BMW blames failure to join euro for Rover sell-off

Britain's failure to join the euro was today blamed in part by BMW management for the German car group's decision to sell Rover cars and Land Rover.

BMW officially announced the sales of Rover to venture capital group Alchemy Partners and Land Rover to Ford at a hastily-convened press conference at its Munich headquarters today.

Amid hostile questioning about the impact of the sell-off decision on workers at Rover's Longbridge plant, BMW chairman Professor Joachim Milberg insisted that the sale to Alchemy was the best possible option for jobs.

He said that he was certain the new owners intended to continue producing cars at Longbridge.

BMW sales chief Dr Helmut Panke denied that the £1.85 billion price agreed for Land Rover was well below its value, saying it represented a "fair and realistic" price given the brand's failure to produce any profit in 1999.

Prof Milberg said that the decision to sell Rover had been taken as a result of falling sales, both internationally and in the UK, and the high value of the pound, which made the company's cars expensive to produce and prohibitively priced in the European markets.

He added: "Another reason was the policy of the British Government, which has made the situation at Rover even more of a problem, due to the ongoing debate on the exchange rate of sterling and the question of whether Britain will join Euroland.

"This issue has been continuing over the years and the most recent statements made by British politicians indicated that Britain joining Euroland was being deferred to the distant future.

"That had an influence on our decisions, of course it did. It would have been very positive indeed if Britain had been in Euroland for the development of Rover."

Alchemy had first approached BMW with a purchase offer last autumn, he confirmed, but serious negotiations had not begun until "a number of weeks ago".

He said that there had been "various talks" with the British Government and trade unions over the last few months, at which BMW "tried to make the critical situation at Rover quite clear".

But he admitted that the possibility of a sale to Alchemy had not been revealed to the British Government until Tuesday, in a phone conversation with Trade and Industry Secretary Stephen Byers.

Dr Panke did not deny that the German giant would be paying a sum to Alchemy to take Rover off its hands, but dismissed a reported figure of £1 billion as "absolutely wrong".