Chinese plied Rover managers with alcohol, says ex-director

Senior management of the collapsed MG Rover company were naive, profligate and allowed themselves to be plied with alcohol during failed rescue talks with representatives of Shanghai Automotive, according to a director.

Senior management of the collapsed MG Rover company were naive, profligate and allowed themselves to be plied with alcohol during failed rescue talks with representatives of Shanghai Automotive, according to a director.

The regime of the so-called "Phoenix Four" was guilty of "dreadful conservatism" - including a failure to secure a deal with Fiat, it is alleged. Peter Stevens, Rover's former consultant director of design, accuses the consortium of inertia and "the same old muddle you'd get in a corner hardware shop".

The consortium wrongly focused attention on making a new medium-sized car, but there was no "soul-searching" to draw up a long-term strategy. "We were firemen really. We were rushing up and putting out fires wherever we found them around the company, never finding time to think of certainly a 10-year plan."

Internal divisions and a reluctance to accept change in the market place also inhibited progress. Managers were more intent on defending their patch from people "down the corridor" than seeing off the competition abroad. Mr Stevens tells the story of a dinner in Shanghai where the hosts - "very sharp people" - were pretending to drink in order to gain an advantage over the British delegation.

In an interview for ITV1's Tonight with Trevor McDonald, broadcast tonight and next week, Mr Stevens said: "They weren't drinking but they were doing all the play acting of being drunk and reeling about and it wasn't really happening. And then after midnight it was to repair to the bar to begin negotiations. I thought it was crap quite honestly. It would be wrong to say they were slaughtered but the Chinese would have given themselves an advantage."

He accuses management of tolerating "excessive" staffing levels: one man was employed to check whether there was sufficient space around car wheels so that snow chains could be fitted; another ensured cars would fit on to delivery trucks.

While Longbridge was producing around 125,000 cars a year with a 6,000-strong workforce, some companies can build half a million with the same numbers. Some £25m was poured into motor racing to no effect. Mr Stevens said MG Rover management was reluctant to do business overseas, but when they did so, they were lavish with expenses. The idea of getting up early and driving to Stansted for £9.99 flight to Italy was "absolutely anathema".

He alleged that they preferred to fly from Birmingham where a flight to Bologna could cost £640.

He said senior managers had been "over-awed" before a meeting with Fiat that could have led to a joint venture to secure the Longbridge plant's future. He said there seemed to be a "cultural barricade" around Birmingham and a reluctance to accept ideas from elsewhere. Employees seemed to think they had a "God-given right to have a job there."

The allegations emerge within days of the company's administrators, PricewaterhouseCoopers, revealing that creditors owed £1.4bn were unlikely to salvage anything from it.

A spokesman for the Phoenix consortium said the directors were proud that they had managed to sustain 6,100 jobs and car- making in Longbridge for five years producing 8,000,000 vehicles. "The Shanghai Automotive deal promised an exciting future for MG Rover and we fought to the last moment to secure the partnership. It was tragic to lose when we were so close to success."