MG Rover's rescue hopes collapse

Thousands of MG Rover car workers were today facing redundancy after hopes of a proposed deal with a Chinese partner finally collapsed.

The Shanghai Automotive Industry Corporation told the Government that it was not willing to acquire any part of MG Rover as a going concern.

Tony Woodley, general secretary of the Transport and General Workers' Union, said his "worst fears" had been realised, leaving 6,000 workers at the MG Rover factory in Longbridge, Birmingham, and 18,000 in supplier firms facing a "bleak future".

Administrators brought in a week ago to try to rescue MG Rover said "significant redundancies" will now be made.

Ian Powell, joint administrator at PricewaterhouseCoopers, said: "In light of this important development we have concluded that there is no realistic prospect of obtaining sufficient further finance to retain the workforce while the

position with other parties is explored.

"As we indicated earlier in the week significant redundancies will now be effected. We are extremely disappointed that SAIC has decided not to progress discussions to acquire the business. We are very conscious of the impact this news will have on the employees, their families and the businesses dependent on MG Rover Group."

Steps were being taken to notify workers who will now lose their jobs and claims for redundancy will be handled by a special payments office opened in Birmingham.

On an election campaign visit to a community centre in Crawley, West Sussex, Prime Minister Tony Blair was asked about the news from China.

Mr Blair said: "We have received a letter from the Chinese company. I think there will be announcements made about this shortly.

"I do not have anything more to say at this point in time today. But we will keep you in touch with the thing as it develops.

"I think it is best that we wait and see, until we are in a position to give you the details of the letter.

"I have not actually seen the letter myself yet, for example, because I have been down here."

Mr Woodley said: "The one in a million chance we felt our people had has now been taken away. We have worked hard this week with the administrators to develop a sound business plan to present to Shanghai Automotive Industry Corporation. But it does take two to talk and that opportunity has now gone."

He said the union would now be in urgent talks with the administrators to see what could be done for the thousands of people involved.

Trade and Industry Secretary Patricia Hewitt said it was "devastating news" for the MG Rover workers and their families.

She is expected to announce a package of support to help the workers find other jobs.