MG Rover calls in Administrators, alledgedly

news.bbc.co.uk...

The board of MG Rover has called in the administrators, UK Trade and Industry Secretary Patricia Hewitt has said.

Following the administration announcement, MG Rover said it had asked PriceWaterhouseCoopers to "accept engagement to advise the board of directors on the current position at the company".

This has just been developing on Newsnight, Patricia Hewitt makes a statement saying MG Rover are going into receivership, and then MG Rover make a statement that they are not! At least, not yet. Reporter on Newsnight said he had never seen anything like this before.

I can see this story snowballing somewhat, I dont think MG Rover was ever going to be saved by this deal, but how Labour handled it was crucial. The West Midlands has a fair few seats up for grabs in the election, Labour could be hit Very hard by this (28 seats hard, worse case scenario of course).

I live in the West Midlands, and this has been the major issue in local news and on local radio, will be interesting to see how this unfolds.

Originally posted by squarepusher
I can see this story snowballing somewhat

- Naaa I don't.
The underlying truth of this is that it is a sad end that just took it's time coming.
People in the UK weren't buying their cars. We all know that.

I dont think MG Rover was ever going to be saved by this deal

- I agree.

It seems quite likely that the Chinese group were interested in the biggest bargain possible hence the collapse of the talks to make the deal.

Watch and be totally unsurprised as they (and others) get the bits of value at a knock down price from the receivers.

I expect MG sports cars to revive (as they are very up-to-date and actually do sell in reasonable numbers) but for the 25, 45 and even the 75 I think that is it.

how Labour handled it was crucial.

- Naaaa not really. It really made little difference IMO.

Oh of course it'll be trumped up into a massive deal (for all of a few minutes) by the tories and the anti-Labour crowd who stand by to make mountains out of the tinniest molehills but that'll quickly fizzle out as the realities become more widely known.

The Labour gov stood by to extend a £100million 'bridging loan' to cover the gaps in the proposed deal, once the deal wasn't happening there was nothing being bridged to and hence the loan evapourated.

What other course of action, not involving the receivers, was ever going to take place?

The West Midlands has a fair few seats up for grabs in the election, Labour could be hit Very hard by this (28 seats hard, worse case scenario of course).

- On what basis would that be then? What is it that the other parties might actually have done differently?

Maybe some imagine the tories riding in to the rescue and giving more aid.....maybe renationalising the whole thing?
Come on.

It's tragic and a deep worry for those closest involved but even there thanks to the general state of the UK economy it mightn't be quite so bad.

I live in the West Midlands, and this has been the major issue in local news and on local radio, will be interesting to see how this unfolds.

- Well I do agree but I also saw people on TV last night saying there is a pronounced skills shortage in the WM and that this might not work out as badly as it first seems.

The real killer in this was not the Labour party (are you really trying to say they did this to have this issue kick off as the election is announced?!), it was the Chinese refusal to deal.....

.....along with the UK based component suppliers demanding cash on the nail for their parts.

No big business could survive much of that never mind one in such a parlous state.


[edit on 8-4-2005 by sminkeypinkey]

Well I expected the Lib dems and the Tories to put the boot in, perfect opportunity to score some points against Labour's strong economy campaign. Of course, neither the Lib dems or Tories actually had a plan of their own concerning MG Rover, its still good political ammo for the rest of the country.

Actually the only MP I have seen trying to score points is Caroline Spelman (Conservative), who has been getting about quite a lot recently, though she seemed to be holding back somewhat. Edit - Julie Kirkbride (conservative) is now on Central news saying exactly the same things as Caroline Spelman, trying to blame Labour for announcing receivership prematurely.

I have never said that any of this is Labour's fault, but we're now in an Election, facts and all that go out of the window while we watch politicians fight like dogs. Thats why I said it is crucial that Labour handle this well, they have it all to lose, the timing is terrible for them.

Tony Blair and Gordon Brown have travelled to Birmingham to speak with the unions, and there is now talk that the deal with the Chinese can be revived, link here. This is going to go on for more than a few minutes, it would seem.

Oh and Labour have at least 15 seats in the West Midlands that are in touching distance for the Tories, not 28 as I said in previous post, sorry about that.

Originally posted by squarepusher
This is going to go on for more than a few minutes, it would seem.

- Oh don't get me wrong squarepusher, the serious stuff will drag on some, hell they might even pull a result out of the bag with the Shanghai Automotive Industry Corp. people afterall, who knows?

My 'few minutes' comment was relating to the political froth and nonsense ie the notion that the Labour gov was at fault for any of this and that they could be justifiably be blamed for what has happened.

The truth is this has probably been on the cards for the last 5yrs. Maybe the Pheonix group were not the right people to 'save' the company afterall maybe the people so many feared were just in it to asset strip (Alchemy) were the better bet.

Regardless the root of the problem, as everyone knows, is simply this; if Britain's own car manufacturer cannot maintain a strong position within it's 'home' market it really has problems, and didn't they just, hmmmm?

No point blaming the gov if the people don't want to buy the cars.

Originally posted by sminkeypinkey
The truth is this has probably been on the cards for the last 5yrs. Maybe the Pheonix group were not the right people to 'save' the company afterall maybe the people so many feared were just in it to asset strip (Alchemy) were the better bet.

I agree, John Towers is one of the few who will come out of this with a nice pension package. EDIT - Just to expand on this a bit, as im wrong. Work and pensions secretary Alan Johnson said that all 6,100 workers will receive at least 90% of their promised pension, due to the launch of the pension protection fund (PPF). The Phoenix four set up a £12.95m pension fund in 2002 that will see them paid around £60,000 to £80,000 a year on retirement. As far as im concerned, good work by Labour, bad work by the Phoenix four.

Interesting article here regarding Rover's demise, seems that, as you say Alchemy had a more realistic solution but were touted as asset strippers.

Oh and this comes as no surprise; www.politics.co.uk...$8221463.htm" target="_blank" class="postlink">'EU to blame' says UKIP. I dont know whats more annoying, that a "politician" can be so stupid, or that some people will actually believe him. I expected UKIP to make a fuss over the EU restrictions on the bridging deal, but I think most sane people would agree that the solution doesnt involve throwing money at it.

[edit on 10-4-2005 by squarepusher]