UK News 08-04-2005 MG Rover Collapses who: MG Rover what: Faces collapse after vital negotiations collapse where: LONGBRIDGE when: Thursday night snippet: Just before 10pm on Thursday night, Trade and Industry Secretary Patricia Hewitt announced that the directors of Rover`s car manufacturing plant in Longbridge, Birmingham, had decided to call in the receivers. It may have been more a disappointment than a surprise, but the factory workers have been devastated by news of the collapse of talks with China`s Shanghai Automotive Industry Corp (SAIC), which in turn forces the government to withdraw its offer of a £100million bridging loan which might have kept the ailing company afloat. Earlier on Thursday, the car giant "temporarily" suspended production blaming "isolated component supply problems" prompted by rumours that the company would run out of money by the weekend. Meanwhile, SAIC was seeking a guarantee from MG Rover`s holding company, Phoenix Venture Holdings, that the company would remain solvent for the next two years. No such guarantee could be made. "The meltdown at the Longbridge factory in Birmingham could not have come at a worse time for Labour, which has put its handling of the economy at the centre of its campaign," says The Evening Standard`s political correspondent, Jason Beattie. "Tony Blair now faces having to defend the Government`s record against the backdrop of thousands of job losses in a key election battleground. At least 6,100 jobs could go at Longbridge factory itself, but at least 20,000 jobs are under threat at West Midlands component firms that relied on Rover for business." "There`s no future for Rover," says 44 year-old employee Dave Wilkins, quoted in The Telegraph, looking back on his 20 years with the firm. "It just seems to be one five-year deal after another. They`ve not invested anything. The equipment is here - they should have invested the money in prototypes. I knew this was coming six months ago and it was at that point that I signed up for the fire service." Patricia Hewitt stepped in on Friday morning to put together a three-year, £40million rescue package to support the companies which depend on MG Rover for survival. "Ms Hewitt refused to blame MG Rover`s management for the company`s collapse," says The Guardian, following accusations that the company`s future might look rosier today had the four directors of the 100 year-old company not pocketed £30million between them. Moreover, accounts show there is £16.5 million in the directors` pension fund, while the workers` pension fund is £67million in deficit. "She pointed out that if the company had failed five years ago when it was sold by BMW, tens of thousands of jobs would have been lost but many suppliers had now diversified." In other motoring news, the BBC reports that "US-German carmaker DaimlerChrysler has won a court case which accused it of lying to shareholders during the 1998 merger which created the group" while The Mirror tells us "Alfa Romeo sports coupes are flashed by speed cameras more often than any other car". [... more]

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