Rover 'put brakes on car production'

English car manufacturer MG Rover is to halt production for three days this week to “balance” dealers’ stocks in the face of falling sales, it was reported today.

Longbridge-based MG, which the Phoenix consortium bought from BMW for £10 in 2000, will halt production of its 25, 45 and 75 models from Tuesday night until next Monday, the Sunday Times said. No-one from MG Rover was available to comment.

The move comes as sales of the group’s cars struggle to reach the 200,000-a-year level predicted by Phoenix, the report said.

The company has seen sales slump by nearly 50% in the past three weeks, from nearly 4% of the total market to nearer 2%, due to controversy over payments to the firm’s directors, another report today said.

Trade unions have voiced concerns about executive pay at the company, said to be the highest in the car industry, a pensions deficit of more than £70 million and reports that a trust fund has been set up for company directors.

At a meeting last Wednesday, MG Rover reportedly asked trade unions not to talk up the matter because of the impact it was having upon the group’s sales.

After the meeting, unions said they would take up the company’s offer to let them examine its finances.

Officials said they had asked the company for an explanation of directors’ pay, including salaries, pensions and loans.

They said the company categorically denied allegations of asset-stripping and said current speculation was unfounded.

The unions, including the Transport and General Workers Union and engineering union Amicus, called for the meeting following reports that a £13 million trust fund had been set up for executives of the loss-making car firm.

Head of the Phoenix consortium, John Towers, masterminded the purchase of Rover from German car firm BMW, which safeguarded thousands of jobs at Longbridge near Birmingham.