Rover administrators seek to reopen Saic discussions

Administrators at the collapsed MG Rover car group are seeking to reopen discussions with Chinese manufacturers SAIC to revive a deal which could keep the company’s Longbridge plant open, it was confirmed today.

Administrators at the collapsed MG Rover car group are seeking to reopen discussions with Chinese manufacturers SAIC to revive a deal which could keep the company’s Longbridge plant open, it was confirmed today.

Joint administrator Ian Powell, a partner at PricewaterhouseCoopers, also said he had already been contacted by other businesses interested in buying all or part of MG Rover.

Mr Powell said there were grounds for optimism about the group’s future, despite the fact that key assets, such as the intellectual property rights to some Rover models, have already been sold.

“I think at this point it is right to be optimistic, because we have got good assets, we have got a great workforce,” he told BBC Radio 4’s Today programme.

“Everybody is working incredibly hard, including the trade union representatives, the Government, our team and the management, to try to get a successful outcome from this.

“But it is early days yet and we are really only in a position of trying to assess the position over the next few days.”

Prime Minister Tony Blair yesterday said he thought it was “possible still” that a deal could be struck between MG Rover and SAIC (Shanghai Automotive Industry Corporation).

On a hastily-arranged visit to Birmingham with Chancellor Gordon Brown, he pledged that the Government would fight to preserve car production at the Longbridge plant and the jobs of its 6,000 workers.

Downing Street said he had written to Chinese premier Wen Jiabao offering the Government’s “continued goodwill” towards SAIC and “willingness to provide whatever assistance we can as SAIC considers what to do next“.

Mr Powell said today: “We are interested in talking to SAIC, whether direct or through their advisers.

“Certainly, all day yesterday, we were keen to speak to them and keen to reopen discussions.”

The appointment of administrators yesterday meant there was “a certain freezing of assets”, allowing them to offer a “clean deal” to potential buyers and possibly to reignite SAIC’s interest in a joint venture, said Mr Powell.

“There is an exceptional workforce and a great production unit there,” he said. “I think the unit has proved it can produce good quality cars over a period.

“We believe that the MG brand is still a very valuable asset, so the productive units and the MG brand means that we have got assets we can talk to people about, as regards trying to keep some business at Longbridge.”

He added: “There is further interest in the business. At this point in an administration, you do get a lot of interested parties.

“Our job is really to evaluate those levels of interest very quickly and try to sort out the people who are seriously interested in the business and the people who might be interested just in small parts of the business.”

Mr Powell has asked Longbridge workers to turn up for work on Monday, but was unable to say what message he would have for them.

Administrators were working until late last night and will stay at their desks through the weekend with the aim of providing a clearer picture of the company’s future by the start of next week.

“There are some pretty crucial discussions that are going to be taking place over this weekend, both with prospective funders of the business – whether that is with other parts of the Rover group that are not in administration or other third parties,” said Mr Powell.

“We want to have detailed discussions with the Government as well.

“Until these crucial discussions are completed, it is quite difficult for us to know exactly what the message will be next week.”

Trade and Industry Secretary Patricia Hewitt yesterday announced a £40 million package of support for firms which supplied the Longbridge plant to give them a “breathing space” and head off job losses in the supply chain.

A Rover Task Force will meet on Monday to offer help in retraining workers facing redundancy and advice to firms across the West Midlands to cope with the loss of business.

Birmingham Chamber of Commerce policy director Jerry Blackett today told BBC’s Radio 5 Live that jobs in the supply chain could be saved because of work already done by the first task force after the Phoenix consortium took over the company from BMW in May 2000.

He said: “We’re very lucky that in the last four or five years businesses have already diversified away from Rover and so I don’t think we’re going to see any sort of meltdown in the supply chain and I think we will get through this.”

Mr Blackett said the job market was good in the West Midlands.

“We are suffering from quite a skills shortage. Here in the chamber of commerce I am often approached by businesses who are saying, ‘Look, I can’t find skilled manufacturing labour’.”

He added: “Rover have trained their people well. They’re qualified, they’re experienced, and I am very confident that these people will find jobs.”

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