Slim chance of deal as Rover workers sent home

Thousands of workers at ailing British car giant MG Rover were sent home on full pay today and were left in no doubt that the chances of a deal to secure their future were slim.

Thousands of workers at ailing British car giant MG Rover were sent home on full pay today and were left in no doubt that the chances of a deal to secure their future were slim.

Administrators appointed to run the company after the collapse of talks with a proposed Chinese partner said they had no plans to resume car production at the Longbridge factory in Birmingham, which hasn’t built any cars since last week.

They revealed that without a £6.5m (€9.5m) emergency British government loan they would have announced 5,300 redundancies today.

The European Commission insisted it must approve the bale out, aimed at keeping MG Rover afloat for another week, before the money can be paid.

The 6,000 Longbridge workers held a mass meeting with union leaders and were told to go home to await developments while efforts continued to revive talks with the Shanghai Automotive Industry Corporation (SAIC).

Meanwhile it was revealed that wives and partners of MG Rover workers are planning to march on Downing Street on Wednesday in protest at potential rates of redundancy pay.

The women want similar rates for workers at the Birmingham Longbridge plant as for those laid off at other British car plants in recent years.

Administrators revealed that MG Rover and its Powertrain engine business were incurring “very significant losses”.

Ian Powell, one of the joint administrators from PricewaterhouseCoopers (PwC), said the loan had given a breathing space while efforts were made to contact SAIC to establish if the firm was still interested in a deal as well as pursue other expressions of interest.

“We have no plans to recommence car production. We have told workers they will be paid until further notice but there is no production going on.”

Tony Lomas from PwC said the administrators faced a “significant challenge” in trying to resurrect the talks with SAIC and he believed any meetings would not be held before next week.

“We are doubtful that we will have a substantive conversation with SAIC this week. This is an extremely complex transaction and it will take some time and continued support from all parties involved.”

Tony Woodley, general secretary of the Transport and General Workers Union, told the mass meeting that the chances of SAIC returning to talks were “one in a million”.

Denis Tuller and David Branch, who have 29 and 37 years service at Longbridge, described the mood of workers as “very low.”

They said workers were angry at the way MG Rover chairman John Towers and the board of directors had run the company.

Mr Tuller, 52, said: “Tony Woodley was saying there was a one in a million chance of the Chinese coming back in. That’s a bad figure.

“We’re hoping there’s still a glimmer of hope but it looks like it’s just a slight one.”

Liz Hanks, 41, whose husband Phil has worked in the paint shop at the plant for 15 years, plans to meet MPs and ministers in London on Wednesday.

The mother-of-two said: “We’re trying to get as many women and children to support their husbands and fathers."

A member of the Rover Task Force, which met for the first time in Birmingham today to deal with the crisis, said the British government should not be propping up any “lame ducks".

Sir Digby Jones, director-general of the CBI, said it was not the job of the Government to help failed businesses, adding: “British governments over decades have had no success in doing that.”

The Task Force launched a helpline for workers who may lose their jobs, offering advice on mortgages, other financial problems and employment opportunities.

The venture capital firm which almost bought Rover five years ago revealed it had contacted the administrators in the past few days.

Jon Moulton, of Alchemy, said he would be talking to PwC again but admitted that the chances of doing a deal were “remote.”

Derek Simpson, general secretary of Amicus, said there was only a “slim chance” of saving Longbridge but he pledged that union leaders would explore “every last vestige of possibility”.

Without new models to build then MG Rover would have to face “stark realities”, said Mr Simpson, who added that union leaders were prepared to go to China to meet SAIC and British government officials.

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