Thousands of workers at MG Rover were today awaiting the inevitable arrival of their redundancy notices following the collapse of the carmaker.
Hopes of saving the firm hung by a thread for the past week, but it was severed when the Shanghai Automotive Industry Corporation (SAIC) told the UK government it did not want to buy any part of MG Rover.
The huge Longbridge plant in Birmingham will be mothballed and the 400-acre site will probably be redeveloped, smashing up 100 years of history.
British Prime Minister Tony Blair abandoned his General Election campaign to travel to the factory, accompanied by Chancellor Gordon Brown and Trade and Industry Secretary Patricia Hewitt, to announce a £150m (€220) support package to help workers retrain or find other jobs.
Following talks with the Rover task force, Mr Blair said he wanted to express his “real sorrow” for the workforce and their families.
“This is a desperate time for the workers at Longbridge and their families,” he said.
The support package will be made up of £60m (€89m) to help diversify industry in the area and to support the supply chain.
There will be another £50m (€73m) to fund the retraining and re-skilling of workers made redundant and a further £40m (€59m) will be ploughed into statutory redundancy payments.
The Chancellor said that around £40m of previously announced money will help with construction of a new industrial park in the region and the British government will discuss the prospect of additional help with the European Union.
Pension protection arrangements will come into play, and the Prime Minister assured workers that the British government was examining the question of Rover cars bought by the company’s employees, in some cases involving finance deals.
Workers have expressed concern that they will be left owing thousands of pounds for cars they have bought through MG Rover which would more than wipe out their redundancy pay.
Mr Brown said every Longbridge worker will be interviewed over the next week to be told about opportunities for retraining. They will be given details of the 26,000 job vacancies in the West Midlands.
Sir Digby Jones, director general of the Confederation of British Industry, said last night that firms had been ringing him all day saying they were crying out for skilled workers.
“Although this is a very sad day, I firmly believe it will be a day or rebirth rather than one of death.”
Sir Digby launched a fresh attack on the four directors of Phoenix Venture Holdings (PVH), who bought MG Rover from German car giant BMW for a nominal £10 in 2000 and who have come under attack for paying themselves millions of pounds in wages and pensions.
“They should look at their consciences. It does nothing to help the argument we have been pressing about directors not being rewarded for failure.”
One of the Phoenix directors, John Towers, said he felt no guilt over the way events had turned out and did not feel that the Longbridge workforce was angry with Phoenix.
He told BBC Midlands Today: “We see the anger in the press, we see excited and quite amazing stories in the press about so-called millions of pounds (paid to directors).
“What we see here is a realisation on the part of the employees that we have put our personal assets at risk in managing this business through five years, we have put a lot of hard work into that process and, yes, we have received rewards for that.
“We don’t see that anger at Longbridge.
“I feel devastated about the fact that we have been stopped at this final hurdle. I don’t feel guilty about the process we have been through.
“Wind back the clock five years and I would have done the same.”
The end of the road for Rover came quickly after a tortuous week of clinging to hopes that a partnership deal with SAIC could be revived, even though all the signs from China were negative.
Ian Powell, joint administrator at PricewaterhouseCoopers (PwC) said: “In light of this important development we have concluded that there is no realistic prospect of obtaining sufficient further finance to retain the workforce while the position with other parties is explored.”
Ms Hewitt said the Government had hoped to give the car firm a “breathing space” to secure the investment needed for new models needed to keep the Longbridge plant going.
She added: “It’s that hope of new models, new investment and the continuation of Longbridge as a going concern which has now, I’m afraid, died with the Chinese saying no.”
Ms Hewitt telephoned the home of one of the women who led a protest to Downing Street earlier this week to express her sympathy.
The minister spoke to the Phil Hanks, who has worked in the paint shop at Longbridge for the past 15 years.
“She sounded genuinely upset about what has happened,” Mr Hanks told PA.
“I don’t blame the (British) government for what has happened because they have done all they can.
“We were still holding out some hope that the deal would go ahead, so this is the worst possible news.”
Mr Hanks said he was “disgusted” with Mr Towers and his fellow directors, adding: “How they can treat working people like this and just walk away with millions of pounds is beyond me.
“They won’t be having any sleepless nights about how they will pay the bills.”
The administrators said 600 Longbridge staff would help to complete about 1,000 half-made cars.
About 400 staff would be retained at the company’s Powertrain engine plant and 25 at MG Sport and Racing.