MG Rover-China deal: More jobs hoped for

Workers at MG Rover were today hoping more jobs would be created at its Longbridge, UK factory after Chinese firm Nanjing bought the collapsed carmaker.

Workers at MG Rover were today hoping more jobs would be created at its Longbridge, UK factory after Chinese firm Nanjing bought the collapsed carmaker.

Administrators reached a deal with Nanjing over three months after being called in to try to draw up a rescue package for the last British volume car firm.

PricewaterhouseCoopers also held talks with the Shanghai Automotive Industry Corporation (SAIC) and British businessman David James over the sale of all or part of MG Rover.

Cars will be built under the MG marque and could include sports models and small and medium sized vehicles.

SAIC has the intellectual property rights to Rover models including the 25 and 75.

Professional services firm Arup, which specialises in engineering, car designs and mergers, has been advising Nanjing on the proposed deal.

Its chairman John Miles said: “This is great news. It brings together Britain’s recognised expertise in premium products with China’s emerging strength in volume production.

“The fact that Nanjing has bought the entirety of MG is an indication of their bigger intention to become a global automotive company.

“Arup will be working closely with Nanjing to help them develop their strategy to achieve this goal.

“It is premature to release detailed plans at the moment. It is clear from our bid, and the indications from other bidders, that a viable MG business is possible in the UK.”

Unions had been backing the SAIC bid as the best way of attracting new jobs to Longbridge amid hopes that at least 1,600 research and development posts would be created.

Tony Woodley, general secretary of the Transport and General Workers Union said: “Having viewed both the Nanjing and SAIC bids, there is no doubt in our mind that on first viewing the SAIC proposals appeared to suggest more jobs for Britain.

“It’s disappointing therefore that the administrators have not seen fit to allow SAIC to complete its bidding process.

“We made it clear that if Nanjing were indeed the preferred purchaser we would look forward to a discussion with them concerning their plans for Longbridge and for Britain and we will now make urgent contact with them in order for those discussions to take place.”

Nanjing Automobile is China’s oldest carmaker, having been founded in Jiangsu province in 1947.

The manufacturer, a state-owned enterprise with approximately 16,000 employees, is much smaller than SAIC, which produced 600,000 vehicles last year.

Nanjing, which makes trucks, cars, and buses, has previously entered into partnerships with Fiat and will hope that the acquisition of MG Rover can help it become a global player in its own right.

It set itself a target two years ago of selling 300,000 vehicles a year by 2006 and reports about its intentions for Longbridge have made a variety of predictions.

Some observers have suggested that it intends to “lift and shift” Longbridge’s production facilities to its main factory in China.

Others, meanwhile, have reported that Nanjing has no plans to dismantle Longbridge, but wants to restart production of a range of models, including the Rover 75 and MG sports cars, at the south Birmingham site.

Joint administrator Tony Lomas said Nanjing will now begin to take control of the assets and develop its plans for the future.

No details of how much the deal was worth were published, but there had been speculation that Nanjing had offered around £50 million to buy MG Rover.

Mr Lomas said: “In early June I reported to the creditors that there were no viable bidders for the business as a going concern.

“As a result, plans had been put in place for a break-up sale, unless a bidder pre-empted that process before it could be completed.

“SAIC had offered to buy the engine plant for relocation to China, so negotiations were underway to sell those assets separately.

“Whilst we have been negotiating with Nanjing Automobile (Group) Corporation, we have been aware of Martin Leach’s interest in the car production assets, although no bid has ever been made by Mr Leach.

“Until late last week SAIC had offered to acquire only the Powertrain assets. On Monday of this week SAIC submitted a conditional bid for all of the MG Rover and Powertrain assets.

“However the level and conditionality of SAIC’s bid left Nanjing’s bid as the preferred way forward.

“Nanjing will now begin to take control of the assets and develop its plans for the future.

“It has indicated its intention to relocate the engine plant and some of the car production plant to China, to retain some car production plant in the UK and to develop an R&D and technical facility here in pursuit of the same global expansion ambition that it had when it joined with SAIC as the intended joint venture partners to Phoenix Venture Holdings before the collapse of MG Rover.

“For a transition period a residual workforce will continue to be employed by MG Rover Group and Powertrain, assisting the administrators as they have for the last three and a half months.

“In the meantime Nanjing Automobile (Group) Corporation intends to begin to hire staff to assist it in implementing and developing its strategy.”

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