MG plays its final act..[its sad and final]

[JBsZ06]

MG Rover Plays Its Final Act

Some 5000 MG Rover workers received letters on Monday morning telling them that they no longer had a job. Despite false hopes that were fanned by local and national politicians fearful of the effects of closure in the run up to a national election, no further delay was possible in announcing the fact that China's Shanghai Automotive Industry Corporation was no longer interested in purchasing MG Rover, which was effectively bankrupt.

SAIC confirmed it would not buy the British company in writing at the end of last week, and the administrators appointed a week earlier had no option but to immediately fire 5000 of the 6000 workforce at MG Rover's Longbridge plant. The workers had only received last week's pay because the government had stepped in with a loan. The loan, and two visits by Prime Minister Blair and his finance minister, could have been influenced by the fact that Longbridge is surrounded by constituencies held by members of Parliament from Blair's Labor party. All of them are standing for re-election on May 5, and one cynical newspaper said the only jobs the government wanted to save were those of its own candidates.

PWC, the administrators looking after the remains of MG Rover, say they have had plenty of interest in the firm or parts of it, but none that would keep the car plant as a going concern. Now there will be a sale of the company's viable assets, the most important of which is the MG name and business.

Owners of MGs and Rovers up to three years old are currently without a warranty on their cars, and they have been advised to look at the possibilities of buying independent warranty coverage. Dealers have been left in the lurch, but as yet there are no big price reductions at dealerships - values of used models in auctions have already fallen, however. -

 

[jaybird]

You have a reference to this article, a link? I'd like to forward it to our car club. We had a long discussion about this last Monday.

 

[jaybird]

Collapse of MG Rover dealership chain puts 500 more jobs at risk
By Michael Harrison, Business Editor
19 April 2005


The fallout from the collapse of MG Rover gathered pace yesterday after the chain of dealerships owned by its parent company, Phoenix Venture Holdings, followed the car maker into administration, putting nearly 500 more jobs at risk.

Phoenix Venture Motors (PVM), which owns 11 car dealerships, is the fourth PVH business to go under since PricewaterhouseCoopers (PwC) was called into MG Rover 10 days ago. Almost 5,000 workers were made redundant at the car maker's Longbridge plant over the weekend after China's Shanghai Automotive Industry Corporation (SAIC) pulled out of rescue talks, and thousands more are under threat in associate companies and supply firms.

Rob Hunt, one of the joint administrators, said the chain of dealerships had been owed a "substantial sum" of money from MG Rover. In light of this, the directors of PVM, had little option but to seek an administration order.

Last night the administrators said three of the 11 dealerships, in Northampton, Oxford and Muswell Hill, London, had closed immediately with 86 job losses. Mr Hunt said PwC would work with the PVM management to see how many sites could remain open. PVM had sales of £80m and made a loss of £2.5m in 2003.

In addition to MG Rover and the engine manufacturer Powertrain, the group's car business MG Sport and Racing is also in administration.

Meanwhile, as an investigation began into the PVH group of companies, uncertainty remained over just how big the liabilities of MG Rover were, and how much creditors were likely to salvage.

MG Rover's biggest liability is a £427m interest-free loan which the Phoenix directors received from BMW when they bought Longbridge for a token £10 in 2000. In the event of an insolvency, BMW is entitled to demand the loan back, which would wipe out trade creditors who between them are owed about £250m.

Technically, however, the BMW loan was made to a master company called Techtronic 2000, set up specially by John Towers, the chairman of PVH, and his three fellow directors. Techtronic 2000 then lent the money to MG Rover and charged interest.

Because Techtronic 2000 is not in administration, the issue of whether BMW can call in the loan does not arise. A spokesman for PVH said: "Since Techtronic 2000 is solvent and has no costs or expenses, there is no issue."

A BMW spokeswoman also said questions over whether BMW could demand repayment was a non-issue because it was not made direct to MG Rover. "The loan is still in place and will not appear in the list of creditors being drawn up by the administrators," she added.

BMW is, however, among MG Rover's trade creditors because it supplied diesel engines for the Rover 75 model.

The future of the Powertrain facility also remains unclear while the administrators establish whether it has the right to continue building petrol engines for Land Rover now that the licence to the engines is owned by SAIC.

https://news.independent.co.uk/business/news/story.jsp?story=630888

https://news.bbc.co.uk/2/hi/uk_news/england/west_midlands/4456207.stm

 

[Radford]

The only thing left of any real value are MG name and a castle. Rover's marque will revert to BMW and from what I've read the Chinese will get the rights to the K series engine.

PH still has the rights to the MG name and to its line of sports cars, but will have no place to produce them. MGRover sold off the physical plant at Longbridge and had leased it back.

If MG were to survive it would have to start as a small export oriented firm.

I think its pretty much DEAD.