British Car Maker MG Rover is Bust

MG Rover, the last mass production British car maker, went into receivership last week. As many as 6,000 workers are going to lose their jobs just two and a half weeks ahead of a general election. Talks with the Shanghai Automotive Industry Corporation [SAIC] collapsed on Thursday, and Patricia Hewitt in her role as Trade and Industry Secretary is getting New Labour involved in a desperate attempt at rescue. Unfortunately, the company died some time ago.

Mike Woodley, general secretary of the Transport and General Workers' Union, hit the nail on the head when he told BBC News 24, that the SAIC discussions in his view were "the only hope for 6,000 workers, and that's why we don't give up, we don't move away from an opportunity that's as yet still there." Saying that he didn't want the MG Rover issue to become a political football while people's livelihoods were at stake was, of course, sheer optimism.

Michael Howard, leader of the Tory Party that is about to lose a third consecutive election to Labour, jumped right in for the first touch. Claiming that the government knew that the company was in trouble a year ago, he blamed the prime minister and chancellor of the exchequer for the business failure. "They seem to have been very slow and very late into the business of seeing what they could do to help." And if there were nothing to be done?

Charles Kennedy, leader of the Liberal Democrats, followed on with his own criticism of the government. He said the government should have acted earlier in determining that there was a problem. In addition, the government should have negotiated "much better" with SAIC. Mr. Kennedy is a smarter man than that; as a relatively successful politician, he knows that successful negotiations don't depend on how well the parties negotiate but rather on whether there is a deal to be struck at all.

MG Rover produces three core models (the 25, 45, and 75) as well as the MG TF sports car. They are all old car designs. And while the company has suffered because of the strong pound, which makes exporting harder, the underlying problem is consumers don't want old-looking cars. It's been years since a new model, the 75, was introduced, and it was modeled on another manufacturer's car. As a result, the company has sold off most of its assets; its Longbridge plant in the Midlands is down to 20 acres. Apart from the jobs, there's nothing left at MG Rover to save.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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