asset stripping rover
WORKERS, JUNE 2004 ISSUE
Where is the "Phoenix" of Phoenix Venture Holdings going to fly off to next? The mythical bird arising from the flames and ruin of Rover and the Longbridge plant continues to be surrounded in mystery with answers which only beg further questions.
The trade unions are still scouring the financial workings of MG Rover and of the four directors, who saved Rover by buying it for £10 in 2000, for answers. How can BMW divest themselves of Rover, for the proverbial £10, followed by the similar divesting of MG Rover engines for £20 and then MGR Capital for £50 and still apparently have written off loans to the tune of £1 billion?
How can BMW have a loan/debt on its books, reputedly repayable in 2049 for £3427 million — less than half the original loans? In 2049, will BMW itself still exist? Will Rover exist? Some doubt it will make it to 2006! MGR Capital had over 58,000 Rover car loan deals reputedly worth £340 million but went for £50! As the loans are cleared there may be a possible £20 million bonus for the four saviours. How? An estimated £31 million plus has been paid in direct salary or placed in a protected trustee scheme for these saviours during the last three years and yet MG Rover is still in the red.
There are 5,000 workers employed at MG Rover. There were 6,500 in 2000 and 40,000 in 1984. MG Rover has now announced that they are in discussions with the Polish government over the closed Daewoo car plant in Warsaw. They are also talking with the Malaysian car manufacturer Proton over possible collaboration and with the Chinese government. All these discussions are about production in those countries, with China apparently the preferred option.
Where is Longbridge in all this? Already land and asset disposal in the West Midlands has netted Phoenix an estimated £60 millions so how much is Longbridge worth? Is it more valuable closed or working? To the soaring Phoenix, losing the millstone of production, employment and underinvested assets, then it may well be the former.