I came across this in my reading of some old files available online.

publications.parliament.uk/pa/cm200506/cmselect/cm...f

Not amusing at all.

Fix-it
MG Rover management believe that they have a viable company; they are
the “fix it” team. Much of the foregoing has addressed the plans that are
in place to fix MG Rover, and gives opinion as to the likelihood of success.
BMW tried to “fix-it” at Rover for six years, and having destroyed
substantial value for BMW shareholders, opted to “sell-it”.
Sell-it
When BMW despaired of fixing Rover Group it chose to sell it. The Land
Rover operation was relatively successful, had value, and was sold as a
going concern to Ford Motor Company. BMW kept the completely updated
factory at Cowley as the production site for its new Mini. On a short-term
basis it also kept the engine plant at Longbridge and pressing plant at
Swindon: it is presently active in finding a buyer for these sites. This left
the Longbridge assembly plant that no one wanted unless BMW provided it
debt free and with a £500m cash legacy.
Given that BMW had to pay to get Longbridge off its hands, could
Longbridge be sold again? One year after BMW sold the plant to
Phoenix/MG Rover nothing has changed in substance, nothing has happened
to change the value of the business. In 2000, BMW could not find an
existing car maker to buy Rover. Discussion with corporate financiers
reveals that there is still no demand to buy MG Rover. The Longbridge site
is well located for the Midlands motorway network and may have value as a
business/retail park.
Close-it
This remains the most likely outcome at MG Rover and the Longbridge
engine plant. In giving MG Rover the cash legacy of £500m, BMW was, in
effect, saying, “This is what it would have cost to fire you guys, but if you
would rather use the money to try and make a go of it...”. By operating the
plant for three or four years, the management have really opted for a
salary until 2004 rather than a redundancy payment from BMW in 2000.
When MG Rover becomes insolvent and has to close the plant there will not
be any money to make redundancy payments. For the workers this will
have probably been a better option because they will have got more money
from the combination of the £500m cash legacy, the extended operating
period, and the debt built up in the final years of operation. The only
losers will be the shareholders of any bank that has lent to MG Rover.
Recommendations
If every car plant in North America were to shut, it would still be possible
to make more cars than the world wants to buy. With massive excess
capacity only the most efficient car plants will survive. MG Rover will not
be one of these, just as Luton and Dagenham did not survive.
This is not a blow to the UK motor industry. If the most efficient plants of
Nissan, Honda, or Toyota closed or scaled down it would be a blow. But it
is a blow to the people employed by the plants that close, and the people
employed by the companies that supply those plants.
Problems at MG Rover are politically significant because the social
implications for the people involved combine with a closure of symbol of
national virility (the production of cars).

The real story is not at MG Rover, but at Nissan, Honda, Toyota, Jaguar,
which although not owned by British companies are successful through the
efforts of British workers. These workers are the forgotten people of the
motor industry in Britain. They are successful, yet unsung, whereas the
employees of MG Rover have failed (many times) and are held high in the
sympathies of the Nation.
So it is just a matter of time before MG Rover is in trouble, and just a
matter of time before its anguish takes the Nation’s attention. But this
time it will be death by its own hand, there will be no big bad BMW to
blame. What to do?
• Understand and praise the real motor industry in Britain – the
Nation needs to feel pride and success about our motor
industry.
• Compare success (Nissan, Toyota, & Jaguar) with failure
(Luton, Dagenham) and challenge the failure rather than
sympathising with it –- We need to understand that MG Rover
is a small failure against a background of general success.
• Don’t blame anyone for the macro-economic inevitability of
MG Rover’s demise, the decisions that set it on this course
happened in 1994 when BAe sold to BMW -– none of the
current managers or workers is to blame.

Edited by _ORB_ on 09/03/2022 at 17:44