UK: Supplier pull-out fuels MG doubts - paper
The last car to be manufactured at the once-famous Austin, MG and Rover plant at Longbridge may have already rolled off the production line, industry insiders have told a key Birmingham newspaper.
They told the Birmingham Post the decision by main supplier Stadco to stop manufacturing body shells for the MG TF sports car, as the paper had revealed on Saturday, could effectively sound the "death knell" for the Nanjing project.
One influential source told the paper he doubted whether Nanjing parent SAIC would ever produce cars at Longbridge.
He reportedly said he rated its chances of doing so as "very slim" although he did believe that the former Rover factory could still have some role as a servicing centre.
The source, who has declined to be named, said a lot of money would have to be spent to develop new versions of what was effectively an old model - the MGF.
The model was first launched back in 1995 and has had one major facelift when it was renamed the TF.
The source told the Birmingham Post there were serious questions to be answered - could the TF sell in sufficient volume? Could the group meet quality standards? Could they develop an engine? Could they meet environmental requirements?
"It is a tall order," he reportedly cautioned. "It is a huge task."
He told the paper that far more attractive operations had also struggled.
Jaguar had been "taken to the brink" before being acquired by Indian conglomerate, Tata; Aston Martin was reliant on Qatari money and Russian Nikolai Smolenski had baulked at producing TVRs at Blackpool.
"If SAIC/Nanjing thought they could produce cars at Longbridge economically, then I am sure they would," he told the Birmingham Post.
"But can they do it economically?
"I cannot see them prepared to spend the sorts of money required. It was always wishful thinking that something would happen. I accept that some people within Nanjing had intentions to produce. But I have never had the impression they were serious about it."
He told the paper Nanjing never had the capital to do it and SAIC was pre-occupied with making the more recent merger of the two work.
Nanjing held a much-hyped 'start of production' ceremony at Longbridge last May but really drove only a few pre-production cars from a silent factory. Few details of when production really would start were forthcoming in subsequent months before, or after, SAIC and Nanjing were merged in China.
"There is no emotional connection to Longbridge," the insider told the Birmingham Post. "How would they compete? Who would buy the cars? I don't think they will ever produce anything there," he added.
The paper said the claims were backed up by a second source who said the decision by Stadco had effectively brought the curtain down on the Nanjing project.
Stadco, whose involvement with MGF/TF body shells can be traced back to the original 1995 supply by Mayflower, reportedly cited uncertainty over the delays as a reason for pulling out. It also has other fish to fry, having recently set up a body-in-white joint venture in St Petersburg which offers potential as the growing 'Detroit of Russia'.
"There is a very real fear now that they will just pull out altogether," the source told the Birmingham Post.
"The best scenario for Longbridge would be for them to make the panels in China and then send them to Birmingham. But why would they [do] that - why not just assemble the cars in China?"
The paper said UK suppliers have been desperate for some clue as to what the Chinese might be planning but, with no word coming out of SAIC, they remain in the dark.
Stadco was just one of about 150 companies supplying components to the MG TF but, despite investing heavily in a new operation at Longbridge, its patience eventually ran out, the report said .
It announced on Friday it was withdrawing from its contract to supply panels for what it called "commercial reasons". The decision has put 30 jobs at risk, the Birmingham Post said.
However, SAIC/Nanjing is reportedly maintaining that its plans are on track.
"Initial volume production for the TF is insufficient for Stadco to make a profit, making the venture uneconomical for them", NAC MG admitted to Autocar.
"NAC remains commuted to the re-launch of the MGTF and Longbridge. To date it has invested £38.4 million including research and development in the project and is working to ensure that its products are of the very highest quality. It is not thought that this current situation will affect the TF launch."
The company claims that a brand new 'body in white' production line has already been built in China and says that shells will be imported into the UK when production of the TF starts, the report added.
However, NAC insists that body production will still take place in the UK once production volumes are reached, even though it states that the Chinese body production is "consistently producing bodies of a greater quality standard", the Autocar report said.