Blog: Government interest in Rover
Dave Leggett | 21 February 2005
Interesting to see the British Government getting all proactive over the fate of MG Rover, as the company tries to get approval in China for its proposed deal with SAIC. There was precious little of that kind of concern back in 2000 when it was 'hands off' and let the market find a solution (even if it was to be venture capitalist Alchemy, looking at a boutique business model). The Chancellor Gordon Brown is in China this week and will apparently be forcefully pressing the case for the Rover-SAIC deal with the Chinese Government. And there is talk of state aid (subject to Brussels' approval) too.
What is so different this time around? Well, we are due a General Election in Britain - most likely in May - and the political fallout in the West Midlands of a Rover crisis that included the closure of Longbridge would not exactly be good for the Labour Party. Reports in the newspapers at the weekend illustrate the scale of the problem. The Rover plant at Longbridge employs 6,500 workers, but it is estimated by some sources that tens of thousands of jobs in the supplier industry are dependent upon MG Rover work and that the net employment loss from the closure of Longbridge could amount to as many as 50,000 jobs. Once the election is out of the way (and, barring a miracle, Labour is back) expect Government interest to wane as extensive job losses for Longbridge are announced anyway.
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