MG Rover is at the centre of a fresh row with unions amid fears that it is planning to shift production of the flagship Rover 75 to Poland.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The Times said the independent carmaker, which on Tuesday faces scrutiny from MPs over its executive remuneration scheme and corporate structure, is thought to be close to sealing a deal with the Polish government to buy a former Daewoo plant.
The newspaper noted that Rover has previously said that it wants to build models in Poland that have been superseded in Britain but there is increasing speculation that the 75 will be produced at the Warsaw plant from next year.
It is believed that the inclusion of the luxury car in the business plan has helped to secure investment from CWC Capital Management, a US investment business, The Times said.
The newspaper said the T&G (Transport and General workers) union, which helped to galvanise political and community support for Rover’s takeover four years ago, has written to the company demanding assurances about the future of the 75.
Dave Osborne, the T&G’s national secretary for the car industry, told The Times: “We still don’t have details of the new medium car for the UK and now there is speculation that the 75 will be made in Poland. We didn’t back the rescue of the business four years ago to see jobs go to Poland. We have asked for an urgent meeting with (MG Rover chief executive) Kevin Howe.”
The Times said workers at Rover’s Longbridge factory are waiting for concrete plans for the production of a new medium car to replace the Rover 45. A prototype has reportedly been developed from the 75 but the company has had to curtail plans for derivative models because it has yet to secure a joint venture with another carmaker.
An MG Rover spokeswoman told the newspaper that negotiations were continuing over the Polish plant and that the business plan would not be discussed before it was finished.
The Times said Rover has increasingly fallen foul of the unions that supported its takeover. They clashed over a tie-up with Indian carmaker Tata when it was announced that that company’s Indica citycar would be imported and badged as the CityRover and they have come into conflict over the company’s executive pay regime and its complex corporate structure.
The Times said members of parliament on the trade and industry select committee will force these issues into the spotlight on Tuesday when they question Rover chairman John Towers and vice-chairman Peter Beale.
The committee is holding an inquiry into the state of the British car industry and Martin O’Neill, its chairman, reportedly has said that Rover will be called to account over its pay and corporate structure.
The Times said the four directors who formed the Phoenix takeover consortium —Towers, Beale, Nick Stephenson and John Edwards — have given themselves a £10 million loan note and a £13 million trust fund while the carmaking division, which makes a loss, has also made dividend payments to the holding company.
The Times said questions John Towers is expected to face on Tuesday at the Trade and Industry select committee are: Why have the directors given themselves £13 million in a trust fund? Why did they charge interest to the carmaking division on a £500 million interest-free loan from BMW? Why did they receive a £10 million loan note? Why has the carmaking division been ringfenced from profitable parts? Have their actions betrayed supporters of the takeover? Are they likely to find a strategic partner? Why are there no non-executive directors?
