LONDON, March 16 (Reuters) – British Trade and Industry Secretary Stephen Byers unveiled regional funding worth 59 million pounds on Friday to help regalvanise the West Midlands area hit by BMW’s shock ditching of its Rover unit last year.
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The money is the final instalment of a 129 million pounds ($185 million) project finance package pledged by Byers last year.
It will go towards an automotive centre for the region and an apprenticeship training scheme for the auto sector, to help small businesses in the sector get together to develop new products and to study the potential for three hi-tech corridors in the area.
“This money is key to the government’s commitment to supporting workers in the region’s automotive sector and the wider regional economy,” Byers said in a statement.
“This package of measures will help diversify the region’s economic base so it is not too reliant on one industry or employer.”
Byers’s aides admit the Rover affair almost cost him his job last year as the German car giant refused to be fully open about its intentions and kept him in the dark.
As things have turned out, Byers is now a popular man in the West Midlands, a government source told Reuters. “But things were pretty hairy for a while,” he said.
BMW dumped Rover after suffering massive losses and falling sales.
It negotiated with venture capital firm Alchemy Partners but Byers and his officials backed an alternative approach from Phoenix, a group of British businessmen led by former Rover chief executive John Towers. It eventually paid a nominal 10 pounds for Rover.
“A year ago, BMW announced its intention to sell Longbridge to the venture capitalist Alchemy,” Byers said. “Had that gone ahead only 1,000 to 1,500 people would now be employed at Longbridge. This compares to the 7,500 presently employed there.”
(C) Reuters Limited 2001.
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