Hopes for a British-led deal to save MG Rover faded on Sunday night as talks between David James, the 67-year-old ‘company doctor’ credited with rescuing the Millennium Dome, and the Shanghai Automotive Industry Corporation came to nothing, the Daily Telegraph reported on Monday.
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The paper said the two parties met on Saturday morning and signed a confidentiality agreement not to reveal details of the talks – both sides then consulted with their advisers yesterday and met again in the afternoon in the hope of reaching an agreement.
James reportedly offered to pay £40 million through his Project Kimber consortium to re-start the manufacture of the MG TF two-seat roadster and the Rover 25 and 75 models at Longbridge, which would save at least 500 of the 6,000 jobs lost when the company ceased trading in April.
The Daily Telegraph said sis consortium presents itself as the enthusiasts’ favourite and is named after Cecil Kimber, a celebrated managing director of MG in the 1930s – the marque is synonymous with roadsters and was originally founded as Morris Garages by William Morris, later Lord Nuffield, who merged it with the group of companies, which subsequently became British Leyland.
The paper said that, under the joint deal with Kimber, SAIC would have paid between £10 million and £20 million for the Powertrain engine and transmission plant at Longbridge and provided engines for the MG and Rover cars.
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By GlobalDataHowever, the Daily Telegraph added, SAIC on Sunday night walked away from the table just as it did three months ago from talks with the UK government about a rescue package for the failing car firm. SAIC reportedly declined to comment on the breakdown but the newspaper said it understood that there were significant “sticking points” between the two sides, which could not be resolved.
According to the Daily Telegraph, without a deal between James and SAIC, hopes for the UK’s last volume car maker rest with another Chinese company Nanjing Auto, which is understood to be administrators PriceWaterhouseCoopers’ preferred bidder. The Nanjing offer is backed by Nick Stephenson, one of the original Phoenix Four who bought Rover for £10 from BMW five years ago, the report noted.
The Daily Telegraph said executives close to Nanjing have denied suggestions that the company plans to move production away from Longbridge to China – the Chinese car maker says it wants to restart production of a range of models at Longbridge, which could include the MG sports cars and the Rover 75. It is also reportedly planning to assemble small cars at Longbridge from parts made in China, making it the first Chinese company with an assembly line in the UK.
James told the Daily Telegraph on Sunday morning: “I’m very sceptical about the press reports regarding Nanjing and am proceeding on the basis that the prospects for a deal are optimistic.”
He reportedly complained last Wednesday that his bid was encountering “unexpected difficulties” which could reflect government influence, saying: “Our bid stands as a valid British bid backed by British money to ensure the continuation of production at Longbridge. But we are angry that different standards are being applied to the bids.”
BBC television lunchtime news reports on Monday reported that there were three competing bids for MG Rover’s assets but added nothing significant to the Daily Telegraph’s report.
The BBC said the administrators were expected to confirm their preferred bidder within the next few weeks.
