Workers at car maker MG Rover heard on Monday that their jobs are safe in the immediate short term, during a mass meeting on the company’s future.
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The BBC reported that, on Sunday after talks with unions and administrators, the government offered a £6.5 million loan to cover overheads – notably the payroll – at MG Rover’s Longbridge plant for a week.
Six thousand jobs are at risk if the plant in Birmingham closes, the report noted, after MG Rover went into administration on Friday after a possible deal with a Chinese firm fell through.
The government’s trade and industry secretary Patricia Hewitt told the BBC Sunday’s loan had been agreed to avoid job losses “while efforts are made to keep the business together” – she reportedly said the government had agreed to work with the administrator and unions to develop “with all reasonable speed” a realistic business proposition for Shanghai Automotive Industry Corp (SAIC) and other possible purchasers to consider.
Unions and John Towers, the chairman of MG Rover parent company Phoenix Venture Holdings, over the weekend maintained hope that a deal with SAIC could be resurrected. Several commentators noted that the decision on Friday to place the company in administration had reduced the pensions liability, a sticking point in earlier negotiations with the Chinese firm.
The BBC said a task force set up to advise on how best to allocate emergency support for MG Rover’s suppliers, as well as for Longbridge workers and the local community, was due to meet on Monday, while the department of trade and industry said Ms Hewitt would be prepared to fly to China with trade union leaders.
The BBC added that some of Rover’s suppliers are already reducing staff, with hundreds laid off this weekend by engineering firms in the West Midlands and south Wales, despite a £40 million support package for suppliers announced on Friday by the government.
