Pressure was mounting on BMW last night to open full talks with the rival bidder for Rover as it emerged that the Towers plan could ensure production of up to 250,000 cars a year – compared with the 226,000 it made last year.
The bid by Alchemy Partners, the venture capital firm which is in exclusive negotiations with BMW until April 28, envisages just 50,000 cars being built at Longbridge. This would have an enormous knock-on effect on the components industry, with forecasts of 45,000 job losses across suppliers and local economies.
BMW said yesterday that it would look at the offer being made by the Towers consortium, which is being led by John Towers, the former Rover chief executive. But it said it was only able to do so after its period of exclusivity with Alchemy had ended.
The Towers bid is believed to be underpinned by offers of government money, although ministers will be keen that any help cannot be blocked by the European Commission and will not be viewed as a bailout for a preferred bidder.
Mr Towers wants to transfer production of the Rover 75 from Cowley to Longbridge and to produce an estate version of the car. This had been put on ice by BMW, but could go ahead immediately.
There will still be substantial job losses under the new plan, with more than 2,000 employees expected to go.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Alchemy has not put a figure on likely job cuts, but some fear it will only keep 1,500 of Longbridge’s 9,000 employees. It plans to strike an alliance with Group Lotus, the upmarket sports car manufacturer. Alchemy intends to manufacturer performance vehicles under the MG brand, using Lotus technology and design.
Jon Moulton, Alchemy’s managing partner, said earlier this week that he had held talks with Chris Knight, Lotus chief executive, since launching his company’s plan last month.
Richard Burden, MP for Birmingham Northfield, said: “The substance of Mr Towers’s offer is interesting. There are obviously two clear choices for BMW.”