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April 6, 2005

UK: Prime minister promises government will do “whatever we can” to help MG Rover

UK prime minister Tony Blair has said his government would do "whatever we can" to save struggling UK car maker, MG Rover, the BBC reported.

UK prime minister Tony Blair has said his government would do “whatever we can” to save struggling UK car maker, MG Rover, the BBC reported.

Noting that the firm’s 6,000 workers are waiting for news as MG Rover and the UK government are in talks with Shanghai Automotive Industry Corp., the BBC added that industry data showed total MG Rover sales in the UK fell 17% in March compared with a year ago.

Blair reportedly made his promise in parliament which is wrapping up its business at the start of the general election campaign.

Meanwhile, the BBC added, workers at the Longbridge plant near Birmingham – and many supplier companies – are still waiting for the government to confirm it will make a £100 million bridging loan to Rover, a possibility that emerged at the weekend.

Rover’s directors gave “extensive personal commitments” on Tuesday to keep the SAIC deal on track, the BBC said – they are thought to have agreed to put up several million pounds of their own money to guarantee interest payments on the government’s loan.

If SAIC walks away from a deal, there is a high risk that MG Rover could be forced into administration, the broadcaster noted.

The BBC said SAIC is thought to be keen on a deal with Rover, though talks ran into difficulties on Monday over fears about Rover’s finances, which are reported to have deteriorated in recent months.

Mark O’Neill, Shanghai business correspondent for the South China Morning Post, told the BBC SAIC was eager to snap up passenger car brands.

“[SAIC] is in the embarrassing position of being China’s biggest car producer, but it has no passenger car brands of its own so they’re very keen to acquire brands and buying brands is quicker than developing your own,” he told the broadcaster’s Today radio programme, adding: “The problem is whether MG Rover is the right [firm] to buy and how serious its financial situation is.”

Rover denies SAIC talks pull-out

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