MG Rover reportedly has suspended production at its Longbridge plant near Birmingham due to a shortage of components.
Go deeper with GlobalData
The BBC said component makers are believed to have stopped supplying the company because of the uncertainty surrounding the car maker’s future.
The output halt comes as the group is locked in crucial talks with Shanghai Automotive Industry Corp (SAIC) in a bid to save the firm and 6,000 jobs, the broadcaster noted, adding that, if the talks fail, MG Rover risks being forced into administration.
Rover confirmed to the BBC that production at its West Midlands plant had been halted but declined to give the reason.
“Given the amount of negative media coverage this week, it is no surprise that we have suffered a few isolated component supply problems. For this reason, we have temporarily suspended production,” MG Rover said in a statement cited by the BBC.
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.
Thank you!
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 form
By GlobalDataThe company reportedly added that no staff have been sent home as a result of the move which has stopped car production.
The BBC said many companies in the West Midlands region depend, at least partly, on supplying Rover, which is the last surviving British-owned mass car maker, and suppliers have said they will not resume business until there is confirmation of a £100 million bridging loan from the government.
One company that has stopped supplies to Rover is automotive engineering group Wagon, the report said.
“In view of MG Rover’s current inability to meet its payment obligations, it has [been] decided to suspend supplies to MG Rover with immediate effect,” Wagon said in a statement cited by the BBC.
The broadcaster noted that pressure has been mounting on the UK government’s trade secretary Patricia Hewitt to grant the loan, paving the way for a joint venture.
The BBC said talks concerning the loan are continuing, but sticking points have arisen over the terms of the agreement – SAIC wants the loan to run for at least two years – which is when the joint group could start making money – but that could prove difficult as European Union rules on state aid restrict funding to a six month period.
