MG-Rover cars, looks like the end of the road.

PWC have announced just under 5000 redundancies. Looks like the end.

This is a real tragedy. Not only for the staff, but for everyone that has ever owned a Rover. My last 2 cars when I was living in England were Rovers. They were lovely - I have never had a car before, or since that was as nicely made, finished and built. A 100% reliable comfortable car.

The lack of investment by the "gang of four" whilst at the same time them taking 10's of millions out of the company looks very odd.

I hope someone is going to have a good look at this.

I have a Rover at the moment too.

It's sad, but hardly suprising. And blaming the 4 Phoenix directors seems like a bit of a smokescreen to me. I just heard one of them on the radio saying that they pledged £50m of personal assets towards an employee welfare trust (whether this actually comes though is for time to tell).

Rover's problems span back a long way. The only reason why the 4 investors managed to get hold of it was that BMW couldnt make Rover profitable. If a major brand like that cant make things work, then I doubt that anyone can seriously have expected Phoenix to do otherwise.

The Rover 200 series is about 15 years old. The newest product (75) is about 7 years old, and was built during the BMW days. A car manufacturer of that sort needs to put out new products all the time, and for that, you need serious cash (more than tens of millions, that's for sure). The supposed deal with Shanghai Automotive is the last in a long line of possible foreign "lifelines". All of them walked away when they realised the how unprofitable Rover was.

Basically, from that perspective, the firm has been on life support since BMW walked away. Sad though.

Heh, knowing you, adrian, I thought this was going to be about Mars and wondered what the MG meant :)

Fordy:

First, I agree, that the model range has been statis. I would suggest, that apart from marketting tricks, Rover->MG etc., the range has been static since BMW.

I also, however, find it very odd that the gang of four have been able to justify, no kidding, 10's millions of pounds -> of the company and at the same time blaming poor sales for not giving them the chance to develop new models.

I loved their £49m offer of help. Where did that come from? Why was it discounted by PWC because there were to many strings?

Hell, I'd have a new Rover tomorrow if someone was to give me one. Crap Nissan.......

I think it is a crock of s and it stinks.

Cheez:

That was so sweet. No, seriously, I am real. I loved my Rover CAR. Maybe I should let loose a little and tell everyone what I really think.

Perhaps not......

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Originally Posted by adrianxw

Fordy:

First, I agree, that the model range has been statis. I would suggest, that apart from marketting tricks, Rover->MG etc., the range has been static since BMW.

I also, however, find it very odd that the gang of four have been able to justify, no kidding, 10's millions of pounds -> of the company and at the same time blaming poor sales for not giving them the chance to develop new models.

I loved their £49m offer of help. Where did that come from? Why was it discounted by PWC because there were to many strings?

Hell, I'd have a new Rover tomorrow if someone was to give me one. Crap Nissan.......

I think it is a crock of s and it stinks.

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The BBC quotes the 4 directors as recieving somewhere in the region of £40Million between them. That sounds like a massive figure, but it's only a drop in the ocean. Last week the British government paid a (probably illegal under EU law) loan to Rover to cover 1 week's wages while the administrators tried to reforge negotiations with the Chinese: £6.5 Million! With a weekly wage bill like that, then you cant really say £40 Million would change the fortunes of the company in any respect.

From what I've read, PwC haven't discounted the offer of help, but they have expressed reservations as to the legality of Phoenix putting money into a company that is in administration.

Under current British law, once a company is placed in administration, the administrator runs the show, and is responsible to report to the government if he/she thinks that the directors had been acting illegally before the administration. I imagine that the directors trying to offer financial help after the event could be seen as a way of trying to buy favour and escape prosecution if there was any blame. I dont know if this is the sole reason, but I can understand PwC's reservations

Government orders inquiry.

http://news.bbc.co.uk/1/hi/uk/4450925.stm

Quote:

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Originally Posted by Fordy

The BBC quotes the 4 directors as recieving somewhere in the region of £40Million between them. That sounds like a massive figure, but it's only a drop in the ocean. Last week the British government paid a (probably illegal under EU law) loan to Rover to cover 1 week's wages while the administrators tried to reforge negotiations with the Chinese: £6.5 Million! With a weekly wage bill like that, then you cant really say £40 Million would change the fortunes of the company in any respect.

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Equally taking it out of the company probably didn't assist in the logevity of the company either...

edit>>"Where entrepreneurs take a risk they should be entitled to big rewards for big success. But that is not what we are talking about here.
"They did not put up huge amounts of money, the company has not been a success and it was virtually given to them by BMW."

Tough points to argue with...

Quote:

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Originally Posted by RobR

Equally taking it out of the company probably didn't assist in the logevity of the company either...

edit>>"Where entrepreneurs take a risk they should be entitled to big rewards for big success. But that is not what we are talking about here.
"They did not put up huge amounts of money, the company has not been a success and it was virtually given to them by BMW."

Tough points to argue with...

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As far as I can tell, Phoenix were never brought in to run the company as is. That's how people might have percieved it, but they never had the money needed to change the company's fortunes (they were looking at a £1 billion investment to change the company's fortunes). Ever since they took over, they have sought to build a partnership with (or setup an aquisition from) a bigger car manufacturer, and that's what they have (unsuccessfully) tried to do to the end.

BMW had already stripped the most profitable parts of the Rover name (Landrover and Mini) before passing off the unprofitable majority of the business. Running as-is, the part of the business that was left would eat into reserves until someone came in and made expensive changes. It was just a question of whether a new owner/partner could be found before the company died on it's feet. Unfortunately, every potential partner/owner backed off when they saw that the company was not a safe bet, and now the worst case scenario has come into effect.

I'm not trying to defend the directors. Once PwC or the enquiry has reported, it may turn out that they have something more to answer for, then again that might not be the case.

What bothers me is that I think there are deeper implications here relating to why Rover cant turn out a popular vehicle (all personal views aside - I own a Rover too, but Rover did come 28th out of 32 in a very recent owner satisfaction survey - http://news.bbc.co.uk/1/hi/business/4443689.stm), and loses money hand over fist. Other manufacturers make cars in the UK and they fare far better.

Quote:

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Originally Posted by Fordy

What bothers me is that I think there are deeper implications here relating to why Rover cant turn out a popular vehicle (all personal views aside - I own a Rover too, but Rover did come 28th out of 32 in a very recent owner satisfaction survey - http://news.bbc.co.uk/1/hi/business/4443689.stm), and loses money hand over fist. Other manufacturers make cars in the UK and they fare far better.

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Agreed. Shortly after WW2 Rover was a name that came to represent the highest in standards and quality. Then came a succession of "poor" (original 200 series - they were krap) or "expensive" (800 series, complete with reliability problems) cars. The first one they got right was the 75, but sadly it was too little too late.

Be interesting to see what happens to the MG marque.

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Originally Posted by Govtcheez

Heh, knowing you, adrian, I thought this was going to be about Mars and wondered what the MG meant :)

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That's exactly what I thought! I was like, "Oh man, don't tell me something's wrong with one of the Mars rovers again."

There, I edited the thread title!

I saw that when Rover came into Phoenix's hands, it had £450 million in it. I also saw that it takes around £500 million to launch a new range, so really, if those figures are right, they were looking for £50 million.

I don't exactly know what you mean by the "original" 200 series, but I had a 218 SLD Turbo, kind of a Honda Concerto, with a Peugeot engine, Bosch turbocharger and a Volvo intercooler. I had no trouble with it whatsoever, it was a smashing car.

Quote:

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Originally Posted by adrianxw

I don't exactly know what you mean by the "original" 200 series, but I had a 218 SLD Turbo, kind of a Honda Concerto, with a Peugeot engine, Bosch turbocharger and a Volvo intercooler. I had no trouble with it whatsoever, it was a smashing car.

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Fair comment. I had a couple as (low mileage) hire cars, and found them generally rattly and not what I'd expect of Rover quality wise. Horses for courses I guess...

Quote:

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Originally Posted by adrianxw

I saw that when Rover came into Phoenix's hands, it had £450 million in it. I also saw that it takes around £500 million to launch a new range, so really, if those figures are right, they were looking for £50 million.

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Also factor in the loss that the existing activities were making. According to the BBC website, BMW lost £600 million in a year - that's why BWM decided to split up the company and walk away from Longbridge.

With that in mind, the business would probably have eaten those reserves in 9 months.