Blair and Brown in MG Rover talks
Prime Minister Tony Blair and Chancellor Gordon Brown are meeting union officials over the future of MG Rover’s Longbridge plant.
It comes after the car manufacturer went into administration and appointed PriceWaterhouseCoopers to run the company.
Earlier, the Government revealed that it was providing MG Rover suppliers with a £40 million programme of support to help them adjust to the fallout from the collapse of a rescue deal with China’s Shanghai Automotive Industry Corp (SAIC).
Production at the plant stopped when suppliers started to demand payment on delivery.
The support is part of a wider package for MG Rover workers and its surrounding community.
Trade and Industry Secretary Patricia Hewitt visited the West Midlands plant earlier on Friday, where the firm’s 6,000 workers, along with an estimated 15,000 who work in Rover’s supply chain, face a tense couple of days.
The DTI said the £40 million support package would give MG Rover’s suppliers the time and support they needed to adjust and create new opportunities for their employees; and to set up a future supplying other customers in the region.
Ms Hewitt said: “The Government and the unions will do everything possible to work with all concerned to try and secure future car manufacturing at Longbridge.
“This immediate package of support for suppliers demonstrates our commitment to manufacturing in the West Midlands.”
MG Rover’s deal with SAIC collapsed despite the Government’s offer of a £100 million bridging loan. This failed to reassure SAIC over concerns about an estimated £400 million pensions black hole at the UK company.
On Thursday Ms Hewitt expressed dismay at the collapse of the deal, calling it a “devastating blow for all involved”, and said the company’s board had called in the receivers.
She added: “The Government stood ready to issue bridging finance of over £100 million to help, but without a deal there was no possibility of a bridging loan. SAIC indicated that bridging loan finance would not have solved their concerns.”
Conservative Shadow Trade and Industry Secretary Stephen O’Brien has questioned Ms Hewitt’s role in MG Rover going into administration.
He has written to her to ask why she made an announcement about administration before MG Rover did so themselves, and calling on her to provide a precise timetable of events.
He said: “This is a deeply depressing day for so many people in the West Midlands and indeed for the country as a whole.
“It is a tragedy for the 6,100 workers in the Longbridge factory and the thousands of others who work for MG Rover’s suppliers.”
Conservative MP Caroline Spelman, whose Meriden constituency would be hit by the closure of the plant, said: “What we need now is to provide the most effective help we can to rebuild the livelihoods of the Longbridge workers, their families, and the thousands of others who rely on Longbridge.
“The West Midlands has great manufacturing expertise, and we will be working tirelessly to ensure that we can retain the skills base in the region.”
The DTI has set up a dedicated telephone line to provide business support and advice to companies in the Rover supply chain on 0121 6070121. Information is also available on the Rover Response website.
