MG Rover Group

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MG Rover was the last independent mass-production car manufacturer in the British motor industry. The company was formed by the de-merger of MG and Rover from BMW in 2000. It is now part of the Nanjing Automobile Group.

1 History
2 External links
3 Notes

[edit] History

[edit] British Leyland

MG Rover are the heirs of the mass-produced car businesses of the British Leyland Motor Corporation (BLMC), which was formed in 1968 as the end of a chain of mergers between many British car firms. In 1975 BLMC was nationalised, and became British Leyland (BL), due to financial difficulties.

In 1977 BL's new chief executive Sir Michael Edwardes saw that the only way to make the company competitive again was to collaborate with the Japanese manufacturers. In 1979, he began negotiations with Honda to co-develop new models and to share manufacturing facilities. The first product of this relationship was the Triumph Acclaim, and led to a long succession of Honda-Rover models. Edwardes also implemented a ruthless programme of cutbacks and factory closures which also saw the death of many of famous British marques. To reflect the resulting two-brand strategy, BL's volume car subsidiary was named as the Austin Rover Group in 1981. In 1984 BL sold Jaguar Cars into private ownership. The depleated BL was itself renamed in 1986 to Rover Group PLC prior to its 1988 sell-off to British Aerospace. In 1987 the truck and bus businesses were sold-off. The remaining volume car business was sold to BMW in 1995.

[edit] 1986–2005 timeline

1987 Leyland Trucks division merged with DAF and then floated. (Note: After being declared bankrupt in 1993 the new DAF company split into three independent companies; the UK van operation became LDV, the Dutch operation resumed trading as DAF and the UK truck operation resumed trading as Leyland Trucks. Both truck operations were later acquired by PACCAR of the USA.)
1987 Leyland Bus floated off; bought by Volvo Buses in 1988
1987 Unipart spare parts division sold off via management buyout
1988 Rover Group privatised; sold to British Aerospace
1995 Rover Group sold to BMW; 17-year collaboration with Honda ends
2000 Land Rover sold by BMW to Ford
2000 The new MINI launched by BMW, produced at the Cowley assembly plant.
2000 Remainder of company sold to the Phoenix Consortium for a nominal £10 and renamed MG Rover Ltd
2001 MG Rover bought Qvale of Italy (Only bought the factory and the rights of platform of the Mangusta car. MG Rover did not acquire the rights of the Qvale name)
2002 MG Rover agrees to collaborate with Tata of India
2005 Collaborative deal with Shanghai Automotive Industry Corporation (SAIC) collapses, forcing the company into administration and insolvency.
2005 Nanjing Automobile Group acquires the entire assets of MG Rover.

[edit] Sale from BMW to Phoenix Consortium

When BMW sold off its interests, MG Rover was bought for a nominal £10 by a specially-assembled group of businessmen known as the Phoenix Consortium. The consortium was headed by ex-Rover Chief Executive John Towers.

[edit] Potential deal with SAIC of China and its collapse

In June, 2004, it was learned that Shanghai Automotive Industry Corporation had signed a Joint Venture partnership to develop new models and technologies with MG Rover. This led to much speculation among the British media suggesting the Chinese company were poised to launch a takeover. Later that year, in November, news broke of an agreement between the two companies to create a joint venture company to produce up to a million cars a year, with the production shared between MG Rover's Longbridge site and locations in China. SAIC were to have a 70% stake in this company in return for a £1 billion investment, with MG Rover owning the remaining 30%. However, this agreement had to be ratified by the Chinese government, specifically its National Development and Reform Commission (NDRC).

The Commission was of the mind that if BMW could not make a success of Rover, then it would be hard for SAIC to do so.

On December 8, 2004, Tata of India, which had cooperated over the export of the Tata Indica as the CityRover, threatened ceasing its agreement with MG Rover if the SAIC tie-up went ahead, according to the Indian press. Tata claimed the report was inaccurate two days later.

SAIC did purchase the technical rights to manufacture Rover's 25 and 75 models, and for the Powertrain Ltd business, for £67 million last year. It did not acquire the Rover name, which was still owned by BMW at the time (See 'Brands' below).

In January 2005, it was revealed that British Prime Minister Tony Blair had intervened to support the alliance between MG Rover and SAIC. MG Rover could not give a date on which the agreement would be finalized.

Figures released by the company showed that the sale of Rover-branded cars fell in 2004 compared to 2003.

In April 2005 it was reported that the partnership deal with SAIC was in trouble because both SAIC and the British Government had discovered that MG Rover's finances were in a far more parlous condition than had previously been thought. On 7 April 2005 the company announced that it was suspending production because of component shortages. Later in the day, it was announced by Patricia Hewitt, the Secretary of State for Trade and Industry, that the company was being placed in receivership. Her statement was based on a conversation with MG Rover chairman, John Towers. It was later denied by MG Rover Group, although the company admitted that it had engaged PriceWaterhouseCoopers, the accountancy firm, to advise on its current financial situation. In the event, MG Rover placed itself in administration on 8 April 2005, a different status than receivership under British law.

On 8 April 2005, British Prime Minister Tony Blair and Gordon Brown, the Chancellor of the Exchequer, visited Longbridge and stated that there might be some hope for the future of the company, although not the original deal agreed with SAIC.

On 10 April 2005, MG Rover announced that they had received a 6.5 million pounds loan from the British Government 1. This would cover worker wages for one week while buy-out proposals were made to SAIC. The same week, SAIC denied it had ever made an offer to buy MG Rover and threatened to sue anyone who attempted to make the 25 and 75 models.

Wikinews has news related to:

Last British volume car manufacturer closes down

[edit] Acquisition by Nanjing Automobile Group

On 15 April 2005, it was announced that SAIC had once again rejected pleas to buy out the company. With no other rescue deal in the pipeline, PWC declared the company to be insolvent and announced that redundancy notices to Longbridge staff would be issued.

By the end of April 2005, Sir Richard Branson had reportedly expressed an interest in buying the remaining assets of the company for the purpose of reviving the marque in order to enter the hybrid automobile market, and several other parties were also rumoured as wishing to buy the remnants, including two Russian businessmen (one of whom denied the reports) as well as the Iranian state-owned car manufacturer, SAIPA.

SAIC had claimed that it had already acquired Intellectual Property Rights in some Rover product for £67 million in the autumn of 2004, including the Rover 25, the Rover 75 and the Rover Powertrain K-series engine, but the Administrators advised that there was still interest in saving some other parts of the company, including MG, and Friday, May 13, 2005 was set as the deadline for bids from potential investors.

On Friday, May 20, the Administrators announced that, after considering numerous proposals, they had entered talks with two unnamed "overseas companies" with a view to restarting one or more of the Longbridge production lines. Nevertheless, just the following week they informed creditors that they by then expected the company to proceed instead to a creditors' voluntary liquidation, setting the date for a preliminary Creditors' Meeting to be held in Birmingham on Friday, June 10, 2005. At that meeting, creditors learned that so little of value was left in the company that there would probably be negligible or even no repayment of its outstanding debt and that, although three bidders were then still negotiating to acquire the company intact as a going concern, the Administrators had instructed their agents to prepare for the piecemeal sale of the very few remaining assets in the event that satisfactory negotiations for the sale of the entire business were not concluded.

On Thursday, July 14, it was reported that Magma Holdings, a financial group including former Ford Motor Company and General Motors executives, working in conjunction with SAIC, would be making an offer for both MG Rover and engine maker Rover Powertrain which, if successful, would see at least some production being restarted at Longbridge, and that talks with the other two interested parties – China's Nanjing Automobile Group and Project Kimber (a consortium of Birmingham businessmen led by David James) – were still in progress.

On Monday, July 18, Magma Holdings and SAIC formalized their bid with an offer of £60 million. However, that offer was not well-received and on Friday, July 22, the Administrators announced that the entire group had been sold to the Nanjing Automobile Group for around £53 million, with a deposit of around $5 million, indicating that their preliminary plans involved relocating the Powertrain engine plant to China and splitting car production into Rover lines in China and MG lines in the West Midlands (though not necessarily at Longbridge), where a UK R&D and technical facility would also be developed. But on Saturday, August 27, The Daily Telegraph reported that the balance of around £47 million, due on August 22 had not been paid. Citing confidentiality, the Administrators declined to comment.

Nanjing Automobile started shipping equipment from Longbridge to China on Thursday, September 15 and, according to a report in The Times on Saturday, September 17, were close to a deal with SAIC under which they would manufacture the Rover 25 and Powertrain engines while SAIC would produce a stretched Rover 75. Nanjing Automobile Group was reported to be in exclusive negotiations with GB Sports Cars, a venture by former Rover managers, to re-establish MG production at Longbridge.

In late October, key ex-workers received letters from Nanjing Automobile Group offering 10 months' work dismantling plant at Longbridge for reassembly in China while talks with GB Sports Cars continued. However, after announcing that the UK government had not offered any substantial assistance in either grants or loans, Nanjing Automobile was also reported to have begun negotiations with at least two other potential partners, including "a wealthy San Francisco family", and, in early November, Nanjing committed to making every effort "to resume production [at Longbridge] at the beginning of 2007".

[edit] Brands

Many car brands that were formerly the property of British Leyland passed on to MG Rover. The brands of Alvis and Jaguar (including Daimler and Lanchester, as well as the American rights to Vanden Plas) were sold off by British Leyland before it became Rover Group, and Land Rover was sold to Ford in the BMW days. It was announced in September 2006 that the Rover brand would be sold by BMW to Ford for an undiscosed fee [1]. The current status of the former British Leyland brands is as follows:

Owned by MG Rover/Nanjing:

1895 Wolseley
1905 Austin
1912 Morris
1913 Vanden Plas as a coachbuilder and as a car brand (outside the US & Canada)
1923 MG created by Morris
1930 American Austin created by Austin for US market
1947 Princess created by Vanden Plas as a car brand
1987 Sterling created as a separate brand in the US by the Rover Group

Owned by BMW:

1898 Riley
1903 Standard as a part of Triumph Motor Company
1919 Dawson the genesis brand of Triumph Motor Company
1923 Triumph as a car brand – the motorcycle brand owned is by Triumph Motorcycles
1936 Autovia created by Riley as a luxury car brand
1959 Mini originally used as a sub-brand on the Morris versions of the car. Made a brand in its own right by British Leyland in 1969