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View Full Version : MG Rover SAIC talks stalledv- receivership is very possible


boston
04-04-2005, 10:54 AM
Its looking very grim for MG Rover. <p>Talks for SAIC to invest/take over have stalled.. Govt trying to make the deal happen to save jobs using a bridging loan to keep the company going - That sounds so British Leyland like, and possibly causing a problems with the EEC<p>Country likely to elect a new Prime Minister within 60 days which makes all of this quite difficult for the Govt who of course want to stay in power. <p>One stumbling block, the huge pension liability. SAIC reportedly considering letting the receiver in and buying assets that way as a method of eliminating the pension liability. <p><br>Makes me think of all the pension, healthcare and other liabilities that Ford and GM would like to shed in this country. <br>

pcread
04-04-2005, 11:37 AM
From what I gathered from the BBC (5Live), there was enough operating capital for a couple of years.<p>The gov is keen to see this deal succeed because of the upcoming elections and the many vulnerable seats in the West Midlands.

MrMGMan
04-06-2005, 01:19 PM
I think the main bone of contention is MG Rover's pensionand redundancy liability should it fail, not any real lack of operating capital to keep the business running for the next few years. After all, the last published accounts for MG Rover late in 2003 showed a positive bank balance of around 315 million, hardly an amount they could have squandered in the interim two years, certainly not on the relatively low scale R&D projects they've been engaged in.<p>Of course, SAIC are being eminently sensible in their approach - whats the point of starting a partnership with a company which could potentially run out of money before the profits from the Joint Venture have begun to flow, thereby landing SAIC with MG Rover's massive pension liability and redundancy costs.<p>I'm not saying MG Rover is going to fail, or that the deal is going to fall through, but there is always the possibility that MG Rover simply doesn't have enough working capital to see it through until the launch of the new RD60, and until the profits from that car start rolling in. A good way for the government to lend a hand, without giving a direct state subsidy to secure the deal, would be to undertake a commitment to underwrite perhaps 50% of any possible MG Rover close down costs, as well as offering the 100 million bridging loan to prop-up MG Rover's working capital to ensure that any such liability never comes to pass. Assuming MG Rover's redundancy and pension liability amounts to 400 million, then offering to underwrite 50% of these costs, plus offering the 100 million bridging loan would cost the UK government a potential total investment of 300 million - chicken feed for the UK government, and a pittance compared to the BILLIONS they poured into British Leyland in their failed attempts to keep the company going.

pcread
04-07-2005, 05:33 AM
Lateste development:<p>MGR has stopped production at Longbridge, because some suppliers are refusing to deliver parts until the financial situation is clarified.<p>Source:<br><A HREF="http://news.bbc.co.uk/1/hi/business/4420507.stm" TARGET="_blank">http://news.bbc.co.uk/1/hi/business/4420507.stm</A>

mzoltarp
04-07-2005, 05:38 AM
The real question is MG Rover fully competitive in their designs? I honestly do not know but my impression is that VW/Ford/Opel/Peugeot/Renault/Citroen are in a different league and that MG Rover is revising revisions of old designs. If my impression is correct then the only reason anyone would want them would be for production space because I do not think it is for cutting edge design, engineering, and technology.

boston
04-07-2005, 07:05 AM
MG rover designs haven't been competitve for 30 plus years. <p>Morris Marina/Austin America/Morris Ital was a rebodied Morris Minor from the '50s. The car divisions of British Leyland always lost money. New name same problem, they can't make enough money to reinvest. <p>Its hard to say this, as so much of my childhood was spend being driven around in Issigonis influenced products, but its time to say goodbye to MG Rover products. <p>MG Rover RIP

stewacide
04-07-2005, 11:21 AM
I'd imagine Rover's designs are still far ahead of anything SAIC could do in China...

Chicho
04-07-2005, 03:55 PM
News from Departament of Trade and Industry: The Rt. Hon. Patricia Hewitt<br>Secretary of State for Trade and Industry and Minister for Women and Equality reported about failed deal with Saic.<p>She also said MG Rover went bankrupt. <IMG NAME="icon" SRC="http://www.germancarfans.com/images/forums/scared.gif" BORDER="0"> <IMG NAME="icon" SRC="http://www.germancarfans.com/images/forums/eek2.gif" BORDER="0"> <p>RIP MG Rover. Your last chance is gone (BMW)<p><br><A HREF="http://www.elmundo.es/elmundomotor/2005/04/08/empresas/1112912609.html" TARGET="_blank">http://www.elmundo.es/elmundom....html</A><p>Sorry but its Spanish

AM2K
04-07-2005, 04:53 PM
Carry on talk in the other thread which has a lot more recent info:<p><A HREF="http://www.carspyshots.net/zeropost?cmd=tshow&id=14730" TARGET="_blank">http://www.carspyshots.net/zer...14730</A>