By Alan Jones, Industrial Correspondent, PA News
German car giant BMW does not expect any more offers for its loss-making
Rover subsidiary, leaving the shock sale to venture capitalists Alchemy
Partners as the "best solution in town", a company executive said today.
Professor Werner Samann, chairman of Rover, said any "concrete" offer for the
company would be considered, but he expected the deal with Alchemy to be tied
up by early May.
He told the Commons Trade and Industry Select Committee that BMW had to
consider three options for Rover because of mounting losses and falling
sales, which had included closing the company.
Talks were held with US giants General Motors and Ford about selling Rover,
but they were "not interested" and there had been no offers other than the
one from Alchemy.
Speaking after being quizzed for over an hour by MPs, Prof Samann angrily
denied union claims that he had withheld information about the Alchemy deal
from unions, making it difficult for anyone else to make a bid.
"This is a deal between two private companies so we do not disclose details
of the deal. We don't expect another offer. We have the best solution in
town."
Prof Samann, flanked by other Rover officials, told the MPs that the high
level of the pound, coupled with falling sales, meant Rover was losing £2,000
on every car it sold in the UK last year.
Losses of around £800 million last year meant that the whole of the BMW group
was at risk unless something was done.
Options included selling the business or closing Rover, said Prof Samann, who
maintained that BMW did open a "clear information process" with unions and
the government.
The company told Trade and Industry Secretary Stephen Byers last December of
its concerns of a hold-up in planned £152 million of aid because of a
European Commission inquiry.
BMW chairman Joachim Milberg telephoned Mr Byers just before Christmas and
again in January and "gave a hint" of a possible revision to BMW's investment
plans.
The grant aid was only a "minor element" of BMW's planned £1.7 billion
investment package, MPs were told.
Prof Samann disclosed that BMW had not told the Department of Trade and
Industry or unions that it had started negotiations to sell the business,
because of "stock market sensitivity".
Prof Samann said Rover had saved hundreds of millions of pounds through
productivity gains after a groundbreaking deal with workers, but this was
offset by poor sales and the effect of the strong pound.
Committee chairman Martin O'Neill (Lab, Ochil) asked Prof Samann if he
understood the level of "betrayal" felt in the UK, and especially by workers
at the huge Longbridge factory in Birmingham, over the sale of Rover.
Prof Samann: "We understand and we regret this."
Another Labour MP, Lindsay Hoyle (Chorley) told Prof Samann that German
workers would not have been treated in the same way as British workers.
He maintained that Alchemy was being brought in to do BMW's "dirty work" in
sacking car workers.
Prof Samann said BMW hoped to retain as many jobs as possible, including
10,000 workers building the Rover 75 and new Mini, 11,000 at Land Rover which
is being bought by Ford, and 8,000 at Alchemy.
He told MPs that BMW started talking with Alchemy last October, with
negotiations getting under way in late January.
Talks were held with General Motors and Ford but they were not interested in
buying the company or just Rover cars.
"We always said we would consider an offer which was better than Alchemy, but
it must be an unsolicited offer and not just an idea."
But Prof Samann made it clear there was no alternative offer on the table and
the deal with Alchemy was due to be finalised at the end of April or early in
May.
Mr O'Neill summed up by telling Prof Samann that all the major car players
seemed to know that Longbridge was up for sale.
It would have taken a "leap of imagination" for Mr Byers to conclude from the
discussions about the grant that BMW was about to sell Rover.
Earlier, union leaders launched strong attacks on BMW for the way it had
decided to "cut and run", leaving thousands of workers facing redundancy.
Tony Woodley, chief negotiator for the Transport and General Workers Union,
said the German firm had been "dishonourable and dishonest" in the way it
discussed the future of Rover without consulting unions or the government.
Mr Woodley said he believed BMW had "panicked", leaving 10,000 workers facing
redundancy.
Duncan Simpson, chief negotiator for the Amalgamated Engineering and
Electrical Union, said BMW had acted with "utter contempt" for British car
workers, while Roger Lyons, general secretary of the Manufacturing Science
and Finance union, said every county in Britain would be hit by job losses
because of the Rover sale.
The unions accused BMW of keeping back information which could help another
bidder and appealed for the MPs' help in establishing the terms of the
Alchemy deal.
Léon
Triumph Sports Six Club
International Liaison Secretary
1963 Triumph Vitesse 2-Litre Convertible
Wimbledon, London, England.
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