Thousands of Rover workers were tonight celebrating a remarkable rescue
mission which saved the car giant from almost certain closure and returned
the company to British ownership.
German firm BMW sold its loss-making subsidiary to the Phoenix consortium for
a symbolic £10 after seven days of negotiations ended in a dramatic deal.
Phoenix, headed by former Rover executive John Towers, said it confidently
expected to return the company to profit within two years.
Mr Towers said job losses at the huge Longbridge factory in Birmingham should
be fewer than 1,000 - a fraction of the several thousand expected if Rover
had been bought by venture capitalist group Alchemy Partners.
Phoenix received about £500 million from BMW and £200 million in private
backing from United States bank First Union to finance the sale, which was
completed at 0830 in the Central London offices of BMW's solicitors.
Trade and Industry Secretary Stephen Byers joined union officials, workers,
business leaders and car dealers in welcoming the deal.
Rover has been in crisis for the past two months since BMW decided to break
up the group, and there were real fears that Longbridge would close within
the next few days.
The Phoenix consortium, mainly made up of Midlands businessmen, only opened
serious negotiations last Tuesday but have worked around the clock to put
together a viable business plan.
The deal is one of the most astonishing rescue missions in the history of
British industry.
Mr Towers was given a hero's welcome when he arrived at Longbridge this
afternoon - in a Rover 75 - to end an emotional day for the company and the
industry.
Flanked by union officials and other members of his consortium, he said
Phoenix wanted to move Rover on to a firm footing following the trauma of the
past two months.
"We have a robust business plan," said Mr Towers, adding that the first phase
was to turn the business into balance in terms of cashflow, which he hoped to
achieve within 14 months.
"There has been a lot of inaccurate reporting about the financial position. I
expect Rover to be in profit within two years."
Mr Towers said something different would have to be done, and that would
involve collaborating with other firms.
Prime Minister Tony Blair went out of his way to praise the role played by Mr
Byers in securing the deal.
"Today there is good news and I congratulate all involved and I hope people
will recognise the important contribution of Steve Byers who, despite all the
attacks on him, rolled up his sleeves, got to work and, behind the scenes,
ensured the Government did what it could to bring this about," he said.
"Now there is still going to be a lot of difficult going over the next few
months and years, but at least it is a real start to the process of giving
Longbridge a decent future."
Phoenix will not be receiving any state aid towards its purchase of Rover, Mr
Byers made clear.
He told PA News that the Government would offer help to retrain and re-skill
workers from Longbridge who will lose their jobs despite the deal.
"I am pleased that an agreement has been struck and I would like to
personally congratulate Mr Towers, who despite considerable criticism has
stuck to his task and has now delivered a project that will be good news for
Longbridge.
"I am personally pleased that our original objective of maintaining car
production at Longbridge and minimising job losses has been achieved.
"There will be some job losses and we must not forget those individuals and
their families who will still be affected."
Phoenix will continue building the Rover 25 and 45 and the MGF sports car at
Longbridge as well as the current Mini, until the new Mini is built at
Cowley, near Oxford next year.
The top of the range Rover 75 will be switched from Cowley to Longbridge and
an estate version is being planned.
BMW chairman Professor Joachim Milberg said: "After intense negotiations, we
have managed to find a buyer for Rover whose aim is to continue to run Rover
and who will therefore prevent the loss of thousands of jobs in the Rover
plant in Birmingham, in the supplier industry and in the retail business."
Workers at Longbridge gave a thumbs-up from behind the main Q gate entrance
as they arrived for work and sounded their horns as the news filtered
through.
Production worker Roger Voice, 44, from Northfields, Birmingham said: "It's
magic news but I would have to say, what is the long-term plan? It's
brilliant. But it's going to take at least 12 months to turn it around."
Dave Crowley, 27, emerged from the plant in his Land Rover Freelander 4x4 to
say the news was good not just for the workers at Rover but also for his
components company. "I think it's wonderful news. It's the best thing that
could have happened."
Tony Woodley, chief car industry negotiator for the Transport and General
Workers Union, said: "We've worked extremely hard, thousands of hours of work
with the Towers team, to be able to limit the damage after the industrial
disaster that BMW left us with."
John Edmonds, general secretary of the GMB union, said: "This is the best
deal that we could have hoped for and gives the company a breathing space.
"It is an opportunity to rebuild the Rover brand and John Towers can be
assured of the strongest support from the workforce."
The Retail Motor Industry Federation, which represents 300 Rover dealerships,
congratulated Phoenix and welcomed the end of the last few months of
"confusion and indecision".
Franchised dealer director Alan Pulham said: "We hope Phoenix will
immediately tell Rover dealers how their businesses are likely to be
affected."
Alchemy, the original bidder which had been waiting in the wings in case the
Phoenix bid collapsed, issued a brief statement which read: "Alchemy Partners
wish the Phoenix consortium and its employees good luck for the future.
Alchemy Partners looks forward to fresh transactions."
Alchemy boss Jon Moulton bizarrely handed out cakes to reporters when his
firm suddenly pulled out of negotiations last month.
At the end of his news conference today, Mr Towers joked: "I think we have
now done everything - except the cakes."
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