Thursday, April 07, 2005

Carmaker MG Rover Collapses

Reuters reports that the UK carmaker MG Rover has collapsed. The company, most famous for its line of SUVs, formerly belonged to BMW AG but was sold back to British Phoenix Group four years ago. The company's sales had dropped by 25% versus March 2004. (MG sales were up slightly, at 2%.) Talks with Chinese Shanghai Automotive Industry Corp. (SAIC), a potential suitor, collapsed a few hours ago.
The move came after China's Shanghai Automotive Industry Corp. (SAIC) said it would not invest in the company.

"In the end, SAIC made it clear that they were not confident about the future solvency of MG Rover, and therefore there was no reasonable prospect of a deal," she said.

Suppliers refused deliveries on the news of the collapse. The fate of 6,000 employees hangs on the disposition of the company. The collapse continues a trend of ugly news for UK carmaking; last September, Ford announced the closure of the historic Coventry Jaguar plant, resulting in the loss of 1,100 jobs.