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Last Updated: Friday, 8 April, 2005, 13:50 GMT 14:50 UK
What will a Rover collapse mean?
Time appears to be running out for MG Rover. The crisis-hit British car company has called in administrators following the collapse of rescue talks with Chinese car maker Shanghai Automotive Industry Corp.

BBC News looks at what the demise of MG Rover would mean for many thousands of people across the UK with a vested interest in the company - from workers to customers.


MG Rover's workers have little to do but wait for news on the fate of the company, after production was suspended at the car maker's Longbridge plant on Thursday.

Workers arriving at Rover's Longbridge plant on Friday
A rapid response team may be set up to help Rover workers

MG Rover employs about 6,000 workers, but an additional 15,000-20,000 jobs in the area are also supported by business from the firm.

So far, there has been no official announcement on what government funds would be made available to workers should MG Rover collapse.

However, the Department of Trade and Industry (DTI) says it is likely a package of support measures would be put in place.

A "rapid response unit" staffed by a team of Job Centre specialists could be set up at Longbridge to help MG Rover workers, a spokeswoman for the DTI said.

"They would be on hand to advise on retraining and to help with queries about other jobs in the area," she said.


MG Rover's share of the UK car market has been shrinking in recent years, but Britain's last volume car manufacturer still has many loyal customers.

Recent MG Rover customers will be anxious about the status of the warranty which usually accompanies new car purchases.

Dealers who carry out repairs on cars under warranty obtain parts and fees for labour from the manufacturer.

"The warranty falls with Rover," says David Dyson, financial director of UK car dealership Lookers.

However, it is unlikely that many dealers will want to leave their customers high and dry, he says.

"What we as dealers would try to do is stand behind the warranty, but it's going to cost a lot of money to do that," says Mr Dyson.

There remains no guarantee that a MG Rover warranty will be honoured by all dealers if the company goes under, he says.

For MG Rover's customers, much may depend on where - and from whom - they bought their car.


More immediate help is on hand for the many firms that supply MG Rover.

Trade and Industry Secretary Patricia Hewitt has announced a support programme worth more than 40m.

This will give MG Rover's suppliers breathing space as they try to seek new business opportunities.

Ms Hewitt also announced the launch of the MG Rover Task Force, led by Nick Paul, chairman of the regional development agency Advantage West Midlands (AWM). It will be responsible for deciding how best to allocate the support.

Membership of the 23-strong group will include key organisations and individuals from the public and private sectors, and will deal with the regional and local consequences of MG Rover's announcement.

Some smaller companies, which traditionally focused on supplying MG Rover, say they have already been diversifying their interests away from Longbridge.

A dedicated telephone line has been established to provide business support and advice to companies in the MG Rover supply chain, on 0121 6070121.

AWM is also offering advice to suppliers at


At the opposite end of the chain, there appears to be little help on offer for MG Rover dealerships across the country.

Many showrooms face "significant" losses, with those specialising in MG Rover baring the brunt, says Mr Dyson, of the Manchester-based Lookers group.

He estimates many dealers could face six figure losses in the near term from their exposure to MG Rover.

Lookers has around 100 dealerships across Britain, four of which specialise in MG Rover cars.

My Dyson says dealers will still be invoiced under previous arrangements for unsold Rover cars yet to be delivered. A separate firm purchases MG Rover's cars and supplies them to showrooms.

Lookers has hundreds of Rover cars left to sell, Mr Dyson says, while some existing MG Rover customers are beginning to cancel their orders.

"As of today, I imagine we are selling no more Rovers," he says.

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