Wednesday, October 21, 1998 Published at 08:41 GMT 09:41 UK
Business: The Company File
Rover: 2,400 jobs to go - and threat of closure
Rover workers are facing an uncertain future
Union officials at Britain's largest car plant have been told to accept 2,400 redundancies as part of a drive to cut costs or face the closure of the factory at Longbridge.
According to the unions, up to 14,000 jobs at Rover and 50,000 with suppliers would be jeopardised should Longbridge close.
The Rover group was bought four years ago by the German car manufacturer BMW. Despite a multi-billion pound investment the company is still making losses.
Rover's management is now demanding cost cuts and productivity gains to save the company.
He said Rover suffered not only under the high value of the pound, but from a "short-term cash and confidence problem" as well.
The union officials said they had told Bernd Pischetsrieder, BMW's chairman, that they were looking at ways to help and assist the company coping with the crisis.
However, Mr Pischetsrieder had warned the unions that Longbridge would have to close if the cost cutting measures "would not be achieved in a very short time."
Mr Woodley said the workforce was "in serious shock."
Rover's problems have meanwhile sparked off a political dispute, with the opposition accusing the government to have caused the car company's crisis.
The Trade and Industry Secretary, Peter Mandelson, replied that the UK motor industry as a whole was doing well. He said he was 'taking a close interest' in the problems at Longbridge and would be meeting the chairmen of the company and BMW on Thursday.
In the morning the company distributed a statement to all its 39,000 workers, warning them that Rover was in serious trouble.
The management believes that the low productivity of the workforce compared to other car factories is the main problem.
Rover's management says that as well as job losses, it is pressing for other cost saving measures including a possible wage freeze and changes to working practices.
If the talks are successful, Rover may ask the UK government for a grant relating to new investments worth £1bn.
No public money for Rover
Before the meeting of Rover's management and unions, the Trade and Industry Secretary Peter Mandelson said he believed Longbridge had a future but insisted Rover could not rely on public money to save it.
He told BBC Radio 4's Today programme: "I don't think that the salvation for Rover lies with the government.
"The salvation for Rover lies in its own hands - the hands of its management, executives and entire workforce,
The Rover 75 is the first car to be released after Rover's take-over by BMW four years ago - the result of a £700m investment.
Rover Chairman Dr Walter Hasselkus, said: "Longbridge is very important to us. We want to stay in Longbridge and we are committed to Longbridge.
"But that can only happen if there is a commercial and viable solution to our difficulties."
Rover has already started axing 1,500 jobs in recent months and announced production cutbacks at Longbridge in the run-up to Christmas.
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