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Friday, December 11, 1998 Published at 13:09 GMT

Business: The Company File

Rover workers accept deal

The company wants to cut costs and increase productivity

Rover workers have voted to accept radical changes to working practices and redundancies which will secure the future of the company's Longbridge plant in Birmingham.

BBC's Daniel Boettcher: 'The result wasn't a surprise'
The deal will lead to the loss of 2,500 jobs, mainly at the Longbridge plant.

In return, the company's German owner, BMW, has promised to invest a further £2bn to build four new models, including a new Mini, and new machinery.

A Rover worker reacting to the news: 'That is marvellous'
Workers voted in a ballot by 17,784 to 7,045 to accept the agreement which was thrashed out by union leaders and the company's bosses.

The agreement is designed to improve productivity to help secure Rover's long-term future.

Deal welcomed

The result of the vote was welcomed by both union leaders and managers of Rover.

Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said: "This excellent result puts Rover on course for success and the workforce on course for stability."

One disgruntled Rover worker: 'I think it is blackmail'
Bill Morris, general secretary of the Transport and General Workers Union, said he hoped the deal would mark a "turning point" and deliver Rover workers from "fear of the future".

Roger Lyons, general secretary of the Manufacturing Science and Finance Union, said: "This is a vote of confidence in the future of the car industry and shows that partnership is now the central focus of British industrial relations."

BMW chariman Bernd Pischetsrieder said the decision was "a milestone" and the workers and unions had "made a most important secure a successful future for Rover".

Longbridge at stake

[ image: Low productivity is blamed for the company's losses]
Low productivity is blamed for the company's losses
BMW warned it was prepared to take drastic action if the deal was not approved. The plant at Longbridge could have closed at the cost of some 14,000 jobs at Rover and up to 50,000 with suppliers.

The factory produces the Mini, the MGF, the Rover 200 and the Rover 400.

The Bavarian manufacturer bought Rover four years ago and has since invested billions of pounds, without seeing much in return.

Walter Hasselkus, Rover's chairman, has left the company after acknowledging that he "got it wrong". BMW has also blamed the strong pound for hitting Rover sales.

All 39,000 workers at Rover were balloted on the package after it was outlined to them in a series of meetings, including a mass gathering at Birmingham's National Exhibition Centre.


The main points of the deal are:

  • New shift patterns will extend production time at Rover plants.
  • Overtime payments will be replaced with 'working time accounts'; workers will work more when demand is high, and get the free time back when sales are weak.
  • Working hours will be cut from 37 to 35 a week.
  • Job losses will be voluntary and across the company.
The new working conditions have already been tried and tested at BMW's German car factories.

The government has promised £740,000 to help Rover workers find new jobs. The money will go on training courses and is supposed to ease the company's restructuring process.


Productivity is the key to Rover's survival. The figures for the Longbridge plant look particularly bad. Because of decades of under-investment and outdated working practices, the plant produces just 33 cars per worker annually. In comparison, the Nissan factory in Sunderland churns out 98 cars per worker each year.

Within the UK, Sunderland is an exception. At car plants across the country, productivity is much lower than for example in Germany and the United States.

Government aid

BMW is now expected to press the government for a grant aid of up to £200m to build a new medium-sized car in Britain.

BMW has criticised the government for subsidising other car makers by giving them huge grants, which is claims has made it difficult to compete in the UK.

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