Friday, February 5, 1999 Published at 15:59 GMT
Business: The Company File
Threat to Rover jobs
Rover's future back in the balance
The UK Government has stepped up attempts to persuade BMW to keep Rover's Longbridge plant in Birmingham open.
It is feared that if he goes, the board could impose savage cuts at Rover, and even close down Longbridge altogether.
"I'll be speaking to the chairman later today to show that this government is committed to Rover Longbridge and we hope it's a commitment shared by BMW," he told BBC Radio 4's World at One programme.
"We have been discussing possible support to help them improve productivity, to help them build some new facilities at Rover Longbridge.
The UK Deputy Prime Minister has also joined unions in calling for BMW to honour its agreement to safeguard the future of Rover car plants in the UK.
John Prescott said he hoped last year's deal on radical new working practices and 2,500 redundancies would hold despite fears that a new chief executive at BMW would unravel the agreement.
Future in doubt
Mounting losses at the UK car group have put Mr Pischetsrieder's future in doubt. Latest figures show that Rover's UK sales almost halved last month compared with January 1998.
BMW has already announced 2,500 Rover jobs are to go and unions expressed dismay and anger that more jobs are under threat.
Bill Morris, leader of the Transport and General Workers Union, said closing Rover down was simply "not acceptable".
Friend of Rover
Mr Pischetsrieder played a key role when he supported Longbridge as others in BMW were pushing for its closure, and he helped draw up a new workplace agreement with unions late last year which helped keep the plant open.
Mr Reitzle is on record as saying Rover's future lies at its Oxford and Solihull plants, not at Longbridge which employs 14,000 people.
BMW has dismissed as "speculation" reports that the chairman's future would be discussed.
Turmoil in the car industry
The vital board meeting may also clear the way for a takeover of BMW by another car maker. Both Volkswagen and General Motors, the world's biggest automobile manufacturer, have already expressed their interest. A merger would create fresh doubts about the long term future for Rover's major UK plants.
The car industry is currently in a state of turmoil, after a series of major mergers. After Ford's takeover of Volvo, the world's carmakers are showing intense interest in the remaining independent premium car brands.
Drag on profits
The problems at loss-making Rover have drained BMW's 1998 profits.
Rover trade unions and BMW agreed to a rescue package involving a £2bn ($3.3bn) cash injection, 2,500 redundancies, and new flexible working hours to try to return the company to making money.
The rescue package struck with the unions led to the resignation of Rover's boss Walter Hasselkus, who accepted full responsibility for Rover's difficulties.
Rover is now negotiating with the UK Government for a £200m aid package for Longbridge.
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