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Sunday, February 7, 1999 Published at 23:06 GMT

Business: The Company File

Union calls for Rover deal

Longbridge is earmarked to build the Millennium Mini

The head of one of Britain's biggest unions has called on BMW's new boss to agree on a deal on investment in Rover.

Roger Lyons and Jonathan Charles discuss Rover's dilemna
Roger Lyons, head of the Manufacturing, Science and Finance Union, said Rover should agree an investment deal at its Longbridge plant to complement the productivity deal agreed with the unions before Christmas.

The call follows concern over investment at the troubled Birmingham plant after a reshuffle at the top of parent company BMW.

Mr Lyons also said there was an urgent need for investment in the new Mini, which is ready to go into production, and which would put the company back on the world map as a major car manufacturer.

[ image: Rover workers are worried about their future]
Rover workers are worried about their future
"We need to have the investment overall in Longbridge if it to become a modern plant," he told BBC Two's Money Programme.

"The productivity problems are exclusively ones of investment. So [new chief executive] Professor Milberg should now agree to back the agreement with the workforce with an agreement on investment ... we hope to talk to him urgently along these lines," he said.

He added that the government could only make a commitment to give financial support to Rover when BMW had made a firm commitment to develop the medium-size range to replace the Rover 200 and 400 models.

But the BBC's European Business Correspondent, Jonathan Charles, says the fate of Rover still hangs in the balance, with the new management unsure whether they want to proceed with new investment. He says there may also be demands for further job cuts before a decision is made.

Byers 'pleased' about prospects

Trade Secretary Stephen Byers will visit Longbridge on Monday for discussions with management and union officials.

He said he was "pleased" about prospects for the plant after speaking to BMW bosses last week.

The BBC's Christine Stewart: Union bosses want further reassurances from BMW
His spokesman said: "He was pleased to learn that BMW's review of investment plans for a medium-sized car is continuing and that it is looking closely at Longbridge as a possible location."

Mr Byers stressed to BMW the importance the UK Government attaches to Rover and Longbridge, the spokesman said.

[ image: Stephen Byers: Financial aid on offer]
Stephen Byers: Financial aid on offer
Mr Byers earlier said the government was prepared to offer BMW financial assistance.

The future of Rover Cars is still uncertain following the dramatic change in the top management of BMW, the company's owners, on Friday.

Both the UK Government and the Rover unions would like to meet Professor Joachim Milberg, who was appointed chairman on Friday after a dramatic board meeting in Munich which ended with the resignation of the company's top two executives.

Bernd Pischetsrieder, who oversaw BMW's purchase of Rover and his rival Wolfgang Reitzle - who unions feared wanted to close Longbridge - were forced out.

New models

Longbridge has become something of a liability for BMW, returning major losses since it was bought by the German company five years ago.

Prof Milberg's first task will be to consult closely with the recently appointed Rover Chairman, Professor Walter Samann, on how to handle the Longbridge problem.

Longbridge makes the Rover 200 and 400 models, the MGF sports car and the perennial Mini, which is now in its 40th year.

Facelifts for the 200 and 400 are due next year and Prof Milberg will have to make a decision on a medium-sized car to replace these models in three to four years.

Longbridge is also due to turn out a new Millennium Mini for the year 2000.

Last year Rover trade unions and BMW agreed 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.

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