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Wednesday, April 14, 1999 Published at 13:03 GMT 14:03 UK

Business: The Company File

Longbridge 'agreement in principle'

Rover has been given a new lease of life

German car maker BMW has signalled its approval of a UK Government aid offer for the Rover Longbridge plant in Birmingham.

The agreement will safeguard tens of thousands of jobs in the UK car industry.

The UK Government struck a deal with BMW last month in a last gasp effort to save Longbridge after Rover's business clocked up huge losses.

The size of the government aid package has not been revealed but it is rumoured to be in the order of £150m.

[ image: Thousands of Rover workers could be saved]
Thousands of Rover workers could be saved
BMW said: "The management board agreed in principle to the agreement made between the British government and BMW about the nature and scope of the support measures to be provided by the government with a view to securing the production of the follow-on model to replace the Rover 200 and 400 in Longbridge."

The group added that implementing the plans now depended on future discussions with trade unions and approval by the European Union competition authorities.

Rubber stamp

BMW is likely to give final approval to the deal within the next few weeks.

The company is thought to be ready to invest up to £1.7bn in Longbridge.

It has declined to comment on the level of investment put up by the British government.

There are still concerns that more Rover jobs will be lost after the 2,500 redundancies agreed with unions last year.

The turmoil at the UK car marker has led to an management exodus from both Rover and BMW.

Without the government aid, BMW had threatened to move its Rover operation to Hungary.

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