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Wednesday, April 28, 1999 Published at 07:50 GMT 08:50 UK

Business: The Company File

Rover's Longbridge future in doubt

Longbridge's billion pound makeover could be blocked

Karel Van Miert explains his concerns on BBC Radio 4's Today programme
Concerns are growing about plans to save Rover's Longbridge car plant in Birmingham - putting 50,000 jobs in peril.

European Union Competition Commissioner Karel Van Miert has warned that he may block UK state aid to Rover's German parent BMW for its new investment in the plant.

The UK Government is thought to have pledged at least £150m to save Longbridge and tens of thousands of automotive jobs.

[ image: BMW had planned to build new Rover models at the plant]
BMW had planned to build new Rover models at the plant
The deal forms a vital part of BMW's £1.7bn overhaul of Longbridge which is designed to secure its long-term future.

BMW had decided to build a new medium size Rover range to replace the discontinued 200 and 400 series at the plant.

Mr Van Miert has raised his concerns with the UK's Trade and Industry Secretary Stephen Byers.

He said that BMW had yet to provide compelling evidence that the car maker would shift production to Hungary if it did not receive any state aid from the UK.

Mr Van Miert said that unless "detailed evidence" was produced by BMW showing that Britain won the new investment fair-and-square, he would have reservations about approving the UK aid to the German car giant.

"I told the Secretary of State to be aware that the Germans have to come up with convincing evidence. Longbridge can only be given state aid for real investment, not to compensate for lack of productivity," said Mr Van Miert.

The deal is expected to be sanctioned by BMW's board in the near future and will then be referred to the EU competition authorities for a final decision.

Rival manufacturer, Porsche, has complained to the European Commission about the UK state aid.

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