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Last Updated: Tuesday, 27 December 2005, 21:04 GMT
The year when MG Rover collapsed

By Rory Cellan-Jones
BBC News business correspondent

Rover dealership
Dealers were the first to spot the signs of the Rover crisis

Christmas 2004 - and MG Rover is looking forward to better times.

It is about to sign a 1 billion deal with a Chinese car company, Shanghai Automotive, and it is promising to launch several new models in 2005.

Christmas 2005 - and yes, Rover is in the hands of a Chinese firm.

But it is Nanjing Automobile which bought the company from the administrators after its collapse in April, and the prospect of new models emerging from Longbridge now looks remote.

So should we have seen it coming?

Well, ever since the Phoenix Four bought Rover from BMW in 2000 for a symbolic 10, there had been plenty of voices warning that it was all going to end in tears.

In a global market with too much capacity, could a small British-owned firm without any financial muscle really aspire to produce cars for the mass market?

It was gross mismanagement
Peter Pritchard, Rover dealer

The answer was no.

By the beginning of this year, Rover's failure to produce inspiring new models meant it had become a niche carmaker by default. Sales were falling so quickly that Rover now had less than 3% of the UK market.

But the management and the workforce still had faith that Shanghai Automotive would come to the rescue.

Shattered hopes

"I still thought it was going to happen," one former Rover executive says. "Shanghai had paid over some money, and they'd just sent a big team over to Longbridge."

Adrian Ross, the union convenor at Longbridge, was also convinced that everything would turn out fine:

"We were told it was full steam ahead, the Chinese were about to sign," he says.

"After all, we already had a couple of hundred people out in Shanghai working on the project."

But not everyone was quite so confident.

Peter Pritchard, a Rover dealer in Walsall, had reason to be worried - he was owed a lot of money.

Longbridge
Workers at the Longbridge plant had little idea of what was coming

"We were having a hell of a job getting payments from Rover that we had been promised," he says. "At the same time, they were putting us under a lot of pressure to order cars that we could not sell."

In the spring, Mr Pritchard was among a group of Rover dealers invited to Longbridge to be shown models of new vehicles, and to hear about the bright future about to arrive with the Chinese deal.

"A senior director told us we must show confidence by ordering vehicles. I told him I'd lost faith in the company."

Adrian Ross' faith only began to crumble at the end of March, when he heard that the accountants Ernst and Young were warning the Chinese about the dire state of Rover's finances.

Then on 7 April came the concrete evidence that the cash had run out: "We were told there was a shortage of parts and that production was being halted temporarily."

But the suppliers had not been paid and the lines at Longbridge would not be starting again.

Job losses

That night, I was inside the plant as the government announced that Rover was calling in the receivers - or the administrators, as the Department of Trade and Industry hurriedly corrected itself.

Night-shift workers gathered round our satellite truck to ask what was going to happen.

RIP notes left by Rover workers
There seems little chance that Rover will rise from the ashes

Eight months on, we now know what the cost is.

The Rover Task Force says that 9,000 people at the company and its suppliers lost their jobs.

But over half of the Longbridge workforce have found new jobs and many of the rest are retraining.

Adrian Ross is one of the few still left at Longbridge, helping the new Chinese owners with their plans.

He has watched as Nanjing packs up much of the plant to ship it to China, but remains defiantly optimistic that they will keep their promise to build some cars in Birmingham.

It is difficult to find anyone else who believes that Rover will rise again.

Peter Pritchard is angry about what he and the whole region lost - and he blames Rover's managers.

"They strung us along," he says. "It was gross mismanagement."

The final verdict on the whole affair should come in the report by the inspectors appointed by the DTI - but nobody is expecting that to arrive in a hurry.




BBC NEWS: VIDEO AND AUDIO
One ex-Rover worker on her fight for former employees



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