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Last Updated: Wednesday, 22 February 2006, 14:19 GMT
New lease of life for Longbridge
Chief Executive of St. Modwen Bill Oliver (far left) and chairman of Nanjing Automobile Association Mr Wang Hongbiao (far right) exchange gifts watched by the leader of Birmingham City Council
The lease is part of wider regeneration plans for Longbridge
Nanjing Auto, the Chinese firm which bought MG Rover, has renewed its lease on the Longbridge plant in Birmingham and wants to resume car production.

It has signed a 33-year lease and has plans to restart production of the MG TF sports car in 2007, employing between 600 and 1,000 workers.

MG Rover went bust in 2005, at a cost of about 6,000 jobs, and was then bought by Nanjing for 50m ($86m).

But the lease has a six-month get out clause, allowing Nanjing to walk away.

'Optimism'

The deal was welcomed by the Transport and General Workers Union (T&G).

According to the T&G, Nanjing's business plan could lead to the production of 100,000 cars a year and create 1,200 jobs.

Nanjing's UK chairman Wang Hongbiao said he was delighted to have reached the deal with the site's owner, St Modwen Properties.

"This means that we can move forward with our business plan to build cars at Longbridge," he said.

MG TF sports car
Production of MG TF sports cars is set to restart next year

The lease means Nanjing will pay about 1.8m a year for the South Works section of MG Rover's former Longbridge premises.

The 105-acre area, which includes two car assembly plants, a paint shop and offices, accounts for about a quarter of the old site.

Richard Burdon, the Labour MP for Birmingham Northfield, which includes Longbridge, said people needed to understand the scale of the deal.

"We are not talking about Rover's return here, we're not talking about the return of mass car manufacturing," said Mr Burdon.

"We're talking about a relatively small, but significant, sports car manufacturer...that could lead to a broader regeneration of the area."

St Modwen and local authorities have wider ambitions for the Longbridge site, which would see up to 10,000 jobs created through a mixture of housing, retail and industrial developments.

Birmingham City Council chief Mike Whitby said he had witnessed the collapse of MG Rover in April 2005.

"The sense of loss to this community and to Birmingham as a whole was profound," he said.

"But today... we can celebrate in the spirit of optimism that manufacturing will return to part of the Longbridge site."

MG, not Rover

Nanjing's acquisition of MG Rover only included the rights to use the MG brand.

The Rover brand is still owned by Rover Group's former parent BMW.

The Rover marque is up for sale, however.

At a recent dinner in London, BMW chief executive Helmut Panke refused to name any potential bidders, though he pointed out that "the Chinese recognise that established brands can be very useful when entering the Western European market".

Ford would be given first refusal to buy the marque, under an agreement entered into when the American car maker acquired Land Rover from BMW in 2000.


BBC NEWS: VIDEO AND AUDIO
See inside the Longbridge plant now Nanjing has control



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