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Friday, 17 March, 2000, 13:41 GMT
Blair fury over BMW

PM: BMW did not conduct business in the ususal way
Downing Street has told German car manufacturer BMW of Prime Minister Tony Blair's anger at how he was kept in the dark over the break-up of the Rover car group.

A spokesman for the prime minister confirmed a Downing Street official phoned BMW's Munich headquarters to express Tony Blair's anger that UK officials had not been informed of BMW's intentions.

"That is not the way the prime minister believes people should do business," said the spokesman.

The phone call to BMW came after the government accused the company on Thursday of failing to communicate its intentions properly.

But on Friday the company suggested that if the government had been clearer over its intentions for Euro membership, it may have acted differently over Rover.

Ministers say they are furious that BMW was discussing the sell-off while the UK government was in negotiations with the European Commission in Brussels over an aid package for Rover's Longbridge factory.

The Downing Street spokesman said BMW was "under no illusion" about the prime minister's anger.

Mr Blair had been particularly annoyed, the spokesman said, because the government had been lobbying Brussels on BMW's behalf while the company was taking steps to dismember Rover.

Detailed negotiations

While BMW had blamed the strength of the pound and uncertainty over Euro membership, Treasury officials have told the BBC that they believed the company was now trying to make excuses to cover up its own bad management.

But the former Conservative trade and industry secretary, Michael Heseltine, said the government knew of the firm's concerns over Euro membership.

"There is no doubt that BMW has a very substantial financial problem that has arisen from the Rover deal," he said.

"But the problem of being outside of the Euro zone is going to have a very serious effect on our ability to attract investment.

"BMW has made no secret of this, Japanese companies have said for years that continuing support for this country would be prejudiced by this issue."

Mr Heseltine stopped short of accusing the government of mishandling the crisis but added: "The government has a responsibility to do all it can to help British industry."

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