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The BBC's Stephen Evans
"Increasingly, it's a forlorn hope"
 real 56k

Wednesday, 26 April, 2000, 15:26 GMT 16:26 UK
Rover: 24,000 jobs at risk
Rover's Longbridge plant
Rover's Longbridge plant is making losses, despite BMW's multi-billion pound investment
As many as 24,000 jobs are at risk in the West Midlands following the planned break-up of car maker Rover, according to an report prepared by a government task force.


The shock to the West Midlands following the announcement by BMW of the restructuring of Rover cannot be underestimated.

Alex Stephenson, Rover Task Force
As the report was published on Wednesday, Trade and Industry Secretary Stephen Byers promised 10m in immediate help for affected companies "to modernise, retrain their workers, re-tool and diversify".

He also said that a 129m aid package to help the West Midlands recover from the Rover sale could be extended if schemes were identified which would help with job creation.

The task force said that many suppliers had "a high degree of dependency on Rover" and warned they might face "severe business diffculties" as a result of cuts at Longbridge.

However, the "interim report" of the government's Rover Task Force is short on detail as to how the break-up will actually affect the local economy.

The report says that Rover Group supports up to 55,000 jobs and 8% of all manufacturing employment in the region.

Longbridge future uncertain

The factory most at risk, Longbridge, provides 24,000 jobs at the plant and suppliers. It produces 500m in employment income.

Alex Stephenson, the chairman of the Rover Task Force, said: "We still do not know for certain what the future for Longbridge will be but we do know that at least 24,000 people are directly or indirectly dependent on car manufacturing there."

The task force warns that job cuts at the plant are "likely to be felt most heavily in the South West Birmingham/North Worcestershire area". Worst hit will be the Longbridge, Northfield and Bromsgrove area," where over 50% of Rover's Longbridge workforce are based".

However, as neither of the two potential buyers of Longbridge has spelt out how many jobs they actually plan to axe, any more detailed figures must be speculation.

The final report will be published by the end of June.

Losses

The current owner of Rover, German car maker BMW, recently announced plans to break up the group because of mounting losses.

The UK subsidiary is said to cost BMW 2m a day. During 1999 Rover's losses piled up to more than 800m.

BMW is in negotiations with venture capital firm Alchemy Partners to take Rover's sprawling Longbridge plant off their hands.

Alchemy option

Alchemy plans to phase out mass car production of the Rover 75, 45 and 25. Instead, the firm wants to revive the MG brand and produce sports cars.

This option could see 5,000 of the 9,000 jobs at Longbridge disappear, and would affect thousands more at suppliers and the local economy.

Phoenix option

A former Rover chief executive, John Towers, has tried to pull together a rival bid. He wants to halve production levels at Rover, but is promising to continue mass production.

However, his Phoenix consortium has not managed to line up the necessary bank guarantees and is now running out of time to prepare the financial details of its bid before a Friday deadline set by BMW.

BMW plans to keep the newly modernised Rover plant in Cowley, where it will build the new Mini and other cars.

The off-road vehicle division, building Landrover and Range Rover cars, will be sold to Ford.

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See also:

26 Apr 00 | Business
BMW: No Rover deadline
16 Mar 00 | Business
Alchemy seeks gold in Rover
16 Mar 00 | Business
The Rover Group
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