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The BBC's Yvette Austin
"The deadline on the closure of Longbridge is exactly a month away"
 real 28k

Ex-Austin Rover MD Harold Musgrove:
"With great regret, I think it is very doubtful indeed"
 real 28k

Saturday, 29 April, 2000, 15:16 GMT 16:16 UK
Phoenix enters Rover spotlight
Unions believe Phoenix deal will work
Unions believe Phoenix deal will work
BMW is to begin talks with Phoenix on Tuesday over the sale of Rover Cars as it warns the bid is the carmaker's only chance of survival.

"At the moment this path does not only present itself as passable, but is also the only possibility to continue Rover Car Operations in the desired sense - otherwise a closure is unavoidable," said Rover Group chairman Professor Werner Samann.

Rover Cars was thrown into turmoil on Friday after venture capitalist Alchemy pulled out of its planned purchase. Phoenix's proposal had earlier been rejected as unviable by BMW.


John Towers
John Towers: Rover hopes pinned on him
Trade and Industry Secretary Stephen Byers welcomed the news. He said although the government had a limited role in negotiations it would "leave no stone unturned in trying to achieve a successful outcome".

A spokesman for Phoenix said the group was "greatly heartened" and remained committed to securing a deal that would save Rover.

'Not much time'

"Clearly the consortium will do all in its capability to make a success of this," he said.

But he warned: "BMW have said that they need a solution by the end of May, so that gives us an indication that there is not a lot of time."

Unions say they are optimistic that the renewed bid, led by ex-Rover chief John Towers, will win through.

Transport and General Workers Union (TGWU) negotiator Tony Woodley said he hoped to meet BMW chiefs in Munich on Tuesday to urge them to back Phoenix.



Although I wish them [Phoenix] well, I don't know if I'd hold my breath on it

Martin O'Neill, Trade and Industry Select Committee
"I think the chance of the Phoenix bid being successful is extremely high," said Mr Woodley.

"We have all got to work together to make the bid successful."

John Edmonds, general secretary of the GMB union, added it was vital that whatever package was agreed would secure the future of Rover and its workforce.

"There's no benefit to be gained from grabbing for quick fixes that would simply see us return to the same situation in 12 or 18 months time," he said.

BMW still says it will close Rover within a month unless a deal can be finalised.

Others are less hopeful over Phoenix's prospects.

Former managing director of Austin Rover, Harold Musgrove, said he did not believe the plan could succeed.

He said he was "very doubtful indeed" that it was viable to produce the Phoenix target of 200,000 cars at Longbridge, without having an adverse effect on other British car plants.

'Tragedy'

John Moulton, managing partner at Alchemy, told Radio 4's Today programme he "honestly believed" the Phoenix bid was "a non-starter".

He said there was little chance Alchemy would re-enter negotiations. "Barring something unlikely, it is over. This is a chasm, not a small crack."

Alchemy had planned to end mass car production at Longbridge and build MG sports cars instead, at the cost of thousands of jobs.

Phoenix has proposed to cut Rover production by half, but promises that there will be fewer job losses.

Martin O'Neill, chairman of the House of Commons Trade and Industry Select Committee which is probing BMW's negotiations, said Phoenix had no guarantee of success.

"What we have to try to establish is whether or not Phoenix has the money. If they've got it now then you're down to the arm-wrestling of the kind John Moulton was down to."

"Although I wish them well, I don't know if I'd hold my breath on it."

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See also:

28 Apr 00 | Business
BMW threat to close Rover
28 Apr 00 | Business
BMW's image damaged
28 Apr 00 | Business
Workers cheer Alchemy move
28 Apr 00 | Business
Can Phoenix turn Rover around?
28 Apr 00 | Business
Byers urged to act over Rover
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