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Last Updated: Sunday, 10 April, 2005, 20:27 GMT 21:27 UK
MG Rover gets 6.5m loan lifeline
Rover and MG logo
Six thousand jobs are at risk
The government says it has offered a 6.5m loan to prevent redundancies being made at car manufacturer MG Rover on Monday.

Trade and Industry Secretary Patricia Hewitt said the funds had been agreed to avoid job losses "while efforts are made to keep the business together".

Six thousand jobs are at risk if the company's plant in Longbridge, Birmingham, closes down.

The move followed talks between Ms Hewitt, administrators and unions.

She said the government had agreed to work with the administrator and unions to develop "with all reasonable speed" a realistic business proposition for Shanghai Automotive Industry Corp (SAIC) and other possible purchasers to consider.

'Wages and expenses'

The loan would allow wages and other expenses to be paid for a week, said a Department of Trade and Industry spokeswoman. There would then be a review in seven days.

It comes on the eve of a mass meeting of workers at the firm's Longbridge plant to hear of efforts being made to save their jobs.

Ms Hewitt's statement was issued with Transport and General Workers' Union (TGWU) general secretary Tony Woodley and Derek Simpson, general secretary of Amicus.

If the Government takes sensible measures to bring about such a deal, I will support those measures
Michael Howard

Ms Hewitt said: "The government and unions said on Friday that we would do everything possible to sustain jobs and the future of manufacturing at Longbridge.

"That is what tonight's decision shows we are doing."

The DTI spokeswoman said Ms Hewitt would be prepared to fly to China with trade union leaders and that the invitation would be extended to members of opposition parties.

Mr Woodley said earlier that he hoped a rescue deal with a Chinese car-maker could yet be reached.

'Fighting chance'

"In my view, it's the only hope for 6,000 workers, and that's why we don't give up, we don't move away from an opportunity that's as yet still there," he told BBC News 24.

"The business logic is still strong, as long as the government now backs the efforts we're putting in with the administrator, and indeed they are doing that."

He said government help would give MG Rover a "fighting chance" of survival.

Workers at Longbridge
In total 6,000 Rover workers face losing their jobs

MG Rover went into administration after rescue talks with SAIC failed on Thursday, throwing its entire future into doubt.

Some of Rover's suppliers are already laying off staff, with hundreds laid off this weekend by engineering firms in the West Midlands and south Wales, despite a 40m support package for suppliers announced by the government.

'Deeply concerned'

On Sunday, Tory leader Michael Howard and Liberal Democrat leader Charles Kennedy both accused ministers of acting too slowly.

Mr Howard told GMTV the prime minister and chancellor had a share of the blame for the crisis facing Rover.

The government would have been aware of the situation at Rover for at least a year, said Mr Howard, but had "got involved at far too late a stage".

Mr Howard later visited Longbridge, where he spoke to a group of around eight MG Rover employees.

Afterwards he said he was "deeply concerned" at the situation at Longbridge and the possible consequences for workers there and elsewhere.

"If the government takes sensible measures to bring about such a deal, I will support those measures," he said.

But he added it would be "very unfortunate" if uncertainty was prolonged or if workers were given false hopes which could not be achieved.

Lib Dem leader Mr Kennedy told the BBC's Breakfast with Frost programme the government should have acted earlier by assessing and negotiating with the Chinese "much better".



What the plans mean for the future of MG Rover

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