03/17 (15:58) BLAIR `FURIOUS' AT ROVER SELL-OFF
By PA News Reporters
A war of words exploded between the Government and German car giant BMW today
over the Rover sell-off as the scale of "disastrous" job losses and
production cutbacks became clearer.
Shifts at the huge Longbridge factory in Birmingham are to be scaled down
from Monday, costing workers about 80 GBP a month.
New owners Alchemy Partners, a London-based venture capitalist, announced
details of its production plans, confirming fears of substantial job losses
in the West Midlands.
Production will be virtually halved to about 100,000 cars a year, with
engines and other components bought in from outside firms.
Trade and Industry Secretary Stephen Byers, who visited Longbridge, announced
later that a task force was to be set up to advise on how workers and
businesses in the West Midlands could be helped.
The group will assess the impact of job losses and draw up action plans for
the Government and local groups.
The task force will report to Mr Byers within six weeks. A Rapid Response
Unit will be set up at Longbridge to help workers find other jobs and give
them early access to training schemes.
Meanwhile, the break-up of Rover was completed with confirmation of the sale
of Land Rover to American car giant Ford for 1.85 GBP billion.
Downing Street made it clear that the Prime Minister was furious that Britain
had been kept in the dark about BMW's sell-off plans.
Ministers are angry that German officials were discussing the sell-off of
Rover while they were negotiating with the European Commission in Brussels
for a 152 GBP million aid package for Longbridge.
"That is not the way the Prime Minister believes people should do business,"
a Downing Street spokesman said.
BMW caused fresh fury by blaming the decision to sell Rover partly on the
strong pound and the Government's position on the single currency.
Chairman Professor Joachim Milberg told a news conference in Munich that the
strong pound, falling sales and the British Government policies on the
exchange rate and whether or not to join the euro all played a part.
Amid hostile questioning about the impact of the sell-off decision on
Longbridge, Prof Milberg said the sale to Alchemy was the best possible
option for jobs.
Sir Ken Jackson, general secretary of the Amalgamated Engineering and
Electrical Union, who met Alchemy's managing partner Jon Moulton for talks
today, said the fault for the Rover "fiasco" lay with BMW, not the
Government.
"To blame the Government is absurd. BMW is wholly to blame for failing to
produce cars that sell and then walking away from the workers."
The Prime Minister's chief of staff, Jonathan Powell, is believed to have
telephoned Munich and spoken to a member of BMW's supervisory board.
It is highly unusual for Downing Street to be so outspoken about the
Government's dealings with a commercial organisation and reflects the extent
of the anger across Whitehall at BMW's conduct.
That fury will be underlined by Mr Byers, who is expected to travel to
Germany next week for talks with BMW executives.
Mr Moulton told a packed London news conference there were now two groups of
workers at Longbridge - those who will lose their jobs and others who will
have a brighter future.
It is clear that the 9,000-strong workforce will be cut, with some union
officials privately warning of 6,000 job losses.
Mr Moulton said fewer than 100,000 cars will be built by the new MG Car
Company - about half the previous output.
A new sports car is expected to be built and there will be a family saloon
but other Rover models are likely to decline.
A new management team, including people from outside Rover as well as some
currently working for the car company, will be announced in the next few
days.
Mr Moulton said he had not asked for any Government aid before clinching the
surprise deal and said none had been offered.
There were no plans to sell off any of the site at Longbridge, where a new
model could start production within 18 months.
He refused to say how many jobs were likely to be cut, adding: "There are two
groups of workers at Longbridge. There are people who will lose their jobs
which we bitterly regret but that it is inevitable.
"There is another group of workers who will have greater opportunities and
they will not be staring over their shoulders fearing redundancy."
Workers at Longbridge claimed production levels at the plant were to be
reduced in the wake of the sell-off.
Andy McNeil, 37, said shifts on the 25 series were to be scaled down from
Monday.
He said: "They have standardised the day shift and standardised the night
shift. It means a drop in hours which means a drop in production, which means
less money. I'll be hit in the pocket by about 80 GBP a month."
Mr McNeil said workers on the shopfloor were still being kept in the dark
about future working conditions.
"We knew nothing about the new shifts until we were passed a briefing from
one of the workers on the Mini line who had just finished his shift.
"That was the first time we heard about it. I think the way we have been
treated in a disgrace. One month ago we were brought into the factory, told
to bring our families and shown the new Rover. We were told the future was
rosy."
Liberal Democrat leader Charles Kennedy said the BMW decision was "a
devastating indictment" of the Government's policy on the euro - and called
for Mr Blair and Chancellor Gordon Brown to "get their act together" on the
issue.
Shadow Chancellor Michael Portillo said: "Government uncertainty over joining
the euro is undoubtedly destabilising businesses such as Rover.
"If Labour had been clear about the euro as we have been in ruling it out for
at least the lifetime of the next Parliament businesses would know exactly
where they stood."
Motor industry analysts today said it was inevitable that sales of Rover cars
would slump in the short term.
Mark Cowling, chief economist at CAP Motor Research, said consumers were
right to be cautious about buying a Rover until they knew what was happening
to the firm.
But he said that in the long term he did not foresee there being a problem
with buying a new or used Rover car.
Mr Byers said that the £129 million of Government cash which had been
promised to BMW would be made available to regenerate the local economy,
funding proposals put forward by the task force.
The minister said: "I have invited the West Midlands regional development
agency, Advantage West Midlands, to lead a task force drawn mainly from
partners in those areas most affected... to look at the implications of these
decisions for the local economy."
The 150 GBP million offer of support to BMW for the redevelopment and the
upskilling of Longbridge, which included money from local organisations
including the council, has now been withdrawn.
Mr Byers added: "The Government's contribution of 129 GBP million will now be
made available to support other projects in the area and we shall be looking
for good quality proposals, on which to redeploy that money, coming from the
task force.
"I also hope that the local element of the package, which was some 23 GBP
million, which has been put together to support the BMW redevelopment, will
be available to be re-used locally as well."
The task force will hold its first meeting in Birmingham tomorrow and Mr
Byers will be in attendance.
The minister said of his visit to Longbridge today: "I walked on the track at
Longbridge and spoke to a number of men who've worked there for decades who
now face the uncertain prospect over the next few weeks of not knowing for
certain who the new owner of Longbridge is to be.
"We mustn't turn our backs on those people. They deserve the full backing at
this time and they will get it. I understand the anger that they feel."
Questioned by reporters if a rival bid for Rover had been made by a car
manufacturer, Mr Byers said: "We know that an outline agreement has been
struck with Alchemy Partners for Longbridge. They now have six weeks in which
to conclude the details of that.
"In that period Professor Samann, the head of Rover in the UK, who I met at
Longbridge today, indicated that BMW would be prepared to consider
alternative proposals."
Asked if Volkswagen were interested in taking over Rover, the minister said:
"I think as we sit here today, Volkswagen have not expressed an interest in
acquiring the Longbridge facility.
"There have been a lot of contacts made in the last few days. I think there's
merit in encouraging those involved in the car manufacturing sector to look
very carefully at Longbridge and the very productive and highly skilled
workforce and I will hope that they do that."
A number of car manufacturers may look closely at the options available in
the wake of BMW's announcement of the decision to break up Rover, he added.
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Léon
Triumph Sports Six Club
International Liaison Secretary
1963 Triumph Vitesse 2-Litre Convertible
Wimbledon, London, England.
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