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SFO to probe MG Rover collapse

Robert Peston | 11:09 UK time, Sunday, 5 July 2009

The circumstances leading to the collapse of MG Rover, the Midlands carmaker, are to be investigated by the Serious Fraud Office.

The new probe follows the completion of a four-year enquiry under section 432 of the Company's Act by inspectors appointed by the Department for Business.

The Business Secretary, Peter Mandelson, will make a brief written statement tomorrow confirming that the SFO has decided to take the case.

The involvement of the SFO means that publication of the report by the Business Department inspectors will be delayed pending a decision on whether there will be criminal prosecutions.

MG Rover went into administration under insolvency procedures in April 2005, with debts greater than £1bn. More than 6000 employees lost their jobs and suppliers to the company were also badly hurt.

A quartet of executives known as the Phoenix Four took control of the company in May 2000.

John Towers, Nick Stephenson, Peter Beale and John Edwards are estimated to have taken out more than £40m in pay and pensions in the years before the business went down.

They originally bought MG Rover for a nominal £10. The business came with an interest-free loan of £427m from BMW, the previous owner.

There are likely to be questions raised about why the case has been referred to the SFO only after completion of the inspectors' enquiry, rather than bringing in police at an earlier stage.

A spokesman for the Phoenix Four said: "There has never been any suggestion of improper conduct by the directors and this was confirmed in a report by the administrators PWC six months after they took over the running of the company."

Comments

  • Comment number 1.

    I didn't realise the details of the deal between BMW and Rover.
    To blow the near half billion pound loan in the space of 5 years tells me the pheonix four were really good and that the 40 million they paid themselves , (they claimed only to have taken a 36,000 per year salary)well they were worth every penny, wonder what they are doing now should get them to sort out the economy, who is it that owns the Rover name now ?

  • Comment number 2.

    found some excellent info here on the final days of Rover
    http://www.aronline.co.uk/index.htm?wschapter9f.htm

  • Comment number 3.

    There were many rumours floating around within the motor trade at the time of the collapse, this development doesn't surprise me, how true those rumours were though only the SFO can decide.

    "The involvement of the SFO means that publication of the report by the Business Department inspectors will be delayed pending a decision on whether there will be criminal prosecutions."

    Putting my cynic's hat on for a moment I might just throw this into the discussion, if there is embarrassing information relating to any involvement by the UK Govt. (before, during or after the Phoenix take-over) within the inspectors report, referring the case to the SFO might be one way of delaying it's publication until after the next general election...

  • Comment number 4.

    MODERATORS: Hadn't we all be careful what we say in case we prejudice any potential prosecution?

    The 'facts' that are available and in the public domain do seem to indicate an 'interesting' situation. But are there not just as many other 'interesting' situations in the newly privatised and publicly subsidised sector?

    What about the pfi 'profits' 'won' by those 'awarded' contracts? What about other 'privatisations'?

    The reality is that much of the claimed 'advantage' to the public purse by using the private sector in one way or another is really giving a small group of individuals vast sums of money for doing very little, taking no risk and for doing it less efficiently than before, but because of the Government's use of 'commercial confidentiality' we are never to be allowed to see the details!

    Many of the appalling computer systems contracts are a case in point theses waste billions for no benefit, or indeed an overall cost increase, - but we are never to be allowed to know!

    We, the people, are being taken for a ride by greedy business who are being paid to steal our money and are allowed to do so with absolute commercial confidentiality. (see British bank bailouts etc etc!)

  • Comment number 5.

    "There are likely to be questions raised about why the case has been referred to the SFO only after completion of the inspectors' enquiry, rather than bringing in police at an earlier stage."

    Because the government needs to drag out some bad news that they can be pinned on someone other than themselves.

    Every decision being taken now is being done so only in the interests of the Labour Party or individuals within it. The country was cast aside a long time ago.

  • Comment number 6.

    The biggest question is why Byers (then Minister) seemed to prefer the Phoenix bid in the first place, the next just how the owners wasted so muvch money, the third just why did the government not get taken to court for bailing out the company for a short period until a general election had passed. (Sounds like corrupt use of public funds to me...)

  • Comment number 7.

    Interesting Robert.
    So the Serious Fraud Office is going to investigate a company which collapsed, causing unemployment and serious commercial damage, and where 4 people may have taken up to 40 million pounds in pay and pensions in the years before its' collapse.
    So what do the SFO and Business Department inspectors think of certain parts of the financial industry?

  • Comment number 8.

    THE WHOLE RESCUE OF MG ROVER IN 2000 WAS FLAWED.

    THE SFO SHOULD CONCENTRATE ON THE BANKSAND THE TAKING OF DEPOSITORS &

    NOW TAXPAYERS MONEY.

    MG ROVER WAS PLACED IN THE WRONG HANDS WITH THE WRONG PLAN STUPID MAYBE

    CRIMINAL? ONLY IF YOU WANT A DIVERSION AS A POLITICIAN!!

  • Comment number 9.

    Mandelson seems to have carved out a NICE little number.

    SFO and mortgages spring to mind.

    Forget MG ROVER is all gone down the drain,lets see the Senior Bankers
    brought to account for nearly bankrupting the banking system.

    This MG ROVER lark is JUST yet another nulabour SICKY!!

  • Comment number 10.

    Interesting, if only because the general impression is that the SFO had actually given up on investigating serious fraud since their new Director arrived (much commented on in Private Eye). Or is this another BAE - a long investigation that eventually gets spiked by Ministers because of where the blame goes. Although, as the investigation is bound to take over a year, the next Attorney General will be in an interesting position...

  • Comment number 11.

    I am so pleased that at last the report has been completed. I and many others have been pressurizing the powers that be to move things along. At last 4 years and 16 million pounds later we can now start a proper investigation as to what went wrong.

    We lost the last British owned volume car manufacturer in the closure of MG Rover and a substantial blow to the supply chain in the West Midlands and the loss of some 6500 engineering jobs.

    Whilst MG Rover was never a profit making enterprise, it's loss was just another blow to this country's engineering base. In reality it has been engineering that has for the last 200 years largely created the wealth and power that our modern society and lifestyle depends on.

    My feeling is that we lose this longterm capacity at our peril. So whilst I agree that we must move on, nonetheless we MUST learn the lessons of the past. So I can only say to the government, please take this investigation seriously and don't hesitate to act on it's results.

    In these troubled times a lot of people are looking for real leadership and effective decision making from our prime minister, so here is an opportunity to show us all that the government still works.

    MikeN

  • Comment number 12.

    I agree with 10. This is the SFO that refused to investigate BAe that refused to investigate Equitable. It took intervention by Prime Minister Blair to squash the BAe investigation which suggested to me that there was collusion between state and criminals somewhere along the line. I know the official reason given by Mr Blair was that there was nothing to be done with the results of such an investigation since one of the parties belonged to a foreign state. Nevertheless a bit if light on the matter would have at least been ethical. The Equitable case might just have cost some money to the state, but even worse, a loss of face by a very important person.
    So now four men are to be investigated,rightly so, but it has the feeling of the school bully has met someone small enough, and without protection, to smack around.

  • Comment number 13.

    Sticky wicket on this one Rob. Im sure the SFO will sort the whole thing out? Gosh I must be living cloud cookoo land, polaticion,s trying run or save a company must be a joke,Its funnier than the"Goon Show" Or is it?

  • Comment number 14.

    Mandelson is over rated and is only where he is today because the Labour Party was purged of its savvy politicians and replaced with yes people who would not pass an A'level in Government and Politics.
    The electorate did not vote for New Labour, they voted for a radical change from the Conservative Party not spin nor illegal persuits abroad. Mr Brown was expected to usher in a more Labour orientated government and oust out the New Labour andriods. Apparently, looking at how Mandelson is a spinning this Rover story and how well he is doing, The New Labourites refuse to go. Better the devil you know, here comes the Conservatives, God help us all, the cycle continues. At least if you have got it, you stand a good chance of keeping it.

  • Comment number 15.

    11. At 2:17pm on 05 Jul 2009, poshmiken wrote:

    "I am so pleased that at last the report has been completed. I and many others have been pressurizing the powers that be to move things along. At last 4 years and 16 million pounds later we can now start a proper investigation as to what went wrong."

    Is this the new alias Mandelson is using? Just so happens this will delay publication until after the GE, pretty much like Chilcott.

    #3 Boilerplated, the only doubt would be which which part of the saga is embarassing

  • Comment number 16.

    I can see Longbridge (what`s left of it) from my bedroom window.
    It defrauded the taxpayer for years. The only difference was it became more blatant once BMW threw in the towel.At least they genuinely tried.

  • Comment number 17.

    Do not mix FSA with SFO, unless you are putting them both under the banner of expensive incompetents. I think you will find the BAe situation was a Government to Government contract and under Saudi law which no one seems keen to mention. Equitable was a regulatory disaster (here I must declare an interest, Mr Speaker ). FSA were only good at fining Companies that had a system where one in a billion contracts may go wrong because of Company system, not overseeing what needed overseeing; please see Credit Crunch and associated confections.
    MG Rover has come at a nice time for Brown to try and use it to deflect flack from current situation re Government incompetence, nothing more, nothing less. Amen

  • Comment number 18.

    "MG Rover went into administration under insolvency procedures in April 2005..."

    I guess we're lucky that they weren't a bank then, aren't we? Because the UK Government would have had to bail them out.

    According to Stephen Green (HSBC), banks are "too big to fail in the sense of applying the normal processes of bankruptcy and administration - you can't do that".

  • Comment number 19.

    Isn't it ironic that this government is now doing, to quote one PM, 'everything it can' to save the GM jobs/factories in Luton and Ellesmere Port...essentially a foreign owned company.

    Yet they did absolutely nothing to try and save Rover Group, that was still in British hands.

    Unless the SFO are going to investigate this ulterior motivated government then there is no case to investigate.

  • Comment number 20.

    Wierd isn't it how most of the comments here seek to blame the government. Mind you we always have to have someone else to blame 'cos of course it wasn't me gov ! Oh yes it was. It happened in front of all our eyes and pretty much everyone applauded at the time. Hindsight, and a desire to blame someone, anyone will do but the government is always favourite, is a wonderful thing isn't it. Much easier than getting off your backside and actually trying to do something constructive.

  • Comment number 21.

    #20 joaniesman wrote:

    'Wierd(sic) isn't it how most of the comments here seek to blame the government...It happened in front of all our eyes and pretty much everyone applauded at the time.'

    -----------------------------

    I don't just blame this government...I blame them all from 1979 onwards.
    However, Rover went down under this governments watch - FACT.

    I work in the automotive industry...why would I have 'applauded' the decimation of the industry I work in?

    Please explain yourself.

  • Comment number 22.

    Well said Boilerplated (#3) Lord Mandoilson is certainly not to let the governments total incompetence in a labour heartland out into the open until after an election.

    What I find mildly irritating is that this man clearly thinks that we of the rank and file are too stupid to see through him.

    Still, he will be out of office soon!

  • Comment number 23.

    #20

    Much easier than getting off your backside and actually trying to do something constructive."

    ...and just what was the ordinary man in the street supposed to do, especially after the UK Government had announced that it was "doing all it could", we will never know if there might have been another saviour standing in the wings as the government announced it was taking charge of the process (during both the time when BMW took over of the remains of the old BL/Rover Group and the BMW to Phoenix group 'sale'), even when the Phoenix group failed it was the UK government who 'took charge' and again told us all that it was "doing all it could".

    Is it any wonder that people 'blame' the government?...

  • Comment number 24.

    Don't imagine that they are going to question how much the directors took out of the company that could have been used to prop up the company
    http://moralorder.mediumisthemess.com/blog

  • Comment number 25.

    In reply to Bank.....@21
    Living where I do, it is impossible not to have had connections with Austin/Rover. BMC/British Leyland/and every other combination tried at Longbridge. In fact almost everyone I know had some connection with Longbridge,including my own family.
    As was once said "BL make just as good a car as anyone else, only trouble is they only make one of them a week"
    The Allegro: The Marina: The Austin Princess/ The Cambridge,all failures,even the Mini was madeat at a loss until BMW took over.
    The management "did the dirty" on Honda as anyone connected with the motor industry will tell you, hence Honda went elsewhere and is still there.
    Let me give you just one story that was common knowledge at the time.
    When BMW took over some of the senior line management staff came over from Germany. Naturally they were all nicknamed "Herman" and any attempt by them to install "German work practices" were constantly sabotaged, even having their lockers broken into.
    So "fed up" were BMW that they actually were quite prepared to give Longbridge away. When told they could not, they sold it for £5 and left, taking one of my neighbours sons back with them because he was to bl...dy good for that lot at Longbridge.
    We wasted millions upon millions of pounds.
    Now we have a whole series of former employees working as self employed gasfitters/electricians/plumbers/ all doing a better and more worthwhile job than they every did in Northfield, and irony of ironies working well.

  • Comment number 26.

    Who is being investigated? Is it the City for having let us down again or is it the Govt for having ....... errrr..... let us down again.

  • Comment number 27.

    So, we now learn that Lord Mandy, the Prince of Darkness, is to make an announcement tomorrow regarding MG Rover's collapse, and that the SFO have been called in to investigate possible irregularities. It's taken nearly four years and £16m to get to this and I wonder why.
    Could it be the fact that the report into the collapse was soon to be publised and the timing couldn't be worse for the PM? After all, both the Treasury and the DTI have been critisised for their collective lack of support for manufacturing as a whole, and MG Rover in particular. It will call into question New Labour's whole economic strategy of concentrating econimic growth through the City institutions. And now by calling in the SFO to investigate, the report's results will have to be delayed.
    Please remind me who the Chancellor at the time was who was recommending that the government take no action and let MG Rover collapse. Oh yes, it was our Mr Brown, now Prime Minister and facing an ellection in less than twelve months. How convenient that the report will be delayed.
    Call me cynical, but the timing of the announcement by that creep Mandlesson, bears all the hallmarks of yet more bad news to sweep under the carpet before we go to the polls.
    Remeber, there was nothing much wrong with MG Rover. It had replacement models designed and pre-production tested. It was about to sign a joint venture agreement with SAIC which would have propelled the company to a true global motor manufacturer. Yet the government couldn't give a toss because it was involved in those two dirty words - manufacturing and engineering. MG Rover did not want post of money for the JV to be signed, just an underwriting ove pwnsion liabilities, unlike some of the city banks which New Labour finds so precious.
    Don't be fooled by this, it is just delaying the announcement of yet another cock-up by New Labour. Thank goodness we will be well rid next year.

  • Comment number 28.

    Oh dear, oh dear Robert. Another leak on something. And your name attached to the report?

    I have an axe to grind but referring ANYTHING to the SFO is in my humble opinion "another way of kicking something out to the long grass".

    A report that has taken 4 years I read on a BBC website is likely now to be delayed until...........

    Quote "The new investigation comes after the completion of a four-year inquiry under section 432 of the Companies Act by inspectors appointed by the Department for Business, Innovation and Skills.



    Ramsay Smith, speaking for the Phoenix Group: 'There is no basis whatsoever for an investigation'
    Part of that investigation was supposed to find out what had happened to the more than £400m left to Phoenix Ventures when it took over MG Rover from BMW in 2000.

    Our correspondent says the report by the business department's inspectors will now be delayed pending a decision on whether there will be criminal prosecutions" Unquote.

    Ho hum.

    That is another few years I allegedly hear someone mutter.

    Speed and the SFO occupy different Universes. Speed doesn't necessarily mean sloppy - but as I say.

  • Comment number 29.

    I say they should be tried then hanged. the number of greedy people out thee fails to amaze me. This would be an effective deterrent.

  • Comment number 30.

    steelpulse - most of the so-called dowry that was left to Phoenix was in assets and stock (such as un-sold cars), and was not actual cash...

  • Comment number 31.

    As I understand it the goodwill deal involved the entire £800 million cost of development of the Rover 75 ( or something like that) whilst BMW was able to sell Landrover to Ford having pinched all the 4x4 ideas for their X5. Ever since the BAE days all that was happening was Rover was being asset stripped. Lets also not forget that the name of Stephen Byers, then Trade and Industry secretary was involved. Now the issue is who greased whose palm?. Land Rover in the hands of the USA is rather like giving them a strategic asset and soon we will be dependant on others-Bad move. Now watching the Vauhall deal with interest because Labour have always had a vested interest in ensuring that all of british assets go down the pan. Witness Labour and the TSR2, witness the armed services now losing SA80 and the usual Labour mantra get it cheap from somewhere else. Pity they did not say that about the bankers

  • Comment number 32.

    One further afterthought- is the PM going to the plug on this one too given the national interest?

  • Comment number 33.

    This is absolutely outrageous.

    Once the Conservatives have won the next election they should:

    (a) investigate to see if there is evidence of what the Phoenix 4 are saying is true (i.e. government deliberately stalling because of embarassing information); and

    (b) if evidence of the above is found, issue criminal or civil law proceedings personally against the politicians/ civil servants involved to recover the money wasted.

    If it is true, they have directly wasted at least £16 million of taxpayer money, plus the cost of the SFO investigation, plus delaying the payments out of the trust fund to former MG Rover workers, plus denying them justice by delaying the report by such a long stretch that it has become irrelevant.

  • Comment number 34.

    Once the evidence is out, the former Rover employees ought to consider getting together in a group action and suing relevant minister for maladministration in a public office if it reveals a cause of action.

  • Comment number 35.

    Oh yes DeathStar69 - and don't forget the 6,500 people that were made redundant directly, and the estimated 10,000 to 15,000 that were made redundant in the supply and marketing chain.
    Stephen Byers could not even drive - and he was in charge of selling the UK's largest independant motor manufacturer!
    This government is pure economic evil.
    But don't let us forget that MG at Longbridge is still breathing - just. There are plans to build the MG3, 4 and 5 there and a new TF, starting next year (if the economy picks up). We don't want to talk down MG (Rover) too much, rather, just bring all those in Whitehall to account and explain why it is that this is the first government in over 250 years not to have a coherent economic strategy for manufacturing.

  • Comment number 36.

    Perhaps we should ask ourselves whether the separating off of the Mini brand and new model was not just an exercise in asset stripping, and the purpose of the loan from BMW was to buy time and distance from this point of separation to an anticipated eventual demise of the rest of the Rover group which would allow BMW to walk away with the valuable Mini at a knock down price (I seem to remember the R and D cost of the model being £800 million plus) and with considerable tax write downs for the parent company.
    I suspect that when the history of new labour is written it will be seen as appallingly inept in all its financial negotiations, be they with Banks, PFI "partners", Doctors or the city and business in general, and the Rover/BMW farce will barely rate a mention.
    Still we will have plenty of time to look back on this government as we are coming to terms with our national demise under a debt burden which will come to define our very limited future. The sad thing is that we have not only been failed by our government but by the opposition as well.

    Ray Gill SAD AND POOR

  • Comment number 37.

    I've just been contacted by Lord Weinstock. He wants an enquiry into the destruction of GEC and would like big Bob to help.

  • Comment number 38.

    Morning Robert,
    thank you for your latest expose with information supplied by Meddlesome.
    I don't want another enquiry which will produce nothing of substance.
    Why waste more taxpayers money for "water under the longbridge"?
    Surely the SFO have more important and relevant cases to investigate?
    I seem to remember the SFO complaining that they were overworked and understaffed to fulfil their role (and that was before a few key members left). This case will therefore be assigned almost two investigators who will be told to rush slowly to produce their findings.
    As a previous commentator noted, this is nothing but a Labour smokescreen to get them through to the next election and show the electorate that they are tough on crime and tough on the causes of crime.
    This now discredited Government are drowning in their own spittle and we desperately need a fresh mandate to govern this country.

  • Comment number 39.

    same old same old, I am worth a very large amount of money in wages, bonus, and pension. The company I took over and paid myself very large amounts of money, has now becme defunct, I still have large amounts of money but the workers who earnt that money for me can go and get nothing. Dole money is what we get, or to be more presise MG rover workers get.

    I think like many others that the people running our big bussines and our government are complete crooks linning their own pockets before anything else.

  • Comment number 40.

    Hmmm. An investigation leading to an investigation by the SFO which will require (no doubt) an investigation into the conclusions of the original investigation to be certain it worth the time, effort and resources of the SFO to investigate. And the director's report has been mothballed until the SFO have finished their investigation?

    Smoke, mirrors and lengthy procrastination I suppose. Nothing new there-I wouldn't be surprised if a 'report' is requested, and a quango appointed in the meantime.

    And all the misery at ground zero-how will all this help the families and communities torn apart by this 'round and round the garden' behaviour? This business has carried a bad smell since 2000, and only now the SFO are going to investigate?

    Cor blimey Robert! No wonder the architects of our nation's financial demise show no fear! Banks are too big to fail, and the bad guys responsible for the entire unholy mess need not worry about any kind of investigation. By the time the SFO have finished their MG Rover investigation, the banking stink will be long past investigating.

    Give the B of E some teeth and claws for goodness' sake. After all, they have to pick up the pieces.

    And someone give the SFO more resources to go after the banks. If they had enough people they could investigate banks, insurance companies, MP's AND MG Rover all at the same time.

    Nice dream-won't happen though, will it !

  • Comment number 41.

    i don't think that the goverment are crooks, just incompetent at running the ecomony. Well much of running everything they touch seems to turn to disaster. Maybe now people will realise that Brown was not such a great Chancellor after all.
    But will someone please tell my why Mandlesson is making all these statements instead of the Secretary of State in Parliament, where he could be questioned by elected Members?

  • Comment number 42.

    The involvement of the SFO means that publication of the report by the Business Department inspectors will be delayed pending a decision on whether there will be criminal prosecutions.

    This is so all party's involved get a fair trial it is not hide government involvement in the matter

    it is to make sure justices can be done

    SFO have had trouble in the passed with information getting out and making it impossible for them to make the case that will stand up in court


  • Comment number 43.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 44.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 45.

    Does any one appreciate the irony of Peter Mandelson, a man not always noted for his proberty, being involved with the SFO?
    PM has had to be sacked at least twice, how come he is one of the most powerful people in the country?

  • Comment number 46.

    I've used this phrase on numerous times 'Captains Of Industry' these are the very people that Nu Labour handed control to and quite possibly those in opposition would have done the same. Quite simply this type of capatalisim will always fail, only the few gain aka (4 off) versus the many who lost!, this alleged £40m should be sequestrated. Look where this GB brand has ended up! But look at the billions pumped into the likes of Fiat, and I'm guessing that some of the money enamated from a general Euro back-hander!

  • Comment number 47.

    The Phoenix four might say, as one would expect them to, that at the time it was concluded that there was no suggestion of any improper conduct on their part but, that was then and this is now.

    Now we are all much wiser and have a better idea of the scams that these and many get rich quick charlatans got up to. There is no doubting that these four knew how best to exploit the situation to their personal advantage, even if that was to the detriment of all the people they were supposed to serve. That is why I do hope the FSO can find some way to prosecute them.

    There is a need in this country to get the message across to those who are priviledged enough to be heading up our largest banks and corportate businesses (both in the private as well as the public sector) that their first duty is to serve the best interests of those who they are supposed to serveand not the other way round.

    I would suggest that these people should have a clause written into their contract that says, when the business fails then they are required to suffer the same fate and in the same manner as the rest of the employees.

  • Comment number 48.

    To 17. Yes I was aware that it was a gov to gov contract and that there was nothing legal to be done about the contract but one of the participants was British and surely should have been investigated; it does take two parties to be involved in bribery and corruption. And as for Equitable, lots of people were defrauded in a ponzi scheme. Ernst & Young put their good name to a rating never deserved etc. However the main point is that the SFO seems to be an agent of authority not of law.

  • Comment number 49.

    #16 "I can see Longbridge (what`s left of it) from my bedroom window.
    It defrauded the taxpayer for years. The only difference was it became more blatant once BMW threw in the towel.At least they genuinely tried."

    MG Rover cannot be compared to BMW !! BMW is a genuine profit making company !! MG Rover can and should be better compared to Trabant (the East German car company that made the world (in)famous "Trabie" - a bureaucrat-run intentionally non-profit-making/loss-making company !! Well, the Trabant died when the Berlin Wall fell; now MG Rover is equally dead !!

    It is not that the British cannot run successful car companies; Nissan in Sunderland comes to mind. It is the toxic combination of government and unions that kill off car companies !! First British Leyland, then the revived Rover Group, then the split up MR Rover and Jaguar Land Rover groups !! Soon, it will be the turn of Vauxhall !! Just watch this space !!

  • Comment number 50.

    #46 "I've used this phrase on numerous times 'Captains Of Industry' these are the very people that Nu Labour handed control to and quite possibly those in opposition would have done the same."

    If these are the prime examples of "Captains of Industry", then it is no wonder that Britannia no longer rules the waves !! To me, "Captains of Industry" are people like Sir Richard of the Virgin empire, Green of the BHS empire, the bosses of Tesco and Sainsbury and their ilk; not these fly-by-night NuLabour cronies !!

  • Comment number 51.

    @19: "Isn't it ironic that this government is now doing, to quote one PM, 'everything it can' to save the GM jobs/factories in Luton and Ellesmere Port...essentially a foreign owned company.

    Yet they did absolutely nothing to try and save Rover Group, that was still in British hands."

    You must remember that Longbridge is not in a Labour-controlled council...

  • Comment number 52.

    Well we certainly would not want to publish a report that may be prejudicial to the government in the run up to an election would we?

  • Comment number 53.

    Nice one Peter Mandelson and another diversionary tactic. The question of any malfeasance should be why did the government pump taxpayers money into what was a very risky venture (as it turned out)?

    Oh - it was just before the last election, I seem to remember. MG Rover never had a chance because its business plan was never sustainable (read the various evidence available at the time).

    And - oh yes we're now pumping more taxpayer money into Vauxhall (ahead of another general election). And of course we were trying to do the same with LDV (the Mandy connection again) though common sense won out in the end. It seems as though the whole of BERR are working/negotiating free for the auto industry.

    Yes - its very sad that people have/will lose jobs through a continual decline in our car industry though nobody seems to comment on all the small businesses that are/will go under without a shred of government help.

    Contrast the money being pumped into the car industry with the tough line on National Express last week rarher than renegotiate. The rail franchise benefits far more taxpayers than either of these two car manufacturers (alongside the franchise and corporate tax). Mmm.....

    Perhaps it would have been useful if the Government had a strategic plan for the auto industry in the UK given the global overproduction that's been going on for decades.

    No - just a plan to buy more votes through targeted subsidies when its forced to - it doesn't get more corrupt than that..........

  • Comment number 54.

    I get the sense that some silly civil servant or politician really believes that no-one has noticed the odd thing about the timing and how conveniently that the belated SFO investigation means that the inspectors report will be suppressed until after the SFO has completed their investigation.

    One can resonably presume that will be at minimum several months, if not considerably longer, so one does wonder just who is trying to keep the lid on just what, and for what reasons, in the way this has panned out.

    Now that same very silly person thinks they've been very clever in manipulating things this way because they are just too plain DAFT (even if they have a dozen Master degrees) to realise that all they've done is brought the Inspector and the SFO into disrepute and further damaged the public trust in the Government's ability to handle any matter to do with business or finance.

    But, as I said before, if MG Rover had been a bank they would never have even got as far as administration because the Government would have HAD to bail them out. Do you remember how many people said months ago to let the banks go to the wall? Well, it was never an option, it seems. Stephen Green seems to have let the 'cat out of the bag'!

    Ironically, one wonders if they had bailed out MG Rover (and others too) would there have been enough money to bail out the banks?

    It seems the car industry - and indeed all sorts of others - can be allowed to go to the wall but banks can't go bankrupt or into administration.

    Against that backdrop, this investigation by the SFO is very probably highly politically influenced for the sake of controlling the fall-out of any criticism of the Government.

    As one school of pyschology would put it, 'all behaviour IS communication'. Or as my Mum would have said, 'Actions speak louder than words'.

  • Comment number 55.

    It is a reflection of how much this Government - and Mandy in particular - is mistrusted so much that so many people are reading between the lines and looking for ulterior motives for this investigation.

    On its own, the annoucement of an SFO investigation is small beer; but it is yet another example of the on-going cover-up of Government lies, incomptence and sleaze that has been the hallmark of British Government since 1997.

  • Comment number 56.

    Private Equity - or thievery? - That is the question.

    One man's turnaround in efficiency is another mans redundancy.

    One man's reward is another mans loss.

    You want this system of Capitalism - this is what it does - why the complaints to the SFO?

    Convenient cover for the Government too - almost like they planned it.....

  • Comment number 57.

    31. At 10:45pm on 05 Jul 2009, leoRoverman wrote:

    "Pity they did not say that about the bankers."

    But they can't say that about the bankers. Banks can NOT be put into administration or bankruptcy in the conventional sense.

    Isn't it interesting how, despite all the debate and discussion over the last umpteen months or so, no-one ever mentioned that?

    Now who might have had an interest in keeping that quite?

    Can't you see? Banks are 'globalised' and are therefore bigger than national governments and/or regulators powers. Governments go 'yes sir, no sir, bags full sir' to the banks - not the other way around - and the noises from the Chancellor and the FSA are just posturing so as not to cause scandal and panic amongst the public.

    Stephen Green (HSBC) gave the game away in his recent interview for the BBC World Service.
    http://news.bbc.co.uk/1/hi/business/8131682.stm

    Now just ask yourself why is there no appropriate mechanism to put banks into administration? Is that an accidental failure of law and regulation? Or might it be that it was deliberate and that someone or some people gained from ensuring that was the case?

  • Comment number 58.

    I am perplexed by the comment by the Phoenix 4 spokesman re the Administrators report. The Administrators report is confidential between what was the DTI and the Administrators. Just because nothing came of it does not mean there were not matters of unfitness found and reported. In the majority of cases where reports are submitted by Insolvency Practitioners the DTI/BERR/BIS etc have to take a view on whether to take action.

  • Comment number 59.

    BMW were not paragons of virtue in this matter. they took with them and sold Land Rover, they kept the entire Cowley Plant, they kept Studley Country House which was teh MG Rover training centre, they took all designs and prototypes for the new Mini, they enforced MG rover to cease production of the old Mini, they took the designs for the replacemnt of the Rover 200/400 series which is now the BMW 1 Series and they even kept ownership rights to the brand names of Austin, Healey, Wolseley, Vanden Plas, Riley and almost any old british car name that was part of the old Leyland organistation. In essence thay stripped MG Rover of any worth, leaving them only with the Rover 75 and old Honda designs that were too outdated to compete. Think how different it would have been if the new Mini and 1 series as the Rover 200/400 had been produced and launched by MG Rover?

    BMW walked away, made money on the sale of Land Rover to Ford and have made millions on the new Mini and 1 Series. You can try to blame the Government and the Gang of 4, but remember the real culprits were and are BMW! QED

  • Comment number 60.

    When MG Rover was `saved' by the Phoenix Four I recall that an alternative proposal led by Alchemy Partners which recommended a slimmed down factory producing MG cars only, was abused by government and unions alike for being `asset strippers'.

    Now after much pain and further loss of money, which includes taxpayer funds, we have a slimmed down factory making MG cars only; but owned by foreigners. Alchemy were right; but then when you are using your own money it helps to be right.

    This says it all as to the competence of the government and the union leadership. In backing the saviours of the motor industry they failed to protect the business of building cars and added value for the taxpayer.

    This is yet another story of bungle, fumble, ignorance and stupidity at a very high level. Mind you, it is pretty small beer when set alongside the banking debacle.

    To my mind Alchemy, the taxpayer and the workforce deserve a huge, grovelling apology from unions, government and politicians alike. Fat chance of that happening.

  • Comment number 61.

    Four years & £16m (more nice fees for BDO) to produce a report and out it comes NOW. Pure distraction! What will happen now? Further prevarication for years, more smoke screens and expense and £ to a pinch of snuff, ultimately no action!
    There is plenty of live issues the SFO should be getting their teeth into without wasting time on a dead issue.

  • Comment number 62.

    #29 "I say they should be tried then hanged. the number of greedy people out thee fails to amaze me."

    I must say that since I first started reading this blog, many months ago, the image of Captain Kidd's corpse circled in iron has haunted my mind more than once.

  • Comment number 63.

    The cynic in me wants to scream another government clanger kicked into the long grass. Perhaps Meddlesome Mandy with the teflon shoulder pads has locked MG Rover away till after an election but is there another point to consider.

    When carrying out a government sponsored enquiry are those charged with finding out what happened also charged with informing the necessary authorities if they suspect malpractice that borders on the illegal.

    If they dont inform the authorities are they guilty of perverting the course of justice? So instead of paying £16,000,000 to them should the police investigate them for covering up what went on?

    Giving those sitting on the enquiry the benefit of the doubt. If anything had been found wouldn't have asked for legal intervention, testimony under oath etc....

    As none of this happened, I think that the people who would come of worst if this report were to be published are HMG.

    As an after though what are they doing about Vauxhall?

  • Comment number 64.

    Want to know the real question in the car industry?

    Why are cars made with huge engines and amazing top speeds in a country where the maximum speed limit is 70mph?

    In a world of logic - this would not occur, however it does, and it seems a lot of people 'aspire' to owning one of these vehicles. So much so that they re-mortgage their over-valued house in order to buy such a car (which they will be regretting today)

    Here is evidence of the Capitalist system being based on greed - allowing the production and sale of vehicles which have their own waste built in.
    The car companies don't care about the environment
    The car companies don't care about selling trinkets to magpies
    The car companies don't care about anything - except PROFIT.

    The Longbridge workers were sold out by the car industry
    The Ellesmere port workers will get sold out.

    NOTHING STANDS IN THE WAY OF A CAPITALIST AND HIS PROFIT.

  • Comment number 65.


    P.s. For all those mis-informed on this blog, this has nothing to do with party politics. Longbridge is in Northfield which has been LABOUR since 1992.
    (good to see those who bang the bandwaggon STILL CAN'T GET IT RIGHT!)

    IN ADDITION to this not all the Longbridge workers lived in Longbridge and many came from surrounding areas (the closest two happen to both be Labour seats for the last 2 elections - Selly Oak and Egbaston)

  • Comment number 66.

    The very fact that it's taken 4 years before the SFO was called in shows how much 'urgency' this Government has for this car plant and the inquiry around it's collapse.

    The billions to bail out banks was agreed and actioned within weeks, and it takes 4 years to do an inquiry - which concludes 'oops, looks like we need to get the fuzz involved here'.

    An absolute insult to every man, woman and child who had anything to do with that plant.

    Where do you think those 6000 workers are now? New jobs? Nope, they are now mostly sitting on their hands - people who want to work but are wasting away because someone NEEDED TO MAKE SOME PROFIT.

    However I'm sure that Capitalist has suppressed his guilt with a lot of money and a nice house on a Carribean island.....

    ...."oh but we need these people as they 'create wealth'"

    Absolute rubbish

    "oh but without these people there would be no innovation"

    Absolute Poppycock

    "Oh but without these people there would be no industry".

    Complete balderdash.

    What is the Church? is it the building, the pews or the altar? It's none of those it's the people who attend it.

    What is an industry? is it the building, the tools or the canteen? It's none of them it's the people who work within it.

    I have grwon tired of the idiots that lead us and the fools that gladly follow them for their own selfish interest.

    May you all burn in hell.

  • Comment number 67.

    #60 is spot on. The problem was that Alchemy were honest about Rover's prospects and came clean about the job cuts etc that needed to be made to save the business. As always they were shot down by the Unions, government, PE haters etc that were blind to the fact the Rover was innefficient, lacking leadership and going backwards in terms of product quality.

  • Comment number 68.

    stanillic

    It's all very well making out Alchemy to be the good guys - but all they are is simply 'the best of the worst' - not a title worth winning. Their only solution was to slash and burn as much as possible and to be left with the minutest workforce - although I agree in hindsight we have that anyway.
    However what Alchemy would have done is no better than the banks. Slashed the workforce to cut costs - and who do you think picks up that tab when they're all standing outside the Rednal job centre? - That's right the taxpayer in the form of unemployment benefits.

    Simply more privatising profits and nationalising losses.

    I would also strongly disagree with this statement:

    "Alchemy were right; but then when you are using your own money it helps to be right"

    errrrr no, do you understand how PE works? They don't put their own money in - that would be risky - oh no my friend, they borrow against the existing assets and use that money - thereby extending the debt into the future (it's a lesser slope of debt, but for longer, and it's actually a bigger climb than before)

    Surely you don't believe that these wealthy individuals actually RISK anything do you?

    If you do then I'm afraid you're a lot more Naieve than I had you down for.

  • Comment number 69.

    This further delay also delays the financial compensation to the workers that lost their jobs. There is a fund of GBP 16 million lying in some bank account gathering dust that is waiting to be distributed. I hope that it is still there..

    Even after the company has been closed down the former workers are treated with contempt. They deserve better.

  • Comment number 70.

    #29 "I say they should be tried then hanged. the number of greedy people out there fails to amaze me."

    As I have said before - greed is what drives the Capitalist system. Therefore the number of greedy people will only increase. After all if you're not greedy you will get left behind in poverty.

    The Capitalist conveniently calls this 'enterprise' or 'innovation' - but neither of these concepts need the driving force behind Capitalism - the need to make more and more money. (both enterprise and innovation can be produced without money - but are not within Capitlaism).

    Eventually people will be killing each other for a buck - what's that? they are already? - Quelle surprise.....

  • Comment number 71.

    It requires investigation into how this took 4 years at a cost of 16 million pounds.

    Off topic below, but infuriated me this morning. "The Land Registry says it has raised its fees because the recession and property market slump have depressed its income."

    The private sector would have already cut costs and/ or jobs.
    This government department's solution is to increase prices by a huge amount, on housing market that is not going to recover any time soon.

  • Comment number 72.

    #67 willowacorn

    "PE haters etc that were blind to the fact the Rover was innefficient"

    Not at all (if I count myself as a PE hater) - but the inefficiecy at Rover was allowed to fester by the owners at the time (who were not the Government) - either BMW or British Aerospace I believe.

    So why should all the 6000 workers in the plant have to pay for the previous administrations failures with their jobs?

    Is that justice? Someone else messes up and it costs you your job? Even better when those people are all still running around with the money they extracted from the innefficient company during their time.

    Don't think you would be saying that so strongly if it were you.

    Sure Moulton and his crew rode in on white horses, but to be honest any 4 year old could have come up with the age old plan of 'cut jobs, make plant efficient'.

    A predator that snatches an injured animal is not doing it as a favour to put it out of it's misery - it's doing it to feed itself and because the injured animal is 'easy prey'.

  • Comment number 73.

    The passing of MG Rover will be lamented by many in this country for years to come but where was the support from this government when the company was alive. I remember reading a Press report which said they had chosen to buy 35 Ford Mondeos (built in Belgium) as it was cost effective. Can you imagine the French doing that to their car industry? More recently, LDV vans in Birmingham has closed with barely a squeek being heard. Ford are going to make the Transit in Turkey in the near future and Vauxhall will nodoubt see the loss of their van production facility at Luton when their owners sell it off. Then we shall not have a white van manufacturer in this country and our import bill will increase further. We have had a distinct failure in the British Isles to support our home grown industries - why? Incidently, I have three Rover cars - love 'em all.

  • Comment number 74.

    No.64 writingsonthe wall wrote:
    Why are cars made with huge engines and amazing top speeds in a country where the maximum speed limit is 70mph?

    In a world of logic - this would not occur, however it does, and it seems a lot of people 'aspire' to owning one of these vehicles. So much so that they re-mortgage their over-valued house in order to buy such a car (which they will be regretting today)

    Well I for one think all large cars are overpriced and resent the way in which some owners of large overpriced cars give the impression that they believe that they have more right to the road (because they have paid a large amount) than me in my perfectly adequate FIAT Panda. Admitted, those with large families will require a vehicle larger than mine.

    I also dislike the way in which some car salespersons look down their noses at you when you ignore their large offerings and concentrate on the size of vehicle that meets your personal requirements. An example of such was being told that the Peugeot 107 did not have electric mirrors as an option because it was not a top of the range car. Funny how my previous 106 had had electric mirrors!

    My requirements are 1) width (the car has to fit down a shared drive between two houses and I have not been able to persuade next door to knock a couple of feet off his house) 2) economy (I want a car that is very economic a minimum average mpg of 50) 3) electric mirrors (because Im lazy).

    My sister is currently looking for a replacement of her Mini 35 and despite the reports of falling car sales is finding it hard to get the dealers to engage in meaningful talks regarding the shifting of a small car as that replacement. She has had an offer for the Mini so is not looking to participate in the scrappage deal sponsored by the Government. Hopefully she will find a small car she likes at a reasonable price fairly soon.

  • Comment number 75.

    How can a company of 6,000 people have debts over £1bn? That equates to over £166k per person.

    Therefore each and every employee would have to generate value far in excess of £166,667 (that's from the profit line - i.e. less wages and other costs).

    Admittedly, this amount is deemed to be recovered over a long period of time, but as anyone who gets in debt know, the longer a loan is spread over the higher cost, and the higher the chance that the underlying assumptions of the business model will be stressed.

    How about we look at companies using a measure of "debt per employee"? Surely those with excessively high amounts (coupled with high expectations of future growth) are the ones most vulnerable in these uncertain economic times.

  • Comment number 76.

    MG Rover is just another example of how bad our insolvency laws are. It would appear that if you are brazen enough and have no morals then it is very easy to rack up debt in a company and walk away with no come back other than the remote possibility that you might be disqualified as a company director.

    By inventing the pre-pack Gordon has also made this even easier, and the right of the creditors to have a meeting has also been removed unless there is a potential dividend. This just leads to the administrators being able to hide behind a cloak of secrecy and to take their fees without really having to justify any potential wrong doing or even answer questions. They are appointed to represent creditors but rarely do, it is quite frankly a flawed profession with the opportunity to charge £500 per hour for a partner and £100 per hour for a junior with limited experience and as fraud or wrong doing involves hard work to investigate it is normally brushed under the carpet as the administror is more interested in what they can earn rather than ensuring crooks are brought to justice.

    Rather than making it easier to restart in business there should be an automatic ban on directors buying back a business they have managed into oblivion, plus a review of pay and bonuses in the period up to administration. If directors have taken bonuses or spent in effect the creditors money on items other than those needed to save the business, then the administrators should have recovering these monies as part of their remit, and not something they report on and which may be persued 4 years later.

    The Pheonix 4 may well be dealt with now although we may find that this just fizzles out, but in any event it is unlikely that any wrong doing they are found guilty of will change the way business is conducted in future.

    We need a change in our insolvency laws which ensures that fraudsters who have had disregard for the creditors, which includes employees, are brought to justice. Limited liability exists to enable capitalism to work, unfortunately the average small business does not benefit from this as banks have personal guarantees from directors who have already invested risk capital. Large companies have no such problem and in fact reward senior management with no risk involved, which is why they are reckless and carefree with other peoples money.

  • Comment number 77.

    Whether there is a case of fraud or not, as shocking to me is the situation. The absolute incompetence of taking 4 years to carry out an investigation at £16m cost at our expense. The results being secret. Seemingly acceptance that it will take the serious fraud squad another 12 months to decide whether any action needs taking at more significant cost no doubt. What planet do politicians live on when they think that these are acceptable timescales and costs?

  • Comment number 78.

    #74 DickyJ39

    "perfectly adequate FIAT Panda"

    I think I love you.....

    Although we had to give up our perfectly adequate Panda (because we could not justify 2 cars when we got together) - we still only have a small car - less than 1600cc, and we're currently looking to downsize further.

    It's good to see there are other people out there DO apply logic to their car buying. Maybe the old adage is true and all these people in big cars are trying to make up for 'other inadequacies' in their lives.

    P.s. You don't hear me crying about rising fuel prices - like my BMW owning neighbour. Maybe it's because my car does nearly twice the distance his does on the same amount of petrol.

    Still - if he thinks that car and those shades make him a Hollywood star - who am I to tell him he actually lives in a council flat in Norbury!

  • Comment number 79.

    #76 PurpleMarvin

    "The Pheonix 4 may well be dealt with now although we may find that this just fizzles out, but in any event it is unlikely that any wrong doing they are found guilty of will change the way business is conducted in future"

    I thin you'l find that the wrongdoings are actually already legitimate business practice. It's only us in the real world who have moral mis-givings about such practices. In the world of politics and business - as we have seen many examples of this year - moral guidance is in very short supply.

    .....still, maybe we can act like Capitalists and start seling moral guidance to the corrupt worlds of big business and politics.

  • Comment number 80.

    Post 75 out of interest RBS employs 20 times more staff than MG Rover did and has debts more than a thousand times more.

    Re the comments re the difference between MG Rover and Vauxhall and which party has MP's in the area. Labour does have the three local constituencies and eleven out of thirteen in Birmingham as a whole but the Council is run by a Conservative / Liberal alliance. Commom belief in Birmingham is that Labour will be lucky to hold on to any more than 3 of their seats at the next election.

    Erdington (Jaguar Land Rover) is likely to go Conservative and Hodge Hill (LDV) could go anywhere but labour. I imagine some in labour HQ see Birmingham as a lost cause.

    There are considerably more Minsisters from Liverpool than Birmingham.

    Interestingly the previous labour administraion in Birmingham were very big supporters of the Phoenix four as were the Unions locally.

  • Comment number 81.

    #78 writingsonthewall wrote:

    '#74 DickyJ39..."I drive a perfectly adequate FIAT Panda"'

    I think I love you.....

    ----------------------------

    I drive a Robin Reliant, which after all is a very small British car...
    does that mean you love me more than DickyJ39?

    (after all I don't pull much in the Reliant these days!)

  • Comment number 82.

    Writingsonthewall you seem to have a very big axe to grind on this one. Flip things around for a moment if a significant proportion of a 6000 workforce is no longer required should a business just carry on employing them regardless?

    And to twist your analogy re sick animals a vet amputates a leg to ensure the injured animal survives. Or would you prefer the animal limp on finally succumbing to infection. Don't bother responding I think I know your answer.

    If Alchemy had been given the nod I have no doubt Rover would have survived and perhaps prospered in a more efficient manner.

    Now how about trying to provide some ideas for how to go forward rather than your normal blame everyone stance preached from your ivory tower where you live a life of abstinence and supreme morality.

  • Comment number 83.

    Let's see ;
    Report comes out, the Government at the time comes out very badly! so how can we lose it till after the next election? that easy set up another report,

    It is the oldest game in Politics.

  • Comment number 84.

    oh really....by calling in the sfo mandelson manages to keep secret the £16 million 4 year investigation until after the next election...I wonder why?
    Am i alone in thinking that anything mandelson does always has an ulterioir motive?

  • Comment number 85.

    Government this, government that. All too easy and lazy-minded to blame a small group of people for the misdeeds of the many, thereby never getting to real causes when things go wrong. The fact is, these four were just greedy and no amount of legislation would remedy that.

  • Comment number 86.

    Message 68 writingsonwall

    Sure I am so naive that I know that money does not grow on trees.

    MG Rover was a business the owners had walked away from. Now why would they have done that? Just reflect on that for a moment before we get into the dead parrot sketch.

    The business was finished as there was no market for the product other than the niche MG brand. Alchemy saw this as a business opportunity which would create value and jobs. The government, the unions, the Phoenix Four and no doubt you saw this as an opportunity to save jobs. The problem with this approach is that the jobs are only safe when they add value; that is make something people want to buy.

    It doesn't really matter who owns the capital so long as they understand they need the labour to add the value. There are many models for funding a business and there need be no moral content in any of them.

    Now if you are arguing for workers control in the real sense then even this can be included within a framework of invested capital. It is all a trade-off between capital and labour both optimising their return from the added value.

    The trouble only starts when politics is allowed to enter the work-place and the control-freaks take over. They will screw up anything because they are not there to work. This was Rover's problem going back to the year dot and I include the management in that analysis.

  • Comment number 87.

    My decision to leave Rover shortly after The Phoenix group took over Longbridge was based on my belief that the team had up to five years to find a partner or they would have to close. As this would put me in a position of being 55 years old and looking for a job I took the option which provided the best long term security for myself and my family and took the position I still hold at Warwick Business School.

    I never doubted the commitment or the capability of John Towers and his team as I had worked with John since the eighties when I joined Land Rover. What I did doubt however was whether there were any serious motor manufacturers in the world who would not be pleased to see a plant with the capacity of Longbridge closed, as there was and still is too much capacity for motor manufacture, the results of which are all too visible right now.

    Although they tried, the group could not find a partner even though discussions with a Chinese company went right up to the deadline. We all know the outcome; six thousand Longbridge workers out of work and more in the supply chain and what was left of the company went to China for peanuts anyway. We are still hearing promises about some form of production of the MG sports car but nothing seems to materialise from this either. The government did much the same as they are doing today, they announced loads of meaningless initiatives but said their hands were tied by European legislation regarding financial help although they didnt seem constrained by the same requirements when bailing out the financial system recently.

    Then the UK government in its wisdom decided that they needed to hold an enquiry to discover what happened to the £300 million that was given to the company by BMW as a loan so that the Phoenix group could take a plant that BMW had announced was loosing £290 million a year off its hands. Now these are all large numbers so they need to be put into some context; to develop a new car and get it to the marketplace costs around £250 500 million, so in motor industry terms these numbers are not that big. Bearing this in mind, the Phoenix group made a good job of reducing the losses when a company with the reputation of BMW could not - but it could not invest in new models.

    So, there seems to be some smoke screen being put up by the government about £40 million in salary and pensions taken by 4 executives over 5 years. I am speechless, they have spent £16 million to discover that the Phoenix executives who put their own money and reputations on the line were paid about a quarter of what the new chief executive of the bailed out RBS is going to be paid.

    I looks to me like the government is trying to ensure that blame is directed towards the people who were trying to save the company rather than towards their own weak and ineffectual efforts. Longbridge was not the same company that hit all the news in the sixties and seventies and by the time it closed they had not lost one minute to industrial action in 25 years and the workforce had voted to accept some of the most modern and efficient working practices in Europe. It is a great pity that their efforts have gone largely unrecorded.

  • Comment number 88.

    I was brought up in Coventry in the 60's and 70's and now work for a bank. There are some interesting parallels between the car industry then and the banking industry now. Both were driven by producing shareholder return above what was unsustainable.

    In the sixty's the car industry could sell everything it produced no matter what the quality. Result - management got complacent, big rewards were given (for the time) and no-one invested to modernise the industry until it was way too late and oh yes the shareholders got big fat dividends.

    What have we just had in the banking industry. They could sell everything they produced no matter what the quality. Big rewards, big shareholder returns and so on.

    A few years ago GSK announced that it was upping it's r&d budget. Result: the share price went down because short term shareholder returns would suffer. A swiss pharaceutical did the same and its share price went up.

    Britain will keep ruining its best industries until it realises that

    1. You need to invest long term to remain competitative.
    2. Short-term gains benefit no-one in the end.
    3. You have to invest to get returns

    Will market analysts please start looking beyond next week. Perhaps the govenment should try it too (now that WOULD be novel).

  • Comment number 89.

    21. BankSlickerminustheR wrote
    "I don't just blame this government...I blame them all from 1979 onwards.
    However, Rover went down under this governments watch - FACT.

    I work in the automotive industry...why would I have 'applauded' the decimation of the industry I work in?

    Yes Rover, a Plc I would add, did go down under this government but was then rescued, to huge applause all round especially by those working in the industry, by Phoenix. And that went wrong - so who do we blame. Ourselves ? No chance.

    BankSlickerminustheR should get their head out of the sand and try doing something constructive rather than just whingeing.

  • Comment number 90.

    #89 joaniesman

    I worked at Longbridge and Solihull during the 90's as an engineer, I did not belong to a union and I worked my butt off to do the best job I could in a difficult situation. Every day was a constant battle to get things done...so just who are you to lecture me about whingeing. What the hell do you know about it anyway.

    BTW...what have you ever made anything in your life (other than smart-ass comments on a blog)?

    I suggest you read posts #87 and #88 for accurate descriptions of went on there in the dying days. They have both pretty much fairly described what and where it went wrong and how successive 'free market' governments have plundered this country's assets over the last three decades.

  • Comment number 91.

    #88
    I also grew up and worked in Coventry during the 60s and can clearly remember a period of recession when next to nothing got produced.
    All the men working in car factories were laid off or on a 3 day week for quite a while, masses of shops closed in the centre of town.

    The militant strikes and Friday afternoon cars came I think? after 1966 when several car companies merged and production went into overdrive.

    Agree with your 3 points would add...its like being at war, not only banking, but each industry has to plan ahead for the long term with a recovery strategy in mind. Unfortunately until we have an election, this state of finger in the dyke running of a country will continue.

  • Comment number 92.

    It is to be hoped that the SFO don't allow themselves to be drawn into a Labour government smokescreen, designed to keep the Rover report out of view until after the general election.

    Mandelson would never try for that, would he ?

  • Comment number 93.

    It is called asset stripping Robert and I would be looking at Lord walk on water Mandleson and looking very closely as well and Brown and Blair as nothing goes amiss without their say so. So the worker has not been paid and they bout the company for a penny why was it not offered to the workers? and they the Ponzi Four also got a bail out as well and then they cleared the company and took off so were were the Unions in all of this blind as usual and now the police have been brought in another four years and hundreds of taxpayers money wasted as they will not find anything in this country its long been salted away I will make a guess in Caymen Islands to be divided later. I hate it when the BBC thinks that it can insult the license payer how much do they owe me I wonder?

 

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