Learning English - Words in the News
08 April, 2005 - Published 10:18 GMT
Rover deal with Shanghai Automotive collapses
A deal to rescue the British carmaker, MG Rover has collapsed. Rover's management had been negotiating with China's biggest carmaker, Shanghai Automotive, for it to take over the company. This report from Rebecca Pike:
Speculation about MG Rover's future has been going on for months. In the past weeks, it reached critical levels as senior DTI officials arrived in China for crisis talks with the Shanghai Automotive car group. A partnership with the Chinese company was Rover's last hope. They'd agreed in principle to work together on new models, with Rover swapping information on technology for much needed cash. But as the talks went on, it became clear that the Chinese were deeply concerned about the state of Rover's finances. They didn't want to take on responsibility for hundreds of millions of pounds owed to Rover's former owners, BMW, and to the pension fund. By the end, even a government offer of a one hundred million pound bridging loan wasn't enough to keep them interested. The government has always said the loan was dependent on the deal going ahead. Without Shanghai Automotive's commitment, it would have been tantamount to, throwing good money after bad.
As well as six thousand people employed directly by MG Rover, some fifteen thousand employees of component suppliers in the West Midlands will also be affected. Earlier today, some of those companies said Rover hadn’t been able to pay them, so they'd been forced to stop supplying parts. Production at Longbridge was halted as a result.
The government is acutely aware of the impact this could have on a number of marginal West Midlands constituencies. Tony Blair spent twenty five minutes on the phone to the president of China last night trying to persuade him to rescue the deal. But with both sides blaming the other for failing to commit, it was only a matter of time before the whole thing began to unravel.
Rebecca Pike, London
throwing good money after bad
failing to commit