Directors of embattled MG Rover have attacked claims that they are asset-stripping the company and boosting their pensions at the expense of the Longbridge workforce.
In an exclusive Autocar interview, his first since controversial financial details were revealed in the annual report, chief exec Kevin Howe countered his critics: ‘It is complete rubbish that we are asset-stripping the company.’
Howe was responding after the accounts for Phoenix Venture Holdings Limited revealed that land at the Longbridge factory had been sold for £11m, while a £13m trust fund had been set up to provide pensions for the four directors of the holding company that owns MG Rover and its subsidiaries. Meanwhile, the main pension for the 6500-strong workforce slumped to a £73m deficit.
‘The money for the land has gone into the car business, and the money paid into this trust is for the four guys in lieu of them receiving any pension contributions since the company was formed,’ said Howe.
When it was bought from BMW for £10 in May 2000, the Phoenix consortium of John Towers, John Edwards, Nick Stephenson and Peter Beale was hailed as saviour of the company. But today, critics believe the consortium has become a cash cow for the directors who are lining their pockets while the company treads water.
Howe says the workforce’s pension is well funded and that its status as a ‘final salary’ scheme makes it a good deal for the workforce.
‘The company pension is actually in one of the most fortunate positions of any in the UK with almost 50 per cent more cover than you would need,’ says Howe.
Meanwhile last month MG Rover relaunched the programme to build the 45 replacement (shown right), setting a November 2005 on-sale date.
But the hatchback’s styling still has to be signed off, despite £100m being sunk into its engineering and press tooling. The styling freeze is dependent on a deal with a Chinese partner that Howe hopes to sign soon.