MG Rover’s position as the UK’s last volume car manufacturer appears to be fading away after the company went into receivership following the collapse of joint-venture deal with Chinese car maker SAIC.
The deal’s failure effectively ends all hope of MG Rover surviving as a volume car maker, with falling sales and mounting debts proving insurmountable. A short-term government bridging loan of £100m wasn’t enough to convince the Chinese that Rover has a viable long-term future.
The chain of events on Thursday that led to the collapse started when a large group of MG Rover’s suppliers refused to continue deliveries until outstanding invoices were paid, with one supplier claiming to be owed a figure in the region of £1m.
With existing parts supply exhausted, the Longbridge production line ground to a halt, and events quickly sped towards MG Rover appointing accountant Price Waterhouse Cooper to advise the directors on the next move.
An MG Rover insider reportedly claimed the company’s chances of survival are ‘very slim to non-existent’ without the Chinese deal, which is now seen as beyond recovery, with the jobs of 6000 Longbridge workers at stake.