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Platinax Internet >> Platinax Internet News
« Pension protection moves to bonds | Main | Palestinians get .ps » April 08, 2005Rover into administration
After a long financial struggle, iconic British car manufacturer, MG Rover, has been forced to call in administrators. The company had been struggling financially for years, and had been desperately trying to reach agreement on a partnership with Chinese car manufacturer Shanghai Automotive Industry Corp this week, before that fell apart last night. BMW had owned Rover until 2000, when it sold the heavily indebted company for £10 to a consortiumm, the Phoenix Venture Holdings, led by former chairman John Towers. Although they were able to reduce the company's debts from £800m in 1999, to £77m in 2003, Rover faced a fiercely competitive car market that analysts suggest they simply did not have the financial muscle to become profitable in. Critics claimed that Rover was essentially rebuilding old models as new cars, and failed to invest in developing the new models required to take the company forward. Others have suggested that the company needed to focus on a niche, rather attempt a general range of vehicles it could not fully promote in the world market. Falling sales over the past few years had forced Rover to look at alternative backing - a deal with Shanghai motors promised an ideal of shared production and reduced costs for Rover, while offering a stepping ground in European car markers. After months of negotiations that deal collapsed. Now Rover has called in administrators, who will try and determine which parts of the company are viable, and protect it against creditor actions. There is also speculation that Shanghai motors may return to the table in return for a larger stake in Rover. However, if administrators fail to find a credit window for the company, and no other car manufacturers move to buy it, then Rover will not simply sink as a brand name, but it will also threaten to bring down a whole chain of suppliers attached to the company. Posted by at April 8, 2005 08:38 PM > Discuss this in the Platinax Internet business forums |
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