£40 million aid package

The UK government today set out details of a support package following the failure of MG Rover and the Shanghai Automotive to form a joint venture.

Trade and Industry Secretary Patricia Hewitt today set out details of a support package following the failure of MG Rover and the Shanghai Automotive Industry Corporation (SAIC) to reach agreement on a joint venture.

MG Rover Group today filed for a form of bankruptcy protection after the merger deal with SAIC fell through and a £100 million Government loan, contingent on a successful joint venture, was not granted. Up to 6000 jobs could be lost if MG Rover folds.

Ms Hewitt announced a first stage of immediate action to tackle the damaging impact that the failure of the deal will have on MG Rover’s suppliers with a programme of support worth over £40 million.

According to the Department of Trade and Industry, this will help give MG Rover’s suppliers the time and support they need to adjust and create new opportunities for the people who work for them. MG Rover was forced to stop production yesterday as suppliers suspended deliveries over fears they would not be paid.

The Government support includes short-term transitional help for business planning and employee training for suppliers with significant sales to MG Rover, to give them a breathing space whilst they seek out new opportunities.

Business advice will be available to help these companies and they will then have access to a second phase of longer-term help to improve products and processes, drawing on the successful programmes run by Advantage West Midlands over recent years.

A dedicated telephone line has also been established to provide business support and advice to companies in the Rover supply chain on 0121 6070121. Initial information about the support on offer to suppliers at a central website which is now live here.

The supply chain support is only part of a wider package being developed for the MG Rover workers and the wider community. Ms Hewitt announced that the Rover Task Force – led by Nick Paul, Chairman of Advantage West Midlands – would be tasked with deciding how best to allocate this support and oversee its effective implementation. The full detail of the package will be announced shortly.

Ms Hewitt said: “The government and the unions will do everything possible to work with all concerned to try and secure future car manufacturing at Longbridge.

“This immediate package of support for suppliers demonstrates our commitment to manufacturing in the West Midlands.”