There is a depressing irony in the fact that MG Rover is back in the news at a time of unparalleled uncertainty for the automotive industry in the UK and around the globe.
When the firm collapsed in 2005 there was a distinct sense of an era ending. Most agreed that the age of UK-owned mass-production, mass-market vehicles stopped when lengthy efforts to save the firm fell apart in controversial circumstances. That controversy continues after an investigation that has taken four years, with a possible probe into whether or not any criminal conduct took place and ongoing allegations that the government’s interest was in preventing the firm’s collapse on the eve of a general election.
Business secretary Lord Mandelson promises answers, or at least publication of the report, sooner rather than later. In the meantime, consider how the world has changed in those four years. Back then the passing of MG Rover was seen as momentous but not calamitous. The UK was producing more cars than ever, albeit from plants owned by overseas firms and the depth of innovation in the lower tiers of the nation’s automotive supply chain suggested that if we were not going to own production of the world’s vehicles, we would at least have a big role in the future of the industry.
The recession and a collapse in demand for vehicles around the world have left these assumptions on a knife edge. In those few years we have gained some hard-earned insights into the future of the world car industry, the types of vehicles that will wither and die (huge and gas-guzzling) and those that will prosper (low emissions, efficient).
Many of us at the time of the Rover collapse said the government was at least doing the right thing by resisting calls for a wholesale renationalisation of the company, pointing to the lamentable record of failing, state-run car makers in the 1970s. That remains true, but in an age that has seen mega-sums invested to prop up the banks it is relevant to wonder what decisions might be made today.
Back in 2005 Richard Branson of all people suggested that Longbridge could become the base of a UK, and indeed European, push into the development and manufacture of alternative, environmentally benign mass-production vehicles. He pointed out that state backing can, when properly directed, deliver results, citing Airbus as an example from the aerospace sector.
Branson is never slow to grab the chance of a sound bite, but at a time when the idea of ‘strategic assets’ that are vital to the long-term prosperity of the nation is back on the agenda it may have received more attention now than it did then.
Andrew Lee, Editor
I seem to recollect, the Rover collapse was guaranteed and the company doomed from the day China was given their intellectual property, early on in the negotiations.
Simple and stupid. Who did that? Rgds.
With hindsight MG Rover was finished when BMW sought to sell it. Stephen Byers had nothing like enough experience to handle the situation well. The Phoenix Four may not have intended to commit fraud at the outset, but they might as well have done. Richard Branson, as is often the case, may have been right, but even without alternative technology at that stage, money could have been spent on important engineering and styling improvements for ordinary motorists buying the ordinary models, so that their sales might have been improved. Instead money was siphoned off into all sorts of flashy schemes and face-lifts which were unlikely to make real money. A good hybrid electric MGF was designed, but it was not ready for production soon enough. What I want to know is what was most of that £2M per day loss going on? Pensions? Or was it just making cars which could not be sold for enough money?
Why are there no indigenous companies involved in large scale production (& employment) existing in the UK anymore? Those abroad give the impression of being much better at operations management and the engineering that goes with it. Whenever home firms came up against foreign competition in mass markets, they lost. British boards of directors hardly seemed insightful, innovative or even competent in any of the long-gone industries that come to mind (automotive, white goods, bicycles, shoes, consumer electronics, clothing & pretty much anything else made in large numbers). The ‘leadership’ of MG Rover was almost embarrassing to anyone with an interest in British manufacturing and it is hoped they never seek to work in industry again (probably not hard for them given their financial arrangements).
Branson had a point, and with our technological expertise in the UK we could, if the will was there, develop and mass produce efficient electric cars.
But will we? No, because the will to support UK enterprise is just not there, its still all about the short term and where has that got us?
Oh, and by the way, who invited Mandelson in to run the country?
I have sympathised with some of the comments regarding the demise of MG Rover. Perhaps part of the problem was incompetent management, inept politicians or an over burdensome pensions commitment. However, I believe the main reason for the downfall was just bad engineering particularly with regard to the ill-fated K-series engine.
The K-series engine was heralded as the saviour of MG Rover with its modern lightweight design. In practice this engine runs very hot, has inadequate cooling with tiny coolant pipes and radiator and a very weak head casket. Literally everything over economical in the design with no room for error.
I had the misfortune of owning a 1997 Rover 400 which had two head casket failures both covered luckily for me (not so lucky for Rover) by the warranty. Foolishly I bought a Rover 45 in 2002 thinking that I had been just unlucky and that this inherent problem would be solved – but it was not – with another couple of head gasket failures.
My experience with owning K-series engines was not untypical of other owners with models from Rover, MG and Land Rover. Even if 1 in 10 vehicles suffered this problem the cost of covering these several hundred thousand warranty repairs would have cost MG Rover hundreds of millions of pounds; money it clearly could not afford to lose.
When BMW took over the Mini I was interested to learn that they decided very early on to use their own engine imported from Brazil rather than the locally produced K-series, which had been destined for the Mini. Did BMW know something even at that stage?
Before the demise of MG Rover there was still reluctance by the company to admit any problems with the K-series engine and as a result the company lost any confidence and good will it had with its loyal customer base and it was doomed – Mainly thanks to a badly designed component costing pennies.