Rover’s Longbridge plant could close unless productivity is brought up to the level of BMW’s plants in Germany, BMW chairman Bernd Pischetsrieder confirmed this week at the British Motor Show.
‘The productivity gap if you ignore wage costs is 30% between Germany and Britain. We are determined that the gap must go’ said Pischetsrieder.
His warning cast a shadow over the launch of the Rover 75, billed as ‘the rebirth of the Rover brand’. Pischetsrieder said it ‘recaptured Rover’s heritage in a contemporary way’.
BMW has invested £400m in manufacturing facilities for the 75 at Rover’s Cowley plant, now renamed Rover Oxford. It has also invested £450m in Land Rover at Solihull for the Freelander.
Longbridge is the company’s third assembly site, building the Mini and the Rover 200/400 range. Pischetsrieder said the problem lay both in the high exchange rate and productivity at the factory.
BMW and Rover are looking at ways to cut the cost base, including introducing more flexible working practices and job cuts. Job losses of 1,500 are already being sought at Rover, through not extending short-term contracts, early retirement and voluntary redundancies.
Pischetsrieder said BMW is committed to having products in all segments of the market worldwide. ‘We need to find a viable long-term successful business proposition’ for the 200/400 replacement, he said.
If such a product could be developed, ‘Longbridge will be secure’, he added.
Rover chairman Dr Walter Hasselkus said the company had made major progress, but not enough within the economic circumstances: ‘The parameters under which we planned for Rover Group have changed. We are determined to take all necessary action to cut costs.’
Pischetsrieder refused to comment on BMW’s negotiations with the Government. But he said Rover would only be as successful as other companies when it meets world-class levels of efficiency. ‘It will be painful but it has to be achieved for the sake of the entire business,’ he said.