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MG Rover collapse could cost private sector, ex-workers 1.1 bn dollars
London (AFP) Jul 25, 2006 The collapse of carmaker MG Rover could cost Britain's private sector and former workers more than 600 million pounds (879 million euros, 1.1 billion dollars), an official report out Tuesday suggested. The House of Commons Public Accounts Committee said that figure included an estimated deficit in the firm's pension scheme of 500 million pounds, which may have to be met by the British business-financed pension protection scheme. Lawmakers on the committee also estimated that MG Rover's decline between 2000 and 2004 cost British taxpayers 270 million pounds. About 2,000 former workers and employees in the supply chain are still jobless more than a year after the company, based in Birmingham, west central England, went bankrupt with the loss of about 6,000 jobs. But the committee said the situation could have been even worse if agencies had not helped the local economy to diversify before problems at the Longbridge factory worsened. At the same time, the report highlighted "serious gaps" in the British government's contingency plans, including how to help sell MG Rover as a going concern once the firm went into administration. The DTI knew in 2000 that MG Rover was vulnerable without a strategic partner, but its relationship with owners Phoenix Venture Holdings was "distant", it added. It also had difficulty obtaining information about the company's plans, the report said. Commitee chairman Edward Leigh, a Conservative member of parliament, said MG Rover's closure presented the government with a situation "fraught with risks", particularly during a general election campaign, but said it often "rose to the occasion" Some 5.2 million pounds of the 6.5-million-pound DTI loan given to help keep MG Rover afloat for a week after it went into administration would probably have to be written off, the report said. It said the directors of Phoenix Venture Holdings received 40 million pounds from the company between 2000 and 2005. In response, the DTI said it "did a good job in challenging circumstances and carried out its duties fully and diligently", including by trying to help broker a deal with Chinese firm Shanghai Automotive. In the end, fellow Chinese automaker Nanjing Automobile Corporation acquired MG Rover and has plans to restart limited production of a number of its historic MG marques. Community Email This Article Comment On This Article Related Links China News from SinoDaily.com
Typhoon hits China, over 500,000 evacuated
Beijing (AFP) Jul 25, 2006 Typhoon Kaemi struck the southeast coast of China on Tuesday, sparking the evacuation of over 500,000 people in an area still reeling from a tropical storm that claimed over 600 lives. |
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