Lest anyone get sentimental about the loss of 6,500 jobs at Rover, it is important to bear in mind some important facts surrounding this company, and indeed of the manufacturing industry in the UK.
First off, people may be up in arms at the loss of so many manufacturing jobs, but the truth is this many jobs are being lost in the UK manufacturing industry every two weeks [1]. I'll leave others (or perhaps a later post) to discuss the finer issues regarding the collapse of manufacturing as a major force in UK commerce.
Then there is the £6.5 million loan the government handed to rover to cover this weeks wage bill. A cynical move if ever there was one. The company has no means to repay it, and even though they can now pay the employees for a week, they have nothing to do, as all the suppliers are insisting on cash on delivery. This has of course caught the interest of the EU, who have given the government 24 hours to explain why they gave a company state aid.
On to the state of the UK motoring industry. Despite the collapse of Rover, things are not as bad as they seem. Figures from the SMMT [1] show that over 1.2 million cars were made in the UK in 2004. Rover contributed less than 36,000 cars to that total. Hardly a potent force in UK plc.
So what is actually left to sell to any potential buyer? Well so desperate to keep the business solvent, the directors have been selling off the family silver over the last few years.
The longbridge plant (or at least the land) is owned by a property company, the spares parts business belongs to Canterpillar and the Rover name itself is licensed from BMW. Best of all, Shanghai Automotive, who were angling to buy the business already have the development rights to the K, KV and L series Rover engines. That is probably enough to keep them happy without having any other part of the company.
So, when you hear a politican during this election campaign talking about what they'll do to save Rover, bear in mind the above and note that despite the (unlawful) weekly cash injections of £6.5 million, a lot of people in Birmingham are going to have some very bad, but entirely unsuprising news come May 6th.
[1] http://business.timesonline.co.uk/article/0,,16849-1520619,00.html
[2] Society of Motor Manufacturers and Traders - http://www.smmt.co.uk
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