“In early June I reported to the creditors that there were no viable bidders for the business as a going concern. As a result, plans had been put in place for a break-up sale, unless a bidder pre-empted that process before it could be completed. SAIC had offered to buy the engine plant for relocation to China, so negotiations were underway to sell those assets separately.

“Whilst we have been negotiating with Nanjing Automobile (Group) Corporation we have been aware of Martin Leach’s interest in the car production assets, although no bid has ever been made by Mr Leach.

“Until late last week SAIC had offered to acquire only the Powertrain assets. On Monday of this week SAIC submitted a conditional bid for all of the MG Rover and Powertrain assets. However the level and conditionality of SAIC’s bid left Nanjing’s bid as the preferred way forward.

“Nanjing will now begin to take control of the assets and develop its plans for the future. It has indicated its intention to relocate the engine plant and some of the car production plant to China, to retain some car production plant in the UK and to develop an R&D and technical facility here in pursuit of the same global expansion ambition that it had when it joined with SAIC as the intended joint venture partners to Phoenix Venture Holdings before the collapse of MG Rover.

“For a transition period a residual workforce will continue to be employed by MG Rover Group and Powertrain, assisting the Administrators as they have for the last three and a half months. In the meantime Nanjing Automobile (Group) Corporation intends to begin to hire staff to assist it in implementing and developing its strategy.”

Media are requested to respond via email to confirm attendance.

Journalists who are unable to attend are invited to dial-in to the conference by following the instructions below. Again, journalists are requested to register for the dial-in facility by emailing either Jon Bunn or Caroline Feltham by Thursday 9 June.

Full PWC Release!

Price Waterhouse and Cooper Website!

MG Rover Group Limited and subsidiary companies (in administration) - update by the joint administrators - 20 May 2005 20/05/2005 13:07
 

The joint administrators of MG Rover Group Limited asked potential bidders to provide proof of funds for their bids by the end of last week and have spent this week examining these. Interest in the MGTF sports car business has been narrowed down to three potentially viable proposals, which will now be explored in detail to see if one of these can be transacted, and discussions for the sale of the rest of the business and assets are continuing with two credible interested parties.

Tony Lomas, joint administrator and partner PricewaterhouseCoopers said:

“We are still discussing a sale of the rest of the business and assets with two credible interested parties. They are particularly concerned to understand what rights SAIC or other third parties have in physical assets at Longbridge and in the intellectual property rights. We can now provide them with a lot more positive information regarding these points as we have further examined the matter.”

“While there is still an outside possibility that some form of car production could recommence at Longbridge, the cost and complexity of the challenge should not be underestimated. Engine production would be a lesser, but still very demanding, challenge. The potential buyers are known to be looking at the alternative scenarios of continuing production at Longbridge or relocating it elsewhere.”

“While efforts to sell the business continue, we are progressively downsizing the support functions in order to further reduce costs. Around 400 people are still employed at MG Rover, helping us mothball the facilities and support car sales activities in the UK and Europe. A further 110 people are employed at Powertrain undertaking similar roles.”

“We will be posting letters to creditors early next week, notifying them of a meeting on 10 June at which we will report on the companies' affairs.”

Notes:
 

1. On Friday 8 April 2005, Ian Powell, Tony Lomas and Rob Hunt were appointed joint administrators of MG Rover Limited, while Tony Lomas, Rob Hunt and Steven Pearson were appointed joint administrators of Powertrain Limited. Steven Pearson and Rob Hunt were appointed joint administrators of MG Sport and Racing Limited on 12 April. Tony Lomas, Rob Hunt and Steven Pearson have also been appointed joint administrators to eight European subsidiaries of MG Rover Group Limited.

Following on from the news that MG Rover was being put into administration, there has been widespread speculation about the effect this might have on residual values. According to Glass’s, a definitive situation regarding increased rates of depreciation for MG and Rover-branded cars has yet to emerge fully, with most dealers unwilling to make dramatic price reductions until patterns of demand become more clear. However, it is already apparent that the market can expect minimum additional falls in value of around 10 per cent.

"It is still too early to provide a definitive assessment of how MG Rover is perceived in the eyes of the wider buying public and how this translates into what they are prepared to pay," explains Adrian Rushmore, Managing Editor at Glass’s. "Not unsurprisingly, this uncertainty has initially resulted in low trade and part-exchange prices as the measure of risk is considered to be high. When market prices start to stabilise, it is likely that some of the recently quoted prices will appear to be an over-reaction."

Glass’s says the question of price is more acute in relation to the age of the car. "MG Rover cars beyond six or seven years old are scarcely affected because prices are low and customers are far less brand conscious. For these older cars, the buying criteria have much more to do with reliability, practicality and low running costs.

"However, for younger cars the issues are greater. Warranties have to be offered to make them saleable and prospective customers need to be reassured about future backup for servicing and parts. Rover cars will also carry the stigma of being ‘defunct’. These are the key elements that will determine the market price realignment that is necessary."

Another qualifying factor is that in recent months MG Rover prices have been falling across the board, and at an accelerated rate compared to the broader market. "Prior to the closure announcement, market jitters had already repositioned prices against competing brands and, for the key models of 25, 45, and 75, the residual value ranking was already low," states Rushmore. "Clearly, since the announcement, prices have stepped down again."

Glass’s says franchised dealers have made additional pricing adjustments with their stock over recent days, but there was little evidence that prices were slashed. "Price reductions were more in line with the actions that would be taken as stock ages. A logical approach would be to test the market with incremental drops of perhaps £500, measuring customer reaction at each price adjustment. The practicality of doing this will depend on the urgency to liquidate stock and the actions taken by competing dealers with a similar profile of stock.

Statement:

During the course of this past week the administrator, PWC, the Trades Unions, the DTI and members of the management team have explored every avenue aimed at avoiding today’s redundancy announcements.

Clearly, not enough progress has been made on this to provide comfort for the administrators, and for the DTI, to continue the payment process that began last week.

In May 2000, when Rover was saved from BMW’s liquidation process, a lot of people said that the business could not last for more than 14 months. The management and employees of MG Rover have defied those conventional predictions and worked tirelessly to create a positive result.  Almost five years later, and within weeks of what we believe to be its natural long-term outcome, it is devastating to be stopped at the final hurdle. 

In a meeting with the administrators this afternoon, the directors of PVH discussed whether any other possibilities, including use of PVH and personal assets, could provide a further mechanism to allow employees to continue to be paid. The conclusion of this discussion was that the best use of those assets would be to quickly realise their value for the benefit of the Trust established to benefit the families and dependants of the Longbridge workforce.

This will enable the initial Trustees, Carl Chinn and Nigel Petrie, to start providing financial assistance to the employees of Longbridge, and their families.  We can also announce that the Bishop for Birmingham, has approached us, and has agreed to become a Trustee of that fund.

In addition to the many millions of pounds being made available for the Employee Trust, we are also committed to provide any other support that the administrators request in creating the best possible employment outcome for this business emerging from insolvency.  Despite a concerted view to the contrary, we remain hopeful that car making at Longbridge is not at an end.

For all of us this is a desperately sad day.  Our hearts go out to all of our employees, their families, and the local community, at this terrible time.

John Towers, Peter Beale, John Edwards, Nick Stephenson

Desford, UK – 12 April 2005 – XPart, the company that owns and operates the entire spare parts business for MG Rover, today reassured owners that the ongoing parts support of their vehicles is in good hands. XPart, a division of Caterpillar Logistics Services, is largely unaffected by the current difficulties at MG Rover and is running its spare parts distribution operations as normal.

“With £40million of parts in our warehouse, and strong ongoing partnerships with the 800 companies that supply parts for MG Rover models, we are in an excellent position to maintain uninterrupted supply to MG Rover dealers worldwide,” said John Parkinson, Chairman of Xpart.
“Whatever the outcome of the negotiations at MG Rover in the next few days and weeks, it is important that everyone who owns one of the three million plus MG Rover vehicles on the road today understands that the entire dealer network is supported by a thriving, dedicated and world-class spare parts business.”

XPart’s Desford facility, one of the largest warehouses in Europe, carries the manufacturer’s total range of parts required for all MG Rover vehicles, present and past.

Background Information about XPart!

XPart is a division of Caterpillar Logistics Services, Inc. Cat Logistics provides world-class supply chain solutions and services to its parent company, Caterpillar Inc., and more than 50 other leading corporations throughout the world. Headquartered in Morton, Illinois, USA, Caterpillar Logistics operates more than 100 offices and facilities in 25 countries on six continents. Caterpillar Logistics provides its full service capabilities to companies in market sectors, which include automotive service parts, industrial service parts, consumer durables, technology and electronics, manufacturing logistics, and aerospace service parts.
More information is available at www.XPart.com

The Board of directors has met with PriceWaterhouseCoopers this morning. The directors are taking the necessary steps to appoint administrators from PWC for MG Rover Group and Powertrain.

Following the completion of these formalities the administrators will issue a statement and press release later today.

All employees are asked to come to work normally on Monday.

The board of MG Rover has asked Price Waterhouse Coopers to accept engagement to advise the board of directors on the current position of the company.

The management is committed to working closely with the Trade Unions, DTI and Advantage West Midlands agency who can provide support.

This is a deeply worrying time for everyone and our thoughts are with the workers and their families. We would like to thank everyone for their loyalty and commitment at this very trying time.

Peter Beale, PVH vice chairman commented:” We requested the bridging loan from the Government to provide the additional time needed to complete our partnership with SAIC. The PVH directors will provide £10 million of personal money to convince the Government of our commitment. What we need now is the Government to decide.

“Speculation about the ability of MG Rover to survive will continue to mount as long as the decision on the loan is delayed. The speculation has affected the confidence of our suppliers and dealers and time is clearly running out.”

30 March 2005 - Lewis Day embrace the Unmistakeable Style of Rover

17 March 2005 - Hands free Kits available

17 March 2005 - MG Ice Maiden is Double World Champion - Bobsleigh!

12 March 2005 - RDX60!

12 March 2005 - Herbert Austin joins Automotive hall of fame!

Each year, during the Geneva Motor Show, the European Hall of Fame honours technical, managerial and entrepreneurial achievements in the industry. In 2005 Herbert Austin joins with Vincenzo Lancia, Pierre Lefaucheux and Ferdinand 'Ferry' Porsche.

The European Automotive Hall of Fame has a permanent home at the Palexpo in Geneva. The presentation will take place at a celebration dinner, attended by over 300 senior automotive executives, following the opening day of the motor show.

Austin was one of the founding fathers of the British motor industry. He was born in Little Missenden, Buckinghamshire in 1866. At the age of 16 he went to Melbourne, Australia, where he worked as an engineer before returning to Birmingham, England in 1889 to supervise Frederick York Wolseley’s sheep shearing equipment factory.

The two later started making cars, and Austin started his own company a century ago, this year at Longbridge. Austin Motor produced 120 Endcliffe Phaetons. The 25 BHP car was priced at £6.

His business ingenuity and dream to build cars saw the company export cars all over the world. Notable products made at Longbridge include the Austin Seven, which was unveiled in 1922. The Seven set the standard for a European small car that was inexpensive and met the needs of the family. By 1926 annual production was 14,000. The car was built until 1939, when Austin’s Longbridge factory was turned into a manufacturing base for military vehicles, equipment and aircraft – the Hurricane fighter, Stirling and Lancaster bombers being the most famous. During the war, the Longbridge factory tripled its size to 22,000 employees. He was knighted for his contributions to the war effort but Austin died in 1941.

MG Rover Group launches its new advertising for Rover this week, targeting a discerning, affluent audience.

It is the first work from St Luke’s since the agency was awarded the business and marks a return to Rover’s focus on product quality and design heritage.

The press and radio campaign features Rover’s new ‘Leather as Standard’ proposition, whereby all 2005 Rover 25 and Rover 45 models come with leather upholstery as part of the standard package.

This campaign principally targets ‘empty nesters’ who are taking advantage of their freedom to choose the kind of life they want to live. This is reflected in the new end line: "Rover – Your Space" which features in both the press and radio ads.

The press campaign, which will appear in national newspapers, Sunday supplements and consumer magazines, uses the values of the marque to create an up-market, aspirational feel to the ads. The photography, together with the strong black and red colour theme signals a renewed sense of sophistication.

Two 40-second radio ads support the leather proposition with a sensual but humorous approach. The first, ‘Aromatherapy’, plays with the smell of leather, whilst the second, ‘Cloth’, examines the differences between the look, feel and durability of leather upholstery and that of cloth.

Steve Robertson, director marketing and product services at MG Rover Group, says of the new ads: "This campaign illustrates the value that Rover is putting back into our products. By offering leather as standard on Rover 25 and 45 we are creating a unique proposition which will appeal to our target audience."

Neil Henderson, joint MD of St Luke’s adds: "We’ve gone back to the brand’s roots and picked up on the quality, style and attention to detail that Rover is rightly proud of."