Premium
This is an archive article published on March 20, 2000

BMW must help soften Rover fallout, says UK’s Byers

LONDON, MARCH 19: Trade and Industry Secretary Stephen Byers said on Saturday that German car giant BMW AG's had a responsibility to help ...

.

LONDON, MARCH 19: Trade and Industry Secretary Stephen Byers said on Saturday that German car giant BMW AG’s had a responsibility to help meet the social cost of job losses in the English Midlands resulting from its sale of Rover.

"(BMW has) acted in a way that most people regard as unacceptable," Byers said. "They have kept the workforce and the government in the dark about their intentions.

"I think they’ve got a responsibility here which they need to discharge. They need to join with us and make a contribution towards our efforts to regenerate the local economy," Byers told the BBC.

Story continues below this ad

He was speaking after the first meeting in Birmingham of a task force set up following BMW’s decision this week to sell Rover’s Longbridge plant. The move has sparked bitter recriminations between London and Munich.

Eager to avoid a job meltdown, Byers pledged that a rescue package once destined for ailing Rover would now be invested in the economy around Birmingham.

He said he wanted a wide range of job creation schemes to help workers and gave the task force six weeks to come up with solutions. "We are not going to walk away from the problems that have been created by BMW’s decisions. We are going to work together in a real sense of partnership so we can deliver alternative opportunities to the people of Longbridge and the West Midlands," he told reporters.

British media said Byers, who will fly to Germany on Thursday for talks with BMW, was effectively seeking compensation to cushion the blow of Rover’s closure on the West Midlands economy.

Story continues below this ad

But he has yet to spell out what he wants from Germany’s third biggest car manufacturer. Job cut fears

BMW said massive losses at Rover forced it to abandon its six-year bid to turn around one of the oldest names in British carmaking. It sold the rump of its loss-making British unit to the venture capital firm Alchemy Partners.

Alchemy says it is too early to say how many of the 8,773 jobs at Longbridge will be lost. But unions and politicians fear about half will go — along with many of the 40,000 jobs in the components industry which are dependent on Britain’s biggest car plant.

Prime Minister Tony Blair personally rang BMW Chief Executive Joachim Milberg to express "a great deal of disappointment and anger" over the shock sale of Longbridge.

Story continues below this ad

Graffiti scrawled on the wall of a local BMW dealer echoedthe anger felt in the Midlands. It read, "Scum".

Byers promptly withdrew the government’s 152 million pound($240 million) offer of support for training at Longbridge.

He said 129 million pounds pledged to BMW would now be usedto regenerate the local economy in the West Midlands.

Byers has appealed for other buyers to come forward beforethe BMW deal is completed with Alchemy.

Story continues below this ad

"We want a new owner for Longbridge committed to the motorindustry and the workforce," he said.

Clearly furious over the way the deal was handled, Byerssaid: "Alchemy has been very up front in saying they want to dispose of the business in four years. I am not sure that marries with long-term viability."

At a Munich press conference on Friday, BMW boss Milbergtouched a raw British nerve when he said that the Blair cabinet’s ambiguous stance on whether to join Europe’s single currency was the nail in Rover’s coffin.

He said the high-flying British pound had ruined efforts atturning Rover around.

Story continues below this ad

BMW also stepped up its retreat from Britain with the saleof Land Rover to Ford Motor Co, the world’s number two carmaker, for three billion euros ($2.9 billion).

Latest Comment
Post Comment
Read Comments
Advertisement
Advertisement
Advertisement
Advertisement