29th May 2007 – The alternatives!

Firstly I have to say that my previous BLOG was by no means an attack at the entire British Media, over the last couple of years I have made some good contacts, and even some good friends from people involved in the media. I have found some of them honest, honorable and even down-to-earth individuals with family’s, feelings and yes even a willingness to listen and learn! However there are those who are lazy, those who just regurgitate, reassemble and re-type other people’s correspondence. They scan the Internet, view the BLOGS and discussion forums, read yesterdays newspapers and even talk to the ‘man down the pub’. Then following a predetermined script set out to make the story fit their point of view – regardless of the facts. This is journalism at its worst.

I have come in for some backlash following my previous BLOG, I would like to apologize to those real journalists who spent time investigating the story, and delivered a true picture of the events. My issue was never with the story reported – yes we should have released prices, it would have been great to announce X number of dealers, and we desperately want to succeed, and employ 1000’s of ex-MG-Rover personnel – negativity around these issues, is accepted. However I still believe this should have been balanced with the excitement and fantastic news that Longbridge wasn’t dead – despite the thousands of nails firmly hammered into the coffin by many a journalist in the past. I just wanted to offer a couple of alternatives to how a story could have been told if NAC hadn’t brought MG, and finally a version of a report written by a NAC employee!

Scenario 1. Alternative Chinese Manufacturer's Purchase of MG-Rover

May 29th 2007 - The story begins over two years ago as a Chinese company that were once heralded as savior’s by the MG-Rover’s owners, stood aside and watched the company fall into administration, then as the vultures circled above they stepped in and purchased the company for a fraction of what it would have cost as a going concern. This launched their plans and they systematically stripped the Longbridge site of every nut, bolt, washer and light bulb, all packed away and transported to a factory somewhere in middle China. This incredibly secretive company who failed to purchase the Rover brand from BMW last year, have relocated the equipment and are now producing their version of the familiar Rover 75 for Chinese consumption branded as MG 750. We also saw a glimpse of a new vehicles at this years Shanghai Auto Show, a medium car badged as the MG 350, which could be on sale here in the UK early next year.
The company rejected offers to continue production at Longbridge, despite pleas by the unions and local politicians, and today a group of journalists and St Modwin executives gathered at what would have been the old Q’Gate to witness the opening of an enormous housing and retail park on the former heart of British Automotive Industry.
This alternative Chinese Manufacturer handed the keys over to St Modwen some 18 months ago, after taking what they owned, the following day the bulldozers moved in. Demolishing the massive site, flattening it to the ground, then like a phoenix the entire site has been transformed into the largest office, housing, and retail park in the south of the city. As far as the eye could see, bland, grey warehouses and shops have been erected on a place that not only provided jobs for thousands of people, but also provided hopes, dreams and a sense of pride in a whole community. This has been replaced by more branch’s of Comet, NEXT, Tesco’s and WH Smiths.
The original factory was testament, not just to car production, but during both World wars provided munitions and even airplanes to the British Forces fighting oppression by would be invaders. Over 100 years of blood, sweat and tears fell at the factory, famous for building, the Maxi, the infamous Allegro and of course the Mini – to name but a few of the hundreds of vehicle brands manufactured on the site. Employing hundreds of thousands over they years, training tens of thousands and providing a sense of belonging for millions. Also watching this final nail in Longbridges coffin were some ex-employee’s – tears welled in their eye’s as the ribbon was cut by a beaming councilor, he explained that the new development was a sign of progress and we shouldn’t look to the past but look forward to the future. For those who watched, the new shops and houses provided no future, no sense of belonging and almost certainly no employment. As one former employee said to me “A vast part of British heritage has been replaced by a thousand 3 Bed Semi’s that no one around here can afford – if that’s progress, I will stay in the past!”

Scenario No. 2 – British Investment Group Buy MG-Rover

May 29th 2007 - Just 2 years after a British consortium of businessmen purchased the old MG-Rover assets from the administrators, dozens of journalists gathered once more at the gates to witness the chains go on, and bring an end to another chapter in long Longbridges chequered history.
Like the Pheonix 4 before them, they promised to sustain production and employment in Longbridge well into the thousands for years to come. Unfortunately they underestimated the amount of money that was required to not only develop new vehicles, but also to pay the 2000 workers they hired 6 months after purchasing the company. There initial investment represented only 10% of what would be needed to develop a fresh range of vehicle’s, demanded by the press and the public. The wage bill ran into millions, especially when considering the senior executives bonus’s, and a failure to find a suitable partner to help share the burden of development costs so desperately needed, left the company struggling from day one.
It was a story all too familiar to many of us who reported the same scenario only a few years earlier when John Towers was hailed as the savior of MG-Rover, they (PVH) managed to keep the company afloat for 4 years, and made themselves extremely rich in the process. No one knows if the latest band of executives have made similar individual profits – we are sure that will be unearthed under the usual parliamentary investigation that seems to provide a more profitable revenue source, than actually building vehicles these days. What is true is, as before this is a devastating blow to the thousands of employee’s, their families and the suppliers who supported this latest resurrection attempt.
We were all surprised 2 years ago when the administrators accepted the offer from this latest group of investors. There had reportedly been higher offers from several Chinese companies’ who wanted the brands and the equipment to fuel the growing car market in the East. But in an attempt to keep local jobs the administrators were praised when they allowed them to re-open the gates only 6 months after the former collapse. Despite the halving of the workforce, they were hailed as heroes. The public were skeptical and the suppliers reluctant to open supply lines again, add together the lack of a partner and sufficient funds this always looked like an attempt to support various peoples political careers and bank accounts, rather than a serious attempt at reviving a once great British Icon.
So as we stand here yet again, with 2000+ employee’s facing an uncertain future, thousand’s more suppliers are left owed millions, and thousands of owners left without warranty’s on vehicles with rapidly dropping values. We wonder if anybody else would be around to try again? They Chinese have gone, and there doesn’t seem to be any rush for anyone else to take control – perhaps this really is the end of Longbridge

Scenario No.3 – Nanjing Automotive Buy MG.

29th May 2007 - Following the sale of MG-Rover’s assets to Nanjing Automotive Corporation nearly 2 years ago, the world’s media met to celebrate the reopening of Longnbridge.
We were all skeptical and surprised when NAC outbid various rivals to gain control of the company back in 2005, they were open about there plans to center production around a new plant being built in China, however surprisingly they also committed to keep Longbridge at the heart of their European strategy. Surprising because Longbridge had become the bye word for failure and inefficiency over the years. Strangled by a lack of investment and used as a cash cow for its previous owners, some observers had wished that the site and the marques had disappeared once and for all – maybe one reason why British political and financial support was less than forthcoming for the new owners.
Everyone expected the ‘Lift & Shift’ operation to have singled the end of over 100 years of production at Longbridge, and see the gates locked for the final time. Not so, the Chinese met there commitment and re-started production, albeit employing small numbers of former workers, and launching the same vehicle that the previous owners had touted for several year previously. They told us that this was just the beginning and that greater employment, and future models would arrive in the years to follow, can we believe them? Is this just a false dawn? What makes them think they can succeed where everyone else had failed?
Well one big factor in this is that they don’t have to solely depend on sales in Europe for success, everyone before them centered production and sales on the market in the UK and mainland Europe. NAC have centered their plans on Asia’s growing economy and fast paced automotive industry. Having built one of the largest and most technically advanced production facility’s in China, they hope to sell almost ½ million vehicles a year in the near future, investing in not only 1, but 2 facility’s before even taking a single deposit on a single vehicle! Money gained from this will be ploughed into new products, innovations and facility’s – not only in China, but also in the UK.
The UK is central to their plan, why? Because to be saleable in China you need a foreign brand, and experienced engineers to help develop future products, add to this the factor that many European consumers aren’t ready for Chinese imports. A UK facility makes far more sense than some would believe. Longbridge provides a real link to the origins of the brand, a focal point for enrolling British engineers and a production base in the heart of Europe.
One of the most important reasons that could be ignored but maybe the most influential in the decision to retain Longbridge is pure politics. Nanjing and the Jiangsu Government can now declare to be the first, and the only Chinese Automotive Company to wholly own a production facility in the West. The kudos this carries in China is enormous, and helps provide regional and national political and more importantly financial support.

The future remains unclear, however we can only stand back and admire NAC for taking a positive approach to manufacturing in the UK, while everyone else is transferring there facility’s to mainland Europe or the Far East, they are reversing the trend and recognizing that business isn’t just about profit and dollars, but is also about people, heritage and having a long term view.



Given the three circumstances the choice in my eyes would be very clear, maybe I have been rather negative on scenarios 1 & 2, but I guess history and hindsight play there part in my writing, I was also party to all three propositions during that period that required the administrators to choose a purchaser, whilst I didn’t have any influence in the decision – I am glad that NAC won out in the end, at least they have proved to be honest and loyal to the brand and Longbridge.
These are my final words on this issue, I like many others hope that NAC prove the doom Sayers wrong, and we live to see Longbridge continue to grow, develop new products and continue to be at the center of NAC’s European operations.