MG Rover in administration, Government pledges £40M to bail out suppliers

As MG Rover went into administration today Trade and Industry Secretary Patricia Hewitt moved to help suppliers of the beleagured MG Rover following its failure to reach agreement with the Shanghai Automotive Industry Corporation on a joint venture.

Ms Hewitt announced as a first stage immediate action to tackle the damaging impact that the failure of the deal will have on MG Rover's suppliers with a programme of support worth over £40 million.

This will help give MG Rover's suppliers the time and support they need to adjust and create new opportunities for the skilled and capable people who work for them.

The Government support includes short-term transitional help for business planning and employee training for suppliers with significant sales to MG Rover, to give them a breathing space whilst they seek out new opportunities.

Business advice will be available to help these companies and they will then have access to a second phase of longer term help to improve products and processes, drawing on the successful programmes run by Advantage West Midlands over recent years.

A dedicated telephone line has also been established to provide business support and advice to companies in the Rover supply chain on 0121 6070121. Initial information about the support on offer to suppliers at a central website which is now live at //www.4ni.co.uk/link-error.aspx.

This support will help those firms to work towards a successful future supplying other customers, in the region and further afield. In addition this includes new investment by AWM over the next three years in the successful programmes for modernising and diversifying automotive businesses, and helping new start-ups.

The supply chain support is only part of a wider package being developed for the MG Rover workers and the wider community. Ms Hewitt announced that the Rover Task Force - led by Nick Paul, Chairman of Advantage West Midlands - would be tasked with deciding how best to allocate this support and oversee its effective implementation. The full detail of the package will be announced shortly.

Ms Hewitt said: "The government and the unions will do everything possible to work with all concerned to try and secure future car manufacturing at Longbridge.

"This immediate package of support for suppliers demonstrates our commitment to manufacturing in the West Midlands."

A MG Rover staement said: "This is a deeply worrying time for everyone and our thoughts are with them and their families. We thank everyone for their loyalty and commitment at this very trying time."







(GB)