BMW'S decision to sell-off most of its loss-making Rover Cars business and its Longbridge factory marked the bleakest day in British manufacturing, a trade union leader declared yesterday.
Mr Tony Woodley, chief negotiator for the Transport and General Workers' Union, was speaking after confirmation of the £2 billion sterling (€3.23 billion) sell-off deal with Alchemy, the London-based venture capital company.
Following its meeting in Munich, the BMW board announced the sale of the Rover and MG sports car brands and the Longbridge plant in Birmingham.
With unresolved questions about the fate of many thousands of Rover workers, and thousands more in the components industry, new owner Alchemy stressed that, while Longbridge would be reduced, the company was not in the asset-stripping business.
Mr Stephen Byers, the British Trade and Industry Secretary, was holding further urgent talks with Mr Jon Moulton, Alchemy's managing partner, last night in an effort to "clarify the company's intentions". And Mr Byers will hold a further series of meetings today with trade union leaders and others in the crisis-hit West Midlands.
Acutely conscious of the potential political backlash in as many as 20 marginal Labour seats in the Midlands, the Prime Minister, Mr Tony Blair, is certain to step up pressure on the European Commission to approve a £152 million aid package for modernisation at Longbridge.
Mr Byers said BMW's decision had come as "a major disappointment". There had been a clear understanding between the government, the Rover workforce and BMW that the business strategy under way meant there would be no question of break-up at least until 2002. While clearly no company could ignore the £1.3 billion losses BMW incurred over the past two years, the Trade Secretary was disappointed even so that it "had failed to deliver on this commitment".
The priority for government now, he said, was "to see that the new owner of Longbridge is committed to continue car production in the long term".
There was partial relief for Mr Blair's government with the news that BMW will continue to make, for Alchemy, the Rover 75 model at the Cowley factory in Oxford and that the new Mini - which had been due to go into production at Longbridge later this year - will now also be made at Cowley. But good news for Oxford compounded the gloom and uncertainty gathering over the Midlands amid reports the profitable Land Rover division would be sold, probably to Ford for about €3 billion.
The leader of Birmingham City Council, Mr Albert Bore, reacting to the "devastating news" from Munich, said he feared a 25 per cent increase in the city's unemployment rate if the Longbridge plant's future was not secured. Mr Woodley said the BMW chairman, Prof Joachim Milberg, had told him Land Rover, too, would be sold, claiming the company had lined up a purchaser who was "a main player in the car industry".
"They are proposing to completely break-up and destroy Rover Cars as we have known it," declared Mr Woodley. "They are proposing to sell off not only Rover Cars but Land Rover as well, which leads to the destruction of a once great British car manufacturing company."
Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said: "Alchemy will have to demonstrate its commitment to the loyal workforce."
