Chinese Make Another Run at Rover Takeover

Date Posted 07-15-2005

BIRMINGHAM, England — Former Ford and Fiat director Martin Leach has been hired by China's Shanghai Automotive Industries Corporation (SAIC) to head up a revived buyout bid for collapsed British automaker MG Rover.

There was initial optimism the move could revive production at the company's Longbridge plant, but insiders now think the plan involves shipping production lines to China and setting up production there.

However, SAIC is believed to want to establish a European R&D facility at Longbridge, which could mean up to 1,600 jobs. The BBC said the SAIC-Leach plan could also see the Rover 75 luxury sedan and MG sports cars built at a downsized Longbridge.

SAIC and another Chinese bidder, Nanjing Automotive, have each placed bids for the assets of the carmaker, along with a British-backed bid headed by businessman David James. MG Rover's administrators, PricewaterhouseCoopers, said Thursday they were in talks with three parties, which all hoped to continue "at least some car production in the U.K." The bids are thought to be worth around $100 million.

All three intend to acquire all of the car and engine production assets of both MG Rover and Powertrain, said PwC's Tony Lomas, indicating other bids for individual parts of the collapsed business had been rejected. At least three consortiums had bid for just the MG brand and assets.

What this means to you: In Leach, SAIC has found a capable front man. And the MG brand has plenty of mileage worldwide, including America. But how much damage has been done to the Rover brand? Leach will have to get around that problem if this plan is to succeed.