rover

[TEAK36]

I am probably being a bit naive here, but Rover is/was a business, and if a business does not make a profit, then it goes bust.I am desperately sorry for all those people that are likely to lose their jobs, but why should the government, or SAIC bail out a company that has continuously lost millions of pounds.

[milly143]

I totally agree with you, was thinking the same thing myself. Obviously it is very sad that those people will lose their jobs but I don't think it is fair to expect the government to bail them out.

[willowman]

Maybe because it's cheaper than paying dole money to all the Rover workers and employees of suppliers who would also go bust.

[willowman]

PS Don't forget that if a big firm like Rover goes down the pan, then it will take many suppliers, both big and small, with it. Sadly we are now in the position where large car manufacturers create a disproportionate amount of puchasing power - bit like the large supermarkets.

[milly143]

Even so, how can the govrnment be expected to pay for the company and ultimately all the supplying companies. Surely Rover have gone bust because they are not selling enough cars, therefore the workload will eventually be radically reduced as well.

[Dom Tuk]

The government will also probably fall foul of EU laws that prevent such a thing ie: a government using tax payers money to susbidise a private company. I agree that it is sad for the families concerned and we could all be in the same boat one day but to use the public purse to bail out a company that was fleeced by a handful of senior executives is insane.

[Ducati]

Yes it is incredibly sad, but if they are losing money than it is inevitable - the knock on effect will be huge, but I fail to see how the government can step in to save the jobs: where would we draw the line? if the small firm I work for were to go bust, could I expect the government to bail my firm out to guarantee my job? No, of course not.

 

As far as I can tell, this is similar to the mining probelem in the eighties: at the time, it cost more to mine a ton of coal than it could be sold for, but for some reason, the militant NUM at the time, headed by Scargill with his comfortable living and Jag in the driveway, just couldn't - or more likely weren't prepared to - see that the sums just didn't add up.

 

Genuinely sad, but a fact of business life.

[Didwot]

If a business is losing money, or making little or no profit, and you have the ability and funds to make it successful, you can but the business cheap, turn it around, and make an absolute fortune, just like Philip Green did at Bhs. A particularly attractive proposition if the business comes wiht a good brand eg MG.

[smudge]

Unfortunately, this fiasco has a bad knock on effect for other companies in England.

A friend of mine is a Manager in a car accessories company, who issue mirror stickers, etc., to motor manufacturers, including Rover. Since the news broke, they have already lost orders & some members of staff are twiddling their thumbs.

Even though they supply to other companies, Rover was one of their largest customers, so some now fear losing their jobs too.

[TEAK36]

Didwot,I understand what you are saying, but I thought this had already been attempted with Rover.Didnt Phoenix purchase them for �10 a few years ago?

[jake-the-peg]

Frankly I think you are being naive.

You can't simply apply the economics of small marketplaces to large enterprises. Now I'm not necessarily saying that the following applies to Rover but if you just let a huge enterprise go bust you could get a consequential failure of businesses resulting in a countrywide recession or worse case a depression.

You may remember that even George Bush - that guardian of free market forces illeagally acted to protect the US steel industry against competition last year.

Having said that if you are going to step in as a Government to try to prevent an economic disaster you've got to have a reasonable chance of success - and I just don't think that that is there with Rover.

But you can't just wring your hands and say "We'd love to help but Market forces must be respected".

By the way - do any of you own a British made car?

[silly moo]

I agre with everyone about how bad it is for Rover workers and all those in the motor industry supply .
I have a friend whose husband will lose his job, and at 50+ yrs of age he will find it incredibly hard to get another job.
BUT think back to the mining industry ; the steel industry ; the building industry ; etc., etc.,
Thousands of people in these industries lost their jobs, some of my family and friends included.
Why should Rover be any different?
Also maybe the Phoenix 4 should be made to repay the millions they have taken out of the business for themselves before any more cash is given to them?
I don't mean to sound heartless but it's not always a nice world out there.

[milly143]

jake-the-peg my Dad and sister both have Rovers, so yes.

[jake-the-peg]

Well you shouldn't necessarily let a major industry employer go bust laying off thousands if it's down to bad management and saving it is feasible.

You have to consider a countries' strategic interests.

You don't actually think the nuclear industry is a profitable business do you?

[TEAK36]

Jake-the-peg.I actually drive a Rover, and have done sone for several years now, which is what prompted me to ask the original question.

I do understand what you are saying about the economics, but you cannot compare it to the US steel industry which I understand employs over 50 thousand people.I would begrudge my hard earned taxes going to save a company that has proven to be an economic failure in recent years.If the goverment bail them out now, they will only be delaying the inevitable.

[BigDogsWang]

Jake-the-peg - Rover isn't necessarily a company which has gone to the wall due to bad management. As a manufacturing business, it has suffered financially for many years due to the fact that even before the Phoenix consortium took over, Rover were reliant on building cars based on old technology. The Rover 45 in particular has been around for donkey�s years, all that happens every few years is it gets a facelift. I bought an MG ZS a couple of years ago, and although brand new, it felt 10 years old. In fact, it was crap! The hope was that the Shanghai Motor company inject massive amounts of money into Rover to allow it to move forward and develop new technology. Now it looks as though they have pulled out, what are we supposed to do? Carry on throwing good money at a duff product?
Don�t forget, it�s the Election next month. Call me cynical but couldn�t the government be after votes?

[jake-the-peg]

You've hit the nail on the head, the MG Z series were old models tarted up and badge engineered like the old MG metro and Maestro. It didn't work for Leyland and it was never going to work for Rover.

Rover had lots of problems but since the rescue it was bad management that sunk it. Plain and simple. A hundred Million pounds was wasted instead of creating genuinely new and innovative cars to save Rover from it's image of being about as desirable as a pair of flannel pyjamas.

And as for the dubious pension dels for the directors - well that's another thing entirely.

Personally I don't think Rover can be saved now even with Government money. Pretty much every asset the company had (including its name has been flogged off) and it's liabilities - including pension commitments are just too big.

There just might be a way out for MG but I suspect they've even even run this into the ground.

I can't see how the Chinese deal was ever going to work - we now discover that the Chinese had already bought engine technology and other intellectual property from them - when you've sold the family siver there's not much left to bargin with.

I don't think any governments going to put money into this I just hope that in the future companies like this get a little more scrutiny and that the current directors get the scrutiny they deserve. 

[Didwot]

TEAK36 Either John Towers and his colleagues lacked the the ability or the funds or both, or perhaps the had another agenda.

[LionNo4]

Don,t mean to be callous but when a small business closes no one really bothers,but when 6000 people lose their job it,s an outcry.Add up all the smaller jobs lost and it would end up just as bad.

[pjm007]

Maybe The Queen should be Rovers saviour and buy the company on a sentimental basis, the royal family have had thier fair share of Rovers. Lets face it, what else has does she have to spend her millions on ?

[jake-the-peg]

I'm actually agreeing with most of you in this case, I think Rover is beyond saving.

But the question was why should the Government bail out a failing company and my answer was it should bail out a failing company if that company is in the countries strategic interest and if it has a reasonable chance of success.

My point is that you cannot simply appy the criteria of "oh well it was loosing money so it has to be shot in the head - business factors must be paramount".

In Rover's case I'd suggest that maintaining a volume car manufacture may well be in the countries strategic interest, however looking in from the outside it doesn't actually look as if there is a significant chance of success in this case.