Excel620
24-06-2006, 10:58 AM
U-turn at Longbridge as Nanjing slashes production of sports cars
Tim Webb, The Independent
Production levels have been set at realistic levels
NANJING, the Chinese company which bought the collapsed MG Rover last year, has more than halved the number of cars it had pledged to make at Longbridge.
The state-owned company now plans to build only around 4000 MG TF sports cars each year at the West Midlands site, a spokeswoman said. Production could be increased if demand for the sports car was high, or cut back even further if sales failed to take off, she said. The company planned to employ 400 people at the site, but only "when we reach a certain level of production". She could not say what level of production would be needed for all those workers to be employed.
Before MG Rover went into administration last April, 6000 people worked at Longbridge.
Nanjing signed a 33-year extension to the lease on the Longbridge site with the owner, St Modwen, in February. But it inserted an option allowing it to cancel this extension in July. The company will not, as some had feared, exercise this option next month, the spokeswoman said. Nanjing's commercial director, Wang Yaoping, said in April that it planned to build between 10,000 and 12,000 cars a year at Longbridge, down from the 100,000 a year it had originally predicted when it took over the site. The figure of 10,000 to 12,000 was contingent on receiving at least £10m in British government grants.
Now Nanjing has decided not to apply for government help, resulting in the scaling back of its business plan.
Some union officials are privately sceptical of any production at all going ahead at Longbridge because Nanjing has changed its plans so many times. After the company bought MG Rover, it initially said it wanted to eventually employ 1200 workers to produce 100,000 cars a year.
It has dismantled most of the assembly lines for production of Rover cars and shipped them to China. This has added to suspicions that Nanjing is not interested in producing cars in the UK, where costs are higher.
Tim Webb, The Independent
Production levels have been set at realistic levels
NANJING, the Chinese company which bought the collapsed MG Rover last year, has more than halved the number of cars it had pledged to make at Longbridge.
The state-owned company now plans to build only around 4000 MG TF sports cars each year at the West Midlands site, a spokeswoman said. Production could be increased if demand for the sports car was high, or cut back even further if sales failed to take off, she said. The company planned to employ 400 people at the site, but only "when we reach a certain level of production". She could not say what level of production would be needed for all those workers to be employed.
Before MG Rover went into administration last April, 6000 people worked at Longbridge.
Nanjing signed a 33-year extension to the lease on the Longbridge site with the owner, St Modwen, in February. But it inserted an option allowing it to cancel this extension in July. The company will not, as some had feared, exercise this option next month, the spokeswoman said. Nanjing's commercial director, Wang Yaoping, said in April that it planned to build between 10,000 and 12,000 cars a year at Longbridge, down from the 100,000 a year it had originally predicted when it took over the site. The figure of 10,000 to 12,000 was contingent on receiving at least £10m in British government grants.
Now Nanjing has decided not to apply for government help, resulting in the scaling back of its business plan.
Some union officials are privately sceptical of any production at all going ahead at Longbridge because Nanjing has changed its plans so many times. After the company bought MG Rover, it initially said it wanted to eventually employ 1200 workers to produce 100,000 cars a year.
It has dismantled most of the assembly lines for production of Rover cars and shipped them to China. This has added to suspicions that Nanjing is not interested in producing cars in the UK, where costs are higher.