Financial Times 3-2-2006: GBSC Ltd - NANJING Plans

[PERRY-MGTF]

Symfwna me toys Financial Times xthes, oi 2 partners symfwnhsan sto na arxisei h paragwgh mono me spor aytokinhta kai na kathysterhsei h paragwgh twn saloons (ZT, ZS, ZR).


Rover's return to start on sports cars
By James Mackintosh
Published: February 3 2006 02:00 | Last updated: February 3 2006 02:00

Plans by the new Chinese owner of MG Rover for the revival of the British business have been scaled back to focus on sports cars, according to people close to negotiations between Nanjing Automobile and GB Sports Car, its UK partner.

Nanjing, which paid £53m last July for the assets of Rover, agreed at a meeting with GB Sports this week to drop plans for the early restart of production of large saloons at the Longbridge factory in Birmingham.

It will instead focus on setting up a smaller sports car business, involving fewer jobs initially and lower investment.

However, Nanjing has signalled its commitment to British production by requesting a long-term lease on 100 acres of the sprawling Longbridge site, about a quarter of the land previously used by Rover.

According to people close to both sides, St Modwen, the property company that owns the site, is in talks with Nanjing about the terms of a lease, which is due to expire in three weeks.

This week's talks, held at Nanjing's Longbridge offices, concluded that the business should start by producing an updated version of the MG TF two-seater, requiring about 600 workers.

This is only half the number of staff Nanjing had hoped to take on under the old business plan but the company is understood to be hoping it can still expand the business enough to require the full complement of 1,200 within a few years. Rover employed 6,100 before it collapsed under debts of more than £1.4bn last April.

The less ambitious start would halve the initial investment required to about £75m, according to one person involved in the negotiations. "In the short term the business plan is much smaller," he said. The aim is still to reach output of 50,000-80,000 cars a year in the UK, although much remains to be negotiated.