Fleet News

Cost-cutting and job losses overshadow Rover 75 launch

ROVER has pledged to launch a replacement for its 200 and 400 models in 2003 and is to continue to significantly reduce its rental business in pursuit of stronger residual values across the brand. Meanwhile, this week's press launch in Spain of the long-awaited Rover 75 - the manufacturer's new executive contender which will now go on sale in the UK in mid-June - was overshadowed by the company announcing further massive cost-cutting measures and more job losses as it embarks on a one-year action plan to make the company profitable.

Recently appointed Rover chairman and chief executive Professor Werner Samann repeated the company's claims that the value of the Pound was too high, but he admitted the manufacturer had been inflexible and had not reacted quickly enough to currency fluctuations in a bid to stem losses. Consequently a tough cost-cutting programme has started including the axing of up to 3,000 jobs and the introduction of flexible working practices at UK plants aimed at saving £150 million a year.

At the 75 launch the company said it was looking for further voluntary redundancies which could 'run into thousands' in its bid to become more competitive. Samann: 'We face a hard cost-cutting programme. We must significantly reduce our cost base and we must become faster on our feet - more flexible. But the most important objective is to increase sales again to more than 500,000 units at reasonable prices.

'Our target remains to break even in 2000. We do need some help from a more realistic level of Sterling; a proper interest rate strategy and Government fiscal policies can achieve that without inflating the economy. Early entry of the UK into the Euro would benefit all exporters.'

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