Fleet News

Rover at 'rock bottom' after EC aid investigation blow

CUSTOMER confidence and workforce morale is approaching 'rock bottom' at Rover following the announcement that the European Commission is to investigate the Government's £152 million aid package for Longbridge. The EC blow for Rover was compounded by market estimates that the manufacturer's 1999 losses will exceed those of the previous year.

According to a Rover insider, the mood at Longbridge is downbeat, after the workforce pulled out all the stops to meet BMW's new working conditions and improve production standards. But Rover showroom traffic is said to be at an all-time low, threatening to dampen the sales potential of the new 25 and 45. The insider said Rover did not expect the Government aid to 'go through on the nod', but news of a potentially lengthy investigation by Mario Monti, the Competition Commissioner, has come as a further blow to the manufacturer.

Monti will examine the authenticity of BMW's threats to move Rover manufacturing to Hungary if it did not receive Government aid to redevelop Longbridge. BMW has warned that Rover losses during 1999 will outstrip the £635 million it lost in 1998, despite Rover sales developing 'very positively' in the final quarter of 1999, raising hopes that. earnings in 2000 should be 'significantly better'.The Rover insider added that BMW expects the EU Commission to give 'unlimited and speedy' approval to the Government's aid package. 'Otherwise we will have to ask whether Longbridge is the right site,' he said.

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