Fleet News

Final desperate days of MG Rover empire

FORMER managers at MG Rover have revealed the desperate measures taken to make the company look like a viable business as the Phoenix Four saw hopes of financial rescue by Shanghai Automotive (SAIC) disappearing.

Retailers were encouraged to take on huge quantities of cars, but as the larger dealer groups began protesting, the emphasis switched to the small business owner-drivers. One manager said: ‘We were twisting the arms of the little guys.

‘We were mortgaging the future. The idea was we didn’t need to declare anything until the deal was done. If the company went down, then it would not matter.’

MGR’s 80 senior managers were briefed by directors each fortnight and some are convinced they were misled.

They think they were encouraged to put pressure on dealers to take cars, keep the Longbridge assembly lines rolling and inflate registration figures.

Kevin Brown, corporate sales director when MGR collapsed, agreed to be named because he wants dealers – especially those with small businesses – to know how badly he feels.

He was head of strategy at RAC Business Solutions before returning to Rover. Brown said: ‘I feel let down by the Phoenix directors, as I was encouraged to join from a good job at a great company. I thought the risk was quite small as the commercial and strategic logic behind the deal from the Chinese perspective was very strong.

‘It seems the deal was much riskier than I had thought.

‘I feel sad for the people at Rover who have lost their jobs, and for the dealers, who invested lots of money and were pretty supportive. Some of them will suffer quite badly.’

Last week, administrator PricewaterhouseCoopers executives said Rover would be sold on a ‘piecemeal’ basis but that creditors were to get a settlement that was ‘nil or negligible’ as few assets remained.

Discount sales spell misery for dealers

FLEET decision-makers have been hearing about the misery and the chaos behind the MG Rover collapse.

At some dealerships, discounts of up to 52% were being offered on some Rover products, while some small suppliers were left with unpaid bills running into six figures.

Members of the Association of Car Fleet Operators were told about the problems during a London West regional meeting.

Even individual salesmen have been left out of pocket, with a staff member at one dealership owed £8,000.

One member said: ‘There are some dealers in a lot of trouble and there is a lot more to come.’

Discounts revealed during group discussions ranged from 40% to 52% on some models, with one example of a MG ZR 2.0 TD listed at £13,000 offered for £6,995. Members commented that if it was so cheap, maybe it was worth purchasing the cars anyway, despite the company’s troubles.

One said: ‘At that price, you could buy one, keep it for five years and throw it away. It is almost buy-one-get-two-free.’

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