Skip navigation

Indymedia UK is a network of individuals, independent and alternative media activists and organisations, offering grassroots, non-corporate, non-commercial coverage of important social and political issues

MG Rover gravy train

Keith Parkins | 29.04.2005 16:20 | Analysis | Globalisation | Social Struggles | Birmingham | World

Every cloud has a silver lining. For some it was gold-plated.

'”What about the workers?” was never a sentiment that echoed around the boardroom of MG Rover after supposed saviour John Towers and his partners rode into Longbridge five years ago.' -- Private Eye

'There were floods of crocodile tears from the Dear Leader when he realised that a number of marginal Labour seats could fall victim to a Longbridge backlash after the MG Rover collapse.' -- Private Eye

Workers stranded in foreign parts, pursued by angry creditors, wages and expenses not paid for weeks, no return ticket home.

That was the fate of MG Rover staff caught abroad when the company collapsed. Fortunately the administrators have taken pity on them and flown them home.

The rest of the workforce, sent home on one week's wages, courtesy of the government. No job, will be lucky if they get their statutory minimum redundancy payments.

Suppliers and dealers not paid for months. One dealership has already gone into liquidation following the collapse of MG Rover.

They are the unlucky ones.

An ill wind always has a silver lining, and for a few it was lined with gold.

The Phoenix Four, having picked up the company for a tenner, milked the company for millions.

For an initial investment of ten pounds, John Towers and his cronies got a pension pot of £40 million.

At the end of 2003, the MG Rover Pension Fund (that is the workers' pension fund) had a deficit of £68 million, with liabilities of £401 million. Both figures are by now likely to be very much higher.

Into the pension fund of the Phoenix Four, MG Rover paid around £17 million. Not bad for five years work. During the same period, MG Rover paid into the workers' pension fund (to cover 6,000 workers) £49 million. Very roughly £8,000 for each current employee.

Even sharper contrast was 2002, when £13 million was paid to kick-start the directors' nest egg, and only £11 million into the workers' pension fund to cover the entire workforce. This was the year that new accounting rules and falling stock market, saw the deficit in the MG Rover workers' fund rapidly escalate from £1 million to £73 million.

It was though not only the Phoenix Four that found a gold-plated cloud floating over Longbridge. Property group St Modwens have also done very well out of MG Rover.

In two tranches spread over 2003 and 2004, St Modwens acquired the 403-acre Longbridge site for £57.7 million. The site was then leased back to MG Rover at £5 million per annum. Conveniently located near the M42 and M5, devoid of a functioning car plant, with planning consent for mixed-use, light industrial, warehousing, housing and a Tesco superstore, the site is now worth a small fortune. Unlike those who have been whistling in the wind for their money, St Modwens had their lease paid in full until the end of June 2005.

The liquidators, as the Chinese before them, will find the MG Rover cupboard is bare – the site has been sold to St Modwens, the Chinese own the intellectual property rights, BMW own the name Rover. What is left?

There are those, for example UKIP, who wanted to see millions of taxpayers' money poured into MG Rover to keep it afloat, others, of more radical persuasion, who wished to see MG Rover occupied and car production continued in some form of workers cooperative utopia.

Both are living in cloud cuckoo land.

To have poured money into MG Rover would have been to at best to pour money into a black hole, at worst to serve as a conduit for transferring money into the pockets of the Phoenix Four.

Birmingham is not Argentina. There is no history of worker occupations. It was tried with Lucas in the late-1970s, good ideas were put forward, but nothing came of it.

The difference between Birmingham and Argentina, apart from radicalism (could you imagine anywhere in England people rising up and cleaning out corrupt town halls), is that in Argentina workers do not just take over factories, they change what they are producing, they have links with other worker cooperatives. There is also involvement with local communities, genuine participatory democracy. When an occupied factory is under attack by corrupt police and politicians, the whole community turns out to safeguard the site.

We don't have this social conscience in England. Workers and their trade unions are just as much driven by greed as their bosses. The only difference is that one group is at the bottom of the pile, the other sitting at the top.

What would a worker occupied MG Rover produce? They could not produce the cars they have been manufacturing as they do not own the intellectual property rights. Even if they did, there was no market for the cars.

But what they could produce, assuming they have the talent, is an electric hybrid car, something like the hypercar developed at the Rocky Mountain institute. One only has to look at the success of the Smart car.

Smart Car have now produced a sports car version. MG Rover could have produced a sports car version of the hypercar under the MG badge.

Sales of hybrid cars in the US have increased by 960% since 2000, albeit from a very small base. Taking a differing view from George W Bush, Americans are driving hybrid vehicles because they feel it is a socially responsible thing to do.

It is not only the environment that would benefit. Would there have been an illegal war against Iraq, would the US be hardening its stance towards Venezuela, be in bed with the Saudis, contemplating war against Iran, were it not for its ever growing dependence on oil?

If a workers cooperative is to have the support of society, it has be producing something of societal benefit. Long gone are the days when jobs were supported to save jobs.

An inquiry has been launched into MG Rover, but this is of limited scope and will not report until after the General Election. This is nothing other than a face-saving exercise for Labour MPs in marginal seats in the West Midlands.

A real inquiry has to look into the activities of the Phoenix Four, the role of Tony Blair and the discredited former Trade Secretary Stephen Byers in promoting the bid for MG Rover by the Phoenix Four, the role of Blair and Trade Secretary Patricia Hewitt in trying to prolong Chinese negotiations for an insolvent company beyond the General Election, the activities and role of St Modwens, the only beneficiaries besides the Phoenix Four of the collapse of MG Rover.

The Phoenix Four have been described as the 'unacceptable face of Capitalism'. A closer look at the activities of St Modwens would uncover the same picture.


Argentina: Workers Defend Zanon Occupied Factory, Indymedia UK, 23 April 2005

Car dealers face 'new Longbridge', BBC news on-line, 29 April 2005

Climate campaigners scale Prescott's roof + fit solar panels, Indymedia UK, 26 April 2005

Dee-Ann Durbin, Hybrid Car Sales Soar in U.S. in 2004, Associated Press, 25 April 2005

Juan Forero, U.S. Considers Toughening Stance Toward Venezuela, New York Times, 26 April 2005

Hewitt Pudding, Private Eye, 29 April - 12 May 2005

The Hypercar Concept, RMI

In the City, Private Eye, 15-28 April 2005

In the City, Private Eye, 29 April - 12 May 2005

Nicola McGann, No house, no job, what future? BBC news on-line, 28 April 2005

Michael T. Klare, Oil, Geopolitics, and the Coming War with Iran,, 11 April 2005

Amory Lovins and David Cramer, Hypercars, Hydrogen and the Automotive Transition, RMI, 23 March 2004

MG Rover: A Modest Proposal, Indymedia UK, 11 April 2005

Amitabh Pal, Bush's Handholding with the Saudis, The Progressive, 27 April 2005

Keith Parkins, Globalisation - the role of corporations, September 2000

Keith Parkins, Natural Capitalism, October 2000

Keith Parkins, Soft Energy Paths, May 2001

Keith Parkins, A sense of the masses - a manifesto for the new revolution, October 2003

Keith Parkins, St Modwens the destroyer, Indymedia UK, 30 March 2005

Keith Parkins, Longbridge and St Modwens, Indymedia UK, 25 April 2005

Keith Parkins, MG Rover, Indymedia UK, 28 April 2005

Rover workers 'stranded' abroad, BBC news on-line, 28 April 2005

Katherine Shrader, U.S. Weapons Inspector Finishes Work Without Finding Iraqi WMD, Associated Press, 26 April 2005

Tim Webb and Clayton Hirst, 'Morally bankrupt' Phoenix Four stand to make millions more from the wreckage of MG Rover, The Independent on Sunday, 17 April 2005

Keith Parkins


Display the following comment

  1. Workers without bosses — Keith