MG Rover – stay focused on the big issues


The Phoenix Directors have given me some more information about the reports that have appeared in the press recently. They have explained their rationale for some of the ways in which the companies in the group – including MGR Capital – have been structured. In response to a specific question from me, they have also reconfirmed that all the proceeds from the sale of surplus land at Longbridge will be reinvested in MG Rover’s manufacturing business. The latter point refutes one of the more lurid allegations that has appeared in sections of the press recently.

Their argument for some of the financial rewards they have made to themselves seems to be that as they had put substantial amounts of their personal funds at risk in the acquisition of MG Rover from BMW and its development, they are now entitled to expect a substantial financial reward. They also say that as they have not received any pension cover from the company until now, it is reasonable for them to set up the 13m pension fund for retirement fund for themselves and other senior managers.

It is true that people should not forget the key role which John Towers and his colleagues played in saving Rover back in 2000 and most people would accept that both this and their continuing involvement should receive appropriate financial recognition. It is also appropriate that the company should contribute to their retirement as well as contributing to the pensions of MG Rover employees.

But both the scale of the benefits they have awarded themselves and the opaque manner in which it has appeared to have been carried out are matters of real concern. They are correct to remind the people of the contribution they made to saving MG Rover but they also should remember that the Phoenix would not have risen from the ashes 3 years ago without the backing of thousands of people – in the West Midlands and elsewhere, who helped create the climate in which the rescue was able to take place. People wanted to create something different with MG Rover. I think the directors perhaps need to remember that when considering whether the priorities they have shown in this case are the right ones for the company and its employees..

There are come further clarifications which I will want to seek from the Phoenix directors and will be getting back to them over the coming days.

The company has to answer the legitimate concerns which have been raised. But people should also be wary that there will be those who will have their own agendas are now jumping on the bandwagon of condemnation of the Phoenix directors. There are those who did not want the Phoenix rescue to succeed in the first place and are just itching to say “I told you so.” The jobs of 20,000 real people were at stake in 2000 and it was right to find a way of safeguarding those jobs. Contrary to the predictions of the critics, MG Rover is still in business and still making cars. Sure, they face big challenges for the future. All automotive manufacturers do. Where things need questioning then they should be questioned. Accountability is important. But helping MG Rover to succeed is still the priority for people in the West Midlands and we need to keep focussed on that.

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Richard Burden

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I was Labour Member of Parliament for Birmingham Northfield between 1992 and 2019 and a former Shadow Transport Minister. I now chair Healthwatch in Birmingham and Solihull, and the West Midlands Board of Remembering Srebrenica. I also work as a public affairs consultant. I am an effective community advocate and stakeholder alliance builder with a passion for human rights. I am a trustee of the Balfour Project charity and of Citizens Advice Birmingham, and a former Chair of Medical Aid for Palestinians.

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