BMW in £1bn plan for Rover plant

THE INDEPENDENT
By Michael Harrison

BMW IS considering building a new generation of small-to- medium sized cars and utility vehicles at Rover's Longbridge plant in Birmingham, provided the Government contributes up to £300m towards the £1bn cost of the programme. The cars and utility vehicles would be built on a common platform and would increase output from Longbridge to 500,000 a year, turning the threatened plant into a financially viable operation.

Joachim Milberg, the new BMW chairman, has already ordered a sweeping overhaul of Rover which will convert it from a stand-alone business into a fully-integrated part of the BMW empire. This involves combining purchasing, marketing and distribution activities.

The short-term future of Longbridge looks secure following confirmation that production of the new Mini will go ahead next year. However, any long-term rescue plan for Longbridge is likely to involve further job losses on top of the 2,500 pushed through last year.

The new family of front-wheel cars being examined by BMW include a replacement for the Rover 200-400 series, a multi-purpose utility vehicle similar to the Renault Scenic and possibly a small BMW-type car.

It is unlikely, however, that the two car model ranges would be merged since BMW cars are rear-wheel drive while Rovers are front-wheel drive. Tony Woodley, national car industry negotiator for the Transport and General Workers Union, met the new Rover chairman Werner Samman yesterday and said afterwards: "There are no decisions taken but what BMW is examining is how it can maximise the capacity of the plant and seeing whether it can make Longbridge pay by producing a family of cars from one platform."

Mr Woodley also spoke yesterday to the Secretary of State for Trade and Industry, Stephen Byers, who has pledged that the Government will do all it can to keep Longbridge open and provide it with a secure future. Output from the plant, which produces the Rover 200/400, Mini and MGF, is currently running at around 300,000. But in order to make it viable, production would need to be raised by at least 200,000.

That could be achieved with the new Mini, which is scheduled to be produced at a rate of 100,000 to 150,000, and two new models built on the same platform.