Launch of new Rover brings 6000 jobs

THE INDEPENDENT
Launch of new Rover brings 6,000 jobs
Michael Harrison

ROVER yesterday unveiled plans to create up to 6,000 jobs through a pounds 400m investment in a new executive car at its Cowley plant near Oxford. The new model, codenamed the R40, will make its debut at the Birmingham motor show this autumn and will go on sale next spring.

It will be a replacement for the Rover 600 and 800 series and production is expected to be about 100,000 a year - double the current output of the 600/800 series. The new car takes investment in Rover by its German parent company BMW to pounds 2.5bn since the business was taken over in 1994.

BMW will have spent pounds 4bn on Rover by the turn of the century. The investment will create 1,000 direct jobs at Cowley - taking the workforce there to 4,000 - and a further 5,000 jobs among suppliers. In total Rover's workforce will rise to 40,000.

The R40 is the fifth model replacement since the BMW takeover. BMW has already brought out new versions of the Rover 200/400 series and the Range Rover as well as a new baby Land Rover, the Freelander, and the MGF sports car. In addition, a new Mini will go into production at the Longbridge plant in Birmingham in just over two years' time while Rover is also investing pounds 400m in a new engine plant at Hams Hall in Warwickshire.

Despite the enormous investment, BMW is yet to see a return on its acquisition of Rover. The business made a loss of pounds 92m last year, down from pounds 119m in 1996 under German accounting laws. Under UK accounting standards it made a profit of pounds 31m against a loss of £88m. Dr Walter Hasselkus, the Rover chairman, said the R40 would be the first fully-engineered car to be developed by Rover since BMW took over. The new model will compete against the likes of the BMW 5 series, the Audi A6 and the Jaguar S type.

Rover has yet to decide on a name for it, although the idea of calling it the Rover 700 series has been ruled out because of similarities with the BMW 7 series.