John Hemming's Web Log John's Reference Website
Thursday, April 14, 2005
  MG Rover / Powertrain Class Action
One interesting aspect of the situation at MG Rover is that it is arguable that anyone made redundant would have a case for Negligence against the DTI ministers that caused the downfall of the company through their briefings.

One would presume that this case would be against the DTI as a ministry.

If we look at the basic financial loss.

Each worker has probably lost £20,000 or so in redundancy.
That for the 6,000 workers is £120,000,000

Then they have lost about £10,000 on their car loans.
That's another £120,000,000 because of the fact that there are 12,000 car loans.

Then you have the dealers and the supply chain.

All in all the DTI might have to fork out around £500,000,000.

Not a nice thing for the DTI to think about.
 
Comments:
So the problems of Rover are down to the DTI? Nothing to do with the fact that the money has run out, Rover aren't making cars that people want to buy and can't afford to develop new models. Any minor involvement that the DTI may or may not have had is massively less important than the performance of the Phoenix Group management - the cause that you championed a few years ago. The faultlines were there and the fracture was inevitable.
 
I remember being on a course with some people from MG Rover last year. They were very critical of the management, feeling that there was a gap between what management thought was going on and what was actually going on.

It seemed like more than the normal workers criticism of management.
 
The DTI pushed MG Rover into administration.

I am on record (see blog) as being critical of the Phoenix Management. I spoke to them in 2003 and was threatened with legal action by one of them.

If the Labour Party had not been so slavish we could have done a lot better on this. Labour were so happy to see the community squeezed out of the original bid that they have to accept responsibility for the situation.
 
For John, life is so simple. The Labour Party is to blame for everything... for not doing anything about the piss-poor Pheonix consortium that Hemming did help to put in charge of the company so that they could bleed it dry, the fact that Rover have no originality or design in their vehicles and therefore no-one buys them, they are responsible for scaring off the Chinese,the state of the weather, the fact that John can't get elected to the Palace of varieties... just about everything in fact. Of course, the Tories, that's different, they're John's new best friends, and we all know their record as regards the deindustrialisation of Britain, the manufacturing sector in general and British Leyland in its various guises over 18 years. But John can't say anything about them because his mate Mike will throw his rattle out of the pram. John... go ahead... encourage people to litigate against the DTI... and when they lose, you can afford to pick up the tab... so offer them your very own no win-no fee service.
 
It would be a class action and I am sure could operate on a "no win no fee" type basis.

In any event being as it is such a large sum of money the costs would be a very small sum in comparison.

As you know I have been critical of the Tory record and of the Phoenix Management.
 
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