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MG Rover

The National Audit Office have produced a report that I have not as yet read about the relations between MG Rover and the DTI.

The first thing to note is that MG Rover produced good cars that themselves were produced at a profitable margin. They, however, sold too few and therefore could not maintain the number of staff they had.

Had the deal with SAIC gone ahead there would have been about 3,000 redundancies (half the plant). They could have made redundancies previously to bring the income and expenditure into line, but for whatever reason this did not happen.

The final failure of the company arose from the publicity surrounding its financial difficulties (which mainly came from the government) causing people to stop providing supplies on credit.

Were any deal to be possible through administration it would only have happened following substantial redundancies.

I do think a deal with SAIC would have been possible if the government had not withdrawn the offer of a loan.

What I find sad about the whole process is that it would have been possible for the company to have succeeded following the deal in 2000. However, key errors were made.

BDO are still working on their report. It is quite substantial and I don't know when they are supposed to report.

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