EU offers MG Rover training funds
April 20, 2005
The EU has said the UK government can "re-allocate" up to 100m euros (£68m) of regional aid funds towards helping workers who lost jobs at MG Rover.
The cash, part of an 890m euros award for the 2000-2006 period, can be used for training and retraining of staff, and for local business support.
The money had already been earmarked for investment in the West Midlands.
The news comes as manufacturing groups say about 1,200 staff at former suppliers to MG Rover face redundancy.
"Part of the 890m euro programme could now be redirected to alleviate the consequences of large-scale redundancies," the European Commission said in a statement.
Regional policy commissioner Danuta Huebner said a team of commission officials had already arrived in the UK to talk with government officials about precisely how to use the funds.
Competitiveness boost
Anything between 50m and 100m euros of the EU money can now be re-allocated to dealing with the demise of the MG Rover plant at Longbridge in Birmingham.
"Mainly it would be used for training and retraining," said a commission spokesman.
"The second objective would be for business support, to help businesses be created and reinforced in their competitiveness.
"The commission wishes to be of the greatest possible assistance in this matter."
According to the Engineering Employers Federation, a number of supplier firms owed money by MG Rover were set to announce "fairly sizeable" job cuts.
The task force set up in the wake of MG Rover's collapse has already paid grants of £300,000 to 34 suppliers affected by the crisis.
The body, set up to help workers at Longbridge, said the payout had prevented 700 redundancies among supply firms.
It has £150m of government aid to hand out following Rover's demise which saw 5,000 jobs going at Longbridge.
The support package includes more than £60m to help diversify industry in the Longbridge area, and to support MG Rover's supply chain.
A further £50m will fund retraining, while £40m will be used for statutory redundancy payments.
Dealers
Meanwhile, 86 workers have lost their jobs as Phoenix Venture Motors (PVM), an MG Rover dealer, went into administration.
Hundreds more PVM workers could face redundancy after the firm, which employs 472 staff at dealerships across England - selling cars, spares and servicing - called in the administrators PricewaterhouseCoopers (PwC).
PVM is owed a "substantial" sum of money by MG Rover.
Three dealerships earmarked for closure are Northampton, with 18 jobs lost, Oxford, with 25 jobs lost, and north London's Muswell Hill, with 43 jobs lost.
Joint administrator Rob Hunt said the directors of PVM had been left with little option but to seek the administration order.
Remaining PVM dealerships are located in Preston, Chorley, Coventry, Rednal, Bromsgrove, Kidderminster, Hatfield and Romford.
There are about 240 other MG Rover dealers in the UK.
PwC has said it would now be seeking to "mothball" Longbridge and sell parts of the company.
On Tuesday, administrators said they have sent details of what MG Rover assets are up for sale to "40 of the more likely prospective buyers".
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