Rover suppliers receive payouts
April 14, 2005
The task force set up to help suppliers of MG Rover, the car company which is in administration, has made its first payouts to suppliers.
So far, £63,000 has been paid to six companies, saving 234 workers from being laid off.
The government has said a total of £40m will be made available to support businesses who supplied Rover.
Suppliers who rely on MG Rover for 15% or more of their total business are eligible for help.
Staying alive
Jobs have been saved for the time being at the six firms, but another - Stadco in Coventry, which makes body panels for Rover - has said it may have to lay off 230 staff.
John Edwards, a member of the task force and chief executive of Advantage West Midlands, said that helping companies which are heavily dependent on Rover for most of their work could be more difficult than helping those which are more diversified.
"We have to target those companies, which with some support, can survive," he told BBC Radio 4's Today programme.
"We know of others where 85% of their business is supplying Rover. In these circumstances, it is hard for them to see a future for themselves.
Moving forward
"We are talking to government about (the possibility of) deferring VAT and National Insurance payments..but it is very difficult."
Separately, The Times newspaper reported that the government has set aside £25m to keep MG Rover afloat if Shanghai Automotive Industry Corporation (SAIC) resumes talks about investing in the cash-strapped car firm.
The extra government funds could keep the troubled car firm going until the election on 5 May, the newspaper said. The government has already offered a £6.5m loan to keep Rover going this week.
If talks with SAIC were to restart, the Department of Trade and Industry could make a previously-discussed £100m bridging loan available, the paper said.
PricewaterhouseCoopers, the administrator for MG Rover, is said to want to put forward a new plan to SAIC, but doubts remain over how enthusiastic the Chinese firm will be to revive the deal.
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