manufacture - record loss for rover
WORKERS, JANUARY 2004 ISSUE
MG Rover, owned by Phoenix Venture Holdings, recorded a £95 million loss in 2002. The T&GWU and Amicus trade unions are expressing further concerns over the financial stability of the group and the financial arrangements associated with its directors.
MG Rover was bought from BMW in 2000 for £10 by four venture capitalists, hence the Phoenix title. Though MG Rover has recorded losses, trade union analysis of the company books has raised significant worries about the future livelihoods of the 6,500 Rover workers. The company pension scheme has a £73 million deficit.
Yet through the complex, murky company infrastructure and lack of clarity as to who owns what, a £13 million trust fund for the directors and families has been established for future pensions. A £10 million interest-bearing loan for share purchase has been established with returns of £2.5 million due in 2005 to four directors. The directors earned in 2.5 days what a shop-floor worker earned after a year. The annual 'basic' director salary was £3 million (ignore other benefits) as opposed to the average shop-floor wage of £27,400. The directors received rises of 307% as opposed to 7% for those building the cars. The unravelling of the financial relationships has led to the unions appointing a specialist financial adviser to examine the company books.