mg rover - payoffs, promises and debts


Four men, the Phoenix Consortium, who bought MG Rover for £10 from BMW in 2000 , 'saving' over 6,500 jobs in the West Midlands, are revealed through the company accounts to have received over £31 million in salaries, share options and bonuses from the network of companies associated with Phoenix. It is also revealed that BMW has assisted the consortium with nearly £1 billion in interest-free loans and asset transfers. Certain loans are not due to be re-paid until 2049, 50 years after being set up.

However, MG Rover's market share has continued to fall from an original high of 25% to less than 4% of the UK market. World-wide sales have also dropped by nearly 50% from 240,000 in 1999 to just over 127,000 in 2003.

MG Rover's promises about a return to profitability have now been deferred until 2005. In 2002 losses of £95 million were recorded. If the losses continue during 2004, then the future of MG Rover will once more be back in the firing line.

The government could not or would not assist Rover in 2000 due to EU regulations. If MG Rover falters during 2004 then closure looms during 2005, but the Phoenix Four have already made their millions, which will nicely cushion any redundancy.