Blog : Should MG Rover have been bailed out in 2005?
With the ashes of MG Rover long since scattered to the four winds, and UK PLC doing a pretty good job of manufacturing cars without it, the answer to the question in the headline above seems pretty clear, doesn’t it? In 2005, when the assembly lines at Longbridge went quiet, its model range looked pretty tired – allowing it to die really could be construed as an act of mercy.
However, as in all these discussions, things really aren’t all that clear cut. Yes, the UK makes more cars than pretty much any time in its history right now, and we make a fair deal of profit selling our own premium models across the globe – Jaguar Land Rover is expanding, as are Aston Martin, Bentley and Rolls-Royce. Great news!
If you’re British and you want to buy a British car, things aren’t so clear-cut. Firstly, let’s rule out MG’s current model range – the MG6 is long gone, and what’s left is as Chinese as the mobile phone, tablet or computer you’re reading these words on. We have the British-designed, developed and assembled Nissan Qashqai – but its Britishness is a huge secret. Who outside the industry knows these cars are made in Washington?
What choices are there today?
There’s Toyota and Honda, which are both doing great jobs, building Japanese cars in the UK. But again, even though they’re as well made as their homemade counterparts, buyers are oblivious to their country of manufacture. That’s probably a reflection of the international nature of car manufacture.
Is there a desire for buyers to still buy British? Probably not… But I’d suggest that a new car market today, in 2017, would still benefit from MG Rover still being around. Choice in the family and executive market has never been more limited than it is right now – we have Ford, Renault-Nissan, PSA-Opel/Vauxhall, BMW, Mercedes-Benz, Volkswagen Group, Toyota, Honda and Fiat-Chrysler – and that’s about it.
In this world, MG Rover could have offered something genuinely different if it had been supported by the Government instead of sold off to BAe in 1988. But as it was, then we can surmise that, following BMW’s failure to get things on track between 1994 and 1999, the Government could have swooped in around the time of the 2005 General Election with an emergency package to get things moving again, before investing in a more robust plan for rebirth in the following years.
Hard work reaps its own rewards
We have talent in the UK, and we have ambition. But we’re also our own worst enemy. So, as the sun came down on the Phoenix Four’s tenure of MG Rover, should the newly re-elected Labour Government led by Blair have thrown caution to the wind and committed a billion or so into regenerating MG Rover and its ability to build cars?
What we learned from the 1975 bail-out was that the company’s future prosperity rested heavily on the shoulders of management – and the ability to build great products. Had someone as strong as Sir Michael Edwardes been appointed to run the company – and break the unions’ stranglehold – sooner, then the story might have been entirely different. We would have needed to find someone of that calibre to run a bailed-out MG Rover from the outset. Would it have been possible? MG Rover, after all, was a basket case by 2005.
I say yes, but not in the way that bail-outs were done before. Even though the EU would have deemed it illegal to do so, the UK Government had every justification in sticking up two fingers to Strasbourg and saying that the Midlands, as a whole, needed this investment. We were at the tail end of our ‘Cool Britannia’ phase, and the Government was still popular enough at this point in time to have pushed it through, regardless of what the Tory opposition might have said.
But how to rescue MG Rover in 2005?
Assuming there were enough British assets still in MG Rover’s hands at the time, it could have been doable. Firstly, the Government should have said this was a long-term investment. No ‘getting it ready for privatisation’ talk would be allowed to pass a single Minister’s lips – this was industrial regeneration of the Midlands first and foremost.
Secondly, a long-term plan should have been drawn up. This would have included a replacement for the MG TF, Rover 45 and 75, and new models based on ideas drawn up with Tata (for CityRover, but properly implemented) and Matra (assuming it would release plans for the Espace), but executed in the UK. How would that be done? MG Rover would take a controlling interest in Ricardo (2010) Limited, bringing a world-class development team in house.
The Rover 75 platform was still a viable starting point for an all-new replacement for the Rover 45. RDX60 proved it was possible to spin off(albeit expensive and overweight) a smaller car, which would have competed in the C-segment against the Ford Focus and Volkswagen Golf. As for an executive car – the SAC928 version, with a 10cm stretch in the wheelbase and a less retro style, would have been good enough to re-energise Rover in the D-segment against the likes of the Ford Mondeo and Vauxhall Insignia.
Even with new tooling, new production lines and a kick up the distribution network, these longer-term models would have been introduced for considerably less than £1bn. Consider where Skoda was in 1991 and fast forward to 1996, with the Felicia/Octavia/Superb ranges it was offering – a confident MG Rover based in an expanding Longbridge could have achieved the same.
Could they do it alone?
Probably not… A strategic partner would most definitely have helped – and, seeing as Rover had burned its bridges with the Germans and the Japanese in earlier times, the obvious choice was staring the British in the face.
The talks between MG Rover and SAIC Motor should have been resumed immediately, but with competent business leaders and strong management (which would have been installed after Towers and Co. were marched out of the building) taking the helm. With Government support and the commitment to its 10-year plan, this would have put the British negotiating team in the driving seat – and not taking the subservient role it did in MG Rover’s dying days.
The model range was past it (sorry, but it pretty much was), so the first job would have been to instigate emergency facelifts of the TF and 75/ZT. This would have been achieved quickly, with a deal to offer transplant deals for these cars to the Chinese placed on the table. The empty Longbridge assembly building (once intended for MINI production) could have been refurbished and kitted out with new manufacturing equipment while the next-generation of cars were readied.
What of the first wave of facelifted cars?
By 2005, the IPRs to 25 and 75 might have belonged to the Chinese but, in partnership with SAIC Motor and with a joint production deal on the table, facelifted versions could have been produced in double-quick time. The purchase of Ricardo (2010) Limited would have been the masterstroke here.
The good work that the company undertook on the Rover 75 in order to transform it into the Roewe 750 shows just how quickly. Much of that work had already been done before 2005, though. We even had some new body-style ideas to work from. Probably as early as 2006, there would have been technical improvements fitted to the Rover 75, along with the new (Indian-built) G-Series diesel engine. By 2008, it could have been wearing those smart new clothes.
The purchase of Ricardo would have been necessary for this work, and much of the task of getting an updated body and interior onto the 25’s underpinnings would have needed to be outsourced, too. Probably also to Ricardo, but equally likely, SAIC Motor’s rapidly growing Engineering Department (set up to mirror Ricardo in the UK) could have handled this work – getting a modern-looking, 25-based supermini onto the market within three years of the Government bailout.
For expanding markets for niche cars, the Renault Espace plan hatched between MG Rover and Matra would have been exhumed – this time taking the French car’s innovative underpinnings and creating a 21st Century Rancho from it. And below the 25/ZR, Tata’s growing UK operation could have been tasked with a more thorough re-engineering job of the CityRover to incorporate a decent engine, interior and more inviting styling.
This would have left MG Rover at Longbridge to go on a recruiting spree for its base. It would have needed to encourage engineers lost during the Phoenix years to come back – but, had that been successful, and with a new engineering centre installed in Longbridge (large enough to house Ricardo as well as a large contingent of SAIC Motor’s engineers), the job of dealing with its most important (and weakest) car could have taken centre-stage.
Ah, the 45 and ZS
Yes, here lay the biggest problem for the bailed-out MG Rover/SAIC Motor alliance. Firstly, it relied on Honda’s IPRs, and also the Japanese company’s generosity on allowing it to continue using it. But, given that it was based on the 1992 Domani, it was no longer relevant to the Honda model range, the Japanese company might have been persuaded to allow MG Rover to continue with it – with certain provisos.
Secondly, its facelift and emergency refitting for 2007 would have taken place alongside the development of the RDX60 at Longbridge. This would have needed to be a UK-only operation by necessity and, as such, would have been quite limited in its scope. However, having said that, Honda gave its blessing to Rover to turn the 800 Mk1 into the R17 – a huge change – so we’ll have to assume it would do the same for a limited rebody of the 45/ZS.
This restyled car would have only needed to last three years until 2010 and the arrival of its son-of-RDX60 replacement. And by then, the partnership with SAIC Motor could have been made more wide ranging. But back to 2007, and given that the 45/ZS’s underpinnings were pretty sophisticated in the suspension department, rebodying this car and fitting it with a new and more appealing post-Cool Britannia interior might well have been enough to see it through.
And on to today…
It’s highly likely that the 2010 Coalition Government would have needed to see out MG Rover’s plans because of the long-term strategic alliances that had been signed – a good way of embracing further trade with China. And seven years on from then, that decision to stay on course could have born fruit with a successful range of British mid-market saloons that could have done their bit to fight off the uniformity of today’s car market.
Twelve years after the bail-out, and with that investment, it’s easy to see that in partnership with the Chinese, but led by the British, MG Rover could have been around today building cars in China and in the UK. It would have survived by building good value, well-styled cars British cars with cool interiors and bristling with new-world tech to keep them near the head of the pack. More importantly, Birmingham would have been a manufacturing power house, and it might have been in a whole lot better shape than it is now.
MG Rover showrooms would be offering a city car, supermini, medium-sized hatchback, crossover/SUVs, a sports car and large family car/executive challenger. That’s a far cry from the wreck of 2005, and the realisation of the dreams that people within Longbridge had for the company as the Phoenix Four were running it into the ground.
Of course, it would have taken strong leadership and wholehearted support from Westminster, much like that given to Renault by the French, and as such it would have not been a cheap, short-term fix. However, with vision, investment and stability, the Anglo-Chinese car manufacturer could have been in good shape today – and leading the charge for innovative styling in the marketplace.
One can dream…
Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Clsssics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...
Likes 'conditionally challenged' motors and taking them on unfeasable adventures all across Europe.