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Clive Goldthorp

MG Rover enquiry update

Any AROnline readers who have been following the Press Reports on these News pages during the last week or so will already know that the Phoenix Four - Peter Beale, John Edwards, Nick Stephenson and John Towers – have appointed Public Relations Advisers Media House International Limited (MHI) to act for them and that MHI’s Jack Irvine and Ramsay Smith have recently compiled and circulated a Briefing Document entitled ‘The MG Rover Dossier’ to the media on their behalf.

‘The MG Rover Dossier’ runs to 16 pages and much of the document’s contents have already been disclosed in the series of excellent articles by the Birmingham Post’s Jon Griffin which appeared here as Press Reports last week. However, AROnline believes that the ten key submissions made by MHI in the Briefing Document bear repeating below:

1. MG Rover closed in April 2005 – now, four years later, the workforce and the public deserve nothing less than to be given the full reasons for its demise.

2. Various Government departments have refused all requests for information and are treating Freedom of Information (FoI) requests with contempt.

3. The inquiry has cost the taxpayer more than £16milion.

4. Phoenix Venture Holdings provided five years of high quality jobs for 6000 people not to mention between 20,000 -30,000 supply chain jobs.

5. Unlike the recent banking bail-outs, the Phoenix Directors pledged substantial personal sums in support of the offered and then withdrawn short-term government loan.

6. Contrary to DTI misinformation the Phoenix Directors did not plunder the company.

7. The DTI not only failed to support MG Rover but they poured millions into rival foreign manufacturers such as Ford, Nissan, BMW, Vauxhall and Peugeot.

8. The DTI’s dealing with China was amateurish at best and malicious at worst.

9. The Nanjing Automobile Corporation was appalled by the behaviour of the DTI under the then Secretary of State, Alan Johnson.

10. Prime Minister Tony Blair wanted to save MG Rover. Those close to MG Rover are firmly of the view that Chancellor Gordon Brown and his adviser Shriti (now Baroness) Vadera blocked state aid. MG Rover collapsed and the 6000 UK jobs and thousands of supply chain jobs were lost.

MHI’s Irvine and Ramsay, who were first ‘asked to examine the circumstances surrounding the closure of MG Rover and the roles played by certain Government, Civil Service and banking figures’ just over one year ago, undertook extensive research in an attempt to discover why the Government withdrew the £120m short-term loan which would have facilitated the proposed JV with Shanghai Automotive Industry Corporation and Nanjing Automobile (Group) Corporation and so avoided MG Rover Group Limited’s closure. Messrs Irvine and Ramsay summarise the outcome of their research as follows:

‘It is clear that, since the demise of MG Rover, there was a concerted campaign to lay the blame at the door of the Directors of Phoenix Venture Holdings.

‘Apart from the numerous attempts to gain information through FoI, we interviewed the Directors, their advisors, politicians and journalists who covered the story and freely admitted that they were fed an astonishing barrage of negative propaganda from Government sources.

‘Despite Gordon Brown and Shriti Vadera’s lack of conviction about the ultimate Joint Venture process that the £120million loan was meant to facilitate, the essential elements of that JV have now been put in place, independently by the now merged Nanjing and SAIC, but at an enormous and unnecessary cost in terms of jobs and taxpayers’ money.

‘The conclusion that we have reached is that the Government is doing and will do anything to disguise the role played by senior political figures in the closure of MG Rover. And, as in the recent revelations over MPs expenses, it is clear that adherence to Freedom of Information means nothing to this Government.’

Interestingly, one of the more than 30 FoI requests submitted on behalf of the Phoenix Four and rejected by the various Government departments concerned will be reviewed by an Information Tribunal sitting in Manchester on the 10th and 11th August, 2009*. However, in the meantime, AROnline hopes to be in a position to publish the whole of ‘The MG Rover Dossier’ in the not too distant future…

[*Editor's Note: Please see the preceding News page entry entitled Press Report: 'Phoenix Four' set date for court clash over MGR collapse.]

MG Rover Jack Irvine, John Edwards, John Towers, Media House International, Nick Stephenson, Peter Beale, Phoenix Four, Ramsay Smith

Sarah Bridge, Daily Mail, 11th July, 2009

The Government is set for a legal showdown with the MG Rover Directors known as the ‘Phoenix Four’ when a Freedom of Information Tribunal is heard in Manchester next month.

MG Rover collapsed into administration in April 2005 with debts of £1.3billion and the loss of 5,000 jobs.

A report into the carmaker’s demise, written by the Financial Review Reporting Panel, was finished in May 2005, but has still to see the light of day as Alan Johnson, then Trade and Industry Secretary, barred publication until the Government had completed its own investigation.

After four years and at a cost of £16million, the Government’s own report has now been finished but publication last week was prevented when Business Secretary Lord Mandelson referred it to the Serious Fraud Office. The involvement of the SFO has now delayed publication until possibly after the General Election.

The four former MG Rover Directors – John Towers, Peter Beale, John Edwards and Nick Stephenson –have been pilloried for their role in MG Rover after it was revealed that they took millions in pay and pensions before the company collapsed.

They want the original report published in the hope of clearing their names. Their Freedom of Information request was initially turned down by the Department of Business and Regulatory Reform, but the matter will finally be decided at the tribunal hearing on August 10 and 11.

The Government is taking the threat of publication seriously and has hired James Eadie QC to represent it. The 850-page Government report is being studied by a four-strong team at the SFO headed by Head of Anti-Corruption, Keith McCarthy. He will report to Director Richard Alderman, who will take legal advice before deciding whether to launch a full-scale investigation.

The involvement of the SFO last week raised eyebrows because, until then, there had been no suspicion of fraudulent activity. The SFO is understood to be annoyed at speculation that it is being used as a delaying tool. However, sources close to the Phoenix Four have questioned its independence amid suggestions that Government officials were contacting it on an ‘almost hourly basis’.

The findings of any report into MG Rover are bound to be political dynamite as Gordon Brown and Tony Blair were closely involved.

[Source: Daily Mail]

MG Rover Alan Johnson, Financial Review Reporting Panel, John Edwards, John Towers, Nick Stephenson, Peter Beale, Phoenix Four, Serious Fraud Office, SFO

John Cranage, Birmingham Post, 14th July, 2009

Jaguar is booking advance orders for its new flagship XJ from potential buyers who have not even seen the car and, with full-scale production of the XJ due to start in the autumn, the company is restricting the annual shutdown of the Castle Bromwich plant in Birmingham to two weeks in order to prepare for anticipated high volumes.

The factory also needs to keep running to meet continuing demand for the successful XF mid-range car – particularly the popular new 3-litre diesel variant, the company said yesterday. The summer shutdown at Land Rover’s Lode Lane factory at Solihull will also be restricted to two weeks – compared with the traditional three weeks – as the lines gear up to produce new variants of the Range Rover, Range Rover Sport and Discovery.

Jaguar Land Rover’s comments contradicted a claim by The Sunday Times that the company was drawing up plans for a prolonged summer shutdown as sales remain depressed by the global recession. Spokesman Don Hume said yesterday it was too early to say whether demand for the XJ, which was officially unveiled at the Saatchi Gallery in Chelsea last Thursday night, would match the levels generated by the XF last year which saw the order book filled for months in advance.

However, Mr Hume added: ”There has been very strong initial interest in the new car, including some customers trying to place orders sight unseen. The order book has only just opened but we are now ramping up for the XJ at Castle Bromwich as well as for the new models at Solihull. We are also transferring 300 people from Solihull to Castle Bromwich to support XJ production.”

There has been very strong initial interest in the new car, including some customers trying to place orders sight unseen. The order book has only just opened but we are now ramping up for the XJ at Castle Bromwich as well as for the new models at Solihull. We are also transferring 300 people from Solihull to Castle Bromwich to support XJ production.” Don Hume, Director Corporate and Government Affairs, Jaguar Land Rover

While Castle Bromwich and Lode Lane gear up to produce new models, there is uncertainty about the future of Jaguar Land Rover’s third factory, at Halewood on Merseyside, which currently produces the Jaguar X Type and the Freelander 2. The site is widely believed to be at risk following comments from Ravi Kant, Vice-President of JLR’s Indian owner, Tata Motors, in the wake of figures showing that JLR lost more than £280 million in the last ten months of the financial year to March 2009.

Tata has already axed nearly 2,000 jobs across the three JLR plants, cut production volumes, temporarily shut plants and imposed a pay freeze in response to the global slump in sales. Mr Kant, who is closely involved with JLR’s operations, warned in June that further job cuts and “more such” plant closures could occur unless demand for its vehicles improves.

Tata says Mr Kant was referring to temporary shutdowns, but his remarks have been interpreted as suggesting that Halewood – which was converted to Jaguar production in 2000 after decades of making the high volume Ford Escort – could close. Tata yesterday said it would not comment on “speculation”, but the Birmingham Post understands that no decision on either a temporary or permanent shutdown will be made until the autumn at the earliest.

The belief within the automotive industry is that Tata is content to let rumours circulate in an attempt to bring its long-running negotiations to win aid from the UK Government in the form of commercial loans or loan guarantees to a successful conclusion. Halewood’s case could be weakened by the fact that the X Type – an unsuccessful attempt by Ford to broaden Jaguar’s appeal in that volume car market – will almost certainly not be replaced, leaving the factory with just one model, the Freelander 2.

If Tata does decide to shut Halewood the company would have to renegotiate a £27 million grant from the Government toward the estimated £300 million cost of putting the planned Range Rover-badged LRX low carbon concept car into production. A condition of the loan is that the car would be produced at Halewood.

[Source: Birmingham Post]

Jaguar Land Rover Castle Bromwich, Don Hume, Halewood, Jaguar XF, Jaguar XJ, JLR, Lode Lane, Ravi Kant, Tata Motors