By Robert Gibson
The Government claimed yesterday it was saving Rover Group’ s life by selling off Leyland Trucks and Freight Rover to DAF of Holland.
More than 2,000 jobs will go as part of a survival plan that will cost taxpayers £750 million, mainly to pay off Leyland’s creditors. But Industry Secretary Paul Channon told the Commons that any other solution would have cost more cash and Jobs. He said it was a life-saver for a new, slim Rover Group, now free of Leyland’s crippling debts and set to emerge as a major force in Europe.
And Rover chairman Graham Day revealed that without the DAF Joint venture, the only option was to close Leyland Trucks.
He said a deal with Paccar of America was’not sufficiently commercial.’ But about 1,700 jobs will go with the closure of the Scammell plant at Watford and the engine and foundry plant at Leyland.
A further 560 will go through slimming down operations at Leyland and Albion. No Jobs are expected to be lost at Freight Rover, which will continue manufacturing in Birmingham. But the real Job losses could be much greater with supply firms forced to slim or close. Tory Dame Jill Knight said; ‘The survival of literally thousands of small businesses depends on their continuing ability to provide components to the Austin Rover Group.’
DAF will own 60 per cent and Rover Group 40 per cent of the new merged company. It is part of Rover Group’s five-year plan including collaboration with Honda on a new car. Mr Channon denied the Government now planned to merge Austin Rover with Honda. And he later said Land- Rover would be sold to the private sector’within reasonable time,’
Meanwhile, the £750 million Government money to back Rover Group’s plans means the taxpayer has now provided nearly £3 billion support for the former British Leyland motor company.
Labour’s industry spokesman John Smith said ‘We are witnessing the effective surrendering of control of the British truck and van industry and that is something no Government should be proud of.
‘Why is Freightrover – a very successful company with increasing sales and increasing workforce and a strong market performance – being included in the sale? Is Freightrover being included as a sweetener for DAF? We appear to be surrendering control of Leyland vehicles because it makes a loss and surrendering control of Freight Rover because it makes a profit,’
Labour’s leader Neil Kinnock said the venture’ will result in major job losses and will be a further industrial retreat under this Government, all in order to provide a bargain package for a foreign competitor that will strip the company, if not actually shut it, or substantial parts.’
Coventry Labour MP George Park claimed that since November Leyland had led the British truck sales market and it would’ make more sense for the merging to take place in the reverse direction.’
Jack Straw Labour MP for Blackburn said the merger was a’betrayal of British manufacturing industry’
But Mr Channon said:’You omit the fact that DAF is’profitable whereas Leyland Trucks has been losing hundreds of millions over a period of years.’
Anthony Beaumont-Dark, Tory MP for Selly Oak, Birmingham, said there would be widespread relief in the West Midlands that Ministers now shared the view that Austin Rover had a great future.