Archive : Reverse gear Maggie halts US car deal

Tory Pressure Kills Off Austin Rover Sell Off
By John Warden
Political Editor

In the fastest U-turn on record the Cabinet yesterday killed off plans for a Ford takeover of Austin Rover, the last British-owned car maker. Senior Cabinet Ministers persuaded Mrs Thatcher to change policy and avoid another Westland fiasco. Party chairman Norman Tebbit, former Industry Secretary, intervened from his home where he is convalescing. And Energy Secretary Peter Walker, a Midlands MP, backed him.

faced with their views and those of scores of rebellious Tory backbenchers opposing the deal, the Prime Minister chose the embarrassment of bowing to demands from Labour and her old enemy Edward Heath,  They had roundly condemned the planned merger less than 24 hours earlier. But the sale of Land Rover and Leyland Trucks to another U.S giant General Motors, will go ahead. Talks are already at an advanced stage.

New Trade and Industry Secretary Paul Channon said the Government had decided it would be wrong for uncertainty over Austin Rover to continue. He told MPs the company faced, serious damage if people who bought their cars had doubts about the future, Mr Heath said decision was ” absolutely right.” But he vowed to continue his fight against the General Motors takeover of the remainder of BL. He said it meant control would pass to Detroit.

Austin Rover welcomed the reprieve as ‘” a tremendous acknowledgement ” of the efforts of workers and management. It will now continue and develop its links with Honda. Local union leaders also hailed it as a ” victory for common sense.”

The’ Government still faces trouble from its back-benches over the General Motors deal, Mr Channon claimed It would boost Land Rover sales in the U.S. He also announced the seIl-off of BL’s Unipart Subsidiary to British investors.

Keith Adams

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