Archive : MG ends production in October as Aston-Martin rescue fails

By Clifford Webb Midlands Industrial Correspondent

Attempts by a consortium led by Aston-Martin to save the MG sports car marque have failed. The consortium was unsuccessful in raising the £25m purchase price in time to prevent BL closing the Abingdon plant and making most of the 820 employees redundant.

BL Said last night production would cease towards the end of October. World stocks of unsold MGs are now so big that even the three-day week which has been worked since June 2 has failed to reduce the stockpile. The working week will be further reduced to two days after the holiday shut-down which begins on Friday.

Remaining MG production will be restricted to right-hand- drive models for the home market. It is expected that there will be fierce competition among MG enthusiasts to buy the last of the marque. BL said it had looked “long and hard” to find an alternative use for Abingdon, but in view of the world recession in the motor industry it had proved impossible. The required 90-day notice of redundancies would be issued. Details of the redundancies, their timing and the terms of severance pay would be discussed as soon as possible with employee representatives.

Negotiations with Mr Alan Curtis, chairman of Aston Martin, to save MG began more than nine months ago. He said that he could put together a consortium to raise the purchase price. From the beginning there was doubt among BL senior management about his ability to do this. Critics said that as the world’s motor manufacturers faced their biggest recession for 40 years financiers would not be prepared to take a gamble on the venture.

The interest and determination of the public to save MG was so great however that BL management felt obliged to go along with the consortium’s negotiations, but they were not surprised last week when Mr Curtis said that he had failed to raise the money in this country, and as there would be redundancies within his own company he was now looking for most of the purchase price from an unnamed Japanese source.

Unconfirmed reports suggested that this was Toyota, the leading Japanese car manufacturer. BL executives insisted privately that it was most unlikely that any Japanese company, and particularly Toyota would put up most of the money without wanting to take complete control.

World interest in MG and the MG marque meant that when news of the consortium’s failure broke last week BL was inundated with calls from companies and individuals wanting to buy Abingdon. Most of the would-be “saviours” had no idea of the economics involved, BL said. Abingdon employees were considering last night that but for the consortium’s intervention several hundred jobs might have been saved. BL had planned to convert the plant into an export packaging operation and a centre for conversion work on special cars.


Production of the famous MG sports car will end in October with the loss of hundreds of jobs. The 800 workforce at Abingdon , Oxfordshire , had been waiting since last week to hear their fate after BL announced the fate of MG . They were told yesterday that most employees will be made redundant.

Talks will be held with the unions about the timing of the closure , severance pay and other matters. The company also announced a two day working week to be introduced on August 1 because of an increasing number of unsold MGs.

The statement said: ‘Austin Morris have looked long and hard to see if it is possible to move other work to the Abingdon site but in view of the continuing world recession in the motor industry the company has been unsuccessful .”

Production of the sports car will have lost the state owned giant a staggering £20 million by October. The factory – currently on a three day week because of the slump in sales – shuts down on Friday for an annual two week holiday. A consortium led by Aston Martin has been trying unsuccessfully to raise a reported £30 million needed to buy the company and save the MG.

After months of talks with BL the consortium admitted it could not raise the cash , despite hopes that a Japanese group would back the rescue plan .

MG workers were ‘shattered” at the announcement , said Mr Eric Brind union convener. He added: ‘I have known for the last ten days that things looked black and we knew we were going to be executed . Now we know the execution date.’

A BL spokesman said: ‘In view of the superb work record at Abingdon we have told the workforce that we will do our best to sell the plant in small units in the hope that small businesses can be attracted to the area quickly.”

Keith Adams

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.