News : October 2004

Polish factory still an option…

The on/off saga continues. After it looked like MGR had abandoned plans to take over the ex-Daewoo/FSO plant in Zeran, Poland, it seems that the company has re-ignited talks with the Polish government, thanks to the promise of an Shanghai Automotive Industry Corporation (SAIC) cash injection. Certainly, the Polish plant would make for a useful bridgehead into Europe for the Chinese as well as offering more inexpensive production costs than the UK…

According to a report in the Warsaw Business Journal says that FSO has been given a second chance with SAIC and MGR forming a consortium to take over the plant. “On Saturday (the 9th) the SAIC supervisory board made a decision concerning the investment in the Warsaw plant. This means that the project has also been initially accepted by the government in Beijing, which is the main shareholder in the company,” said one of the people who has been searching for a potential investor in FSO.

According to Just-Auto, letters from China were allegedly received last week by members of the management board of FSO and Deputy Economy Minister Jacek Piechota.

It looked as thought the Ukraine company ZAZ had won the bidding war for the factory, thanks to an agreed purchase of nearly ZL100m of FSO’s liabilities. FSO currently owe Bank Millennium (BM) the sum of $8m, and BM decided to progress the transaction in favour of declaring FSO bankrupt. If ZAZ manage to negotiate similar terms with the rest of FSO’s creditors, it would take over the car plant for a total of nearly ZL100m.

However, ZAZ has been moving slowly towards a Polish takeover, and the work could well still amount to nought, now that MGR has brought SAIC riches into the equation. There are a few obstacles to negotiate for any potential buyer, not least FSO’s list of creditors: apart from BM, the list includes Citibank (ZL75m); Bank BPH (around ZL25m); ING Bank Slaski; Kredyt Bank; and Pekao (around ZL30m each).

MGR appoints new PR chief

On the 8th October, MG Rover announced the appointment of Daniel Ward as communications director with immediate effect. The decision to appoint a communications professional with long experience of the motor industry represents an acknowledgement by the company that it needed to strengthen this aspect of its managerial team for some time in the light of the hostile press it has been receiving for some time.

Following an extensive review of the company’s communications needs the department will be restructured to include internal communications, product and corporate affairs, government affairs, global product communications, international communications and UK product PR. All these functions will report to Daniel Ward who is also responsible for all communications relating to Phoenix Venture Holdings.

Ward will report directly to Kevin Howe, chief executive MG Rover and PVH.

Previously Daniel held positions as executive director communications Ford of Britain and vice president communications Nissan Europe. His career in journalism included motor industry correspondent on The Times and technical editor of Motor magazine, and amounts to the company admitting that the best way to deal with the press is to get a seasoned member of its own ranks to play the role of middle-man.

‘We have needed to strengthen our communications team for some time but we wanted someone proven and capable of handling all aspects of communications from internal through to new products,” explained Kevin Howe, ‘and Daniel’s record underlines we have found the right person.”

‘Two great British marques and the chance to head an international team represent exciting challenges for me and I am delighted to be joining MG Rover,” said Daniel Ward. As part of the restructuring all media enquires will now be handled by the in-house MG Rover communications staff.

Here at we think that this is an excellent opportunity for the company to undertake a ground up review of its PR and advertising policy. This September’s disappointing round of sales figures proves that something drastic needs to be done, and a good starting point would be an overhaul of the company’s advertising strategy. For a long time, we have advocated a SniffPetrol style advertising campaign, or even a subversive internet-only advert (it works for Ford and Mazda), which would move the company away from its more traditional “Union Flag Waving” style of advert.

If you agree with us, drop us a line, and I will forward your comments directly to Mr Ward.

Keith Adams

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