Bulldozers start clearing path at troubled Rover

While the supervisory board of BMW was preparing in Munich to replace Mr Bernd Pischetsrieder, chairman and architect of the purchase of loss-making Rover Group five years ago, bulldozers could be seen at work at Rover's Longbridge plant in Birmingham.

The bulldozers are clearing part of Longbridge, Rover's biggest plant, for the £400 million sterling (€575.3 million) project that will result in an all-new Mini emerging from an essentially new production facility at the end of 2000.

Inside the main assembly lines, preparatory work is going ahead for production in the second half of this year of the "Oyster" and "Jewel" projects - revised versions of Rover's 200 and 400 models. These slow-selling cars are the biggest volume cars produced at Rover's biggest plant, and thus the source of many of its problems.

Elsewhere, design and production engineers are addressing the manufacturing adjustments needed for the updated version of Rover's MGF sports car, also destined to hit the market within the next year. All have been signed off not by Mr Pischetsrieder alone but the entire BMW board.

There is an increasing disparity between what is happening on the ground and a now widely held public perception that doom is hanging over Longbridge.

BMW's decision to put Prof Joachim Milberg in Mr Pischetsrieder's place should give the doomsters pause for second thought. However, Mr Milberg, whose own career path has been through BMW's engineering side, is described as a low-key pragmatist well suited to bring to a close the chapter of bitter rivalry between Mr Reitzle and Mr Pischetsrieder seen as having had a negative effect on plotting an orderly course for Rover. An orderly review of Rover's prospects will now be near the top of Mr Milberg's list of priorities.

That Rover has acute short-term problems is not in doubt. Car registration statistics released last week showed Rover's British market share in January fell to a record low of 4.7 per cent, about one-third its level a decade ago, and down 50 per cent in little more than a year. This year, it will take more than 10 per cent of planned production out of its schedules, to bring output in line with demand.

Its problems are worse inside Britain than outside. Lost in the uproar over BMW was the news that Rover's worldwide sales last year, at 487,700, were only a small step down.

Within the next month to six weeks the board of BMW, Rover's parent, will make the final decision on where and when the replacements for Rover's 200 and 400 ranges - the main vehicles produced at Longbridge - will be built.

The decision will be made in the light of a comprehensive study of alternative, cheaper countries in which to build the new models, including central European countries such as Hungary. The study is essential and explains why a decision has yet to be made and no approach so far made to the British government for aid.

Rover executives say it demonstrates that the project could be undertaken viably and more cheaply outside the EU. Only by doing so can BMW stand a chance of securing the £150-£200 million sterling government aid it believes should be possible for regenerating Longbridge. The effect of the changes at BMW on the morale of Rover's workforce was unmistakable. As they straggled out of the gate from the morning shift the Longbridge men seemed weary of yet another bout of speculation over their future.

There was jaded disbelief that the future of the 14,000 workers at the Birmingham factory might once again be hanging in the balance.

"We've heard it all before, haven't we?" said Mr Charles Walton. "Our end manager said `I guarantee the place won't close down', but who's to say it won't. He won't have any influence in the matter."

Workers' descriptions of activity inside the factory appeared to add to the sombre tone. "There's about 300 people who walk around with nothing to do," complained one man, who asked not to be named. Another said workers had been told they would get an extra week off at Easter.

Mr Walton, a driver, said he and two colleagues working at a depot where new stock is stored for dealers moved only 20 cars between them during a 6.30 a.m. to 2 p.m. shift. "There isn't much work," he said.

That there should be so much concern in the Midlands about BMW's view of the future for its troubled British subsidiary is understandable: Birmingham Chamber of Commerce calculates 50,000 jobs at 11,000 first, second and third tier suppliers in the West Midlands depend on contracts with Rover.