The administrators of British carmaker MG Rover are seeking to reopen talks with Shanghai Automotive Industry Corporation in a last-ditch attempt, backed by the London government and unions, to revive a partnership deal that could keep the company in business.
The initiative, regarded with deep scepticism by many in the motor industry, was taking shape last night as parts and other suppliers to MG Rover began laying off hundreds of workers in the British Midlands, and as confusion reigned over the validity of a claim by SAIC to have already acquired the rights to use the Rover brand name.
The rights are still owned by BMW, the German carmaker that sold MG Rover to the Phoenix consortium of British businessmen four years ago.
While BMW is not disputing SAIC's claim to have acquired the intellectual property rights to the Rover 75 and 25, and to build them and engines in China, "there is no agreement in place for SAIC to use the Rover name", a spokeswoman for BMW said last night.
People familiar with the situation inside BMW said BMW had no objection to use of the Rover name being extended to the joint ventures which had been under negotiation for nearly a year between SAIC and MG Rover.
However, MG Rover did not have the freedom to transfer the name rights, which it has held from BMW under a royalty-free licence, to a third party under any other circumstances.
SAIC claims the Rover name rights formed part of a £67 million (€98 million) package it negotiated with MG Rover late last year, under which it acquired the rights to build Rover cars and engines.
However, in the event of the failure of the latest bid to revive the joint venture talks, SAIC would have to approach BMW for use of the Rover name on "the usual commercial basis", said one insider.
The glimmer of hope for MG Rover was raised yesterday by one of the PwC joint receivers, Ian Powell, who said there were "grounds for optimism" about MG Rover's future.
While giving no details of how contacts with SAIC might be revived, "I think that at this point it is right to be optimistic because we have got good assets and a great workforce", despite SAIC having already taken the rights to build MG Rover's only modern car, the Rover 75.
SAIC, which at the weekend reported first-quarter earnings down 50 per cent due to a weakening Chinese car market, was making no comment last night. - (Financial Times Service)
