British carmaker MG Rover collapsed last night after it failed to secure an alliance with a potential Chinese partner.
The 100-year-old carmaker has gone into receivership, a form of bankruptcy protection under which a court-appointed third party takes control of the business, the UK's Trade and Industry Secretary Patricia Hewitt told a news conference.
"MG Rover has announced that their board has decided to call in the receivers. This is a devastating blow to everybody involved — the workers and their families, the company's suppliers and the wider community," Ms Hewitt said.
The move, which came after China's Shanghai Automotive Industry Corp. (SAIC)
said it would not invest in the company, has put 6,000 jobs at risk.
"In the end, SAIC made it clear that they were not confident about the future solvency of MG Rover, and therefore there was no reasonable prospect of a deal," she said.
The collapse could create political problems for the British government in the run-up to a general election on May 5th.
Mr Hewitt said the government could not give MG Rover a £100 million (€146 million) loan without the prospect of a deal with the Chinese automaker.
MG Rover was forced to stop production yesterday as suppliers suspended deliveries over fears they would not be paid.