Opinion: how Rover’s failings provides a history lesson for UK government

MG TF leaving Longbridge

BMW had to sell the Rover Group, including MG

When BMW requested aid to save Rover in 1999, the government refused. We reflect on lessons learned

The UK government’s surprise £500 million loan guarantee for Jaguar Land Rover investment comes exactly 20 years after the then-Labour administration turned down BMW’s request for aid to try and save Rover from the scrapheap. 

In March 1999, the BMW board was shocked when government ministers rejected the request for £240m, much of which would have been spent levelling and rebuilding Longbridge ahead of the investment in the new Mini and new R30 compact hatch. After all, the sum was a fraction of what BMW had poured into the Rover Group over five years. 

With 11,500 people then employed directly at Longbridge, BMW bosses expected the government to understand how finely balanced Rover’s future was – but the trade and industry secretary offered just £100m, with another £30m or so coming from local government. 

BMW revealed that Rover had lost £645m in 1998 (£1.12 billion in today’s money) and hoped that it could convince the government to up the offer. But by April, the EU was showing an interest in the aid request, making it possible that Rover would get nothing. 

BMW spent May to September trying to work out a way of hanging on to Rover but eventually gave up. When it announced in March 2000 that the Rover Group – which employed 38,000 people – would be broken up and sold, it was front-page news for weeks. 

The UK government expressed astonishment at the move. BMW’s retort was that it had warned them it was “five minutes to midnight” for Rover. 

Obviously, JLR is nothing like as fragile as the Rover Group, but Whitehall clearly recalled what had happened in 1999 and how a well-judged loan could help avoid a domestic industrial meltdown.

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Source: Autocar

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