Saturday, June 27, 2009

£16m Rover Report

An independent report into the collapse of MG-Rover has been handed to the government. It cost £16m and took four years.

In 2005 Andrew Johnson and Steve Bloomfield for The Independent asked MG Rover Closure: 'What happened to all that money?'

The cost of support packages had £171m allocated and a projected likely spend was £146m. (Figures are from the National Audit Office. (Download Links in PDF format.)

It seems while the workforce were working overtime, seven days a week to try to make the plant and the company profitable and save their jobs, the 'Phoenix Four' were busy lining their pockets as quickly as possible in advance of the collapse.

When you look at the amount of money spent on closing the plant with the loss of 6,000 jobs, at least £187m (not counting the extra costs to the NHS treating depression and related problems, neither the lost revenue from 6,000 taxpayers or the impact on local communities, both financial and social.) it really doesn't seem to make economic, political or social sense. Even if they all got a job at Tesco's (suggested by Margaret Hodge, work and pensions minister at the time) the difference in wages, and therefore the tax they would pay would be considerable.

It seems to be just another case of the workforce making all the effort, the bosses taking all the credit and profit and the workforce paying the price. Oh yes, while the government stand back, with their gold-plated unassailable wages, expenses and pensions doing nothing but spout rhetoric and commission expensive 'independent' reports that give their pals a 'raison d'être'.

And I ask, what good will the report be? Will it highlight how things might have been done better, perhaps saving jobs? Probably not, but too late if it does. Will it highlight the failings of the Phoenix Four? Maybe, but will anything be done? Doubtful. Will it change government attitudes or produce a different strategy to save jobs in future? Well, ignoring the fact that this was the last big employer, certainly in the car industry, definitely in the West Midlands and so a similar situation is unlikely it won't change government attitudes until there is a change in political, social and economic thinking. The recent closure of LDV with a refusal to help from New Labour proves this. The banks got billions, changed little though this was a requirement of the funding and are now shedding staff. Yet the relative pittance LDV asked for as a bridging loan while takeover negotiations continued was refused.

This country was once great because of the industrial revolution; because of its strong manufacturing base and because of engineering skills this manufacturing base produced. This country is now collapsing socially, economically and politically because we are allowing these strengths to fail Lack of investment has led a decline (often blamed on unions and the workforce). In the 1970's I was milling cylinder heads on pre-war milling machines, drilling sumps on pre-war radial drills. We need to reverse this trend by injecting money into engineering and manufacturing alongside new technologies. It will be expensive and painful. But we might once again lead the world and make a better future for our children and our children's children.


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