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MG Rover - calling in the Serious Fraud Office has confused matters

Is it just me that sees the re-emergence of the MG Rover crisis into the headlines a twisting of a knife that’s pain had been a little dulled over time?

 

The demise of the final British-owned volume car manufacturer began when the chairman of then-owner BMW Bernd Pischetsrieder described Rover as the “English patient” as market share had fallen from 10.9% to 4.7% in five years and by 2000 was experiencing losses of £2 million a day.

There were high hopes when the company was broken up and the Phoenix Consortium “bought” the remnants left by BMW and Ford.

And the rollercoaster of expectation continued as Phoenix sought a joint venture partner until final assets were sold to the Chinese.

Now, nine years after the Phoenix rose and four since MG Rover’s demise we are still waiting to find out what when wrong.

The latest news of Business Secretary Lord Mandelson calling in the Serious Fraud Office has confused matters – and pushed the chances of clarity – further from our grasp.

It is my understanding the SFO should be called in at the first signs of criminal activity.

So, why has none been suspected after years of inspectors’ rummaging? Mandelson says he is acting on legal advice.

Aside from accusations from the Tories that the Government is pushing the matter “into the long grass” to avoid embarrassment in the run-up to a General Election, couldn’t his move to bring in the heavy mob also be construed as a deferred counter to those that have accused ministers of inaction over the sale of GM Europe’s Vauxhall/Opel unit?

Beijing Automotive Industry Corp (BAIC) has bid €660 million for Vauxhall/Opel and there have been initial reports it has threatened to close European plants.

Rival bidder Canadian Magna International is also likely to have its own rationalisation plans.

Mandelson is in the frontline of both MG Rover and Vauxhall issues. I wouldn’t be surprised if in his mind the tactics he adopted for one were designed to impact on
the other.

“Don’t mess with the UK Government if you’re sniffing around UK plants,” I sense he’s trying to say.
 

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