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BMW chief criticises Rover bosses

BMW's UK chief has branded MG Rover bosses as the “unacceptable face of capitalism".

Managing director Jim O'Donnell said it was "disgusting" that MG Rover's owners paid themselves generous salaries while the company suffered losses.

Four partners in Phoenix Venture Holdings were sold MG Rover by German owners BMW in May 2000 for just £10.

When it took control of the Longbridge-based car maker, BMW also gave it an interest-free loan of £550m.

Since then, the businessmen behind Phoenix Venture Holdings have been criticised for the amount they have taken out of MG Rover given its worsening financial state.

Last year, five Phoenix directors awarded themselves more than £16m, including salaries and pension contributions despite the fact that MG Rover lost £89m.

BMWs board, in the meantime, took £7.5m, while the company made a profit of £2.24bn.

Earlier this year, the Commons Trade and Industry Select Committee accused the chairman and vice-chairman of Phoenix of failing to exercise good corporate governance and using "financial sleight of hand" to line their own pockets.

Speaking at BMW's annual press dinner in London, O'Donnell said: "I think it is a disgrace. The Rover board pay themselves more than the BMW board if you include the pensions. I think it is the unacceptable face of capitalism. BMW gave them a real opportunity for £10."

The Birmingham businessmen have previously defended themselves on the grounds that they took huge risks when they bought Rover because each invested £60,000 in the deal.

"I regret BMW buying MG Rover in the first place," O’Donnell said. “BMW tried very hard. They put a huge amount of investment into it and it was clear that it was not going to work."

In response, a spokesman for Phoenix said: "We would obviously disagree with O'Donnell's comments. But we have commented on this so often that we have to get to the point where we are not going to comment anymore.

"More comment now would fuel the debate."

(Source: bbc.co.uk)



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