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Phoenix 'not to blame for MG Rover collapse' – report

The Phoenix Consortium was not to blame for the collapse of Rover. The fault-lines that finally led Rover into administration actually go back as far as the early 1960s, says a new report published by the Cambridge-MIT Institute Centre for Competitiveness and Innovation at Cambridge University.

In the report ‘Who killed MG Rover?’ authors Dr Matthias Holweg and Prof. Nick Oliver argue that by the time Phoenix took over, Rover’s fate was largely sealed. They say: “When BMW sold Rover to the Phoenix Group in 2000, the new owners were left with an ageing range of models but had no resources to develop new ones. Without a strong partner, a slow death was unavoidable.”

The report argues that MG Rover’s predecessor, the British Motor Corporation, had struggled to generate sufficient cash for new model development as early as the 1960s. By the early 1970s, Rover was producing nearly a million cars a year, it was still unable to generate sufficient surplus funds to renew its range of models. This, they say, set the business on a downward path that successive changes of ownership were unable to reverse ­although the partnership with Honda came perhaps closest to doing so.

Both Dr Holweg and Prof. Oliver have researched and written extensively on the UK motor industry. This special report, which seeks to assess whether the dramatic end to Rover after a century of car manufacture was inevitable, is published by the Cambridge-MIT Institute Centre for Competitiveness and Innovation, of which Prof. Oliver is co-director. It can be read in full on the Centre’s website at: www-innovation.jims.cam.ac.uk/news.php

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