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Parts supplier cancels MG Rover business

Parts manufacturer Wagon has today announced that it has stopped supplying MG Rover because of doubts over the beleaguered car company’s ability to pay its bills.

Its decison is thought to have contributed to the shutdown today of production at the Longbridge plant. The BBC says suppliers are refusing to continue business with MG Rover until a £100m bridging loan promised it by the Government has been paid.

Wagon currently has approximately £0.9m of due stock for MG Rover.

MG Rover’s business represents approximately £14m to Wagon – or less than 3% of total sales.

In the event that supply to MG Rover is terminated permanently, Wagon will restructure certain of its manufacturing operations in the UK, the maximum cost of which is expected to be approximately £1.5m.

Pierre Vareille, chief executive of Wagon, says: "For the sake of MG Rover and all its stakeholders, we sincerely hope that a positive route forward can be found for the business.

"However, our first duty is to protect our own business and the interests of Wagon's shareholders, leaving us with no alternative but to pursue this course of action."

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