02-22-2006, 02:09 PM
Join Date: Mar 2001
Chinese Firm to resume Production soon at former MG Rover plant
Production to resume at former MG Rover plant
Car production should soon resume at Longbridge, the former MG Rover plant, after a "landmark" deal signed by the new owners of the collapsed car firm.
Nanjing Automobile Association, the Chinese firm which bought MG Rover for £50 million last summer, has agreed a 33-year lease with the owners of the West Midlands site.
Nanjing said the arrangement - £1.8m rent a year for use of 105 acres of the 469-acre site - will allow it to push ahead with its plan to restart car production at the site.
The deal covers the South Works of the plant, incorporating two car assembly plants, the paint shop and administrative offices.
The terms of the lease include a six-month break clause in case Nanjing is unable to confirm a viable long-term future for the site.
St Modwen, the site owner, said it was looking forward to a "long and fruitful" relationship with Nanjing.
Wang Hongbiao, chairman of Nanjing, said: "This means that we can move forward with our business plan to build cars at Longbridge.
"The MG brand is famous and we are proud to project it into an exciting future. We are grateful for the help and support Birmingham City Council has given us throughout this process and look forward to working with them in the future."
Around 6,000 jobs were lost when Rover collapsed just before last year's general election, but unions are hoping hundreds of workers will be hired by Nanjing when the company's production plans are finalised.
A special task force was set up to help former Rover workers find jobs and to assist firms which used to supply the British car giant.
St Modwen acquired 412 acres of the Longbridge site in two deals in 2003 and 2004 for £57.5 million and leased it back to MG Rover.
Around 180 acres of the former plant are earmarked for a multimillion-pound redevelopment, including offices, houses and a technology park.
Carmaker takes lease on MG Rover plant
LONDON (Reuters) - Chinese carmaker Nanjing Automobile took a 33-year lease on the former MG Rover plant at Longbridge in the Midlands on Wednesday and said it still hoped to revive production at the site.
"This means we can move forward with our business plan to build cars at Longbridge. The MG brand is famous and we are proud to project it into an exciting future," Nanjing UK Chairman Wang Hongbiao said in a statement.
T&G national secretary for the car industry, Dave Osborne, said the lease confirmed Nanjing was moving ahead with a plan, "which we are told will see the production of 100,000 vehicles a year and 1,200 new jobs".
Property developer St. Modwen Properties Plc, which owns the site, said Nanjing signed the 33-year lease on 105 acres at a rent rising from 1.8 million pounds per year.
The company said the lease incorporates a 6-month break clause in case Nanjing is unable to confirm a viable long-term future for the site.
St Modwen acquired 412 acres of the Longbridge site in two deals in 2003 and 2004 for 57.5 million pounds and leased it back to MG Rover.
St Modwen Chief Executive Bill Oliver said the company hoped that now the lease was agreed, other regeneration plans in the surrounding area would proceed quickly via the planning process.
Nanjing surprised the motoring world when the company paid 53 million pounds to buy MG Rover out of bankruptcy in July last year. MG Rover's administrators chose Nanjing over rival Chinese carmaker Shanghai Automotive Corp. (SAIC).
The carmaker collapsed under debts of 1.4 billion pounds in April 2005, leading to 5,000 job losses at its main plant.
Vice President Wang Qiujing said in September that Nanjing Auto would create up to 1,200 jobs at Longbridge by 2007 and produce 100,000 cars annually within five years.
However, when Nanjing bought the British manufacturing icon out of bankruptcy it said it aimed to employ 2,000 British workers and produce at least 80,000 saloon and sports cars a year within five years, on top of production in China.
Nanjing Auto is one of several Chinese car makers, including Geely Automobile Holdings Ltd. and Chery Automotive Co. Ltd. hoping to follow Japan's Toyota Motor Co. and South Korea's Hyundai Motor Co. in becoming truly global brands.
A slowdown in growth in the domestic car market, coupled with intense competition, is pushing more Chinese auto makers towards overseas markets.
But analysts say Chinese car makers face problems ranging from quality issues to a lack of design expertise and capital.
Nanjing Auto is one of China's oldest vehicle makers, beginning life as a military garage in 1947. Its first attempt at vehicle production was a light truck called the "Yuejin" or "Leap Forward", a vehicle still seen on Chinese roads today.
It has faced financial difficulties since the late 1990s as domestic rivals secured alliances with foreign firms, such as Ford Motor Co., BMW and Honda Motor Co., and chipped away at its market share, according to Jia Xinguang, chief analyst with China National Automotive Industry Consulting.