Wednesday, March 01, 2006

Fears rise for MG deal

Storm clouds are gathering around the historic deal signed last week by MG Rover's new owner, Nanjing Automobile Corporation (NAC), to bring car production back to the Longbridge plant.

Although the Chinese firm sealed a deal with St Modwen Properties - owner of the Midlands site - for a 33-year lease, Auto Express understands that there is a clause within it which allows the company to leave Longbridge by 22 August if it "cannot build a viable business at the location".

At present, Nanjing's intention is to build the MG TF on a 105-acre section of the 469-acre site. Body presses will be brought from storage in Coventry, and the original TF line restored - a process expected to involve around 600 people. This number is tipped to grow to 1,000 if the venture is a success after full production starts in2007

Development of the site will also be expensive, although it's understood Birmingham City Council has already contributed £300,000 to help with the initial clear-up. Despite this grant, Nanjing will need to attract new businesses to Longbridge to spread the costs. NAC UK chairman Wang Hongbiao said: "I am delighted we've reached an arrange-ment with St. Modwen Properties. This means that we can move forward with our business plan to build cars at Longbridge." Birmingham City Council leader Mike Whitby added: "As a result of this deal, we have created hope and opportunity for the people of Longbridge and Birmingham. We have also safeguarded the MG brand in Birmingham, and I would like to congratulate both NAC and St Modwen for their efforts in managing to bring this tremendous deal together."
Dan Strong



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