Dealing with Auto Industry Rundown and Closures: a perspective from Birmingham Challenges facing Mono-Sectoral Cities, Open Days 2010



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MG Rover case

  • Closed in 2005, with the loss of 6300 jobs directly, c 3000 more in supply chain
  • Major economic shock in city and region
  • MGR: turnover = as much as 1% regional GDP
  • £200 million in lost govenment revenue
  • Owed £1.4 bn to creditors; £104m to suppliers - received 1p in £
  • How was this dealt with, and what were the outcomes?

Picking up the Pieces

  • Government Package: c.£176 million
  • £50 million: training
  • £40 million: redundancy payments
  • £24 million: loan fund to help otherwise viable businesses
  • £41.6 million: support MG Rover suppliers sustain trading
  • EC: up to £68 million of regional aid could be used
  • RDA: £42 million on redeveloping the Longbridge site
  • RDA: June 2005: £7.5 million on supplier diversification

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