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

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