The government has announced a support package worth more than £40m for Rover MG’s supply chain following the failure of the car manufacturer and the Shanghai Automotive Industry Corporation to reach agreement on a joint venture.
Rover has reportedly called in the receivers after the government refused to give the company a £100m bridging loan. It is estimated up to 30,000 jobs could be affected, including 6,500 jobs at Rover’s Longbridge plant in the West Midlands.
Trade and industry secretary Patricia Hewitt said the programme of support would help give Rover’s suppliers time and support to adjust and create new opportunities.
The government support includes short-term transitional help for business planning and employee training for suppliers with significant sales to Rover. Business advice will be available to help these companies and they will then have access to a second phase of longer term help to improve products and processes.
Hewitt said: “The government and the unions will do everything possible to work with all concerned to try and secure future car manufacturing at Longbridge.
“This immediate package of support for suppliers demonstrates our commitment to manufacturing in the West Midlands.”
CBI director general, Sir Digby Jones, said: “Britain’s success has not been built on governments propping up unviable companies. The country’s value added economy calls for more skilled people making goods that consumers want to buy.”