The Rover tragedy turns into farce
The Babylon dictionary defines a Greek Tragedy as an ancient drama in which the protagonist meets with disaster. The audience knows this from the start, but the main characters don’t, either through ignorance or because they are too dim to see the blindingly obvious until it’s too late.
Britain’s last home-grown volume carmaker was MG Rover. In 1996, for reasons nobody can now remember, the business was bought by BMW, one of the very few carmakers in the world with a clear idea of what it is trying to do. When it saw its terrible mistake, it proposed paying 500 million pounds to the workforce to shut the Longbridge, Birmingham, plant where Rover cars were made.
That was a decade ago. Enter Jon Moulton of Alchemy Partners, who proposed shutting the Rover line, firing the workforce and making MGs on a corner of the site while developing the rest. Onto the stage came John Towers, a 52-year-old Rover veteran and a man with a plan to save all of Rover’s 8,000 jobs. Goodness, thought Stephen Byers, the man going through the revolving door at the department of trade at the time, this gets me round the next corner.
Some of us in the audience could already see the tragedy. Then as now, the motor trade had chronic overcapacity, and Rover was the no-hope brand of a subscale manufacturer. Putting the dog down was the obvious, humane, solution. Alas, nobody on stage would see this, and so the poor old mutt limped on.
Thanks to BMW, it had 500 million pounds in the bank and a brand-new line, so it actually reported profits in the early years. The profit was an illusion, of course, since not enough was being spent on developing the next model. The eventual collapse revealed debts of 1.3 billion pounds.
More effort went into securing a comfortable retirement for Towers and his three cronies. As the Daily Telegraph revealed in 2003, the salaries, pensions and perks of the four topped 40 million pounds.
After enormous labour and 16 million pounds, the inspectors from the trade department confirmed on Friday what we already knew. The four now face the prospect of being banned from being company directors. It’s a pitiful, almost meaningless sanction, and if they can be bothered to fight it, they might even defeat the move, because in driving the company into the ground and enriching themselves, they did nothing wrong.
Nor, of course, did Byers. JMoulton was cast as the villain of the piece, but in 2005, when reality finally arrived and the last Rover stuttered off the production line, his plan was implemented, under Chinese ownership.
The biggest losers were the 8,000 workers in the chorus. BMW’s compensation fpayment amounted to more than 50,000 pounds apiece. Instead, they received statutory redundancy (from the taxpayer), and being six years older were that much less employable. A survey last November showed that most have found employment, but are earning much less than they had been three years earlier.
Businesses come and go, and the unexpected happens. But the demise of Rover was as predictable as rain in the West Midlands. Perhaps it’s fitting that today’s overblown report is merely an expensive rehash of a familiar plot. Only it’s not a Greek Tragedy after all. The protagonists have got away with it.