Thursday, April 21, 2005

It's that man again

It seems that John Hemming isn't alone in blaming the DTI for the collapse of Rover. The Evening Mail headling tonight is 'Workers set to sue Govt.'

It seems that Annil Chandra, a former project manager, reckons that the DTI had a duty of care and that, while the management had caused the instability of the company, the DTI pushed it over the edge.

'After suppliers withdrew their services following Mrs Hewitt's announcement that the company was in receivership before administrators were actually appointed.'
Hmmm. Anyone else feel the hand of Hemming in this?

Let's just examine that minor factual inaccuracy, there.

Wagon plc were the first supplier to halt deliveries to Rover and announced it to the Stock Exchange on Thursday 7 April at 13:51. The statement from Patricia Hewitt came in the evening and the BBC listed it on their website at 22:59. As it was a joint statement with Amicus and the TGWU, perhaps they should be named as co-defendants. Note too the quote from Tony Woodley of the TGWU

'They [MG Rover] agreed the wording of the statement that was read out by Patricia Hewitt'
And if you look a bit further down the article,

Earlier on Thursday, MG Rover had been forced to halt all production at its Longbridge plant due to a shortage of certain parts, after a number of its suppliers refused to ship orders due to the ongoing financial uncertainty at the firm.
Isn't it far more likely that the imminent collapse of the SAIC deal spooked the suppliers who made a commercial decision not to expose themselves to any further financial risk? Once one stops shipping, others will follow suit and suddenly, the production line grinds to a halt on Thursday - still well in advance of Patricia Hewitt's statement.

Incidentally, the skill of the Rover management is shown by their apparent rejection of a £100 million deal with Virgin to sell their cars at discounts of up to 35%. These sort of discounts sound hefty, but aren't unusual. I'm aware of fleet operators who are able to negotiate discounts of closer to 50% on bulk purchases, so 35% isn't even trying. The article doesn't suggest that it was turned down on the basis that the company would make a loss, but rather that John Towers wanted to keep a premium pricing structure. And much good it did him.

But when have the facts ever stopped John from making his case? He's continued trying to convince us that Rover's downfall was down to the DTI, even citing a news article in his support (like Dave at Talk Politics, Ezilon are new to me, too). Yet, if you read that article, SAIC and Rover themselves both seem to be leaking like sieves about the parlous state of the company, but the DTI just seems ready to help.

3 comments:

Unity said...

One of Hemmings blog entries (April 13) mentions Annil Chandra as trying to develop a worker's co-op.

Chandra, himself, on the same day stated that he has the support of an unnamed group of 'West Midlands Businessmen' while Hemming notes in his April 13 post that "I do know some of the people working with Annil."

SAIC, in the mean time, have stated that they plan to go into production with the Rover 75 and build four time more cars than Longbridge off the back of the intellectual property rights that Phoenix sold off for £53 million, five months before Rover went under.

Anonymous said...

The DTI and the owners and unions were debating one weeek earlier very publicly the fact that the company owners could not cover their own 25% liabilities if the deal went through.
If you talk to any individual from within the company running up to this shambolic scenario then they will tell you that the suppliers were refusing to deliver without prepayment before the false statement about recievership,and this was down to the afore mentioned fact being in the public domain.
Besides major contractual obligations have also been broken on customers cars without any recovery action,so every buyer that no longer has a warranty can sue for this breach of contract.

Anonymous said...

The DTI and the owners and unions were debating one weeek earlier very publicly the fact that the company owners could not cover their own 25% liabilities if the deal went through.
If you talk to any individual from within the company running up to this shambolic scenario then they will tell you that the suppliers were refusing to deliver without prepayment before the false statement about recievership,and this was down to the afore mentioned fact being in the public domain.
Besides major contractual obligations have also been broken on customers cars without any recovery action,so every buyer that no longer has a warranty can sue for this breach of contract.