BMW to sell Rover as Longbridge fears grow

BMW has announced that it is to sell the Rover car business, including the Longbridge plant in Birmingham, putting thousands of jobs at risk.

The German car maker made the surprise announcement on 16 March, saying it had signed a memorandum of understanding with the venture capital firm Alchemy Partners over the sale of Rover. It is also in talks with Ford about the sale of Land Rover.

Shock and anger

The news has come as a shock to workers at Longbridge, where around 9,000 people are employed. Many had believed that BMW was committed to the plant, after it promised investment and a new generation of cars.

Alchemy's plans for Rover are expected to involve deep cuts. The firm is reported to want to focus on the MG sports car brand and to make far fewer cars than Longbridge produces now, raising fears of thousands of job losses at the plant and at suppliers across the region.

Trade unions have reacted with fury, and have vowed to fight to save jobs. They say the government must do everything it can to protect car production at Longbridge.

Why BMW is selling

BMW bought the Rover Group in 1994, hoping to build a larger business that could compete with the biggest car makers in the world. But Rover has lost large amounts of money under its ownership, and its share of the British car market has fallen sharply.

Sales of Rover cars in Britain fell by more than a quarter last year, even though the overall car market grew. The strength of the pound has also made it harder for Rover to export cars profitably.

BMW's shareholders have been growing impatient with the losses, and the company has decided to cut its ties with the business.

What it means for Birmingham

Longbridge has been making cars since 1905, when Herbert Austin set up his factory there. It has been one of the biggest employers in the city for most of the last century, and generations of families have worked there.

The plant also supports thousands of jobs at suppliers across the region, from small engineering firms to big component makers. Economists warn that a major cut at Longbridge could have a severe effect on the local economy.

The government's response

The Trade and Industry Secretary, Stephen Byers, has said the government will do what it can to support the workforce and the region. Last year the government offered BMW millions of pounds in aid to modernise Longbridge, and ministers are angry that the company has decided to sell.

MPs from across the region have demanded urgent talks with BMW and Alchemy, and have called for other buyers to be considered.

What happens next

The sale is not yet complete, and talks between BMW and Alchemy are expected to take several weeks. Unions are hoping that an alternative buyer can be found who would keep more of the plant open.

For workers and their families in south Birmingham, the coming weeks will be anxious ones. Many fear that the end of mass car production at Longbridge could be close.