Thursday, April 14, 2005

MG Rover - Slight Return

Sorry there's been light blogging again. I've been in Globostan for the last couple of days, a land composed of airliners, airports, taxis, hotels where they show Bloomberg market reports in the bar-is nothing, nothing sacred?-and Scandinavian telecoms executives who look like Sven Goran Eriksson's geeky older brother. Except for the guys from TELE-Greenland, who look like polar bear hunters. ("We think...IMS will be a tool to keep customers." "How many network operators are there in Greenland anyway?" "One." Ibsenesque silence.) Strangely, despite being a little data packet in the physical network for two days, I never got the opportunity to get at a computer.

But now, the Big Conference is over and the Ranter is back. His story is filed. His expenses claim is in the pipeline. Time for much-needed attention to the blog, no?

Since the last post on the MG Rover disaster, which to my utter astonishment was linked by Tim Worstall - did he not read the bit where I said Red Robbo had been proved right by history? - a few more things have come up. For a start, I'd like to correct an error of fact. The worthless shares John Towers and Co. persuaded the workers to accept are indeed in Phoenix Venture Holdings as opposed to MG Rover Group; the problem is that they are non-voting stock. Although, it turns out, Towers owns only 40% of Phoenix's capital he has 100% of the votes. My conclusion, referring to the Tony Hancock sketch about the A shares (that let you put money into the business) and the B shares (that let you take it out), holds.

If I was him, I'd already have left Birmingham for ever.

He and his partners have since the last post offered to put Phoenix's assets at the disposal of the administrators of MG Rover. Now, I saw a press report at the time that Phoenix too was in the hands of Price Waterhouse Coopers accountants - clearly a mistake, as otherwise they would not have been in a position to make that decision. But there are already heavy claims against some of those assets, and anyway many have been sold. That's the point of asset stripping. By the way, anyone who needs total coverage of this ought to read The Guardian's Ian Griffiths, who is clinging to the Rover accounts like an unfortunate infection.

On other fronts, nothing has happened very much. If it wasn't for the election, one suspects Blair would have let them go. The womenfolk of the Longbridge workers - the phrase is not inaccurate - are preparing to bring a mass demonstration to London. It might help, but I doubt it. One thing that might play a role, though, is the increasingly fraught electoral situation in Birmingham - election fraud and industrial shutdown both. The pressure will be on, especially as the Labour core vote will watch closely.

In the end, though, it's not how Rover might be saved - it's how to make it go. Nationalisation could have occurred for ten quid in 2000, but would it have been Europossible? And would it have helped? Jon Moulton of property developers Alchemy, who wanted to sack all but 1,000 workers in 2000, has enjoyed a media Indian summer telling everyone how he was right. I wonder, though, if he and his would ever have paid for the development of further sports cars after the MGF? A normal private-equity business model would expect a sale about 5 years on-that is, now. And the temptation of a property deal would have been very strong. A workers' co-op? Some speak of it now. The problem at bottom remains the same.

How would they have funded and developed a Rover 30 good enough to retrieve their fortunes? Either of the lefty solutions, oddly, could hardly have done worse than the capitalist ones.

1 comment:

Anonymous said...

Hi, need some more info.
How about more info on names of other arms traffickers in Africa - or any new names of Bout or his associates - airlines operting Africa - anything in Somalia? etc?

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