Tania Branigan 

A discreet push to seal MG Rover deal

Gordon Brown will today press the Chinese government to help clinch a deal between MG Rover and the Shanghai Automotive Industry Corporation.
  
  


Gordon Brown will today press the Chinese government to help clinch a deal between MG Rover and the Shanghai Automotive Industry Corporation.

Mr Brown is meeting Ma Kai, the minister ultimately responsible for approving the venture, on his three-day tour of China. Yesterday Mr Brown was optimistic that agreement could be reached soon, although he played down the British government's role in negotiations.

Under the deal, which is seen as the last hope to save the British car firm's manufacturing plant in the West Midlands, SAIC would take a 70% stake in a new venture to manufacture Rover-branded cars at Longbridge and in China.

Reports last weekend suggested that as many as 45,000 jobs in the Midlands could be lost through the knock-on effects of closing the Longbridge car plant, which employs more than 6,000 workers.

"Joint ventures are very much the way forward," Mr Brown said after raising the issue with the Chinese finance minister, Jin Renqing, yesterday.

"There's the Rover car company and the Shanghai car company, of course, and I hope [a deal] will be brought to a conclusion soon to the benefit of the British motor industry."

But he added: "This is a company, Rover, coming to an arrangement with a Chinese company." Yet British ministers have been lobbying Beijing hard over the negotiations.

SAIC is government-controlled and the deal will have to be approved by the national development and reform commission, which is headed by Mr Ma.

Sources in Beijing have suggested that the government is unconvinced that involvement with MG Rover offers good value. MG Rover has already signed a deal to sell technology to SAIC and some argue that it has little more to offer China. But SAIC said that talks were in advanced stages and had Beijing's support.

Even if the deal goes ahead there could be thousands of job losses at the plant. The Rover 75 production line is likely to be shipped to China.

· China, which is chairing the G20 this year, and Britain, which is chairing the G8, have agreed to work together to address the challenges of globalisation, international development, trade, and the role of international financial institutions, including the World Bank and IMF.

 

Leave a Comment

Required fields are marked *

*

*