Nanjing Automobile, the Chinese carmaker that bought the assets of MG Rover, said yesterday that it planned to invest "hundreds of millions" of pounds in a joint venture to restore car production at Longbridge.
Production of two existing MG models could restart late next year, the company said, with the aim of lifting production, including new models, to 100,000 a year within five years. Wang Qiu Jing, vice-president of Nanjing Automobile, said: "We believe we can create up to 1,200 jobs at Longbridge but this figure could be higher, subject to detailed planning."
Yesterday's announcement was designed to head off concern among some that Nanjing was only interested in a so-called "lift and shift" operation involving the transfer of all the Longbridge equipment to the company's plant in China. It drew a cautious response from Tony Woodley, general secretary of the Transport & General Workers' Union, which represented many of the 6,000 workers made redundant when MG Rover went into administration. "I met Nanjing last week and I am convinced they are genuine about their plans. However, they still don't have sufficient finance, including from government, and we will work with them to help them get that finance." Nanjing's best hopes of achieving its ambition of becoming a global player in the car industry would be to find a partner, he said.
Since it beat Shanghai Automotive Industry Corporation in bidding for MG Rover's assets, Nanjing has been in partnership talks with GB Sports Car Company, a consortium set up to bid for Rover's MG TF sports car assets. Yesterday a Nanjing spokesman, Wang Qiu Jing, said talks were expected to last up to three months.
The plan to build a new business at Longbridge centres on two of the three original assembly lines and the plant's most modern paint shop. The Powertrain engine assets, also bought by Nanjing, will be transferred to China and engines made there will supply cars built at Longbridge. Nanjing has about 400 staff and contractors at Longbridge reconfiguring the site and removing the equipment earmarked for shipment to China. It is hoping to restart production of the MG TF and the upmarket MG ZT saloon, which will mean a bigger range of engines, including diesel. Nanjing and GB Sports will have to make the engines comply with European commission emission regulations. Up to five new models are being considered.
"Our initial assumption is to reorganise the production facilities at Longbridge to create a production capacity of 100,000 cars," Mr Wang said. That would be just below the last year's output by MG Rover, which had a much larger workforce.
The combination of the value of the assets that will remain at Longbridge and the costs of developing models "will provide a benefit to the new UK business of many hundreds of millions of pounds," according to Nanjing's vice-president. He warned that the future of Longbridge would be linked to that of Nanjing's Chinese production because the latter "allows us to take advantage of a competitive global supply chain and share new product development ... Our two plans must be progressed in parallel."
Yesterday's statement gave no hint about the intellectual property rights. SAIC bought a number of rights from MG Rover before the latter went into administration and battled Nanjing to buy the assets of the British carmaker from PricewaterhouseCoopers, with each seeing an opportunity to acquire their own automotive development capability. Although the two have been at loggerheads over the issue of intellectual property rights, there has been speculation that they will settle any differences without going to court.
If Nanjing's plan goes ahead, the new facility at Longbridge will occupy about 28 hectares (70 acres) on the huge complex's South Works, leaving substantial land available to redevelop. The property developer St Modwen, which owns a large part of the Longbridge site, confirmed that it was in discussions with Nanjing.
