Thousands of former MG Rover workers look set to be bailed out by a government rescue fund which safeguards people's pension entitlements if their employer goes bust.
That would end months of uncertainty for those who lost their jobs when Rover collapsed. Many of the workers had feared they might also end up losing their pensions.
But the security the move will provide for those thrown out of work will come at a price. Most of the retired MG Rover workers already receiving their pensions will see their retirement incomes cut to bring them into line with the rescue fund's rules.
Pressure was last night mounting on Phoenix Venture Holdings, MG Rover's parent company, to resolve a dispute over pension liabilities to clear the way for the carmaker's main pension scheme to be considered for pension protection fund cash.
The trustees appointed by the pensions regulator said yesterday they were now more confident of reaching an agreement with Phoenix which would enable the scheme to be assessed for payouts - hopefully within weeks.
Independent Trustee Services said it had been negotiating with Phoenix about the right amount to pay into the pension scheme. Chris Martin, ITS's managing director, added: "While there are a couple of hurdles to overcome, we are now confident we will be in a position formally to confirm entry to an assessment period in the near future."
If Phoenix were put into administration, that would also enable the scheme to enter the protection fund. The MG Rover Group Pension Scheme has about 6,500 members.
Meanwhile, corporate troubleshooter David James is refusing to abandon hopes of a bid for MG Rover despite the collapse of plans to join forces with Shanghai Automotive Industry Corporation.
Mr James is hoping to either restart talks with SAIC or persuade the government to help support his efforts to put together a finance package.
"You have to keep pushing and shoving to get where you want to go," Mr James said yesterday. "We have not accepted we are out. We are quite determined that there is still a dialogue to be had [with SAIC] if we can press the right buttons."
Mr James, who is heading a consortium of Birmingham businessmen, held talks with SAIC over a joint bid which would see the Chinese car maker acquire the Powertrain engines and transmissions business. Powertrain would then supply the MG TF sports car operation, which would be acquired by the consortium.
The deal foundered on SAIC's reluctance to provide a guarantee that it would buy former MG Rover assets from the consortium in a year's time. A guarantee would have allowed Mr James and his colleagues to get the working capital they required by bank borrowing.
Mr James said that he was urgently seeking talks with the Department of Trade and Industry to step in to provide the guarantees to allow the consortium to raise working capital.
However, the main battle for Rover appears to be between SAIC and fellow state-owned carmaker Nanjing Automobile.
A source close to Nanjing said yesterday that its plan would involve design, engineering and manufacturing in the West Midlands. Some reports suggest its plans could involve up to 2,000 jobs. "We are bidding for all the assets but we are not talking about shipping all the assets to China.
"Nanjing wants a global presence and this is a key step."
Nanjing's decision to go for all the assets could give it an edge over SAIC because the latter's more limited offer would still leave administrators PricewaterhouseCoopers to find buyers for the remaining assets.
