Four years ago, the consortium of businessmen who were gifted the keys to the troubled Longbridge car plant in the West Midlands were hailed as white knights for rescuing it from closure. This week the same men were described as "disgusting" for their stewardship of the assets they were given in 2000, and branded as "the unacceptable face of capitalism". Harsh criticisms, especially coming from from Jim O'Donnell, the British managing director of BMW, the company that handed over Longbridge and assets totalling £1bn after concerted public arm-twisting.
This outburst of frustration by a BMW executive suggests that the unhappy saga of MG Rover and Longbridge is limping towards an unhappy ending. The plant's future was a cause celebre in 2000, when rising losses meant BMW was desperate to close it and shift resources to its Cowley plant near Oxford. BMW eventually handed Longbridge over for a peppercorn fee to four businessmen in a consortium named Phoenix. For a brief moment the four were hailed as saviours by grateful unions and the government, which was relieved to have scrubbed a potential vote-loser off the agenda before the 2001 general election.
But the "Phoenix spring" did not last. The reborn MG Rover's sales stayed in a slump. The company tried and failed to woo a string of overseas partners. The company's finances, despite BMW's generous dowry, continue to leak red ink - last year it recorded a £120m operating loss. Research and development has been slashed. Meanwhile, plans for a desperately needed new model continue to slip back. Just how far its reputation has slipped is evidenced by the West Midlands police force's decision to buy exactly one Rover in the last three years.
Yet throughout this period, the directors of Phoenix have continued to grant themselves generous rewards, in terms of pay and fattened pension pots, as well as a lucrative shuffling in their favour of the assets handed over in 2000. Hence the accusation by BMW's Mr O'Donnell: "The directors have utilised the situation for their own benefit." But under the terms of the takeover deal, it is hard to see what can be done to change things. BMW and the government will both have egg on their faces if Longbridge closes, but both seem powerless to act for fear of being blamed for the job losses that a closure would bring. Four years ago, after Phoenix's takeover, this newspaper observed that "the prospects for a small national car producer are slim". Those prospects, and those of Longbridge's workforce, are rapidly getting slimmer.
