Shanghai and Nanjing to fly in for MG talks at Longbridge

Apr 18 2008 By Duncan Tift

The fate of car production at Longbridge looks uncertain that a high level delegation from Shanghai Automotive and Nanjing is to visit the plant for crunch talks later this month.

Sources have told The Birmingham Post that the visit could decide the long-term future of the MG Rover plant.

Fears about the site have been rife during past week following a decision by a major supplier, Stadco, to pull out of an agreement supplying body panels to the MG TF sports car.

A wall of silence has been erected around Longbridge and despite repeated attempts to gain information from the Chinese about their plans, nothing has been forthcoming.

Worryingly, politicians have also been reluctant to comment on the situation.

Now, Rachel Eade, programme manager for supplier support agency Accelerate, said she had been told that a Chinese delegation was to visit the plant at the end of April.

"I’m led to believe that an investment decision on the future may well be taken," she said. "Considerable time, investment and goodwill has been channelled into restoring some form of manufacturing to Longbridge and we are still hopeful that this will eventually take place.

"There is a small but significant number of West Midlands companies involved in the process already and, whilst the latest news was not encouraging, there is still a good number of firms who are keen to work with the Chinese to make this happen," she added.

The visit could focus on the merger of SAIC and Nanjing after Christmas, but the timing of the trip is worrying many observers.

There have been a string of problems with the sports car project since its initial relaunch last summer.

Despite a fanfare for the media last May, very few of the cars have been produced and none have found their way into showrooms despite dealers being primed for delivery since September.

Late last year, production was hit due to problems with components being shipped from China and this was thought to have delayed delivery until March.

Ironically, UK engineers who have moved from MG to Nanjing and SAIC are in China at the moment rectifying quality issues.

However, the delayed date for delivery has now passed and still no cars have appeared.

Stadco said it was withdrawing from its contract for "commercial reasons". It is thought the company was fed up of the repeated delays and was not seeing any return on its investment.

Suppliers confided to The Post that they were worried about the situation and feared that the company would decide to manufacture all components in China and then ship them to the UK for assembly – if the project was still viable.

Industry insiders believe that despite the iconic MG brand, the TFs time has already gone and that a new model is needed.

The Chinese had appointed 50 dealers in the UK last summer ready for the scheduled launch in September.

However, the dealer network is also in the dark and despite being pressed, Nanjing has not said when it will be able to supply them.

Again, just as with suppliers, dealers are also struggling to get information.

Luffield Cars in Loughborough, Leicestershire, was the first UK dealer appointed to sell the TF but nine months on and there are still no sports cars in its showroom.

Managing director David Woods said: "We can’t get anything out of their communications people at all. I wrote to them at the end of March and the reply was extremely vague."

He said they dealership, which is now selling Citroens, still had 800 MG customers in its database and many had expressed interest in the sports car.

"I’m not saying they were breaking down the doors trying to buy one but they were interested. However, we can’t tell them anything because we don’t know anything – it’s all one-way traffic," said Mr Woods.

"The SAIC takeover probably put things back slightly but I would have thought they’d have been over that by now. There’s enough British guys connected with the project to know what’s required."

Nanjing was thought to have the capacity to produce around 15,000 TFs this year if there was demand. There was also talk that in 2009 it would take on production of the MG5, a new car based on the old Rover 45.