MG Rover
On 6 April 2000, John Towers — the most prominent of the four men known as the Phoenix consortium — presented a counter-offer to BMW. The Transport and General Workers Union (T&G), the UK Department of Trade and Industry (DTI), and the British public in general all threw their support behind Towers and the Phoenix Consortium, as Phoenix were the only potential bidders proposing to retain high-volume car production and full employment at the Rover plant in Longbridge, Birmingham. On 8 May, following a last-minute injection of finance from the First Union Bank of North Carolina, a deal with Phoenix was agreed. The sale was completed the next day. Due to UK regulations that hold the prior owner of a company responsible for all redundancy payments if the said company declares bankruptcy within 3 years of sale, BMW guaranteed that Phoenix Venture Holdings (initially named MG Rover Holdings) would have enough money to keep Rover Group in business for at least 3 years following the sale. The agreed "dowry" from BMW was made up of a £427million interest-free loan and stocks of cars. Kevin Howe was appointed MG Rover's managing director in July 2000.
Phoenix's short-term plan was to expand the MG range with sporting versions of existing Rovers, introduce new versions of the Rover 25, 45 and 75 models, reengineer and redesign the MG F, and eventually replace the entire model range with new cars developed through joint venture with another carmaker. The MG-badged versions of the Rover models were launched in the summer of 2001, and were reasonably popular. A 1.1 litre engine had already been added to the Rover 25 range, to give it a competitor at every level with most rival superminis. The MG F was updated shortly afterwards to become the MG TF, and a number of concept cars were shown to the public, hinting at all-new models which MG Rover was hoping to launch in the near future.
The consortium continued to enjoy strong UK press support for several years following the Phoenix coup, despite no all-new models being launched by the company. By 2003, MG Rover was the ninth best selling carmaker in Britain, whereas the Rover Group (which had still included Land Rover and Mini) had been the third biggest seller just five years earlier. It still had a 3.72% share of the new car market, accounting for more than 95,000 sales.[2]
By the beginning of 2005, however, sales figures of MG Rover cars were declining sharply, not helped by the fact that most rival companies had launched all-new competitors in the previous five years. During 2004, the media had regularly reported that the company's sales were in decline.[3] The Rover 25 and 45, for instance, were updated versions of designs which had first been launched in 1995, and all of their major rivals had been replaced once - and in some cases twice - since then.[4]
