MG Rover on the Brink of Bankruptcy

It has been reported that up to 75 of MG-Rover's parts suppliers have refused to deliver more parts to the company, which either

It has been reported that up to 75 of MG-Rover's component suppliers have refused to deliver more parts to the company. (Photo: MG Rover)

must pay cash or settle existing invoices before obtaining delivery. One firm, Wagon Automotive, which makes car doors, claims that it is owed £900,000, while another supplier says that figures approaching £1m are owed.

Well aware of the problems at hand, MG Rover appointed PriceWaterhouse Coopers as administrators to advise PVH's directors on what the next moves should be. While little else has broken in terms of the situation with SAIC, Trade and Industry Secretary Patricia Hewitt has put together a £40m "support package" to pay suppliers in order to keep business in motion.

Currently, the British public's opinion on the situation is divided, as to whether the government should be using taxpayers' dollars to support the failing business, or whether they should have done more. Either way, there's a sense of impending doom on the situation visible by all who are connected to MG Rover.

In the end, it's speculated that the proposed deal between MG Rover and SAIC

The British public's opinion on the situation is divided, as to whether the government should be using taxpayers' dollars to support the failing business, or whether they should have done more. (Photo: MG Rover)

will not go through. However, many believe that the British firm will end up in the hands of the Chinese. Should MG Rover declare bankruptcy or go into holding, SAIC would most likely purchase the brand outright. In this scenario, SAIC would no longer have to honour the previous agreements, such as production facilities being maintained in the UK, and the rights of which models could be produced, and failing that, gain a much more favourable position on the deal. Of all situations, this is the least desirable for PVH, whereupon the pensions and securities of MG Rover employees would most likely vanish.