It’s depressing to be reminded all over again today of the sad and shabby history of MG-Rover. Much more sad is that it looks dangerously likely that history might repeat itself with Vauxhall-Opel.
BMW unloaded MG-Rover in early 2000. It was looking at bids from venture capital firms including Apax and Alchemy. Both planned a slimming down of the company and some quick redundancies. This in the hope of making the firm viable and selling it as a runner to another car company later.
But the government was scared of job losses. So instead it fell for the easy promises of the Phoenix Four, the local ex-managers of the firm who reckoned they could keep it going at its former size. Even though no one much wanted the cars it was making. Governments don’t understand the car industry – they understand only instant headlines.
Five years later Phoenix went bad and – surprise – the government blamed everyone but themselves. Even though it was patently obvious that the Chinese SAIC and Nanjing were simply waiting for MG-Rover to go bankrupt so they could buy it for nothing.
Anyway, back to the Opel-Vauxhall sale. Just as with MG-Rover, there are bids from venture capitalists – in this case RHJ – and the one from Magna, which is promising to save more jobs.
As with MG-Rover, the politicians are doing all they can to twist things in the favour of the bid that promises more short-term jobs. In this case the politicians being Angela Merkel’s German government
GM says the Magna bid, because it is financed by the Russian state bank, will probably result in production moving east, and the Russians grabbing designs that actually belong to GM. Messy.
Also, RHJ’s bid envisages Opel remaining in the global GM design and parts-sharing network, which is probably the only way it can keep competitive.
But that’s the kind of industry understanding politicians just don’t seem to have.