Unions braced for full impact of MG Rover crisis

MG Rover car company went into administration last month, following the collapse of a partnership deal with Shanghai Automotive Industry Corporation (SAIC). This put 6,000 employees and up to 18,000 jobs in supplier companies at risk.

Within days around 5,000 redundancy notices had been issued to Longbridge employees and, while some were kept on to complete work on unfinished cars, further redundancies were expected.

Tony Woodley, T&G General Secretary demanded that the £30m assets still left in the company should be used to increase redundancy payments, and attacked the company directors for their role: "It's corporate greed. There is absolutely no excuse for the money that has been taken out of the company by the four". There is to be an inquiry into the company's finances and the directors are under pressure to return money to the company.

The redundancy notices themselves gave no indication of the level of redundancy pay, but if pressure for enhanced payments fails, the workforce will have to rely on the statutory scheme.

There could also be problems for Rover employees who have leased cars from the company, and may owe more than they receive in redundancy pay.

And enhanced redundancy pay for Rover workers will not help employees of supplier companies who lose their jobs, like those at Automotive Applied Technologies (AAT) in Accrington, and TRW in Burnley.

A taskforce has been set up, with government funding, to help diversify industry in the area, support MG Rover's supply chain and fund retraining.