Rover has been
plunged back into uncertainty follow the dramatic collapse of Alchemys deal to buy
the troubled firm.
capitalists announced today that they had pulled out of talks to buy the company from BMW.
BMW say they will
decide Rovers fate within the next four weeks. The firm says it will let the rival
Phoenix bid have more time to prepare its finance, but have not ruled out closing the
A brief statement
said a dispute over contractual matters had caused the negotiations with
Alchemy Partners to collapse.
Alchemy had been
expected to seal the deal within the next few days
headed Alchemy and BMW Terminate Rover Talks, read:
Partners and BMW have ceased negotiations as they were unable to agree upon certain
contractual matters, some of which arose yesterday.
Partners thanks BMW for its constructive and cordial negotiations and wishes Rover and its
employees well in the future."
They were planning
to turn the Longbridge plant into a small operation making sports cars and thousands of
redundancies were expected.
BMW's share price plunged 7 per cent
on the news. Rover Group is losing £2 million a day and the German company is desperate
to offload it as quickly as possible.
paves the way for a rival Phoenix bid led by former executive John Towers to buy
promised that fewer jobs will be lost. The group, which has inadequate financial backing
according to BMW, has pledged to continue mass production, but will halve output.
Sir Ken Jackson, general secretary of
the Amalgamated Engineering and Electrical Union, said:
"Once again the workforce is
being kicked around while BMW ponders its future. All this is leaving our members dazed
and confused and we are being kept in the dark."
Thousands of people had demonstrated
against Alchemy in recent rallies in Birmingham.
Coventry councillor Dave Nellist said
the cost to workers' jobs would be huge if Alchemy had taken over as they were
Analysts at Coventry City Council said
a total of 1,500 jobs in the city would be at threat from the scaling-down at Longbridge.
Carl Chinn, who joined a union
delegation to see BMW bosses in Munich yesterday, said:
The public pressure is having an
effect on BMW."