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MG Rover on the Brink of Bankruptcy

Government Bailouts and Chinese Trade Deals May Not Be Enough to Save Centenary Firm

"This is a deeply worrying time." Such are the optimistic words of MG Rover, Britains last volume automobile manufacturer, about the situation it will be facing over the next short while.

The brand, which has been plagued with many problems since before BMW sold it to the British consortium, including decreasing sales and mounting debts, has encountered what might be its most troublesome problem yet - the breakdown of talks between it and the Shanghai Automotive Industry Corporation (SAIC), one of Chinas largest automobile manufacturers, and the company which would be MG Rovers saving grace.

Though todays MG Rover products

Troubled MG Rover has encountered what might be its most challenging problem yet. (Photo: MG Rover)

are no longer sold in North America, they once thrived on this continent. Previously part of the now-dissolved British Leyland, Rover, MG, Land Rover, Triumph, and Mini, just to name a few, were some of the most innovative automobile manufacturers on the face of the planet. But those times of glory were long ago, and much different than the story of today.

From the 80s onward, Rover struck a deal with Honda to share components, resulting

Though todays MG Rover products are no longer sold in North America, they once thrived on this continent. (Photo: MG Rover)

in the Civic-based 400, the Accord-based 600, and the first generation Acura Legend-based 800, sold in North America for a brief stint as the Sterling. Though hard to believe, some of these cars, in slightly modified forms, are still in production today.

In the mid 90s, BMW AG purchased Rover and its associated divisions. Dubbed "The English Patient" by the German media for the brands ill financial health, BMW vastly revamped the product line, reinventing MINI, Land Rovers top-line Range Rover, and the front-wheel

Since being separated from BMW, MG Rovers four years under PVH have been rough. (Photo: MG Rover)

drive Rover 75 - in the eyes of the media, the best Rover ever made. Eventually, BMW saw its British half for what it was, a money pit, and sold Land Rover to Ford, and MG Rover back to its original owners, Phoenix Venture Holdings (PVH) for £10, five years ago. It kept the extremely popular MINI brand name for itself.

Since being separated from its German associates, MG Rovers four years under PVH have been rough. Initially, there was some hope that management could return the company to its former glory. However, irrational decision-making, including the purchase of the Mangusta sports car from Qvale/DeTomaso and the partnership

Time is running out for the now 100 year-old Rover brand and 80-plus year-old MG nameplate. (Photo: MG Rover)

with Indias Tata group, resulted in over-priced, left-field cars. Instead of engineering new models to replace its rapidly aging line, it tried to expand into niche areas and cover its behind by offering minor facelifts - a cost-friendly solution, but a shot in the foot nonetheless.

While the now 100 year-old Rover brand and 80-plus year-old MG nameplate have faced impending doom for four years, the spinning blades of the fan are seemingly in sight thanks to a series of events which started this past Thursday.

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