BIRMINGHAM - BMW AG says Rover Group's Longbridge, UK, plant has a bleak future unless workers agree to a massive rise in productivity. More than 2,400 jobs could be at risk at the plant, which employs 14,000.
Chairman Bernd Pischetsrieder has put a one-month deadline on crisis talks over the long-term future of the factory.
'Short-term actions are required for the long-term future for Rover Group,' Pischetsrieder said. 'We are in intensive talks to find solutions for the problem to deal with the overvalued British pound.'
Pischetsrieder said that Rover productivity was almost 50 percent behind the BMW level when the company was taken over in 1994. Initially, favorable exchange rates helped blunt the difference and substantial effort had since reduced the gap to 30 percent.
'It is not our objective to run out the current cars and the factory - but our shareholders cannot be prepared to spend money in a business which does not have a positive outcome,' said Pischetsrieder.
He disclosed that the Rover Group board was in 'constant discussion' with the British government. But Peter Mandelson, trade and industry secretary, said the government would not intervene in commercial decisions and insisted no request for aid had been received from BMW.
Trade unions at Rover have also held urgent talks with Pischetsrieder and the British government. Tony Woodley, chief negotiator with the Transport and General Workers Union, said the Longbridge workforce could not be held responsible for 'circumstances completely outside their control,' referring particularly to the strength of sterling.