Nanjing Automobile wins bid for MG Rover Will China own Ford and GM?
 

LONDON (Reuters) - Chinese carmaker Nanjing Automobile won a bid to buy the assets of bankrupt carmaker MG Rover on Friday, promising to employ up to 2,000 UK workers as it partly revives production of the iconic brand.

Administrators PricewaterhouseCoopers said it chose Nanjing over a bid from rival Chinese carmaker Shanghai Automotive Corp. (SAIC) to buy the assets of MG Rover and its engine producer Powertrain.

Nanjing said it would relocate MG Rover's engine plant and some car production to China.

However, it expected to employ up to 2,000 British workers and produce at least 80,000 MG saloon and sports cars within 5 years, and develop a research and development facility.

"We believe for the first time in many years we'll bring a specific focus to the MG brand. All engines will be made in China, and final assembly will be in the UK, which account for the 2,000 jobs," a Nanjing spokesman said.

"Nanjing are going to build in China cars based on the 25 and 75 platform."

The long-awaited deal follows the collapse of MG Rover in April under debts of 1.4 billion pounds, with the loss of 5,000 jobs after the carmaker was forced to close its production plant at Longbridge in central England.

A source familiar with the situation said Nanjing's purchase price was between 50 million pounds and 100 million pounds.

SAIC, which pulled out of a joint venture expected to save the carmaker earlier this year, had launched a joint bid with a consortium headed by former Ford Europe (F.N: Quote, Profile, Research) boss Martin Leach for MG Rover's assets.

The SAIC bid, tipped to win the bidding war, was favoured by unions who believed it offered the prospect of creating the most jobs in Britain.

The Transport & General Workers Union (TGWU), which represented fired workers at the MG Rover plant, said it was disappointed but would work with Nanjing on its plans for UK production.

"We will now make urgent contact with them in order for those discussions to take place," union official Tony Woodley said.

The Nanjing spokesman said engine-maker Powertrain would move to China and supply engines for cars made in China and the UK.

http://today.reuters.co.uk/news/news...OS-MGROVER.xml

Ford And GM Debt Reduced To Junk Status

New York, NY (AHN) ? After enduring tough first quarter losses, Ford and General Motors take another hit as Standard and Poor?s lowers their debt to junk status.

The move effectively raises the amount of interest each company will have to pay to borrow money. Investors will require higher interest rates to purchase bonds due to increased default potential.

Markets will feel the turmoil as many investment funds will be restricted from owning junk grade bonds which will likely spark a sell off of Ford and GM debt.

GM?s outlook is negative following the drop to a ?BB? rating, the second highest junk rating. Ford is cut to ?BB plus?, the highest junk rating prompting the same negative outlook.

Analysts say the downgrades will have significant impact on both carmakers.

http://www.allheadlinenews.com/cgi-b...230660870&fa=1