Ground Floor: Britain has always had a love-hate relationship with its car industry. Some iconic cars have rolled off the UK production lines - think Rolls Royce, Austin-Healy, Triumph and the Mini - and it's that global branding that makes so many British people still consider their car industry to be important, writes Sheila O'Flanagan

Despite those glories, UK car manufacturing has always seemed to teeter on the brink - either (in the past) through high-profile management and union disputes, or by falling sales caused by an inability to compete with high-spec imported goods.

For as long as I can remember, Rover has been a part of that teetering-on-the-brink stable and the Longbridge plant has, at times, been both a symbol of intransigence and of an eventual willingness to adapt to change.

Having once owned a Rover car (a sleek turbo which used to leave the competition eating dust at the traffic lights - the engine, of course, was Honda!), I've been following affairs at the company with an additional interest.

I learned about its final demise last week as I drove along the M50. But not in a Rover, I switched to Audi long ago. That's the problem for Rover. Most people switch to another marque sooner or later.

The BBC devoted special programmes to the closure of the company and its effect on the local community, the car-buying public, the British industry and just about everything else, while political commentators tried to figure out what this will mean during an election campaign.

There is the usual blame and rebuttal, coupled with dismay that this should happen at all. But, interestingly (and unlike the impassioned pleas in Dublin when the Bewley's chain closed the restaurants), no real cries for the company to be saved.

If we've learned something over the last 30 years, it is that it's not the function of governments to prop up unviable companies which will eventually still go to the wall.

Rover has bounced off that wall over an over again, most notably in 2000 when Phoenix Venture Holdings paid BMW £10 million (€14.6 million) for the Rover brand.

The idea was that the company would concentrate on its mass-market car production, leaving Mini and Land Rover out of the equation.

There was a lot of support for the Phoenix group, which was made up of local businessmen - certainly many favoured this solution over the proposal by a rival consortium, Alchemy, whose proposal was pretty much the opposite - concentrating on the MG sports brand and doing away with mass-market car production. Initially, the Phoenix deal seemed to be working, as it reduced losses from about £800 million down to £77 million in 2003. But the sad fact for the company remains that not enough people were buying Rover cars and that the company hadn't produced a new model since 1998.

In 2002, sales were about 145,000. By last year, they'd fallen to 110,000 and the break-even number that Rover had to reach was 180,000, just 3 per cent of the market.

It doesn't matter if your company is an icon or is considered part of the cultural fabric of the country.

As Bewley's found out, if people don't like your product, you're in deep trouble. In order to keep the show on the road, Rover management went looking for more capital.

It looked as though they might do a deal with Shanghai Automotive, China's largest car firm but, amid recriminations from all sides, that deal went pear-shaped. Because of the awful timing as far as the Labour government is concerned, £150 million in government aid was pledged, of which £60 million was meant to help to diversify industry in the Longbridge area as well as help Rover's suppliers.

Obviously, the government has been caught on the hop here, but given that Rover was such a huge employer in the region and that it was permanently struggling, an effort at diversifying industry in the area would have been a lot more helpful 10 years ago. I know that might seem like hindsight talking, but it's not. Every time I see a town in this country where there is one main employer, I shudder on behalf of the people who live there. Surely by now we must have learned that you cannot put all your employment eggs into one basket? But it's something that happens over and over again. Government ministers take delight at welcoming big companies into their areas, touting the vast amount of jobs that will be created and saying how good it is for the community.

It is, of course, but being the only show in town isn't the most desirable outcome. We don't like monopolies in business. No company should be the monopoly employer in an area.

Anyway, the knives are out now for the Phoenix management group, who have been accused of stripping money from the company. UK trade and industry secretary Patricia Hewitt has ordered an investigation into the accounts.

The Phoenix directors are alleged to have invested about £70,000 each in to the Rover rescue, but have received in return salaries, loans and pensions plus a car leasing arrangement of about £40 million. Chairman John Towers said that he doesn't welcome the investigation and said that other company directors received higher salaries than he did.

But then, the directors of other companies aren't presiding over businesses that have had to make 5,000 people redundant.

He compounded this by understating his salary by about £100,000 in a recent newspaper interview - saying that he received a salary of £200,000 and £105,000 pension. However, his salary last year was reported at £275,000 plus his chairman's bonus of £37,000 as well as his pension.

If he can't get the sums right in relation to his own finances, it's no wonder that the company has gone down the tubes!