Thousands of workers at MG Rover will be made redundant this weekend as slim hopes of saving Britain's last volume car maker collapsed.
The huge Longbridge plant in Birmingham will be mothballed and the 400-acre site will probably be redeveloped. Hopes of saving the firm hung by a thread for the past week, but it was severed yesterday when the Shanghai Automotive Industry Corporation (SAIC) told the British Government it did not want to buy any part of MG Rover.
Tony Woodley, general secretary of the Transport and General Workers Union, said his worst fears had been realised. Many workers now faced a lifetime on the dole.
"This is the darkest day in the history of the British car industry," he said.
British prime minister Tony Blair abandoned his general election campaign to travel to Birmingham, accompanied by chancellor Gordon Brown and trade and industry secretary Patricia Hewitt, to announce a £150 million (€220 million) support package to help workers retrain or find other jobs.
Following talks with the Rover task force, Mr Blair said he wanted to express his "real sorrow" for the workforce at Longbridge and their families.
"This is a desperate time for the workers at Longbridge and their families," he said.
The support package will be made up of £60 million to help diversify industry in the area and to support the supply chain.
There will be another £50 million to fund the retraining and reskilling of workers made redundant and a further £40 million will be ploughed into statutory redundancy payments.
The chancellor said that around £40 million of previously announced money will help with construction of a new industrial park in the region and the government will discuss the prospect of additional help with the European Union.
Pension protection arrangements will come into play and the prime minister assured workers that the government was examining the question of Rover cars bought by the company's employees, in some cases involving finance deals.
The end of the road for Rover came quickly after a tortuous week of clinging to hopes that a partnership deal with SAIC could be revived, even though all the signs from China were negative.
Ian Powell, joint administrator at PricewaterhouseCoopers (PwC) said: "In light of this important development we have concluded that there is no realistic prospect of obtaining sufficient further finance to retain the workforce while the position with other parties is explored.
"As we indicated earlier in the week significant redundancies will now be effected. We are extremely disappointed that SAIC has decided not to progress discussions to acquire the business."
