After a seven year fight, former MG Rover workers are getting just £3 each following the collapse of the company in 2005, UK’s last major car maker.
The management team who bought out the Birmingham based company for £10 in 2000 from BMW, the so called “Phoenix Four’”- John Towers, Nick Stephenson, John Edwards and Peter Beale , paid themselves £42 million in salaries and pension payments. They were disqualified from being company directors for a total of 19 years.
Employees were hoping a trust fund established to pay redundancies would see around £20 million in payments after the liquidation of assets. However, the fund has assets of just £22,500 – leaving each of the former 6500 workers with £3.
Hopes to secure an additional £12.5 million through legal action through the High Court failed when MG Rover’s former parent company, Phoenix Venture Holdings, was refused permission to access information on money paid to creditor HBOS by the administrators in 2005. Lloyds Banking Group, who now own HBOS, said it made losses from Rover’s failure and had a duty to shareholders to minimize these losses.
MG Rover workers were left with no redundancy payments and half a month’s pay when the firm collapsed. When Towers and the other Phoenix directors bought the company, over 100,000 turned out to celebrate in Birmingham. It soon became clear that a classic asset stripping exercise was their plan and unfortunately, the Longbridge workers were the ones to pay the price. A disgusting example of corporate greed gone mad. They should be ashamed of themselves, but in a damning endightment on current corporate culture, I am pretty sure they are not!
Contrarian UK