Britain offers emergency aid as its last carmaker struggles


LONDON - The British government offered $75 million in emergency aid yesterday to help parts suppliers hit by the looming collapse of MG Rover, the nation's last big automaker.

Worried about political repercussions with an election set for May 5, Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown traveled yesterday to Birmingham, where MG Rover is based, to meet with labor union leaders.

The meeting occurred after the breakdown of merger talks between the British company and a Chinese suitor, the Shanghai Automotive Industry Corp.

Blair said he and Brown had been in touch with Chinese leaders yesterday and a more limited deal may be possible.

The accounting firm PricewaterhouseCoopers has been named by Phoenix Venture Holdings, the owner of MG Rover, to take over the administration of the automaker after it was forced to halt production.

The move to the British version of bankruptcy protection seemed to sound a final knell for a home-grown auto industry that once produced brands from the lowly Austin and Morris to the top-end Jaguar, Bentley and Rolls-Royce.

Rover was once an emblem of middle-class reliability, and MG made generations of two-seater sports convertibles.

The company's collapse could cost an estimated 6,000 jobs at the Longbridge plant in the British Midlands and a further 18,000 jobs at nearby parts suppliers.

Except for MG Rover, all the leading British auto brands are now owned and produced by outsiders.

MG Rover's negotiations with Shanghai Automotive were seen as its last hope. The company has never made a profit since it was sold by BMW for a token 10 pounds in 2000 to local managers.

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