£6.5 Million lifeline for MG Rover

[True Federalist (진정한 연방 주의자)]

Land Rover got spun off from Rover about 5 years ago and was bought by Ford.  I can see Ford as being interested in buying the Rover brand if the price is right, both to end confusion such as Soup18’s and to give its Land Rover dealers in the US and elsewhere a way to diversify beyond SUV’s.  (MG Rover does not at present sell cars in the US, altho MG did sell a couple decades ago some before it combined with Rover.) Given the failure Chrysler had with its Eagle brand when it tried introducing a co-brand for its Jeep dealers, I don’t expect that Ford would place a high value on being able to do so with Rover.  Also, I see no reason why Ford would be at all interested in MG or in MG Rover’s debt and pension liabilities, so they certainly would only get involved if MG Rover is broken up as part of bankruptcy.

[True Federalist (진정한 연방 주의자)]

One of the beneficial things about bankruptcy is that it can be used to salavge the still viable parts of companies so that they can continue to operate.  If the company would be profitable except for its debt and pension liabilities, then it is quite possible for MG Rover to emerge from bankruptcy as a viable company, not unlike K-Mart or MCI have done over here.  Of course, those who have their capital, loans, and/or pensions reduced or wiped out in the process won’t be at all happy about this.

I did learn something wierd from Wikipedia, assuming that it’s true.  Apparently BMW still holds the rights to the Rover brand name, and it only leased it to MG Rover.  I still think that Ford will be interested in picking up slected pieces of the company if it goes into liquidation.  Getting the Rover brand and also the non-American rights to the Vanden Plas brand would make a good fit for Ford.  The MG and maybe the Morris brand names might still have some value, but given the current overcapacity in the European car market, I doubt if the Longbridge facility itself will attract much interest if the company gets broken up.  If Longbridge is to be saved, the company will need to get through bankruptcy relatively unscathed.