The Phoenix Consortium, bidding to assure a future for the ailing Rover Cars, has signed a contract with present owner BMW of Germany. The agreement, which is subject to due diligence and approval of Phoenix’s business plan, will see production of Rover’s flagship 75 model remaining at Longbridge, West Midlands, assuring the survival of thousands of jobs in the region.

An unconsummated earlier deal between BMW and venture capital group Alchemy Partners was based on shifting production of the 75 to Cowley, Oxford – a move that would have created social and economic havoc for Longbridge, axing at least 9,000 jobs at the factory and up to 15,000 at suppliers and in the local economy.

According to BMW chairman Joachim Milberg, the deal will prevent the loss of thousands of jobs at Rover. Former Rover boss John Towers, now heading the Phoenix bid, said: "We are delighted that together with BMW we have secured a brighter future for Rover."

The news comes the morning after one of America's largest banks, First Union, offered £200m ($306m) in working capital to part-finance the Phoenix bid.

Phoenix, which includes a director of UK car bodies firm Mayflower, two main Rover dealerships and racing car group Lola, has refused to discuss publicly the financial details of its bid. BMW says it will close Rover unless a deal can be finalised by the end of May.

[Footnote:Seen in Suffolk, England, yesterday by WAMN's editor - an elderly but immaculately maintained canary-yellow Rover proudly bearing the licence registration plate B4 BMW.]

Sourced from: BBC Online Business News