The Fall of MG Rover


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Case Details:

Price:

Case Code : BSTR166 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

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Case Length : 16 Pages
Period : 1975-2005
Organization : MG Rover
Pub Date : 2005
Teaching Note : Not Available
Countries : UK
Industry : Automobiles

Abstract:

UK based MG Rover was one of the oldest car manufacturers in the world. Founded more than a century ago, MG Rover's problems began in the early 1970s. The company had to be nationalized to save it from bankruptcy induced by labour unrest and financial problems.

However, the situation did not improve under the Government's management and the company was privatized by selling it to British Aerospace (BAe). BAe sold MG Rover to BMW which, after prolonged losses, sold it to Phoenix Venture Holdings (Phoenix). Under Phoenix, MG Rover declared bankruptcy when the collaboration negotiations with China's SAIC collapsed.

The case details the circumstances that led MG Rover into problems and finally into bankruptcy. It examines the causes of MG Rover's troubles including the role played by the four acquirers of MG Rover.

Issues:

Understand how internal, industry-specific and macroeconomic factors can negatively affect the financial performance of a company.

Examine the role of government in business.

Study the importance of good labor relations for proper functioning of a company.

Study the circumstances that led to the collapse of MG Rover.

Discuss the measures that should have been taken by the acquirers of MG Rover in order to revive the company's financial and business performance.

Contents:

  Page No.
MG Rover Seeks Bankruptcy 1
Background Note 2
Three Decades of Trouble 3
The 1970s - Nationalization 4
The 1980s - Privatization 5
The 1990s - Takeover by BMW 7
Bankruptcy Under Phoenix 9
The Aftermath 10
Exhibits 12

Keywords:

MG Rover, Corporate Turnaround, Merger and Acquisition, Bankruptcy, Industrial Relations Crises, Financial Mismanagement, Nationalization, Privatization, Corporate Mismanagement

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