Expert's View on Effects of Rover Crisis
(Reported in The Birmingham Post)
A leading business rescue and insolvency specialist believes that Coventry and Warwickshire firms have survived the worst of the MG Rover crisis.
Tony Mitchell, managing director of Cranfield Recovery was expecting to be called into action within days of MG Rover announcing it was to halt production at its Longbridge plant in Birmingham. But the influx of enquiries either directly from companies in the supply chain or through banks and advisors has not materialised – proof, he believes, that regional firms have lessened their dependency on the car giant in recent years.
He said: “There is no doubt that on a wider regional basis, the closure of Longbridge has been a massive blow both directly and indirectly.
“I know that a great many companies in Coventry and Warwickshire have strong links with MG Rover and I think everyone expected there to be some serious casualties.
“Stadco in Coventry has announced its closure but those close to the industry expected more to follow and, fortunately for the economy, that hasn’t happened.
“That is not to say that companies have not suffered – they have – but it appears so far that they have weathered the initial storm.
“We deal extensively with aiding companies to put together rescue packages or, if they have gone beyond that stage, dealing with insolvencies and bankruptcies and we, along with others in our sector, thought we would be dealing with several first and second tier suppliers.
“I have studied what the Coventry and Warwickshire Chamber of Commerce have said in the wake of MG Rover’s closure and it appears that many of our local companies who dealt with Longbridge have diversified considerably in the last five years.
“Many may well have had little choice since the Phoenix takeover because there were no major new models produced, which meant that research and development reduced to almost nothing.
“Other companies must have taken a conscious decision to find new markets and it seems that five years has been long enough to allow them to do that.”
Mr Mitchell is a Licensed Insolvency Practitioner, a fellow of the Association of Chartered Certified Accountants and a member of the Midland’s Regional Committee of the Association of Business Recovery Professionals.
