Sports car future for Rover

THE MG sports car is headed back to the United States, after a 20-year absence, with an all-new lightweight model developed in conjunction with another British icon, Lotus.

That is the message from Alchemy Partners which this week unveiled its controversial plans for Rover under a deal to buy the ailing company from BMW.

Alchemy plans massive job cuts as it downsizes the business and renames Rover the MG Car Company.

However, the Alchemy deal is not yet set in stone as BMW AG has said it will seriously examine a rival bid by former Rover Group boss Mr John Towers, who visited Munich last Friday to speak with company officials.

The Alchemy deal is due to be finalised by April 28.

Unions and British politicians are backing the Towers bid because they fear Alchemy will sack as many as 5000 of Rover's 9000 workers, decimating the industry in central England.

Rolls-Royce has also been reported as planning to slash its workforce, but a spokesman said the automotive company was doing quite the reverse.

The luxury car icon is enjoying market growth and looking for 250 engineers to join its 2000-strong workforce.

Communications manager for Rolls-Royce and Bentley Motor Cars Mr Richard De Leyser said the reported retrenchments applied to Rolls-Royce PLC, the aerospace company that now has no relationship with the car-maker.

Rolls-Royce the car-maker is owned by Volkswagen and, coincidentally, is due to be handed over to BMW in 2003.

However, Mr De Leyser said that Rolls would be happy to continue under VW control and was pleased with the company's recent progress.

It has launched two new cars - the Park Lane and Corniche Convertible - reached double digit earnings growth and a 30.6 per cent increase in RR sales for the first quarter this year.

Bentley, which will remain in VW hands regardless of the BMW deal, has also been strong with a 41.2 per cent increase over the same period last year.

BMW's unhappy six-year ownership of Rover, which amassed huge losses for the Germans, has heightened speculation BMW may let VW keep Rolls-Royce even though an all-new model is under development.

BMW is taking a pounding from the British press over its handling of Rover and will be an easy target for the anger over job losses if the Alchemy deal goes ahead.

Alchemy is remaining tight-lipped over numbers but has said it will honour contractual redundancy and pension rights of workers at Rover's main Longbridge plant.

Its long-awaited business plan reveals that Lotus - now owned by Malaysian car-maker Proton - has been approached to develop a new aluminium composite sports car to be sold as an MG by 2002.

This car is mainly targeted at the US market, where Alchemy believes there are still many MG enthusiasts.

Motor sport will also play an important role as Alchemy aims to take MG back to the Le Mans 24 Hour classic.