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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• 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 the proper functioning of a company.

Keywords

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