Ebook Life After Longbridge? Crisis and Restructuring in the West Midlands Auto Cluster
This paper explores the background to, and implications of, the MG Rover (MGR) collapse. It first sets the scene by outlining the form of the auto cluster in the west midlands, in the context of the structural changes unfolding in the industry. These include: greater pressure on firms to recover costs when technological change has been intensifying, driving up the costs of new model development; increased international sourcing of modular components; and a shift of assembly operations towards lower cost locations. All of these make maintaining the west midlands cluster more challenging for firms and policy makers. It then looks a ‘what went wrong’ at MGR, finding much of value in recent analysis which has stressed the long term problems at the firm and its inability to recover costs.
Given this, BMW’s withdrawal from the firm in 2000 left MGR virtually dead on its feet, and by 2002/3 it was clear to many that the firm was running out of time. The paper also looks at other contributing factors to the demise of MGR, including government policy mistakes over the years, including a misguided ‘national champions’ approach in the 1950s and 1960s, a failure to integrate activities under nationalisation in the 1970s, a mistaken privatisation to British Aerospace in the 1980s, and the failure of competition policy in allowing the sale to an inappropriate owner in BMW in the 1990s. Add in the considerable volatility of sterling and the scene was set for the firm’s demise.
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Ebook Life After Longbridge? Crisis and Restructuring in the West Midlands Auto Cluster
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