A soap opera of epic proportions is going on in Britain. It’s all about the auto business.
Shanghai Automotive Industry Corporation (SAIC), which has stakes in at least 7 different car brands in China, invested 67 million pounds in MG Rover, the British car manufacturer. But it’s not enough: MG Rover is one pretty screwed-up company: they have no money, and their brand is declining in value by the day because, to be frank, their cars suck.
MG Rover is hoping to be rescued by a large cash infusion from SAIC, who would then own most of the company, and be in control of the Rover brand and distribution network, as well as certain patents and other intellectual property owned by MG Rover.
The trouble is that MG Rover is in such terrible shape that SAIC is balking at the deal.
As in any good soap opera, there is another story behind the story.
From the Guardian’s latest report on the deal:
A collapse of Rover would be a severe embarrassment to Labour in the run-up to the May 5 election, and would provide plenty of ammunition for the Conservatives and the Liberal Democrats.
From the Daily Telegraph’s latest report on the deal:
Talks between cash-strapped British car maker MG Rover and Chinese motor giant Shanghai Automotive Industry Corporation stalled last night, raising the prospect of thousands of job losses in Labour’s key West Midlands heartland on the eve of the general election.
The Daily Telegraph’s illustrators enjoyed themselves producing the handy jobs=votes graphic reproduced in part above, in case you weren’t clear on the possible implications of the deal.