Dealers want 2.8 million euro from MG Rover

Neuss, Germany. An offer from MG Rover's administrator has stirred up trouble in with the carmaker's dealer network.

PricewaterhouseCoopers is willing to suspend the contracts of MG Rover dealers. But the dealers would have to agree to accept MG Rover vehicles and give up outstanding financial claims against the company.

The 100-year-old British carmaker went into administration last month after it ran out of money and failed to secure a rescue deal with Shanghai Automotive Industry Corp.

Dealers previously reacted with equanimity to the MG Rover collapse. But they now think PricewaterhouseCoopers' offer is unacceptable.

"It would be contrary to dealers' interests," said Antje Woltermann, the head of the MG Rover dealer association, noting that warranty issues still remain.

On May 13, Woltermann advised MG Rover's dealers and service partners to make their outstanding financial claims against Rover payable immediately.

By May 20, about 60 percent had followed her advice. A total of 2.8 million euros is owed to the dealers.

Juergen Voss, MG Rover Germany managing director, said he understood the dealers' concerns. "But we are not authorized to settle individual claims," he said. That would run violate administration rules, he said.

Voss said he wants to work with PwC to correct the "partly erroneous arguments" of the dealer association. For instance, the requirement that dealers accept MG vehicles hasn't been decided, he said.

"There is an urgent need for further talks with the dealers," Voss said.

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