LONDON - The bidding for Rover cars may not be over.
British government officials said Friday, March 17, they had assurances from BMW AG that the German company would entertain other offers for the troubled operations.
Unaffected, however, was Ford Motor Co.'s deal to buy Land Rover from BMW.
Last week, BMW struck a deal to sell Rover cars to a venture capital company called Alchemy Partners. It is best known for owning a British restaurant chain named Fatty Arbuckles and masterminding management buyouts for Parker Pens and RJB Mining.
The government faced withering criticism for being kept in the dark as BMW negotiated a deal to sell the last British volume car brand to a nonentity in the automotive industry.
According to a Reuters News Service report, Rover Group Chairman Werner Saemann said BMW would be willing to accept other offers during the six-week period during which Alchemy Partners is due to complete its purchase.
Alchemy admitted last week it would probably have to cut Rover jobs, particularly at the 9,000-person plant at Longbridge, one of Europe's least efficient car plants.
Jon Moulton, managing director of Alchemy, told reporters Alchemy is aiming to produce something less than 100,000 units annually under the name MG Car Co. That would be a drastic reduction from the 225,772 Rover cars that BMW built in 1999.
Alchemy will produce the Rover 25 and 45 models at Longbridge. BMW will produce the Rover 75 at its Oxford plant under contract to Alchemy. Alchemy will introduce its first new MG model within 18 months.
Under the deal, which Alchemy and BMW have been negotiating for several weeks, Alchemy would also take over the Rover dealer network.
NEEDED: MORE CASH
Charlie Moss, an analyst for J.D. Power-LMC in Oxford, England, said Alchemy would need a minimum of $800 million to carry on with a product development program. Twice that amount would be better, he said.
Moss said he believed Alchemy could end up conveying the remains of Rover to another car company. There were even rumors Alchemy was acting as a surrogate for a car company such as Volkswagen AG.
Garel Rhys, director for the Center for Automotive Industry Research at Cardiff Business School in Wales, said Alchemy faces a huge task mollifying embittered and demoralized Rover workers and soothing the fears of anxious Rover dealers.
But one dealer, Geoff Yeowart, owner of Tanswell's of Towcester, said he believed Alchemy was worthy of support. 'I'm delighted Rover has come back into British ownership,' he said.