LONDON -- MG Rover administrators were in talks with two Chinese bidders for parts of the bankrupt British carmaker on Monday, though one potential British partner dropped out of rescue talks, unions and sources said.
Administrators PricewaterhouseCoopers (PwC) were talking to China's Nanjing Automotive and a consortium backed by China's biggest carmaker Shanghai Automotive Industry Corp. (SAIC).
SAIC, which pulled out of a joint venture expected to save the carmaker earlier this year, was talking to former Ford Europe boss Martin Leach about a joint bid for MG Rover that could save the carmaker's Longbridge plant, unions said.
"The bid headed up by Martin Leach offers the brightest prospects for Longbridge. It looks as though there is the possibility of real progress," said a spokeswoman for the Transport & General Workers Union (TGWU), which backs the Leach bid.
MG Rover filed for bankruptcy in April under debts of 1.4 billion pounds ($2.44 billion), costing 5,000 jobs after the carmaker was forced to close its production plant at Longbridge in central England.
SAIC was also in talks with Birmingham businessman David James to save the business but it now appeared a deal with James was unlikely after weekend talks, a source close to the situation told Reuters.
Reuters reported last week that PwC was talking to two bidders, and that a deal would probably move production of MGTF engines offshore.
MG Rover used to supply engines for an annual 14,000 convertible MGTF cars, but bidders would probably move that production abroad, the source said.
Production of MG Rover's own cars is unlikely to resume at the car firm's plant at Longbridge, the source said.
Administrators set themselves an October deadline last month to wrap up the sale of MG Rover, which collapsed in April.
Securing continued production of MGTF engines might give security to the producers of MGTF car bodies, Stadco in Birmingham.