LONDON -- The eventual buyer of bankrupt MG Rover is unlikely to resume major production in the UK, given that the two credible bids for the carmaker focus on shipping assets to China, a source close to talks told Reuters on Friday.
"Both parties have a simple plan: to buy the assets, ship most of them back to China and (then) see what they can do in the UK," the source said.
Chinese bidders Shanghai Automotive Corp. (SAIC) and Nanjing Automotive have both lodged bids for the assets of Britain's last major carmaker.
But hopes had been hyped in the media that either SAIC, which has teamed up with former Ford of Europe boss Martin Leach, or Nanjing would revive major production at Longbridge, the source said.
"The TGWU (Transport & General Workers Union) wants SAIC to succeed" because SAIC has indicated "that there'll be significant employment in the UK," the source said.
"Long term, I can't see why anyone would want volume production at Longbridge. Specialist consultants and engineers are a different matter."
SAIC rejected the comments.
"We see this joint approach as a significant step forward in the resumption of car production at Longbridge," a SAIC spokesman said.
Sources have said the SAIC consortium is proposing to establish a design and engineering center in Longbridge employing 1,300 to 1,600 people. Other sources close to the talks have said the SAIC bid involved what they described as "serious" production at Longbridge.
MG Rover's administrators, PricewaterhouseCoopers, said late on Thursday they were in talks with three different parties. which all hoped to continue "at least some car production in the UK". PwC declined to comment on Friday.
Only the two Chinese bids were credible, the source said. British businessman David James has been seeking a government loan guarantee to get a third, separate proposal off the ground.
Administrators have set bidders the challenge of formulating contracts and delivering cash up front to honor their bids, and a deal is unlikely before the second half of next week, the source added.
MG Rover filed for bankruptcy in April after SAIC pulled out of a joint venture.