The Rover Task Force: A case study in proactive and reactive policy intervention*

Abstract

The paper examines the policy responses in the UK West Midlands to the successive crises at the car maker MG-Rover. Whilst the firm's eventual collapse in 2005 was a substantial shock to the West Midlands economy, the impact was much less than was anticipated when the firm was first threatened with closure in 2000 at the time of its break-up and sale by the German car firm BMW. Although the firm struggled as an independent producer, the five years of continued production until 2005 and the work of the initial Rover Task Force (RTF1), enabled many suppliers to adjust and diversify away from their hitherto dependence on MG-Rover resulting in as many as 10,000-12,000 jobs being 'saved'. This first intervention was later followed by a programme to help ex-workers to find new jobs or re-train and assist supply firms to continue trading in the short term. Examination of the effectiveness of these emergency initiatives enables a wider discussion about the nature of industrial policy in the region and the work of the local regional development agency's cluster-based approach to economic development and business support. Whilst the actions taken were successful in a number of aspects, there were a number of significant 'failures' at both national and local level. The MG-Rover case also illustrates a number of critical issues pertaining to regionally based cluster policies and the organization of cluster management groups where the 'cluster' in question not only crosses both administrative and 'sector' boundaries but is also subject to the imperatives of the global market car market. JEL classification: L52, L62, N94, R11, R58Key words: Rover Task Force, MG Rover, automotive industry, cluster policy, industrial policy, regional development agencies * The authors wish to acknowledge the support of the ESRC under award number RES-000-22-2478.

Employment Outcomes and Plant Closure in a Post-industrial City: An Analysis of the Labour Market Status of MG Rover Workers Three Years On

“…On this note, government and regional development agencies (or successor bodies) need to do more to ensure that employees have the necessary skills to cope as industries change, through high quality, flexible education, training, information, and mobility programmes (a more "Nordic" approach). Here it needs to be recognised that much work was done by the RDA Advantage West Midlands and other agencies before the MGR closure, in diversifying the supply chain and economy and this work may have "saved" as many as 10-12,000 jobs in the local automotive supply chain at the time (Bailey and MacNeill, 2008). Avoiding sudden closures and slowing down the process where possible also enables workers released to pick up jobs arising through "replacement demand" where firms require workers to cover those who have left, retired and so on.…”

“…However, the city and the region were strongly hit by the recessions and manufacturing crisis of the 1970s and the 1980s leading to significant levels of unemployment (Brown et al 2007) and ongoing deindustrialisation. At the turn of this century, the newly created regional development agency set out its economic development strategy based initially on priority business sectors and later on ten clusters in line with national policy (Bailey and MacNeill, 2008). Additional regional initiatives included the development of three technology corridors, one of which, the Central Technology Belt (CTB) included the Longbridge area.…”

“…The second Rover Task Force created in 2005 put together a package of £176 million to support actions directed at MG Rover suppliers, vehicle retailers and workers and the local community around Longbridge. Actions to support the workers included facilitating access to Job Centre support and statutory redundancy payment and compensation (£40 million) and dedicated training programmes (£50 million) (Bailey and MacNeill, 2008).…”

The role of social dialogue in skills initiatives: a case study approach

“…With transferable skills they would have improved levels of employability and adaptability. Despite the seeming effectiveness of the programmes made under the aegis of the Rover Task Force, a wider view reveals that each initiative has been reactive and delayed (Bailey 2008b). …”

Plant closures, precariousness and policy responses: Revisiting MG Rover 10 years on

“…Typically, arguments have been put forward on the need for advanced economies to streamline welfare regimes and encourage greater flexibility in labour and product markets. A key manifestation of globalisation (in the UK and USA particularly, but also other industrialised countries) has been a shift away from manufacturing to services industries, a process which has been typified in the UK by a number of high-profile plant closures (Pike 2005;Armstrong et al 2008;Bailey et al 2008aBailey et al , 2008bBailey et al , 2014. Under pro-trade and foreign direct investment regimes, multinational corporations (MNCs) have engaged in the extensive subcontracting and outsourcing of production and employment across developed and developing countries.…”