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Abstract

MG Rover, was once Britain''s biggest car manufacturer in terms of volume, producing more than half a million cars annually. Established in 1906, the company experienced many setbacks in the form of ownership changes, industrial relation problems, low production and financial constraints, which finally led to the downfall of the company. While some analysts held BMW, the owner of MG Rover between 1994 and 2000, responsible for the downfall, the others blamed the government for not rising to the situation on time when BMW sold the company to Phoenix Venture Holdings. The management of Phoenix Venture Holdings, headed by ex-Chief Executive Officer of MG Rover, John Towers, faced criticism for utilising the funds available at MG Rover to fulfill their personal financial requirements. The case while detailing the growth of the company since its inception, profiles the problems faced by MG Rover throughout its 100-year history. Specifically, the carmaker''s problems due to continuous management changes, and failure to establish itself as a strong player in the market in spite of strong brands are highlighted in the case. The case offers scope for discussion on whether the company could have been saved from bankruptcy and if so what is the role that the different stakeholders, including the government, could have played to avoid the fiasco.
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Other setting(s):
1906-2005

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Abstract

MG Rover, was once Britain''s biggest car manufacturer in terms of volume, producing more than half a million cars annually. Established in 1906, the company experienced many setbacks in the form of ownership changes, industrial relation problems, low production and financial constraints, which finally led to the downfall of the company. While some analysts held BMW, the owner of MG Rover between 1994 and 2000, responsible for the downfall, the others blamed the government for not rising to the situation on time when BMW sold the company to Phoenix Venture Holdings. The management of Phoenix Venture Holdings, headed by ex-Chief Executive Officer of MG Rover, John Towers, faced criticism for utilising the funds available at MG Rover to fulfill their personal financial requirements. The case while detailing the growth of the company since its inception, profiles the problems faced by MG Rover throughout its 100-year history. Specifically, the carmaker''s problems due to continuous management changes, and failure to establish itself as a strong player in the market in spite of strong brands are highlighted in the case. The case offers scope for discussion on whether the company could have been saved from bankruptcy and if so what is the role that the different stakeholders, including the government, could have played to avoid the fiasco.

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Location:
Industry:
Other setting(s):
1906-2005

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