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Longbridge closure before month end?

BMW says it may close Rover ahead of its earlier deadline.

BMW has threatened to prematurely pull the plug on talks with Phoenix on the sale of Rover. A BMW spokesman told Reuters on Friday in Munich that there was still no evidence the UK consortium led by John Towers had the financial backing for a deal. The German carmaker is concerned that Phoenix will not be able to raise the £200m of working capital needed to save Longbridge, Rover’s main production site, from closure.

The announcement puts further pressure on the British government, which has repeatedly expressed its determination to help keep Longbridge operational. Towers is due to meat with Trade and Industry Secretary Stephen Byers on Friday. Whether he will ask the government for financial support remains is not clear.

The Daily Mail meanwhile reports that people close to BMW are accusing Byers of avoiding talks with the German group. According to sources, Byers has turned down BMW’s recent request for a meeting. They also suggested BMW believes that the British government has played an active part in bringing down Alchemy’s offer to buy the struggling subsidiary.