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Around a fifth of the workforce at the MG plant in Birmingham could lose their jobs, the car manufacturer has said. MG Motor UK Ltd said 30 employees were at risk of redundancy following a review and restructure of business operations at the Longbridge site.

The company, previously Nanjing, said it could not make assurances of long-term employment stability for staff due to the current economic climate. Production of the MGTF sports car restarted at the factory last year.

A statement from MG Motor UK said: “The unique trading conditions we are currently operating in make any assurances of long-term employment stability difficult to predict. Following a review and restructure of its business operations the company has abided by the statutory consultation process and placed a number of employees ‘at risk’ of redundancy.

“MG UK has always maintained that its workforce would be preserved in line with the ongoing needs of the business and sustainability has and will continue to be a priority as the economy experiences unique trading conditions.”

The company added that by taking early action it hoped further redundancies could be avoided. Nanjing bought MG Rover’s assets following the collapse of the company nearly four years ago. The Chinese firm recently re-branded itself as MG Motor UK Ltd.

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British car sales for the month of March are expected to have fallen by about 28 per cent in stark contrast to other leading European markets that have recently bounced after government “scrapping” incentives.

The predicted drop in the sales for last month will reignite calls for the UK to offer incentives for drivers to scrap old cars and buy new, or nearly new, ones. The move has been urged by the car industry and unions for several months amid plunging sales and lengthy factory shutdowns to cut production.

The Retail Motor Industry Federation (RMIF), the UK car industry’s retail division, stepped up calls yesterday for a scrappage scheme to be introduced in Britain. Paul Williams, the chairman of the federation, said: “Measures to help to revive new-car sales in the UK, including the introduction of a vehicle scrappage scheme, must be enacted as soon as possible.”

He added: “The RMIF will be presenting the Government with a framework outlining how vehicle scrappage could work in practice. The paper will be delivered to the Government in the next few days.”

Germany, Europe’s biggest car market, published figures yesterday showing that sales rose 40 per cent last month against March 2008. About 401,000 new cars were bought in Germany last month. The market rose by slightly more than 20 per cent when adjusted to match the working days of March this year and last year, when Easter fell early.

Germany is offering €2,500 (£2,286) for drivers with cars that are more than nine years old to scrap them and buy new ones. The scheme will be extended until the year end after fears that it would run out of cash by the end of this month because it has proved so popular.

Yesterday the French market rose 8 per cent, Italy experienced a minor rise of 0.24 per cent and Spain lost some of its decline with a 38 per cent fall against a 48 per cent drop in February. UK car sales fell 31 per cent in January, but that steadied slightly in February, when sales lost 22 per cent compared with February of last year.

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The number of cars built in Britain slumped 60% last month as manufacturers slammed the brakes on output. Just 65,647 cars and vans rolled off production lines compared with nearly 110,000 in February 2008, according to the Society of Motor Manufacturers and Traders (SMMT).

This is the biggest fall since 1970 and the fifth month in a row that output levels have been in reverse. The grim figures were released 24 hours after the industry scrapped the British International Motor Show due to take place in London next year.

SMMT chief Paul Everitt said canceling the show was a tough decision but stressed it would be revived in future. “The global credit crunch has placed the industry under unique pressure and created a level of uncertainty that deters manufacturers from committing to large-scale international events.” In January, Business Secretary Lord Mandelson announced a £1.3billion package of support for the car industry.

But manufacturers have been pressing for more help from Government to stimulate demand. In particular they would like to see the introduction of a “banger bonus” which would give drivers an incentive to ditch older, high-polluting motors for new models. Without this they fear it may be so long before sales pick up that thousands more jobs will be lost.

Earlier this month, Toyota’s 4,500 UK workers agreed a 10% pay cut, expected to last a year, as an alternative to redundancies. The firm has already halted production for an extra two weeks due to the lack of buyers. Honda has taken even more drastic action mothballing its Swindon factory until June. 60% fewer cars were built in Britain in February.

The Mirror News

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