The Phoenix Trust Fund - The Story So Far...
Since the collapse of the UK’s last independent car manufacturer MG Rover and closure of its Longbridge factory in 2005 (the largest site closure in the UK for over 20 years) there has been continued media commentary concerning the well publicised ex workers trust fund.
At the time of closure amid much press questioning John Towers (Managing Director of the Phoenix Consortium who bought MG Rover from BMW in 2000) pledged assets worth up to £50million to a trust fund for the ex workers. Non-executive Phoenix Venture Holdings Director Nigel Petrie, the Arch Bishop of York (then Birmingham) Dr. John Sentamu, Birmingham historian and BBC presenter Prof. Dr. Carl Chin and Eric McDonald of the TGWU were nominated as trustees of the fund. In 2005 the original aim of the trust fund was to provide the cash to the former workers quickly – to compensate for the lack of a substantial redundancy payment.
To date, 10 years since the closure no money has yet been transferred.
The Phoenix Directors who bought MG Rover secured between them over £42million in remuneration during their five year tenure (having bought MG Rover for £10) with the governance of MG Rover being watched and criticised in various government reports throughout. Their remuneration was described as ‘unreasonably large’ and ‘out of all proportion’ in a four year, £16 million government enquiry.
At the time of closure, the workers were paid only half a months salary in the majority of cases and received only the minimum state redundancy (these payments were not paid for weeks/months). A study 3 years after the closure (pre-economic downturn) showed two thirds of the workers on lower paid jobs, the majority having to retrain for work and transfer into lower paid jobs in the service sector. The average worker at this time was £5,640 per year worse off.
In the House of Commons, Richard Burden (Labour MP for the Longbridge constituency) raised the issue and publicly requested that the Phoenix Venture Holdings advance the trust fund process as a matter of urgency. Carl Chinn has repeatedly called for the Phoenix Directors to pay £1 million into the fund in lieu of any further monies in order to help those affected by the closure.
Since starting the Justice for Rover Workers group in April 2010, the main objective has been to provide clarity to the ex workers on the matter. The website has acted as a centralised forum for comments and on behalf of the group I’ve met a number of times with the current Director of the Phoenix Consortium and other interested parties to try and provide a latest status. This can be seen via the home page.
Here is a clip of the BBC interview where John Towers discusses the trust fund at the time of the MG Rover collapse (it's approximately 3 minutes 40 seconds in) http://www.youtube.com/watch?v=eYG78PtEaqQ