Cowley out to grass
AS AN Oxford man myself, I do hope that Roland Smith shuts down Cowley rather than Longbridge. That must be the first choice to be made by any new owner of Austin-Morris, recently but not better known as Rover Group. Austin, or Mor- ris? Which? Now that the company is a volume car producer only by courtesy, with no more than a modest share of our own modest domestic market, how can it sus- tain Lord Austin's vast production plant and Lord Nuffield's too? The choice was and is too painful, with too much patron- age involved and too many marginal con- stituencies, to be made under public own- ership. No wonder Lord Young smiles sadly when he says that the conditions of sale will not require any particular plant to be kept open. Close Cowley, then. Plough it in, seed it down, let the grass grow green once more beyond Headington Hill — restore an idyllic pre-industrial Oxford, now post-industrial, but with no difficulty in getting college servants . . . . Oxford could give Professor Smith a new chair of his own, to be held in plurality with British Aerospace and all his other chairs. This would seem to be his best argument for Aerospace's attempt to buy Rover. He has tried arguing that cars and aero-products go together in other countries' companies, notably Saab. He does not say what happened to the last British company trying the combination. This was Rolls- Royce. The Professor is now urging Lord Young to give Rover away with a dowry of public money, putting in more capital and forgiving its debts. I hope that no money will be wasted on Rover's other sharehol- ders. The share price bobs about in the stock market, absurdly valuing Rover at billions, but the fact is that the equity has long since been lost. Creditors' claims come before shareholders', and the prin- cipal creditor, the Government, will never be repaid. Any money now offered to shareholders would in effect be at the expense of public funds, and a scandalous misuse of them. The sensible course, at the time of the original rescue, would have been for the Government to subscribe for a new class of share, with the existing shares being converted into deferred shares. Lord Young, when asked to put more money into Rover, should make such a conversion a condition.
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