It’s a story that, unlike its subject, refuses to die, with more twists and turns than Downton Abbey or Midsomer Murders.
The recent history of MG Rover should be made into a film at some point. It’s a drama with all the necessary ingredients: greed, power, high finance, heartbreak on an epic scale – and even a frisson of sex featuring an inscrutable Chinese woman. (Remember Nick Stephenson and Qu Li unmasked in the DTI report?)
If Martin Scorsese ever fancies a follow-up to The Wolf of Wall Street – another fact-based story of overbearing ambition, hubris and downfall – he might pay a visit to the suburban sprawl that is Longbridge and recreate the last days of the Phoenix empire in glorious technicolour.
It’s a vision that might just prick the conscience of John Towers as he gazes across the rural splendour of his French countryside retreat near Toulouse in southern France.
The facts have been well enough documented down the years. Towers, Peter Beale, Nick Stephenson and John Edwards became the unacceptable face of capitalism with the closure of MG Rover nearly ten years ago after racking up debts of more than £1 billion.
The Phoenix directors had paid themselves around £42 million in pay and pension perks over the course of the car firm’s five-year descent into the abyss, a figure which the ex-directors have consistently challenged. Critics, from government ministers to unions and workers, understandably accused them of being handsomely rewarded for spectacular failure.
When MG Rover closed in April 2005, around 6,500 workers lost their jobs, along with countless others in the supply chain. It was one of Birmingham’s bleakest days, causing hardship to vast numbers of households.
The Phoenix directors’ reputation, post-closure, was not helped by John Towers’ promise of around £30 million towards a trust fund for workers, which fell foul of a claim by taxpayer bailout bank HBOS. The workers never got a penny, however genuine Towers’ original pledge.
An entire decade has now virtually passed since the dark days of April 2005, and many workers have rebuilt their lives, albeit many on much lower salaries than their days at Longbridge.
But the ill-fated Phoenix project was dragged mercilessly back into the spotlight this week as it emerged that the Phoenix Four – plus self-styled hardman chief executive Kevin Howe – are to receive a further £1 million or so each from the proceeds of MGR Capital, a finance and lease loan book subsidiary.
The MGR Capital saga is a curious plot within a plot, a potboiler to the main action, a Byzantine puzzle which has exercised the minds of the Phoenix Four, liquidators, pension regulators, trustees and former workers for five years or more.
MGR Capital survived the Longbridge crash with £23 million or so intact because it had been ring-fenced by the directors and was not part of parent group Phoenix Venture Holdings, and therefore not part of the Towers’ Trust Fund pledge. A total of £23,232,000 lay apparently dormant in a bank account for years after the Pensions Regulator put a claim in to liquidators Begbies Traynor back in 2010. Last week the regulator finally announced a settlement, with more than £8 million going to the MG Rover Group Senior Pension Scheme.
That was good news for 95 former Longbridge middle managers, whose pension payments will increase, but it was even better news for the five former Phoenix directors.
MGR Capital was 51.1 per cent owned by Lloyds Group (which swallowed up HBOS) and 49.9 per cent by Peter Beale and John Edwards, who had set up a trust fund on behalf of all five men. The hands of liquidator Paul Stanley were tied, as he admitted. “I have an obligation in law to pay out, no-one has discretion over this.”
Predictably, there was outrage among ex-workers. Birmingham’s best-loved historian Carl Chinn, one of the trustees of the abortive trust fund, said: “If they had any honour, they would hand their money over to the workers, who have lost so much.”
There seems little prospect of that. Amid the Facebook fervour and the rush to condemn, the ex-directors have done nothing wrong, at least in the strict sense of the law. They simply half-owned a firm which closed with assets of £23 million. The money is rightfully theirs for the taking.
None of the Phoenix Four or Mr Howe have ever gone on the record in detail, although they were swift to react when the long-delayed DTI inquiry report of September 2009 found them guilty of lining their own pockets and other failings.
There is a human story which has never been told. The Phoenix Four may be persona non grata in Longbridge now but they were hailed as knights in shining armour on that sunny May day in 2000 when they bought Birmingham’s best-known factory from BMW for a tenner. The journey from heroes to villains took less than five years.
Since 2005 they have been unable to earn money of any substance, they say (through their PVH spokesman) and effectively forced out of the public eye. We know next to nothing of the personal circumstances or the internal lives of the men who once saved Longbridge.That is their right. But it will also be their legacy.
As the years drift by, they might reflect that silence speaks volumes, and that £1 million bonuses, ten years after 6,500 workers were sacked, might just be a payout too far.