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From the Telegraph

MG Rover's parts supply crisis should be over by June according to chief executive Kevin Howe, writes Andrew English. "We have had some real difficulties after we transferred the parts operation from Unipart to Caterpillar," he says. "Caterpillar underestimated what it would take and it hasn't done as good a job as it should have in managing the transition."

The crisis has reached such proportions that some dealers have had to take on extra courtesy cars to keep customers mobile while their cars are laid up waiting for spare parts. In cases of rare parts for older Rovers (1980 and 1990 models), customers have been advised that the spare parts might never be remanufactured.

We have seen a copy of a letter sent to all Rover dealers on April 2 from parts director Mike O'Hara in which he acknowledges the problems and invites dealers to travel all the way to Longbridge to pick up emergency supplies of Rover spares. We have also been contacted by several Rover owners and dealers expressing concern and in some cases desperation with the situation.

Howe says the move to Caterpillar subsidiary Cat Logistics "was motivated by a need to take more of a share of the parts profits internally - the Unipart deal had a profit share that was not in our favour".

Despite that, he claims that difficult parts supply "is not just an MG Rover problem, it is partly down to the frailness of the UK parts industry, with pared-back profits and receiverships".

Howe hopes the situation has not affected MG Rover's long-term prospects or new-car sales. "We are sorting the situation out with organisational changes," he says.

"It is getting better, but it's not getting better quick enough for me. I hope things are back to normal by the end of June."

1,386 Posts
Very bad but the dealers are doing there best.

Over the easter weekend my head gasget went on my Rover Coupe VVC, all on warranty so no problem with the work being carried out. On inspection it was discovered that the head had a fault on it so a new head was ordered.
The first three weeks I had to find my own transport, I bit of a mare as I live in the sticks and 20 miles from work. I then got a courtesy car (very nice rover 25) which has proved to be a life saver.
BIG Problem though!!!!
My new MG TF is destined to arrived at a different MGR dealer on the 15th June and the coupe is my part ex!!!!! My insurance runs out on the coupe on the 10th June and don't want to have to pay out for coupe insurance when I won't be driving it!!!



Birmingham Post, June 13, 2002
MG Rover sent out a strong message to its UK component suppliers, yesterday, that if they failed on price, quality and delivery demands the parts would be brought in from foreign competitors.

Kevin Howe, chief executive of MG Rover Group, said: 'We take whatever decision is required to make us prosper and I make no apologies.'

Mr Howe, who was speaking at a CBI senior executives lunch at lawyer's Pinsent Curtis Biddle in Birmingham, said the components industry had suffered 'a little bit from the British 60s disease'. When market conditions got tougher the companies laid-off workers and 'suppressed' levels of investment and when the demand returned they could not cope.

'When we talk to small organisations - the SME's - they have genuine concerns but they will not be tier one suppliers.

'A lot of tier one suppliers are saying certain things but are doing their business off-shore.

'Seventy-five per cent of our spend is in the UK but I cannot tell you that 70 per cent or 80 per cent of the work is carried out in the UK. Probably, it is not at that level,' said Mr Howe.

Last week MG Rover announced it was in talks with the Polish Government about taking over the Daewoo plant in Zeran, Warsaw.

Mr Howe was asked if MG Rover would shut Longbridge and transfer production to Poland but he assured his audience the cost of closing down Longbridge to make cars elsewhere was not viable.

A plan was in place for a new small car to replace the Rover 25 and it would follow a new medium sized car into the market in 2004.

He said the public perception of MG Rover had improved. It was Rover that had 'got the battering' and there was never any perception of a problem with the MG brand.

But Mr Howe said the company was facing a logistics challenge following the switch of its parts operation from Unipart to Cat Logistics in March. Subsequent problems have been frustrating for the components industry, dealers and ultimately customers waiting for parts.

'MG Rover is not the only car manufacturer in this situation. When Cat Logistics took over there was a backlog of orders due to the poor economic climate.

'We are taking immediate steps to address this situation and have released materials from Longbridge and have set up a team to chase the backlog.'

The plant was on holiday this week and the time had been used to put parts through the system into the aftermarket, he said.

Next month MG Rover will report on its overall performance during 2001 to its shareholders, who comprise almost all the 6,500 workforce.

When *** sold Rover Group to the Phoenix Consortium for pounds 10 in May 2000 the losses were running at pounds 800 million but last year they were pounds 254 million and they would be half that figure this year.

MG Rover halts car production to tackle spare parts supply crisis

Financial Times (London) June 13, 2002, Thursday

MG Rover, the largest UK-owned carmaker, has halted production for a week in an effort to resolve a crisis in spare parts supply that threatens to damage customer relations.

The business has stood down most of 3,300 production workers at its Longbridge site, in Birmingham, allowing components produced by suppliers to be diverted for use as spares.

Kevin Howe, chief executive, said: "Our dealers and customers are experiencing frustrating delays . . . We are taking incredible steps to address the problem." The shut-down, implemented under flexible working arrangements, began on Monday and is expected to end on June 17. Lost production of 3,500 vehicles, will be made up later.

Suppliers claimed the long-running parts shortage was undermining the service provided by dealers, delaying repairs and maintenance for many Rover customers. One supplier said: "It's causing complete chaos. There has been a foul-up in the distribution and logistics systems."

Union leaders, who have expressed concern at the shutdown, were said to be seeking talks with the Rover management to clarify production plans.

The problems follow the transfer in March of MG Rover's "after-sales parts business" from Unipart, its long-term component distributor, to Caterpillar Logistics. A Longbridge official said the subsidiary of the US industrial group, which was yesterday unavailable for comment, had been hampered in setting up logistics systems for MG Rover by a parts shortage. He said component makers, damaged by two years of falling car sales and a weak euro, were struggling to cope with a rebound in demand.

In a confidential letter to suppliers, Tony Shine, supply chain director at MG Rover, warned: "We continue to experience difficulties in supplying our customers with component parts for servicing and repairs."

The distribution of spare parts is worth Pounds 250m a year to MG Rover, with operating margins on components close to 10 per cent compared with 2 per cent in car manufacturing.

Mr Howe, speaking in Birmingham yesterday, reiterated predictions that MG Rover would make a loss of just under Pounds 200m for 2001, but would break even in 2002 and make profits in 2003. A new medium car, the fruit of a collaboration with China Brilliance, would go on sale in 2004, with a small car to replace the Rover 25, following soon afterwards.

2,833 Posts
Well the parts crisis may be coming to a end,today i finally got my trophy blue touch up kit after ordering it in febuary.
The bloke at eastern MG R said its been hell with them getting a lot of grief off customers when they had no control over what was happening.
He also said it effected VW and seat too as well as bumper supplies for ford.
Anyway he said their almost back to normal now but they have lost money out of the whole fiasco.


What Parts Shortage

Not wanting to fully describe my plight - I'm sure the followers of ELO already know! If you don't you can Click Here, if you do have a read, you will realise tha MGR and Kernahans (local dealer) behaved in an exceptional manner and secured and fitted a major new part to my Motah in record time (5 days)!

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