Fears as Rover halts production

MIDLANDS car giant MG Rover suspended production for the rest of this week to curb stocks in a move that industry insiders warn pre-empts a crunch at the firm.

Hit by falling sales, MG Rover desperately needs a new model to replace the Rover 45 and to boost sales in the mid-market competing against cars such as the Ford Focus.

Although car firms often halt production briefly, one insider said Rover's timing is odd because the UK car market is currently strong.

Rover is still blaming the strength of the euro, although the currency has been weaker recently. 'It is a small sign that the old model is not selling,' the insider added.

The Transport and General Workers Union and Amicus are looking for a third party to go into Rover to examine its books. They are concerned about board pay, a trust fund set up for directors, a restructuring of the finances and a £73m pension deficit.