New research suggests that the majority of workers who lost their jobs when MG Rover collapsed in 2005 work in jobs that pay less than the British car manufacturer.
Three years on from the collapse of MG Rover in April 2005, 90% of workers who lost their jobs have found new employment, but most have taken significant pay cuts, according to a report by the Work Foundation and Birmingham Business School.
A sample of the 6,300 workers ex-Rover workers indicates that two thirds have suffered wage falls - of an average of £5,640 per year in real terms, while a third of the former workers reported an increase in their salaries.
A third of workers stayed within the manufacturing sector and are earning broadly similar amounts, but the 60 per cent who have moved into the service sector are mostly earning less. People who found work in wholesale and retail, real estate and business services, education, and health and social work took average cuts of more than £6,000 in annual income.
A total of 90% of the ex-Rover workers were in some form of employment by April 2008.
Almost a quarter of respondents said they were in debt or in need of drawing on savings; 36 per cent said they are just about able to manage on their current incomes; and a further 38 per cent said they were in a position to save some money.
Some 28% of the ex-workers said their current job was better than the one they had at MG Rover, 21% that it was about the same and 46% that it was worse.
David Bailey, director of Birmingham Business School, and an author of the report, said: "The collapse of Rover is rightly termed historic because it marked the closure of the last volume carmaker in the UK.
"...It needs to be borne in mind just how calamitous the sudden arrival of very large numbers of skilled, unemployed people could have been for the region. For almost all the workers to be in work three years on must count as the central positive finding."
Michelle Mahdon, senior researcher at The Work Foundation, said: ‘The jobs at Rover were high quality manufacturing jobs paying above the average for the West Midlands region so it was always likely that workers would not be able to find directly comparable work – over half the respondents are now doing completely different work and using completely different skills."
The report calls the fast response to MG Rover's collapse a ‘success story’ in that large-scale, long-term unemployment in the south Birmingham and wider West Midlands area was avoided. The report also concludes that a mix of proactive and ‘intelligent reactive’ policies to become a ‘permanent capacity’ in order to address the problems of large-scale redundancies.
What happened to MG Rover?
Production at the old MG Rover site at Longbridge site restarted in 2008 as new owners, Chinese manufacturers SAIC and NAC, recommenced production of the MG TF sports car.
Indian Tata Motors, current owners of Jaguar Land Rover, own the intellectual rights to Rover, although some Rover platforms and components are used by SAIC to manufacture rebadged Rover 75s in the Far East.