Rover
So who really profits from the Towers bid?
MUCH OF THE BID is still hazy. What is clear is that hardly any new money is involved. The American bank that has stumped up £200 million has the stock as collateral: but what interest rate are they charging?
BMW gave £75 million as a donation and an interest free 50 year loan of £500 million. This latter is spread over three years, no doubt so that BMW can get tax advantages out of it. (They have sold Land Rover from a company on the Isle of Man, saving themselves £70 million).
But who has put money in? Apart from the famous £10, it appears that each of the 6 founders - Towers, Hemmings, Nick Stephenson from Lola cars, Mayflower, John Edwards and another dealer - has put in £100,000. Is this £600,000 really the only new money?
Towers has talked about the workers acquiring one third of the equity in Phoenix. But how will they get it?
Will they have to pay cash for shares? Or does he perhaps expect them to carry out the suggestion of BMW UK's boss Werner Samaans, that they pay by working unpaid overtime?
Another percentage will go to the dealers.
So what percentage of Phoenix will remain with the six founders? If anything is left to sell off at the end, what percentage of the assets will they receive?
For that matter, what salaries are they paying themselves?
They have already appointed a Manufacturing Director, Chris Bowen for Longbridge, and they are now looking for a Managing Director.
At that point the founders will just be the board of directors, and go back to their other businesses.
No doubt they will continue to get a salary for being on the board. But whatever reward they receive, it will basically be for having carried out the negotiations.
Towers will have come out very well. In 1996 he left Rover with a £500,000 payout. No doubt when he is on the board he will make sure his style of management continues.
In 1991 he proposed Rover Tomorrow, a far reaching document that dramatically changed working conditions, and led to draconian pressure on issues such as time keeping and flexibility.
He told the unions he would introduce it "with or without them". The union negotiators, then led by Jack Adams and Tony Woodley, immediately capitulated and strongly recommended accepting the document. This was outside of a wage review, and gave nothing to the workers.
Clearly Towers hopes to go on the way he began nine years ago. It seems the union chiefs have already conceded on this - and any other demands he may make.