Four months ago the government announced that Rover would be saving Warsaw based car maker Daewoo-FSO from bankruptcy. What they did not announce was which Rover, Rover the car manufacturer or Rover the dog.
As far as Rover the car company is concerned, it wants credit guarantees from the government and if it does not get them the economy ministry may as well turn to Rover the dog. Other sources of financing seem most unlikely and that only leaves bankruptcy for what was once one of the most important auto producers in central Europe.
The idea was to base the New Small Company (NSC) on the assets of Daewoo-FSO to allow work to continue at the plant. Rover was to bring to NSC the technology and know-how that would allow an annual production of 80,000 cars. However it seems to lack the resources for such an ambitious project. It wants the government to give it a credit guarantee. Rumour has it that this guarantee is to be USD150m.
So now it depends on finance minister Grzegorz Kołodko. If he gives the guarantee then the plant will live. If not, it goes under.
Of course there were those that warned that once the government gave credit guarantees to the Szczecin shipyard everyone would want one. And this is what is now happening.
Things were looking bright at the end of August. Creditors had agreed to the foundation of the NSC as had the Koreans.
Daewoo-FSO owes several million PLN. Sales have collapsed dramatically — by 57 percent in the first six months of this year and that is on top of last year’s plunge.