MG asks troubleshooters to tackle components shortfall

3 July 2002
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04 July 2002 | Liam O'Brien

MG Rover has set up a troubleshooting team to solve a spare parts crisis.

It follows the transfer of after-sales parts distribution from Unipart to Caterpillar Logistics.

The Birmingham-based firm announced this week that a 14-strong team - consisting of senior IT and production managers from MG Rover and Caterpillar - had been told to correct the parts shortfalls that have almost halted some dealers' lucrative after-sales business.

In the face of threats of legal action from some dealers, the team has used a week-long production break at Longbridge to divert parts to its dealer network.

The team is also supervising the taking of parts from production line bins so they can be sent directly to dealers in most need.

Stewart McKee, spokesman for MG Rover, said: "We have dissatisfied customers and frustrated dealers, so we are doing everything that can be done. The team is literally working 24 hours a day on this.

"All UK-based component manufacturers have moved a lot of manufacturing overseas. All they do is the configuration work at the last moment.

"They have also downsized in recent years and have not been able to step up production as the market has grown."

The problems were triggered by the transfer in March of MG Rover's after-sales parts business from Unipart to Caterpillar Logistics. It is blaming problems in getting its computers to talk to MG Rover and the restructuring of UK component makers.

Rusty Dunn, Caterpillar's spokesman, said: "We have had some real start-up challenges. In addition to computer issues, we have an extreme parts shortage with some UK suppliers."

Difficulties with UK component suppliers were said to be the result of many of them moving work overseas as a result of the strong pound.

Neither MG Rover nor Caterpillar Logistics were able to say when the shortages would end.

The issue is critical to MG Rover's profitability, with the distribution of spare parts worth £250 million a year.

Kevin Howe, its chief executive, recently reiterated predictions that the car maker would make a loss of £200 million for 2001, but would break even in 2002 and make a profit in 2003.


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