TONY LOMAS was getting ready to go out to dinner during an Easter family holiday in Washington when the phone rang. It was his office in London. Come back now, was the message. MG Rover, the last British-owned volume carmaker, was going under, and he was going to have to pick up the pieces.

Lomas, senior insolvency partner at the accountancy firm Price Waterhouse Coopers, was used to such calls. But MG Rover was a daunting prospect. Since it had been bought by a consortium of Midlands businessmen from BMW five years earlier, it had hardly been out of the news as losses mounted and sales dwindled.

Rescue talks with a Chinese car group had collapsed, raising the prospect of up to 6,000 workers being thrown on the dole a few weeks before an election — and in a region with more than 20 marginal seats. It was going to be a high-profile job, the biggest corporate collapse of the year and one that could cause a political furore.

Lomas took the call on April 7. He cut short his holiday and was in Longbridge, MG Rover’s Birmingham plant, by lunchtime on Saturday April 9. The MG Rover directors — including the so-called “Phoenix Four” group of investors who bought the carmaker from BMW for just £10 — had met and appointed PWC as administrator the day before. A judge had ratified the appointment.

The future of the group, one of the last remnants of the once- mighty British Leyland, was already the subject of intense media and political interest.

A few days before PWC was called in, a shortage of available cash had forced MG Rover to stop making cars. As the board was meeting to appoint PWC, staff were filing out of the factory, telling waiting reporters they feared the worst. Patricia Hewitt, then trade and industry secretary, sped to Birmingham. She was joined later by Tony Blair and Gordon Brown.

By Saturday morning Lomas and his team had a fairly clear idea of the company’s true financial state. There had not been enough money to pay suppliers the cash on delivery they had demanded. There was not even enough to pay another week’s wages. “It was clear that we were going to have to make 5,000 redundant on the Monday morning,” Lomas said.

The alarming prospect of mass redundancies focused minds. DTI officials and union leaders, including Tony Woodley, general secretary of the TGWU, and Derek Simpson, general secretary of Amicus, were told the news at a meeting on Saturday morning. “It was the last thing the unions wanted to hear, but the DTI had some insight into the real state of affairs,” he said.

Lomas now needed to establish if the Chinese might ride to the rescue. Shanghai Automotive Industry Corporation (SAIC) had been in joint- venture talks with MG Rover until a few weeks earlier, and there was hope it might step into the breach.

But SAIC’s top executives could not be contacted. The eight-hour time difference with China did not help. “We had contact with their advisers (the merchant bank NM Rothschild), but not the top people.”

With time running out — and the offices of the prime minister and the chancellor taking a close interest in developments — the DTI came up with a lifeline. It would provide a £6.5m loan to pay the staff for another week and to give time to contact SAIC.

Even then, Lomas had to tread carefully. Was the government allowed to make the loan, and was it certain that it would not rank ahead of existing creditors when it came to the final wind-up?

PWC was eventually satisfied that the answer to both questions was yes. Lomas spent the next week trying to talk to SAIC, writing to the group and getting PWC’s Shanghai offices to try to establish contact.

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