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Private equity and the flight of the phoenix four-- the collapse of MG Rover in the UK

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  • David Bailey
  • Ian Clark
  • Alex De Ruyter

Abstract

This paper explores the nature of the co-called 'private equity business model' (PEBM) and assesses its shortcomings, using the illustrative example of the role of private equity in structuring the finance and subsequent collapse of MG Rover, as the automotive industry has been a significant destination for private equity financing. The paper outlines the nature of the PEBM. It then details how the PEBM extracts value, before stressing how this can affect workers in a portfolio business. We argue that the emergence of the PEBM changes the basis of competitive rules in organizations and the running of erstwhile going concerns, necessitating a need for further regulation--particularly, how to secure wider stakeholder oversight without reducing the efficiency of PEBM concerns. Copyright 2010, Oxford University Press.

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  • David Bailey & Ian Clark & Alex De Ruyter, 2010. "Private equity and the flight of the phoenix four-- the collapse of MG Rover in the UK," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 3(3), pages 367-382.
    • Handle: RePEc:oup:cjrecs:v:3:y:2010:i:3:p:367-382
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    File URL: http://hdl.handle.net/10.1093/cjres/rsq021
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    Cited by:

    1. Budler, Marko & Župič, Ivan & Trkman, Peter, 2021. "The development of business model research: A bibliometric review," Journal of Business Research, Elsevier, vol. 135(C), pages 480-495.

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