The impact of factory closure on local communities and economies: the case of the MG Rover Longbridge closure in Birmingham

Abstract

Much of the recent literature concerned with the impacts of factory closure refers to closures occurring in the 1980s and 1990s and affecting heavy industry – coal, steel and shipbuilding. It also tends to focus on employment and labour market impacts assessed through the subsequent experience of workers made redundant following closures. It also tends to assume that these impacts are localized. Because of this much of the discussion of policy implications relates to the workers made redundant and to a very local economy. This paper refers to the closure of the MG Rover factory in Longbridge, Birmingham, UK. This closure was regarded as presenting a crisis for government and the local community. The paper responds to arguments in the research literature and explores the spatial and economic impact of the MG Rover closure in more detail. It complements other research which has focused on the experience of those made redundant in 2005 by referring to the loss of employment over a longer time period and identifying a wider impact spatially and socially. The paper draws upon different sources of evidence and concludes with a discussion of implications for policy and research.

Keywords:

• closure
• MG Rover
• long-term social and spatial impacts
• unemployment
• community

Acknowledgements

The authors wish to acknowledge the support of the ESRC under award number RES-000-22-2478.

Notes

1. Under the Labour Force Survey, unemployed people are without a job, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks, or out of work, have found a job and are waiting to start it in the next two weeks (ONS 2006).

2. A key component here was developing the Central Technology Belt and, within this, a science park at Longbridge. But there was no further regeneration strategy developed following the 2005 closure until October 2006 when Birmingham and Bromsgrove presented a plan to redevelop some of the vacant parts of the Longbridge site to create mixed developments (Longbridge Action Area Plan 2006). In addition, some long-term unemployment strategies were put in place in Longbridge and Northfield in the later stages of the MG Rover Task Force 2005. These were designed to deal with suspected long-term and community unemployment (MG RTF 2006, House of Commons 2007).