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

David Bailey; Ian  Clark; Alex de Ruyter

doi:10.1093/cjres/rsq021

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

David Bailey, Ian Clark, Alex de Ruyter

Research output: Contribution to journal › Article › peer-review

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.

Original language	English
Pages (from-to)	367-382
Number of pages	16
Journal	Cambridge Journal of Regions, Economy and Society
Volume	3
Issue number	3
Early online date	11 Aug 2010
DOIs	https://doi.org/10.1093/cjres/rsq021
Publication status	Published - 2010

Bibliographical note

This is a pre-copyedited, author-produced PDF of an article accepted for publication in Cambridge journal of regions, economy and society following peer review. The definitive publisher-authenticated version Bailey, D., Clark, I., & de Ruyter, A. (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, 3(3), 367-382 is available online at: http://cjres.oxfordjournals.org/content/3/3/367.abstract

Keywords

private equity business model
automotive sector
corporate governance
economic restructuring

Access to Document

10.1093/cjres/rsq021

Private equity and the flight of the phoenix four
This is a pre-copyedited, author-produced PDF of an article accepted for publication in Cambridge journal of regions, economy and society following peer review. The definitive publisher-authenticated version Bailey, D., Clark, I., & de Ruyter, A. (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, 3(3), 367-382 is available online at: http://cjres.oxfordjournals.org/content/3/3/367.abstract
Accepted author manuscript, 314 KB

http://cjres.oxfordjournals.org/content/3/3/367.abstract

Cite this

@article{4a1c383e970c4166875ca8ee32c4f4ce,

title = "Private equity and the flight of the phoenix four - the collapse of MG Rover in the UK",

abstract = "This paper explores the nature of the co-called {\textquoteleft}private equity business model{\textquoteright} (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 changesthe 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.",

keywords = "private equity business model, automotive sector, corporate governance, economic restructuring",

author = "David Bailey and Ian Clark and {de Ruyter}, Alex",

note = "This is a pre-copyedited, author-produced PDF of an article accepted for publication in Cambridge journal of regions, economy and society following peer review. The definitive publisher-authenticated version Bailey, D., Clark, I., & de Ruyter, A. (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, 3(3), 367-382 is available online at: http://cjres.oxfordjournals.org/content/3/3/367.abstract",

year = "2010",

doi = "10.1093/cjres/rsq021",

language = "English",

volume = "3",

pages = "367--382",

journal = "Cambridge Journal of Regions, Economy and Society",

issn = "1752-1378",

publisher = "Oxford University Press",

number = "3",

}

TY - JOUR

T1 - Private equity and the flight of the phoenix four - the collapse of MG Rover in the UK

AU - Bailey, David

AU - Clark, Ian

AU - de Ruyter, Alex

N1 - This is a pre-copyedited, author-produced PDF of an article accepted for publication in Cambridge journal of regions, economy and society following peer review. The definitive publisher-authenticated version Bailey, D., Clark, I., & de Ruyter, A. (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, 3(3), 367-382 is available online at: http://cjres.oxfordjournals.org/content/3/3/367.abstract

PY - 2010

Y1 - 2010

N2 - 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 changesthe 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.

AB - 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 changesthe 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.

KW - private equity business model

KW - automotive sector

KW - corporate governance

KW - economic restructuring

U2 - 10.1093/cjres/rsq021

DO - 10.1093/cjres/rsq021

M3 - Article

SN - 1752-1378

VL - 3

SP - 367

EP - 382

JO - Cambridge Journal of Regions, Economy and Society

JF - Cambridge Journal of Regions, Economy and Society

IS - 3

ER -

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

Abstract

Bibliographical note

Keywords

Access to Document

Fingerprint

Cite this