MUNICH — A Rover 200/400 replacement will be built at the automaker's Longbridge, U.K., plant saving 9,500 jobs and insuring a future for the troubled facility.

Rover's parent company, BMW AG, and the U.K. government approved US$200 million in aid for the plant after threats that a replacement factory could be built in Hungary. The aid package also assures continued development of the Mini for production at the plant.

BMW Chairman Joachim Milberg, prior to the final agreement, said the debate on Longbridge was putting pressure on Rover in the market. Milberg says the workforce at the plant is older and that retirements will take care of the attrition required for efficiency.

BMW originally opposed government aid in principle for business, Milberg says, “but our competitors have benefited and to work on an equal footing is only legitimate and reasonable.” The advantage for British taxpayers, he adds, is that investments made in the area generate jobs.

A decision on the aid and the plant had to be made in time to rebuild the factory so it will remain the home of the Mini, MG and Rover 200 and Rover 400 series. BMW already has rebuilt most of its other Rover and Land Rover factories.

U.K. Prime Minister Tony Blair says, with the U.K.'s help, BMW is making Longbridge a “world-class plant for the next century.” Blair also wants to insure that BMW builds its new Roll-Royce plant inside the country. The automaker has yet to decide on an exact location for the new plant, except that it will be somewhere in the U.K. The new Rolls will appear early in 2003, when Volkswagen relinquishes rights to the brand name to BMW.

The new Rover 200/400, meanwhile, is key to Rover's revival. The R30 project will replace the two cars, which are about the same size but use two different platforms. The Rover 400 was launched in May 1995, with the Rover 200 following five months later.

The normal life cycle of a car in the compact class is eight years, but the BMW plan will shave a year off that cycle by bringing out the R30 in 2002. Additionally, the 200 and 400 will get facelifts.