Review of the year: Industry

When the end finally came for MG Rover the company was a pale shadow of its former self, producing fewer cars in a year than General Motors makes each week. And yet there is no disputing the defining industrial event of 2005: the demise of the Longbridge plant in Birmingham and, with it, the only remaining British-owned volume car-maker.

MG Rover had been living on borrowed time for years under a variety of dissolute owners. One of those, BMW, renamed it "the English Patient". And, as befits a patient at death's door after a long illness, there was a faint prospect of remission just before the final reckoning in April. With the general election weeks away and the administrators already in place, the Government announced a package of emergency funding to pay the wages of the 6,000 workers and buy more time to secure a rescue.

It was a cynical piece of gerrymandering designed to shore up the Labour vote in an area littered with marginal constituencies, and in the event, it was to no avail. Just one more dollop of taxpayers' money thrown at a lost cause after the billions MG Rover had already soaked up in its myriad guises.

When the administrators finally got inside Longbridge, they found a business stripped bare and with debts of £1.4bn. Its owners, a group businessmen known as the Phoenix Four, who had bought MG Rover from BMW for £10 four years earlier, had mortgaged off most of the site to keep the company afloat - and enrich themselves. By the time Longbridge closed, the four, led by a former chief executive of Rover, John Towers, had siphoned off more than £30m.

Their hopes of salvaging MG Rover depended on merging it with the Chinese car-maker Shanghai Automotive Industry Corporation (SAIC). In the end, SAIC was frightened off by MG Rover's liabilities, but not before the Phoenix Four had sold it the rights to most of the model range.

Today Longbridge stands idle, but the story of MG Rover's demise is far from over. In May, the Trade and Industry Secretary, Alan Johnson, appointed two inspectors to conduct an independent investigation into the Four and their stewardship of the company. It is likely to take at least three years.

Meanwhile, Longbridge has finally been sold to a Chinese company. In July, Nanjing Automotive paid just over £50m for the business. It subsequently pledged to restart production, employing up to 2,000 workers to make 80,000 cars a year. So far, the only action witnessed is the dismantling of the site's engine line for shipment back to Nanjing where it will be used to meet Chinese demand.

MG Rover is not the only famous British manufacturing name to disappear in 2005. By an odd quirk of timing, at the same time as Longbridge closed the last rites were also being read over Marconi, the telecoms equipment company that had metamorphosed out of GEC seven years earlier.

The fatal blow came in April, when BT froze the company out of a £10bn order to re-equip its exchanges for the next century. Marconi almost immediately put itself up for sale and, in October, it was bought for £1.2bn by Ericsson. Where once GEC had been the biggest, wealthiest and most powerful industrial combine in the country, Marconi will become little more than a brass plate within the mighty Ericsson empire.

It was a sad end for the company built up by Arnold Weinstock over half a century. It will also stand as a testament to the ego-driven hubris of the dot.com era, when cash was frittered away on the ruinously expensive acquisition of several US telecoms companies.

Asked what Weinstock would have made of the deal had he still been alive, Towers commented: "I'm sure he would have had a point of view but I'm not sure how relevant that would be to today's transaction." Clearly, there is no room for sentimentality in business these days, any more than there is room for two of the names that once made Britain great.