Its new builders rev up the MG for a US run

To admirers of things British -- especially automobiles -- the word that the venerable MG name has been saved from extinction comes as very good news. But in the US, at least, the new owners of the famous trademark have their work cut out for them if the car is to survive a sluggish economy and the ever-advancing Japanese.

Bl Ltd., the latest name for Britain's state-owned automaker, shocked sports-car buffs when it announced last year that it was planning to dump the MG in its long effort to save what was left of the troubled company.

Now, however, it reports it has agreed in principle to sell its aging MG plant at Abingdon, as well as worldwide exclusive licenses for the car's trademark, to a group of suitors led by Aston Martin Lagonda Ltd., which itself was saved from oblivion not too long ago.

The sales figure being mentioned by some people is $65 million although neither party will confirm or deny it.

"It's still only an agreement to go ahead and work out the details," said a BL spokesman in the US, who added that no final deal had been completed.

Both the MG and MGB were victims of the tough new stance put forward by Sir Micheal Edwardes, Bl chairman.

Sir Michael is thinning out BL's product line and cutting back sharply on the payroll. This has caused a great deal of labor strife over the years for BL, once known as British Leyland Ltd., and itself a catchall for a batch of companies that came together in an effort to fend off bankruptcy.

But despite worker protests, about one-third of the work force, or 50,000, are due to be cut. Even so, BL's existence as an independent auto producer continues to hang in the balance, despite its agreement with the Japanese carmaker, Honda, in which BL will produce a Honda-designed car for sale in the Common Market within the next few years.

The MG plant at Abingdon, near Coventry, now is building about 600 two-seater MGBs a week, with 80 percent of the total ouput going to the US.The MG Midget was phased out of production last fall. In 1979, more than 20,000 MGs were sold in the US.

The 18-year-old MGB is expected to be replaced by a newer Aston Martin design in about three years, according to the company, and will be the only car marketed by the group. Peter Sprague, chairman of the US distributor, Aston Martin Lagonda, heads up the save-the-MG group, one of several companies which approached BL in a bid to keep the MG sports car alive.

The MG nameplate has long been a favorite among sports- car enthusiasts around the world. When BL announced last September that it planned to halt production of the MG, the backlash in the US was swift and loud and some US car dealers even flew off to Britain in protest.

Indeed, many BL dealers count on the MG to stay afloat. If the MG deal with Aston Martin works out, the dealers stand to benefit because of the continuing supply of cars from the factory. Ultimately, the Aston Martin group will set up its own franchising operation, which could include many BL dealers as well.

Meanwhile, the economic slowdown is having a sharp impact on British car sales in the US. Sales for the first three months of 1980 were off 27 percent from those of a year ago, according to Jaguar Rover Triumph Inc., US subsidiary for BL. JRT sold some 42,000 cars for all of '79, of from 49,000 in 1978.

In addition, the British carmaker is having a hard time marketing its cars while several Japanese carmakers are selling hundreds of thousands of vehicles apiece in the US.

Far more than the lagging economy is at fault. In 1978 there was almost no Triumph production because of a switch in assembly plants in Britain. Last year the falloff was partly linked to a late startup on TR-7 output. Now the car market itself, with some exceptions, has almost completely eroded.

Looking ahead, the British remain buoyant, however. JRT is about to introduce the Rover 3500, which has been selling in Europe for several years. The company hasn't sold a Rover sedan in the US since 1971.

Also, a new Triumph, the TR-8, is scheduled for sale in early May.

"We're still looking for a spring turnaround," says a JRT spokesman. "But it didn't happen in March," he sighs.