CODE 18-77
normally would act as the lead co-ordinator in an endeavour to influence the supply of cars and control systems from one national source.
11. British consultants are advising in the Baghdad system. If Metro-Cammell can retain a sole supply situation in Hong Kong, it is considered that this will enhance their
chances
of securing the TUEN LUN extension, and place them in a strong position for Singapore. The 3 systems referred to are not expected to move for ard until the second half of the 1980s. Metro-Cammell have also recently led a British Group proposal for an MPR system in Lagos.
12. If Metro-Cammell is forced to close because of the purchase gap caused by the LT programme, an experienced exporter will be lost, and the question of who would service LT's future requirements would arise. It should also be remembered that Metro Cammell have supplied the cars for the Tyne & Wear and Glasgow MTR systems.
13.
The possibility of BREL assuming Metro-Cammell's role if the company were to fail must be considered, but given the present governments desire to entourage privatisation, allowing a well managed private sector company with a good track record to be absorbed by a nationalised industry does not appear to be a sensible suggestion.
14. Metro-Cammell is a wholly owned subsidiary within the Laird Group, which itself is financially strong and has recently expanded its operations into the United States raising funds through 2 rights issues. Over the last 3 years Metro-Cammell has paid dividends totalling some £13.5m to its parent. It could be argued that it would now be appropriate for the Laird Group to support its subsidiary through its difficult iminent trading period, and I feel that they should be pressed to do this if not completely at least in part.
15. I feel sure however that Laird's response would be that they are not prepared to give any commitment to financing Metro-Cammell in the short term unless they can be assured over the company's feature in the long term. I judge this to rest on securing a measure of BR business to see them through the 1980s. Therefore I believe it urgently necessary for a commitment to be given that arrangements will be made for BR DEMU business to be offered to them on a time scale and of sufficient proportion to enable them to survive their mid 1980 problems, subject of course to their quotations for this business being acceptable.
STRICTLY COMMERCIAL IN CONFIDENCE
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