My fear is that a major collaboration with a major car maker would pull us back to the old habits that took years rather than months to do things that should only take months

John Towers

And already, the British car maker's new boss is talking about breaking even, perhaps as early as 2002.

But getting back in the black seems like a mindboggling task for anyone who has been listening to financial analysts during the past year, even though MG Rover has slashed its losses from �750m to less than �300m.

Mr Towers says many analysts have no idea.

"I've said to people time and time again that there've been an awful lot of wise men outside of this business telling people what's going to happen to this business," he said.

"Unfortunately, they're the same wise men who told us to invest in the dot.com miracles about a year ago, and more latterly to invest in the mobile telecommunications boom."

City analysts

But despite his disregard for the "nay-sayers", Mr Towers does spend a lot of time trying to win over the City analysts.

Partnership with a large car maker would cramp our style.

Peculiar, perhaps, for the boss of a privately owned company with no plans to float on the stock market.

But Mr Towers insists that "it matters what the City thinks because the press tend to report what the City thinks. And what is reported in the press matters to us because our customers read it".

Investment

MG Rover aims to survive as a medium-sized car maker, selling about 200,000 cars a year.

Mr Towers insists that the new MGs are more than just re-badged Rovers.

About half the cars are exported, with the proportion likely to grow as "the territorial movement is certainly going to be upwards", said Mr Towers.

"Remember the starting point. Remember that �3bn worth of investment was poured into this business [by BMW]."

"The platforms, the cars, they were all re-engineered. The Rover 75 was brand new," said an enthusiastic Mr Towers, clearly pleased with his consortium's �10 bargain.

"Masses of investment poured into the model range gave us a terrific starting point. It created something else as well, though. It created car platforms that were very, very flexible."

So the car maker has adapted existing Rover chassis to launch a whole range of similar cars under the MG brand.

But Mr Towers insists that MG Rover has done more than that: "It's not just slapping badges on cars; it's fundamental engineering changes."

New models

Even more fundamental engineering changes could come about in the future as the company starts investing in new car models.

If we do get ourselves [back] into the position where the butcher, the baker, the candle stick maker and the finance director's wife is telling us what shape a wing mirror should be, then that would be an absolute disaster

John Towers

Thanks to the group's strict cash-flow management over the past year, "we can now fund our medium term investment program, which means the replacement of the medium cars, the Rover 45 and the Rover 25", Mr Towers said.

"So in terms of the next four or five years, there is absolutely no problem whatsoever," Mr Towers insisted.

Take-over threat

Such bold talk comes as a surprise to many observers, who had predicted that a cash-starved MG Rover would be gobbled up by one of the truly large automotive groups.

Towers: In terms of the next four or five years, there is absolutely no problem.

A year ago, Mr Towers shared this view.

He still thinks MG Rover will chose a partnership rather than blow all its cash on new model development.

But he has changed his mind about who the prospective partners are.

Partners rejected

"I no longer think that that would be a partnership with a car manufacturer.

"My fear is that a major collaboration with a major car maker would pull us back to the old habits that took years rather than months to do things that should only take months," Mr Towers said.

"And if we do get ourselves [back] into the position where the butcher, the baker, the candle stick maker and the finance director's wife is telling us what shape a wing mirror should be, then that would be an absolute disaster. But that happens to be the way the car industry tends to do it."

Car parts makers

Mr Towers sees components suppliers as much more nimble and flexible.

There've been an awful lot of wise men outside of this business telling people what's going to happen

"I think there's a lot of good sense in having a partnership with component suppliers," Mr Towers said.

There are precedents for such partnerships. The MG-F was developed jointly with automotive group Mayflower, and the original model for what later became Land Rover's Freelander was supposed to be developed together with a small Finnish company - although BMW scrapped these plans when it bought Rover.

Such an alliance could help slash costs, which are already down by �600m.

The company has removed discounts for fleet buyers and decided to only sell cars where it makes money on every vehicle, thereby making more profits despite selling fewer cars.

It has also worked hard to squeeze material costs, to reduce overheads and to improve efficiency, but without getting bogged down with trying to reduce the time each worker spends on each car.

This is perhaps a surprising statement coming from the boss of a car factory whose workers are just half as productive as its rivals.

Mr Towers acknowledges that MG Rover is not the most productive car maker in the world, but he insists it is not a particularly low productivity group.

And, overall, he has different priorities.

He is keen to avoid the paradox of an industry that seems to be willing to "spend hundreds of millions of pounds trying to trim a few minutes off the assembly time of a car, and then spend three-quarters of a million pounds taking a photograph of its cars in South Africa or the Caribbean".