Essay : BMW – Right owner, wrong boss?
You’ll find that spending time reading Ian Nicholls’ excellent set of stories about Jaguar’s fortunes in the 1990s will probably get you thinking about Rover and its time spent under BMW’s wing – and the contrast in style between the Americans and Germans. When the deal between BMW and Rover’s parent company, British Aerospace, was signed in January 1994, few people would have believed that, within six years, the dream would be over – MG and Rover would be sold to a Midlands-based management buy-out and Land Rover would be reunited with Jaguar, by being sold to Ford.
It all looked so promising in 1994. BMW Chairman, Bernd Pischetsrieder (above), was a staunch Anglophile, and had deep confidence in Rover’s ability to do its bit, be a success in its market sectors and allow the BMW Group to grow into a million-plus cars a year operation. With scale would come survival in what was proving to be a tough time in European car manufacturing. As the great-nephew of Alec Issigonis, Pischetsrieder saw himself as a natural figurehead for Rover, someone who wanted its rich heritage and glorious legacy marques to shine though into the next millennium.
This was not a view shared with BMW’s then-engineering supremo – and one-time heir apparent to the chairmanship – Wolfgang Reitzle (below). His view of Rover was that the UK operation should have seen the expansion of MINI into a small/medium car brand in its own right, MG manoeuvred into a larger sports car brand, Land Rover expanded, with the jewel-in-the-crown Range Rover pushed into the top market slot, as a British alternative to the Mercedes-Benz S-Class or Audi A8. He did not want any overlap between Rover and BMW and, equally, he wanted to steer clear of the mass market.
You’ll notice there’s no sign of Rover in there. No, because Reitzle believed that it wasn’t needed – and that Longbridge could have been made viable with the addition of UK-produced BMW 2 and 3 Series models alongside a larger MINI range. As far as Reitzle was concerned, Rover’s continued existence in the volume car business was simply tarnishing the valuable brands in the UK portfolio: MINI, MG and Land Rover. As Pischetsrieder and Reitzle had been rivals for the top job, and the latter lost out in 1993, the seething Wolfgang was keen to distance himself from Rover. He was all too happy to see it run by the UK team with Pischetsrieder’s blessing.
As well as having a huge amount of trust in the capabilities of the UK management team, headed by John Towers, Chairman Pischetsrieder backed Rover fully to have the eventual ability to reinvigorate its model range with BMW’s generous investment. He ensured that Honda remained on-side, allowing the continued manufacture of the existing Anglo-Japanese range, while pushing the UK team into coming up with a viable future product plan.
This was not actually as straightforward as it seemed in 1994-’95.
In January 1994, the product range flattered to deceive and there were problems across the board:
- The Mini was selling in small but steady numbers and enjoyed a strong image, especially in Japan, France and Italy, but was in desperate need of replacement.
- The Metro/100 was still selling strongly in the UK but, following the collapse of talks with Ford on a Ka/Metro Joint Venture project, its future looked far from certain.
- The 200/400 was months away from being replaced in a confusing two-prong strategy that would see the R3-generation 200 straddling the Metro and lower reaches of the old 200 (R8) range. This car was initially penned as a Metro replacement, combining R8 underpinnings, UK styling, and a Maestro rear end.
- The 400 (R8) was still selling strongly, but would be replaced by the Honda-based 400 (HHR) in both hatchback and (later) saloon form.
- The 600 had been launched in 1993, and was Rover’s most desirable model at the time. It was also the most closely related to Honda, and tied to both costly royalty payments and a deal that precluded it from being sold in the USA.
- The 800 has been facelifted in 1991, but was based on Honda underpinnings not used in any current models. It had also recently been – humiliatingly – withdrawn from the US market in Sterling form.
- The MG RV8 had recently been phased out, and the MGF was months from introduction. It was part of a Joint Venture with engineering group, Mayflower, which would supply the bodies.
- The Land Rover Defender remained in production and the Discovery was selling strongly. Build quality would be these two cars’ most apparent Achilles’ Heels.
- The Range Rover was on the wind-down phase in readiness for the launch of the upcoming Project 38a, and despite being in production since 1970, its image was still riding high.
- The Maestro and Montego – yes, both were still in production, much to Bernd Pischetsrieder’s surprise.
Although any range photo (above) of the Rover Group’s line-up would have looked strong in 1994, the reality was that it was hugely compromised, both by its dependence on Honda and the effects of years of underinvestment by former owner, British Aerospace. The future model programme was looking quite bleak, and it’s telling that Rover and BAe’s bigwigs had been gently putting out the feelers for a new owner since 1991-’92, when the parent company’s finances were struggling the most with the cash-hungry carmaker. That’s why BMW’s £800m buy-out really was great news for BAe.
The contrast between Ford/Jaguar and BMW/Rover became most apparent in the early months following their respective buy-outs. Where Ford wasted little time installing its own management at the top of Jaguar in 1990, and quite publicly made it clear the leaping cat needed significant development in its factories and product line-up, BMW appeared to do very little in 1994, simply saying it trusted Rover, and that there would definitely be new Minis, Rovers and Land Rovers.
Wolfgang Reitzle was not really that interested in steering Rover Group towards BMW, so it was down to UK boss John Towers and his team to come up with a cohesive model development plan – and that meant that new model development would take place in the UK, with regular updates fed back to Munich.
The brilliant Rover 200/400’s replacements weren’t nearly as successful, and needed
axeing far too soon after they were launched
The trouble was that there were conflicting issues, and all needed rectifying sooner, rather than later. For one, Rover’s sales were already beginning downward slide after a strong 1989-’91 and, as BMW had bought the company for volume, the most logical first step would be to concentrate on the mass-market mid-range cars.
However, the new R3 and HHR 200/400 ‘Portfolio’ models were nearing introduction, and Honda had agreed to stay onside (thanks to some impressive manoeuvring by John Towers) in allowing BMW/Rover to continue building them with lower royalty payments. The trouble was no one at the time could have predicted that they would not be the success that the outgoing R8 had been.
So, with the midliners likely to stay around until the millennium, the Rover 600/800 and Mini replacements were pushed further up the queue. This was an interesting strategy and, again, brought about by necessity, rather than desire. The Rover 800 was already pretty much past it in 1994 and, as a flagship product, it was not performing at all well.
The 600, on the other hand, was not making much money for Rover and needed replacing for logistical rather than marketing reasons – so, what became the Rover 75 (R40) was pushed into the job of replacing both, even though it was initially conceived as a replacement purely for the 600.
The Mini (R50) replacement programme was really just finding its feet in 1994, and it wouldn’t be until November 1995 that a proper strategy was signed off. As for the 200/400’s replacement (R30), that was kicked into the long grass in the face of an approaching storm in Europe, centred in Germany. It would not see the light of day, other than minor elements of it finding its way into BMW’s E87-generation 1 Series.
When John Towers memorably quit his job at Rover on the 1995 TV programme When Rover met BMW, it was Wolfgang Reitzle who was drafted in as his replacement as the UK Chairman. Seen as a hatchet man by the UK unions and workers, an ever-strengthening Reitzle would be able to exert his influence on Rover – even if his plans for it would never see the light of day.
In the mid-1990s, this overpriced pairing helped seal Rover’s fate
Between 1994 and 1997, Rover’s sales had been falling away. In the UK, market share had dipped to below 10 per cent for the first time, while in Europe, it was fading even more quickly. This was manifestly down to both the Rover 200 and 400’s inability to match the success of their predecessors – partly because they were less appealing, but mainly because they were both priced way above their ability – the supermini-sized 200 had been given an Escort-sized price tag, and the 400 had been priced to compete with the Ford Mondeo.
The Mini remained popular and the 100 was doing its bit, but Rover wasn’t buttering its bread thanks to the underperfoming 200/400. Bernd Pischetsrieder was being proved as wrong as Reitzle had looked increasingly correct. The fact that Land Rover was still making huge amounts of money at the time (even if it was largely being negated by massive warranty costs) also showed Reitzle was right. He threw much of his energy into the L322 Range Rover – ensuring that it would be the flagship that Rover desperately needed. A shame it would end up being Ford that would benefit…
The slide from the 1997 Frankfurt reveal of the Mini (above) to the 1999 talks with Alchemy and the eventual sale to Phoenix in 2000 was shockingly swift after what appears to have been a fair bit of intransigence under Pischetsrieder and Towers in those early days.
That, therefore, brings us back to the original question posed at the top of the feature – was the BMW takeover a good thing that was badly managed? After all, it took Ford more than a decade to get Jaguar back on to the path of recovery – and, even then, it took a couple of wrong turns before ending up where we are today.
We now have a range of MINIs based on a BMW platform shared with the 2 Series Active Tourer, which takes in the old supermini and mid-range markets. Although looks aren’t on its side, the F56-generation MINI and its Clubman and Countryman cousins easily span the market sectors the old Mini Cooper, Metro/100, 200 and 400 occupied. We also have a range of Land Rovers which now spans the traditional Rover 600 and 800 sectors – with the Range Rover now sitting unchallenged at the top of a very impressive model line-up.
Ironically, and to prove that what goes around comes around in the motor industry, it was Reitzle who latterly oversaw Ford’s development of the L322-series Range Rover under Ford’s ownership, as the Chairman of the Premier Auto Group.
Would BMW’s tenure of Rover have been more productive and long-lasting had it taken Reitzle’s course in the first place instead of the one chosen by the well-meaning, but ultimately misguided Pischetsrider, who led us to the lovely (but unsuccessful) Rover 75 and the retro that came with it? Would Reitzle’s idea of being more brutal with with Rover in a manner similar to Ford and Jaguar have been more effective?
Would swiftly killing the Rovers to supplant them with UK-made BMWs while the MINI line-up expanded and Land Rover blossomed have been the more painful, but ultimately longer-lasting, ideal for the British car company? Certainly, it would appear that this vision for the UK marques has played out in the 2010s exactly as Reitzle had envisaged.