Archive : Austin Rover: Were Ford Only Going Through The Motions?

Hugh Hunston examines the background to the marriage proposal that was probably always a non-starter

Yesterday’s announcement that news of a marriage between Ford and Austin Rover will not even reach the engagement stage has come as no real surprise to motor industry pundits. Talks prompted by the government, keen to find a private buyer for the remaining British volume car concern were only exploratory and set against a background of a European car production excess capacity of 2,000,000 units a year.

It was this factor which made many industry insiders question both the wisdom and the logic of Ford acquiring Austin Rover. Richard Feast, European editor of the influential Detroit industry publication Automotive News, commented: ‘Everyone talks to everyone else in this business. But I think Ford’s conversations about Austin Rover were prompted, not by Ford’s Detroit or European management, but by the British government acting as brokers. Ford have to look at any property which has a for sale sign outside it. I think they were just going through the motions. ‘

The only solid reasons for Ford wanting Austin Rover within their global empire could have been the use of the state owned firms market share to help fight off General Motors British sales threat, or the exploitation of names like Triumph and MG to create a marketing niche for Ford, Although Ford head the manufacturing new car sales league with 26% of the market compared to Austin Rover’s 18%, they could have used traditional established badges in the same way as their Lincoln and Mercury divisions operate in the USA.

Last year the upper echelons of management from Ford of Europe and the giant Fiat auto group spent several months discussing a major production and corporate merger aimed at saving costs, rationalising output and ranges, and creating one of the world’s biggest automotive powers.

In the end they never got further than holding hands and the courtship foundered. If it had succeeded the marriage would have led to major workforce reductions and possible plant closures. It is little surprise that Austin Rover executives and trade unionists united in their hostility towards the thought of Ford control. After recent years in which the Austin Rover model range has been hammered into a cohesive form, the workforce drastically reduced and sophisticated computer and robot technology installed at Cowley and Longbridge, Austin Rover personnel found it galling that Ford, perceived as the enemy should benefit from that transformation.

It now remains to be seen if Honda, the Japanese car builder, will now make a bid for increased involvement with Austin Rover, extending to a controlling interest. Since Austin Rover started building ‘cloned’ versions of Honda cars in Cowley in 1980 with Triumph Acclaim badges on them, the relationship between the two similarly sized firms has deepened.

The Rover 200 series, with increasing numbers of British components, followed the Triumph and in June the Rover 800, previously dubbed the XX, will be launched. It is likely that Whitehall’s decision to abort the Ford talks was strongly influenced by the effect Ford’s involvement would have had on the Rover 800. The car is seen by Austin Rover as their lifeline to a stronger export presence, including the lucrative U.S market.

Honda, aware of Ford’s 25% stake in Mazda, would not have been enthusiastic about continuing a reciprocal agreement whereby they build the Rover in Japan for the Japanese, Australian and Far East market, while British workers put together the Honda Legend version for sale in Europe.

At the moment Ford badged Mazda’s sell in Australia, the Far East and some Mediterranean countries. For Mazda 626 read Ford Telstar and 323 read Ford Laser. Had Ford taken over Austin Rover, the Maestro replacement codenamed YY developed in conjunction with Honda seemed doomed to remain on the drawing board. Ford themselves would have had to decided whether the same stable could hold the Metro, Maestro and Montego alongside the directly opposing Fiesta, Escort and Sierra. Rationalisation would have been inevitable.

Despite Austin Rover’s genuine recovery there is no lengthy queue of prospective buyers or, preferably, partners. PSA, the Peugeot Talbot Citroen Group, have already agreed to supply gearboxes for the Metro replacement, but a European combine seems unlikely.

The Paris controlled group is only now emerging from the traumas of absorbing Talbot. A closer link with Honda seems likely with perhaps British component suppliers also involved in an exercise of logical self preservation. But if Honda take a more active part in Austin Rover, it will be interesting to see the parliamentary reaction to Japanese involvement.

There is already a strong feeling that the Nissan plant due to come on stream this summer already provides a potentially destructive bridgehead into the British and European market from its Washington, Tyne and Wear base. The first 12 month production is for 24000 cars with predominantly Japanese components, while phase 2 is likely to go ahead, building up to an eventual double shift potential of 240,000 units a year.

This is with the very latest in technology and a hand picked workforce drilled in the Japanese work ethic, operating without the inertia inherent in established plants. Not to mention generous regional development aid. It is no co-incidence that the Swindon engine plant where Honda engines will be built has sufficient room to establish a unit capable of churning out complete cars.
Richard Feast commented: ‘It seems ironic that there was no great storm when the Japanese moved into Britain with ultimate control from Tokyo. Ford have 75 years of European car building experience and a strong European base, which is more than can be said for Nissan or Honda.”

Keith Adams


  1. Looking at this now I am coming to the view that perhaps this was a missed opportunity . At the time it was too easy to condemn the Thatcher government for selling out British industry to foreign interests , but the problem was that more and more new car buyers did not want a shiny new Maestro and Montego on their driveway , and good as the Metro was , its Mini derived powertrain was now ageing rapidly . Early reliability issues with both the Maestro and Montego had killed its fleet sales prospects and private buyers also took some convincing that they were desirable cars .
    The Thatcher government took the radical decision to build a new car industry by inviting the Japanese in .
    And the attempt to sell Austin Rover to Ford may have been part of this alternative strategy .
    The article mentions that Ford had a 25% stake in Mazda . Mazda were at the time , three years away from announcing the MX5 sportscar , a global success .
    By purchasing Austin Rover , Ford would have had access to the Triumph and MG marques, which they could have relaunched on a global basis and in the important US market. Remember that when the MGF finally appeared ,it was not sold in the important American market. Why this was so , is another matter for debate .
    The petty political furore over the botched sale of Austin Rover to Ford may have been a terrible own goal . ARG were condemned to continue to compete with Ford’s engineering, marketing and financial muscle with inadequate products , and the possibilty of a return to a lucrative market with the kind of niche product for which there was a demand was denied to them .
    Over to you.

  2. Its likely that Ford would have struggled to get anything out of Rover in the same way BMW did in the 1990s. Would a Pheonix 4 have been on hand to pick up the pieces in circa 1992 had Ford been succesful?

  3. A good point , but was Rover’s ultimate failure because it was competing in markets where sales were hard to come by ?
    It can’t have helped that it was owned by BMW who made similar executive type cars to the traditional Rover, and the BMW Z series sportscar was an MG rival . I wasn’t going to touch on the subject , but anyone trying to make a success of Rover would have tried to sell the MGF in the USA.

    • And at the time of the planned Ford deal, Ford made similar reps cars to Austin Rover. The same conflict would have existed.

  4. Ian Nicholls – above

    “…but anyone trying to make a success of Rover would have tried to sell the MGF in the USA.”

    Good point!!!!

  5. Even if the K-series could not have been made compliant with Federal regulations , an alternative could have been found . The will and determination to sell the MINI in the USA was there , the original engine was sourced from south America.
    Also there were legal issues resulting from MG’s pull out from the US market in the early 1980’s , but these were not unsurmountable for a company like BMW which was throwing stacks of cash at Longbridge and Cowley.
    Another question is what was the point of the Rover 75 ?
    Good car it may have been , but BMW didn’t need it , it was a cramped car with retro styling and its potential customers were by now buying BMW’s anyway .
    The funds devoted to the Rover 75 could have been used to create a sportscar for the American market.
    After BMW walked away from Rover , everybody blamed Longbridge , but it is quite clear that BMW made some major mistakes .
    It appears that Ford had the will to grow the MG brand , BMW did not and now we are witnessing MG struggling under Chinese ownership because the window of oppottunity has closed , because to most Americans , MG is something that went out with Jimmy Carter , disco and Starsky and Hutch .

  6. Perhaps the emergence of Austin-Rover-Ford should have seen Triumph finally become the dominant British brand. Triumph would have played to Ford’s strengths by giving it a premium brand with sporting credentials. In a way, Ford had the latter but not the former, and considering how important ‘premium’ has become today, and how damaging this has been to Ford, this could have been the start of another VAG, with Triumph and Aston Martin at the top of the group, and Ford, MG and Mazda at the bottom. So long as manufacturing remained at the British plants, and R&D divisions remain here, then I’d be all for such a project. If this had happened, then we would have been without a domestically owned industry (unless Jaguar could stay afloat as an independent, which I doubt), but I’m sure the industry would be stronger for it.

  7. ford only wanted landrover,as they got it in the end for the PAG venture also containing volvo and aston martin,ford missed a trick when they sold out to TATA.

  8. Even if Ford were only going through the motions, it would have been a worthwhile thing for them to do.

    In the process, they would have demanded full visibility of Austin Rover’s financial position, the build cost of all the cars, valuation of property holdings, pension liability etc.

    Even if they had no intention of actually buying, that’s exactly the sort of business data and information that would be priceless to Ford!!

    Remember, you’re in the business to make money, not to make cars.

  9. The best thing that happened to Austin Rover was the tie up with Honda, that gave them access to reliable drivetrains, and privatisation in 1988. No longer could Austin Rover keep running to the governmnent, in reality the taxpayer, when the latest new car failed or when there was a shortage of funds caused by a lack of sales. The company now had to behave like a private company and sell cars people wanted to buy or die.
    I think Graham Day taking over Austin Rover shortly before privatisation was the best thing that happened to the company. Out went the Leyland era management and the culture of demanding subsidies and in came a new approach where Rover would be the dominant brand producing aspirational cars that were both reliable and profitable. For a time this seemed to work, as a stream of new models in the early nineties turned Rover round and the link with Honda saved on development costs.

  10. Yes, The Acclaim, then Rover 200 SD3 + R8 range heralded a brighter era for Rover Group – not forgetting the 600 & 800 executive cars.

    I always thought Rover would have been more successful had it been taken over by Honda.

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