NEW CHIEF MAKES MASSIVE CHANGES
By David Benson
ROVER, Britain’s State-owned car giant, lost nearly £205million in the first six months of the year, it was revealed yesterday. Canadian-born chairman Graham Day forecast that the company, formerly British Leyland,would make no profits for at least two years.
And he announced that Harold Musgrove, chairman of the group’s Austin Rover car division,was taking early retirement.
Mr Musgrove’s departure is part of a series of sweeping management changes. Austin Rover made half-year losses of £60 million and other divisions in the Rover Group were also heavily in the red. Leyland Trucks lost £27 million and Leyland Bus lost £6 million. There was an ‘extraordinary’ loss of £83 million arising from the planned sale of Leyland Bus and the Unipart spare parts section.
The group has received £2.2 billion of taxpayers money over the past ten years, and is likely to ask the government for more later this year. The only good news was that Land Rover made £8.7 million profit, and sales were up by 10 percent. Unipart made a £5.3 million profit on sales up 2 per cent.
Mr Day, who has had the top job for just five months, said the management changes were intended to streamline the organization. “We have to work hard, keep our noses clean and hope like hell we have jobs tomorrow.” He said, “I can’t guarantee anyone’s job , not even my own. I am not a miracle worker. In this business it may take five years to develop and introduce a new product. What we are trying to do is build on the strength we have.”
He admitted he was restructuring the company to centralize its management , the direct opposite of what Sir Michael Edwardes did to British Leyland in his final year as chief executive. Sir Michael separated the company into separate and largely autonomous divisions. Another casualty of the shake-out is Mark Snowden, Austin Rover’s Managing director of Product development , who masterminded the link-up with Honda of Japan to produce the new Rover 800 cars.