Archive : How the Rover begging bowl became a pot of gold

By David Benson

Canadian born Graham Day, chairman of the State-owned Rover Group, has achieved what most pundits believed was impossible. After just 18 months in the least enviable job in the motor industry he has turned It around from massive losses to t he first profit since 1983. And he has made Prime Minister Thatcher’s privatising the once ailing and much maligned motor giant a real possibility within the life of the present Government.

Early In the New Year this 54-year-old former Professor of Business administration will prepare a report for Trade and Industry Secretary Lord Young outliningg a stock exchange flotation for late 1989. It will be the product of tough decision making, a newly motivated workforce, increased production and hard and fast agreements which will bring the company’s factories near to full potential .

Day says: “For me the ideology is not the private sector. It Is the avoidance of people eating at the public trough.”

Rover Group has in 1987 proved that it need no longer queue with the others at that trough. The company, in the past, has had a fair old guzzle at the taxpayer since December 1974 when Lord Stokes went cap in hand to Prime Minister Harold Wilson and said that tbe jobs of British Leyland’s 180,000 -workforce were on the line. British Leyland, BL and now Rover Group – call it what you will – has received cash handouts from Labour and Conservative Governments totalling some £3 billion.

Only ten months ago the Government injected £680 million to wipe out company debts and clean up Leyland trucks balance so Day could hive it off to Dutch DAF and stem the £2 million a week the division was losing. Now the Austin Rover volume car division is set to put the whole group back into profit through increased sales, exports and higher production. In 1987 production at Cowley and Longbrldge rose by 14.5 per cent. Some 468,300 cars were manufactured compared with 408,600 in 1986 – extra production worth nearly £500 million in the showrooms of the world.

or the revival is world wide. Exports are up in Europe, the evergreen Mini and locally assembled Sterling are selling in Japan and the company’s return to the vital US market will be celebrated with the sale of 20,000 sterlings in its first full year. The biggest boost for Austin Rover has been the joint venture agreement signed with Honda of Japan by Sir Michael Edwardes in Tokyo in December 1979. Austin Rover produced 80,200 of the Honda derived Rover 200 series in 1987, it also turned out 57,500 sterlings and Rover 800s and assembled several thousand Honda Legends at Cowley.

Now Day has signed a further deal with the Japanese for the jointly engineered medium-sized car—codenamed AR8— which will challenge the Ford Sierra and Vauxhall Cavalier in the medium car sector in 1989. Day has one rule: “If you love your customer to death you can’t go far wrong.”

Keith Adams

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