Archive : The Rover Takeover

The Rover Takeover: Factory staff shed few tears over ownership: The Workers
Tuesday, 1 February 1994

TONY HALLATT, 57, a fusion welder, has worked at the Cowley plant for more than 40 years, his father was there for 30 years – two generations spanning the rise and demise of an industry. He has seen his first employer, Pressed Steel become part of British Leyland, then Rover, then British Aerospace, now BMW.

Like the cars their new German owners make, sentiment for the British car industry is a luxury Rover workers feel they cannot afford. According to Mr Hallatt: ‘Most people will say if this takeover keeps them in work, then it’s a good thing. Nobody is going to turn round and say I won’t work for a German firm, if that means he is out of the door.’

Between 1980 and 1990, 20,000 of the 25,000 jobs at Cowley went out the door. The factory’s front gate faces a building site covered in piles of sand, a redevelopment of what used to be Lord Nuffield’s Morris Motors factory, turning out Morris Cowley’s, then Minors and finally seing the name disappear in the early 80s with the Ital. The destruction of the British motor industry is something the community regrets, but has grown used to.

Rover’s workers were summoned to meetings soon after they clocked on at 7am yesterday. Their managers told them the news which had already been leaked on local radio and spread like wildfire around the factory. A decade or two ago there would have been a walk-out, and a mass meeting, while the management waited anxiously at their desks. Yesterday they asked a few questions, and settled back into their jobs. The leak angered them more than the news itself.

The workers have come to view speculation over new owners like potential suitors in an arranged marriage, not undervaluing themselves. ‘If Honda has wanted us, it has had plenty of chance to make a bid,’ Mr Hallatt said. And they are proud that at least they were desirable.

‘Five years ago nobody was interested in purchasing Rover. There was nothing here anybody wanted. We were facing a bleak future. BMW might be the right answer for us,’ Mr Hallatt said.

‘It shows we make good cars,’ Fred Willett, 40, said.

At their meetings yesterday morning, the workforce were assured that Rover’s Five Year plan would go ahead, that BMW saw the range of luxury cars at Rover complementing BMWs. Some of the workforce were privately sceptical that the Rover range would continue intact, but most were happy enough at the prospect of building BMWs in Cowley if that was what the Germans wanted.

John Power, Lord Mayor of Oxford, used to work at Cowley, and predicts jobs will go: ‘Every time there’s been one of these takeovers at Cowley, we’ve lost jobs.’

A woman who runs the newsagent opposite the works sells fewer papers than she used to. She declined to give her name because her business depends on the goodwill of the owners. But she voiced a sneaking regret about BMW: ‘It’s a pity they’re not British,’ she confided.

The Rover Takeover: Mercedes Benz loses ground on its arch-rival: The Market: Bavarian company steals a march on Mercedes

Tuesday, 1 February 1994

FLASHING an £800m cheque, BMW yesterday stole a march on its German arch rival, Mercedes Benz.

Not only has BMW effectively doubled its European market share, but it has acquired overnight through Rover, a presence in two areas which it judged are strategically vital for its development – small cars and off-road, utility vehicles.

‘We had the choice of trying to grow step-by-step, expanding into these areas, or taking the fast track. Rover has brought us exactly what we knew we had to do,’ Volker Doppelfeld, BMW’s chief financial officer, said in Munich yesterday.

The harshness of the recession and increasingly tough competition, notably from Japanese producers, shocked BMW and Mercedes into a fundamental rethink of how they could strengthen their positions by broadening appeal. Both decided they needed to also concentrate on building smaller cars, below their respective up-market ranges, and on the rapidly growing four-wheel drive market.

But while Mercedes has opted to do this under its own steam, planning a new factory in the United States for off-road vehicles and opting to build a new city car in Germany, BMW has taken over the only international car producer that offered these models off-the-shelf.

‘Just to develop and build a new model in BMW’s existing range would have cost more than pounds 800m paid for taking over Rover,’ Mr Doppelfeld said. In BMW’s view there are far more synergies than potential conflicts, particularly at both ends of the Rover market that it is really interested in. Land-Rover and Range Rover offer it well established off-road vehicles with an excellent reputation that fit easily alongside BMW’s image. At the lower end, it sees the chance to develop Rover’s small cars notably the 100 and 200 series as the best way of tackling head-on the mass market, and the likes of Volkswagen, Fiat and General Motors. BMW has developed its own city car concept, the E1, but this is only seen as a potential niche product. It sees its greatest asset as its strong international distribution network.

In saying it has no intention of extending its current model range BMW has indicated that its marketing expansion will be through developing those Rover cars that complement its interests. Rover’s Honda link-up is something BMW has judged it can live with, particularly as the Japanese co-operation is not in those car segments it is most interested in, small cars and off-road.

Keith Adams
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