Part 3 The English Were Patient.
After the fuss and media fun and games of the BMW ‘takeover’ there followed an anticlimax akin the ‘phoney war’, that period of apprehension followed by not much happening after news of the war was famously announced by Chamberlain on BBC radio: 'I have to tell you now,' he said, 'this country is at war with Germany.' At the time in 1939 people were expecting German troops to begin parachuting into towns and villages some dressed as nuns according to Dads Army. (I don’t recall the Rover board showing any of these episodes to the BMW board though).
We waited and waited but – no Germans and then there was the Road show. All Rover group employees took it in turns to be shipped out to the various Social Clubs with suitable sized halls which existed around the company. At Longbridge, there was a large assembly hall on site where all were gathered too see a car launch style presentation with dry ice, flashing lights and presentations which explained the plan. This was summed up by the road show theme tune, Two Hearts, One Mind by Phil Collins. The two companies were to operate as separate organisations, that was the two hearts bit. But what about the ‘one mind’? That question remained unanswered. Amongst the shop floor, suspicion began to grow that BMW, like so many other aspiring owners were only interested in a few gems such as 4 by 4 technology and getting their hands on some of the iconic brands owned by Rover such as Mini, Triumph, Riley, MG etc. Amongst management there was incredulity that a company like BMW would not take the sane business decision to take the economies of scale that would accrue when the two businesses were merged. Just like in Dads Army, the Germans still did not come.
During this Time John Towers remained as head of Rover but it was widely understood that BMW thought that he was too close a supporter of Honda and Japanese manufacturing techniques and BMW were not very impressed with these. Then someone made the decision to allow a documentary team exclusive and intrusive access to the company to make ‘When Rover Met BMW’. This was seen as a daft decision by many, even in the department which dealt with the press and media. It achieved very little for the two organisations but as they were completing their filming and had most of the series edited, John Towers announced his departure. This caused pandemonium amongst the film crew and they hastily shot some additional footage and included a scene where Wolfgang Reitzler , then BMW number two to Berndt Pischetsreider, made an announcement of which John Towers was completely in the dark. The implication of the documentary was that they had expected this to be the outcome all along. The documentary did show however that Dr Reitzler appeared to be a very ambitious person – to say the least.
I can understand why so many in the company felt that John Towers should be the man to lead the team to run Rover after BMW pulled out. He was at the top of the organisation before BMW came along, when Rover was making profits and their products were overcoming their reputation for poor quality and old fashioned design. He was head of the company for the first few years after BMW took over and it was only after he had gone that things seemed to take a turn for the worse. That was when the Germans finally did arrive.
What then followed was a great British car and a huge squabble between two senior BMW executives which nearlt did for both campanies.
Tuesday 28 July 2009
Wednesday 22 July 2009
Two Hearts, One Loser. Don't mention the war.
The story of the death of Rover.
Part 2. Don’t mention the war.
After BMW has taken the chance to inspect the books and view the new products under development, particularly the new style Range Rover and the Freelander, it was time for the new owners to take possession of their assets. Again, the workforce at Rover welcomed the opportunity to now be part of a successful motor company with a tradition of motoring excellence and a passion for ‘drivers cars’, the boss of BMW Berndt Pischetsrieder was a self proclaimed ‘petrol head’ and related to Sir Alec Isigonis developer of the famous Mini. Things were looking good for the future prospects of the company and there was a general good feeling throughout the plants at Longbridge, Cowley, Solihull and Swindon.
Everyone waited, it was quite a eyrie time, everyone was expecting changes, new initiatives, products, flags, badges and work wear; new letterheads, business cards, company livery and language lessons but as days turned into weeks nothing, the only noticeable event was that there were no longer any Japanese Honda technicians and a marked decline in those learning Japanese. People then started to fear the worst.
Because of my position, I was one of the few that had anything to do with personnel from BMW in the very early days. BMW workers and stakeholders also wanted to know about us so I hosted a number of teams from BMW communications department who were preparing articles for their various internal publications and annual report. They all seemed enthusiastic, committed and friendly, they were good to work with and very keen to find out about both our current status and particularly our long history because the Austin 7 formed the basis of the beginning of BMW.
Senior executives of both companies, it was assumed, were getting their heads around the task of welding these two great businesses into one larger and more successful company. The benefits were obvious; common parts sourcing, greater economies of scale, fewer head office functions and shared marketing and branding were some of the ways that would make the larger organisation more successful and competitive – everyone wins, except perhaps a few senior board members who’s positions would become superfluous when the two companies became one, Rover had, after all been taken over.
What was really taking place, though, beggars belief. Yes the two senior managements were meeting but the senior Rover team had convinced BMW executives that there was still a great deal of antipathy towards Germany in the UK, that they should not be seen as Jack-booting into Rover, a company much identified as part of the British heritage. They were shown episodes of ‘Allo ‘Allo and even the famous clip from Faulty Towers where John Cleese goose steps around the hotel and is advised by Connie ‘Don’t mention the war’. This was all embarrassing rubbish designed primarily to save the jobs of those making the presentation – but the Germans swallowed it.
The breathtaking self interest of the Rover senior executives was not wholly to blame however. It seems that there was a significant camp within BMW who were so worried about preserving the BMW badge that they also wanted to keep the two companies as separate entities, not to take advantages of the economies of scale, not to create one new larger, more competitive organisation and not to make BMW products in the Rover plants in the UK and vice versa.
These were the first of a series of, to say the least, extraordinary decisions by BMW but more were to come.
Part 2. Don’t mention the war.
After BMW has taken the chance to inspect the books and view the new products under development, particularly the new style Range Rover and the Freelander, it was time for the new owners to take possession of their assets. Again, the workforce at Rover welcomed the opportunity to now be part of a successful motor company with a tradition of motoring excellence and a passion for ‘drivers cars’, the boss of BMW Berndt Pischetsrieder was a self proclaimed ‘petrol head’ and related to Sir Alec Isigonis developer of the famous Mini. Things were looking good for the future prospects of the company and there was a general good feeling throughout the plants at Longbridge, Cowley, Solihull and Swindon.
Everyone waited, it was quite a eyrie time, everyone was expecting changes, new initiatives, products, flags, badges and work wear; new letterheads, business cards, company livery and language lessons but as days turned into weeks nothing, the only noticeable event was that there were no longer any Japanese Honda technicians and a marked decline in those learning Japanese. People then started to fear the worst.
Because of my position, I was one of the few that had anything to do with personnel from BMW in the very early days. BMW workers and stakeholders also wanted to know about us so I hosted a number of teams from BMW communications department who were preparing articles for their various internal publications and annual report. They all seemed enthusiastic, committed and friendly, they were good to work with and very keen to find out about both our current status and particularly our long history because the Austin 7 formed the basis of the beginning of BMW.
Senior executives of both companies, it was assumed, were getting their heads around the task of welding these two great businesses into one larger and more successful company. The benefits were obvious; common parts sourcing, greater economies of scale, fewer head office functions and shared marketing and branding were some of the ways that would make the larger organisation more successful and competitive – everyone wins, except perhaps a few senior board members who’s positions would become superfluous when the two companies became one, Rover had, after all been taken over.
What was really taking place, though, beggars belief. Yes the two senior managements were meeting but the senior Rover team had convinced BMW executives that there was still a great deal of antipathy towards Germany in the UK, that they should not be seen as Jack-booting into Rover, a company much identified as part of the British heritage. They were shown episodes of ‘Allo ‘Allo and even the famous clip from Faulty Towers where John Cleese goose steps around the hotel and is advised by Connie ‘Don’t mention the war’. This was all embarrassing rubbish designed primarily to save the jobs of those making the presentation – but the Germans swallowed it.
The breathtaking self interest of the Rover senior executives was not wholly to blame however. It seems that there was a significant camp within BMW who were so worried about preserving the BMW badge that they also wanted to keep the two companies as separate entities, not to take advantages of the economies of scale, not to create one new larger, more competitive organisation and not to make BMW products in the Rover plants in the UK and vice versa.
These were the first of a series of, to say the least, extraordinary decisions by BMW but more were to come.
Two Hearts, One Loser.
The story of the death of Rover.
Part 1. Honda betrayed.
Raking over the past may or may not have any relevance for the future but there are some aspects of the Rover story that have to be told. Everyone knows that Rover was once nationalised and was sold off to British Aerospace by the Thatcher government. It may not have been a great ‘fit’ but at least it conformed to the Thatcher dogma and removed the company from the government’s hands. The buzz amongst the workforce at the time was quite positive with many thinking that all this new aerospace technology could give Rover some competitive advantage with their new models – they were to be disappointed. Many of Rovers best managers were poached into BAe but no expertise flowed the other way.
Although many commentators like to characterise Rover by association with the bad old days of the sixties and seventies, by the time it was off-loaded to BAe it had been through significant changes. Its long association with Honda had brought new manufacturing techniques addressing quality issues and bringing new models and a new approach to working practices. Industrial relations had never been better and the company did not loose one day to industrial action in its last 25 years. Referring to it’s new owner, one very senior Rover executive after spending some time with BAe said, “It reminds me of British Leyland in the seventies”.
However, BAe having helped out Mrs T by taking the company off the government’s hands suddenly discovered that motor manufacture was not part of its core business and touted Rover for sale. Now, at that time Honda still had a 20% stake in the company, Rover also held a 20% stake in Honda UK and, naturally after many successful years of cooperation and collaboration Honda felt that they should be given some consideration and offered to increase their stake. At the same time BMW appeared on the scene. BMW were than seen a quite a small company and felt under threat from the giants of the industry, Mercedes being a nightmare threat for BMW as there was and still is no love lost between the two German companies. Buying Rover doubled the size and capacity of BMW over night. Honda management were furious and rightly felt that their long standing relationship with Rover had been ignored, they were also concerned because it exposed their technology and new products to a competitor. Serious and angry exchanges took place at board level between Rover and Honda.
It may seen strange to some that two, well respected names in the motor industry were squabbling over ownership of Rover but this was at a time when the automotive industry was in a period of significant growth and Rover made a £90 million profit during the year – it was no lame duck, a political football perhaps.
What happened next was quite extraordinary.
Part 1. Honda betrayed.
Raking over the past may or may not have any relevance for the future but there are some aspects of the Rover story that have to be told. Everyone knows that Rover was once nationalised and was sold off to British Aerospace by the Thatcher government. It may not have been a great ‘fit’ but at least it conformed to the Thatcher dogma and removed the company from the government’s hands. The buzz amongst the workforce at the time was quite positive with many thinking that all this new aerospace technology could give Rover some competitive advantage with their new models – they were to be disappointed. Many of Rovers best managers were poached into BAe but no expertise flowed the other way.
Although many commentators like to characterise Rover by association with the bad old days of the sixties and seventies, by the time it was off-loaded to BAe it had been through significant changes. Its long association with Honda had brought new manufacturing techniques addressing quality issues and bringing new models and a new approach to working practices. Industrial relations had never been better and the company did not loose one day to industrial action in its last 25 years. Referring to it’s new owner, one very senior Rover executive after spending some time with BAe said, “It reminds me of British Leyland in the seventies”.
However, BAe having helped out Mrs T by taking the company off the government’s hands suddenly discovered that motor manufacture was not part of its core business and touted Rover for sale. Now, at that time Honda still had a 20% stake in the company, Rover also held a 20% stake in Honda UK and, naturally after many successful years of cooperation and collaboration Honda felt that they should be given some consideration and offered to increase their stake. At the same time BMW appeared on the scene. BMW were than seen a quite a small company and felt under threat from the giants of the industry, Mercedes being a nightmare threat for BMW as there was and still is no love lost between the two German companies. Buying Rover doubled the size and capacity of BMW over night. Honda management were furious and rightly felt that their long standing relationship with Rover had been ignored, they were also concerned because it exposed their technology and new products to a competitor. Serious and angry exchanges took place at board level between Rover and Honda.
It may seen strange to some that two, well respected names in the motor industry were squabbling over ownership of Rover but this was at a time when the automotive industry was in a period of significant growth and Rover made a £90 million profit during the year – it was no lame duck, a political football perhaps.
What happened next was quite extraordinary.
Monday 13 July 2009
McKinseys are not God
So, the CBI commissioned McKinseys to investigate the benefits of Nuclear powered and carbon captured coal versus renewables – and McKinseys came up with the fact that nuclear and coal were better for us! No doubt they took all the variables into consideration and their huge team of very expensive experts will have brought all their brain power to bear in a totally unbiased way.
Well, if this was the case I wonder if they could tell us all how much it costs to decommission a nuclear plant or are they assuming that the private generating company simply hands it back to us when they are finished making a profit from it. I would also like to know just how they factored in the costs of carbon capture coal power stations as I don’t think that such a thing exists yet.
These sods are at it again, putting shareholder value before everything else even our sustainable future. Don’t believe a word they say, they will do anything for a large fee.
Well, if this was the case I wonder if they could tell us all how much it costs to decommission a nuclear plant or are they assuming that the private generating company simply hands it back to us when they are finished making a profit from it. I would also like to know just how they factored in the costs of carbon capture coal power stations as I don’t think that such a thing exists yet.
These sods are at it again, putting shareholder value before everything else even our sustainable future. Don’t believe a word they say, they will do anything for a large fee.
Monday 6 July 2009
Longbridge Shame
My decision to leave Rover shortly after The Phoenix group took over Longbridge was based on my belief that the team had up to five years to find a partner or they would have to close. As this would put me in a position of being 55 years old and looking for a job I took the option which provided the best long term security for myself and my family and took the position I still hold at Warwick Business School.
I never doubted the commitment or the capability of John Towers and his team as I had worked with John since the eighties when I joined Land Rover. What I did doubt however was whether there were any serious motor manufacturers in the world who would not be pleased to see a plant with the capacity of Longbridge closed, as there was and still is too much capacity for motor manufacture, the results of which are all too visible right now.
Although they tried, the group could not find a partner even though discussions with a Chinese company went right up to the deadline. We all know the outcome; six thousand Longbridge workers out of work and more in the supply chain and what was left of the company went to China for peanuts anyway. We are still hearing promises about some form of production of the MG sports car but nothing seems to materialise from this either. The government did much the same as they are doing today, they announced loads of meaningless initiatives but said their hands were tied by European legislation regarding financial help – although they didn’t seem constrained by the same requirements when bailing out the financial system recently.
Then the UK government in its wisdom decided that they needed to hold an enquiry to discover what happened to the £300 million that was given to the company by BMW as a loan so that the Phoenix group could take a plant that BMW had announced was loosing £290 million a year off its hands. Now these are all large numbers so they need to be put into some context; to develop a new car and get it to the marketplace costs around £250 – 500 million, so in motor industry terms these numbers are not that big. Bearing this in mind, the Phoenix group made a good job of reducing the losses when a company with the reputation of BMW could not - but it could not invest in new models.
So, there seems to be some smoke screen being put up by the government about £40 million in salary and pensions taken by 4 executives over 5 years. I am speechless, they have spent £16 million to discover that the Phoenix executives who put their own money and reputations on the line were paid about a quarter of what the new chief executive of the bailed out RBS is going to be paid.
I looks to me like the government is trying to ensure that blame is directed towards the people who were trying to save the company rather than towards their own weak and ineffectual efforts. Longbridge was not the same company that hit all the news in the sixties and seventies and by the time it closed they had not lost one minute to industrial action in 25 years and the workforce had voted to accept some of the most modern and efficient working practices in Europe. It is a great pity that their efforts have gone largely unrecorded.
I never doubted the commitment or the capability of John Towers and his team as I had worked with John since the eighties when I joined Land Rover. What I did doubt however was whether there were any serious motor manufacturers in the world who would not be pleased to see a plant with the capacity of Longbridge closed, as there was and still is too much capacity for motor manufacture, the results of which are all too visible right now.
Although they tried, the group could not find a partner even though discussions with a Chinese company went right up to the deadline. We all know the outcome; six thousand Longbridge workers out of work and more in the supply chain and what was left of the company went to China for peanuts anyway. We are still hearing promises about some form of production of the MG sports car but nothing seems to materialise from this either. The government did much the same as they are doing today, they announced loads of meaningless initiatives but said their hands were tied by European legislation regarding financial help – although they didn’t seem constrained by the same requirements when bailing out the financial system recently.
Then the UK government in its wisdom decided that they needed to hold an enquiry to discover what happened to the £300 million that was given to the company by BMW as a loan so that the Phoenix group could take a plant that BMW had announced was loosing £290 million a year off its hands. Now these are all large numbers so they need to be put into some context; to develop a new car and get it to the marketplace costs around £250 – 500 million, so in motor industry terms these numbers are not that big. Bearing this in mind, the Phoenix group made a good job of reducing the losses when a company with the reputation of BMW could not - but it could not invest in new models.
So, there seems to be some smoke screen being put up by the government about £40 million in salary and pensions taken by 4 executives over 5 years. I am speechless, they have spent £16 million to discover that the Phoenix executives who put their own money and reputations on the line were paid about a quarter of what the new chief executive of the bailed out RBS is going to be paid.
I looks to me like the government is trying to ensure that blame is directed towards the people who were trying to save the company rather than towards their own weak and ineffectual efforts. Longbridge was not the same company that hit all the news in the sixties and seventies and by the time it closed they had not lost one minute to industrial action in 25 years and the workforce had voted to accept some of the most modern and efficient working practices in Europe. It is a great pity that their efforts have gone largely unrecorded.
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