Outlook: New master, but Rover's still a dog
Thursday 03 December 1998
In those days Rover answered to a different name, of course, but it was still a bit of a dog even then. Over the years the business has had many masters and many incarnations - BMC, British Leyland, BL, Austin Rover. With every change of owner comes a cosmetic facelift but the root problem is never tackled.
Since BMW snatched hold of the lead five years ago it has invested the thick end of pounds 2.5bn, only to be repaid with mounting losses. For the last three years, it has been hiding behind the excuse of an appreciating pound to explain Rover's stubborn refusal to come to heel and begin to turn a profit.
But now the gloves are off and the choke chain is on. Faced with the prospect of watching Longbridge close, the unions have agreed to 2,500 job losses, an effective pay freeze and the end of overtime payments.
The new Mini has been secured for Longbridge without government aid but if the plant wants to have a long-term future and build the replacement for the Rover 200-400 series, then the taxpayer will have to fork out at least pounds 200m all the same.
Even then, the BMW chairman, Bernd Pischetsrieder, doubts whether Rover can close the 30 per cent productivity gap with BMW's plants in Germany unless it switches yet more of its pounds 4bn component spend abroad.
Clearly this is not the sort of environment that appealed to Dr Walter Hasselkus, the urbane and rather charming outgoing Rover chairman. In his place, BMW has appointed Professor Werner Samann, who used to run the group's engines and chassis business. A professor he may be, but the word is that the new Rover chairman has been schooled at the rougher end of the car business.
Still, he has an uphill task, even after inheriting a dowry of cost savings worth pounds 150m a year. Mr Pischetsrieder talks enthusiastically about Rover making a 7 per cent return on sales one day but with exchange rates still against it, just break-even point looks a distant dream.
Rover's new professor probably has two years to produce results. If he fails, then next time it will surely be Mr Pischetsrieder's neck on the chopping block.
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
- 1 Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
- 2 Scottish referendum results: David Cameron set to unveil major devolution of powers to England
- 3 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 4 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: YouGov final prediction puts No campaign 8 points ahead - but Yes team remains optimistic
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...
Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...