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.
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 3 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 4 Britney Spears sings 'Alien' without Auto-Tune in embarrassing leaked audio clip
- 5 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Instagram of US airport security chiefs: Lipstick knives and IED training kits among items seized
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Mick Jagger denies being World Cup curse and reason for Brazil’s embarrassing defeat
Israel-Gaza crisis: ‘We just want it to end… We don’t deserve to live like this’
Israel-Gaza crisis: Eight killed in Gaza Strip cafe while watching World Cup semi-final
Sustained immigration has not harmed Britons' employment, say government advisers
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
There’s a nasty smell in the political air – and it’s coming from the Tories
iJobs Money & Business
£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...
£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...
£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...
£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...