Rover fears as BMW chief faces the axe
Friday 05 February 1999
The threat to Mr Pischestrieder has raised fresh concerns about the future of Rover's Longbridge plant in Birmingham. It was saved from closure last year only after unions agreed to 2,500 job losses and a pounds 150m a year cost- saving plan brokered by the BMW chairman.
Mr Pischetsrieder, who bought Rover from British Aerospace in 1994 for pounds 800m and has been its greatest supporter on the BMW board, is tipped to be replaced by Wolfgang Reitzle, his deputy chairman.
Although both BMW and the Quandt family, which own 45 per cent of the shares, denied that such a coup was imminent, shares in the company leapt by 11 per cent on expectations that he would be shown the door at today's meeting of the supervisory board in Munich.
The BMW supervisory board and the Quandt family are said to have lost patience with Mr Pischetsrieder, who has failed to turn Rover into profit despite pumping pounds 3bn into it in the past five years.
Mr Reitzle, who reluctantly accepted the job as Rover chairman for a brief period following the takeover, is known to have opposed Mr Pischestrieder's strategy for turning the ailing car maker around. He is thought much more likely to close Longbridge and switch production of a planned medium-sized car to replace the Rover 200-400 series elsewhere, possibly Hungary.
Last night Tony Woodley, chief motor industry negotiator for the Transport and General Workers' Union, expressed "great concern" about the BMW chairman's fate. "While we would be disappointed if Mr Pischestrieder leaves, we would expect - indeed we would demand - that the recent confirmation of new models and new investment, particularly at Longbridge, is honoured."
BMW confirmed that its supervisory board is to meet today but refused to comment on speculation about Mr Pischetsrieder's rumoured departure, insisting that "personal matters" were not on the agenda.
Behind the boardroom in-fighting is a tussle over the strategy of the BMW group andwhether it can remain independent. It has already received a merger approach from Fiat and Ford was rumoured to be preparing a bid before it unveiled its $6.5bn takeover of Volvo.
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