The launch of Rover`s flagship 75 model at the Birmingham Motor Show two years ago was undermined by BMW executives — led by their then chairman Bernd Pischetsrieder — to put pressure on Rover unions, writes the UK`s Financial Times (12/12/00).
The FT says that the German auto-maker was at that time in negotiations to demand productivity alongside concessions from Rover employees. Citing Mr Pischetsrieder, the FT reports that there was no chance of getting the unions to do this without a crisis, so a crisis was manufactured.
Mr Pischetsrieder — now a board member at the Volkswagen Group in charge of Seat — is reported to be partly blaming himself, referring to the subsequent contraction and sell-off of Rover. He said that the Rover business could have been made a success by BMW if the brand image had not been damaged in part by the German car-maker’s actions at the Rover 75 launch.
Hours after this launch, Mr Pischetsrieder attacked Rover at BMW`s motor show press conference, warning that it was heading towards financial difficulty — which could result in the closure of Longbridge and 14,000 job losses — and demanded cost cuts from Rover suppliers and increased productivity from its workers.
The FT reports that according to German accounting standards, Rover was incurring losses of £600m ($US870 million) per year with both the board at BMW and Mr Pischetsrieder coming under pressure from shareholders to act.
Mr Pischetsrieder acknowledged that he and BMW were acting intentionally to create an air of crisis to coincide with the launch of the 75 model, by far the most important model for Rover within the last 10 years, says the FT.
On the issue of investment in the early days of BMW`s ownership of Rover, the ex-BMW chairman said that if there had been the slightest idea that the pound would go up by 30%, different decisions would have been made.