The UK government’s surprise £500 million loan guarantee for Jaguar Land Rover investment comes exactly 20 years after the then-Labour administration turned down BMW’s request for aid to try and save Rover from the scrapheap.
In March 1999, the BMW board was shocked when government ministers rejected the request for £240m, much of which would have been spent levelling and rebuilding Longbridge ahead of the investment in the new Mini and new R30 compact hatch. After all, the sum was a fraction of what BMW had poured into the Rover Group over five years.
With 11,500 people then employed directly at Longbridge, BMW bosses expected the government to understand how finely balanced Rover’s future was – but the trade and industry secretary offered just £100m, with another £30m or so coming from local government.
BMW revealed that Rover had lost £645m in 1998 (£1.12 billion in today’s money) and hoped that it could convince the government to up the offer. But by April, the EU was showing an interest in the aid request, making it possible that Rover would get nothing.
BMW spent May to September trying to work out a way of hanging on to Rover but eventually gave up. When it announced in March 2000 that the Rover Group – which employed 38,000 people – would be broken up and sold, it was front-page news for weeks.
The UK government expressed astonishment at the move. BMW’s retort was that it had warned them it was “five minutes to midnight” for Rover.
Obviously, JLR is nothing like as fragile as the Rover Group, but Whitehall clearly recalled what had happened in 1999 and how a well-judged loan could help avoid a domestic industrial meltdown.
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leaving out the period of
leaving out the period of british leyland etc...At some point. Rover was majority owned by BAe, with Honda around 20 something percent, during its partnership with Honda, Rover was actually doing well and had gained alot of mass manufacturing and technical know-how from Honda, at some point Honda was approached to aquire more of Rover but Honda refused becasue essentialy it wanted to keep Rover British. BAe got greedy when BMW approached, and BAe offloaded it's shares to BMW. Its true that BMW only wanted to get its hands on the Mini brand and 4x4 tech and mass manufacturing tech, remember BMW were still niche and lots of quality issues srtill.. Asset stripping was also art of it.. When it acquired Rover, Honda were furious and sold its stake in Rover.. BMW killed off development programmes in ROver, it never wanted to make Rover successful, never.. i firmly beleive that if Rover had remained with Honda, ( not including BAe), Rover would still be in British hands today.. Maybe the goverment shoukd have nudged or help out somehow , but certianly not to dump money at BMW, as the same outcome would have occured but with BMW running off and laughing all the way to the bank
The Rover 75 was NOT met with
The Rover 75 was NOT met with a hostile media, far from it, it was lauded as a brilliant car, it handled extremely well, was old school, which at the time was the in thing, it was ful of real leather and real wood, it had good engines, (once sorted), and even today you still see loads of 75/ZT models around, where are the equivilant cars from other brands.I suggest you look back on all the motoring tests in 1999 and they are all stating how good this car was, it was teh morons on the stand on launch day that did for it, the diatribe of finance, exchange rates and so on, and the blatent scrabbing for money from the UK government, thats what it was all about, and they were offered a significant amount of money.BMW said they had invested in Longbridge, but where, the site had had no major works in years, firstly BAe refused to invest, then BMW refused to invest in much needed works, teh P4/5 did spend some, but they didnt have a lot.If they had done it right, they should have gotten BMW to make at least 2/3rds of the staff redundant, at BMW's cost, they could build the cars on 2000 staff, not 6000 that they had, the plant had a well known reputation of removal of parts, laziness and just general lethargy, its a shame as the staff there did want to work, but because there was so many of them, they had begger all to do most of the time, especially the last year. BMW does or did have a lot to answer for, their treatment of staff and dealers and suppliers was attrocious, and now they are getting into bed with JLR, i fear the same will happen again.
You can watch Top Gear's
You can watch Top Gear's review of the 75 on YouTube. If not exactly hostile, certainly not glowing. The 75 was a good car - a different league to all the other rubbish it was churning out at the time - but not exactly what the UK was looking for at the turn of the millenium.
I shouldn't worry about BMW taking over JLR. I think they have enough problems of their own at the moment.
Full disclosure, today I bought shares of Tata Motors at a 10 year low. I think they are down, but not out. Maybe finally they reailise their failings and what's needed to turn around.
Top gear is just one review
It was a shame to lose Rover,
It was a shame to lose Rover, but regardless of whether it got that government support, its days were numbered. By the late 1990's it had lost pretty much all its brand value, and even the Rover 75 was met by a hostile media. BMW was lucky to get shot of it.
BMW probably lacked the skills to turn it round, nor did the people at Rover really know what to do. Jaguar Land Rover is completely different, in that their brands do still have a lot of cachet, especially on the Land Rover side, plus the value and volume of sales is much higher than the old Rover. But unless they sort out their reliability and quality issues they will be gone too. No company has a right to exist, they must prove themselves in the market, year in year out.
I don't think JLR are much worse than the Germans, but the Germans have fallen a long way from their quality of the 1980's and 1990's. JLR should not be benchmarking BMW for quality.