There’s something glorious about the printed word’s permanence. Unlike radio and speech, print forever shows exactly what one said and believed. It also takes away the author’s ability to later claim one was taken out of context, was misunderstood, or never said such a thing. And for the international world of automobiles, in late 1999 I wrote this bit for a vignette on the auto history for my radio show: “In a unique way the Second World War has still been going on during the 1990s. Only it isn’t the German military, crossing international borders armed with bullets to take over formerly independent nations, or the Luftwaffe trying to subdue England. Today it is the sons of the former Nazi regime who are successfully taking over the international corporate community. They’re armed with nothing more than a large credit line and an international squadron of corporate soldiers armed with loaded checkbooks.“Of course I was referring to the invasion and conquest of England’s, America’s, Japan’s and Korea’s car manufacturing industries by German automakers. At the time Bavarian Motor Works owned British Rover; and Mercedes was buying Chrysler, control of Mitsubishi and 10 percent of Hyundai. Volkswagen was resurrecting Bugatti and had purchased Rolls-Royce and Bentley.Everybody Buys BritishAlthough it has not been that many years ago, most forget how transient the entire industry was in the last years of the go-go 90s. However, it didn’t take the Germans long to reverse course on most of those unfortunate decisions. Even as I wrote that segment, BMW was divesting of Rover, pushing Land Rover into the hands of the Ford Motor Company, adding that troubled sport utility company to Ford’s constant losses at Jaguar. Rover Cars would go to a British private equity group that further destroyed the company before handing it off to the Chinese. And BMW kept Mini and its nameplate. BMW had just finished the design of the new Mini — still sold today — and was justly proud of it. To be fair, the Ford Motor Company, in spite of its ongoing losses on its British divisions, did manage to improve the quality of both Jaguar and Land Rover products. But Ford finally threw up its corporate hands at ever trying to make a profit, and it sold both divisions to Tata Motors of India. Gandhi must have looked down on his beloved former British colony and smiled on that move.But the most humorous takeover was that of Rolls-Royce and Bentley by Volkswagen. The Joke’s on VolksThe sorry state of British motorcars in that decade led Vickers to announce, in late 1997, that it too would dump its holdings in the British motor industry and put Rolls-Royce Bentley up for sale. Rolls had owned Bentley since that firm had gone into receivership, back when the Great Depression set in. At the time most believed that the most logical buyer for Rolls was BMW. The German automaker had been supplying engines and other major automotive parts to Rolls, not to mention the joint work on aircraft engines that BMW and Vickers engineers were performing. The fly in the ointment was Volkswagen; it quietly outbid BMW for the company by £90 million — and managed to complete that whole purchase process, apparently, without realizing that Rolls-Royce Automobiles did not actually own the name, “Rolls-Royce.” No, the car company’s name belonged to Rolls’ aircraft engine division, which wasn’t part of the sale. So, though BMW had lost the bidding for the car company, it promptly and gladly paid £40 million to Rolls-Royce Aerospace for the right to use the Rolls-Royce name on automobiles. Now one German car company had the cars but couldn’t use the name, while the other owned the name but didn’t have any cars to sell under it. Worse yet, BMW’s contract with the car company allowed to it end engine and auto parts deliveries simply because it wanted to. It was like a game of poker, but BMW wasn’t going to bluff with the hand they held.Now Volkswagen was feeling the wall at its back. If it ever wanted to use the Rolls-Royce name or continue to purchase BMW parts and engines with which to build the automobiles, the company would have to go hat in hand to BMW and work out an arrangement. BMW agreed to supply those critical parts and, most critical of all, the name, for a period of four years — at which time Rolls-Royce automobiles would revert to BMW, while VW would keep Bentley.Like Ford fixed Jaguar, Volkswagen set out to bring Rolls-Royce Bentley into the new century, improving both product and production facilities. Ford had already experienced a substantial benefit from its ownership of Land Rover; the newest Range Rover, which Ford would start selling the minute the ink dried on the corporate ownership papers, had the help of BMW’s renowned engineers on them. The big question is why, all at the same time, BMW was so hot to dump Rover, badly wanted to take over Rolls and Bentley, and meant to keep Mini.It’s like the entire, pitiful British motor industry was being thrown around like a hot potato to whomever seemed willing to write the next corporate check for its ownership. In the end, Rolls-Royce ends up with BMW, Bentley ends up with Volkswagen, and Jaguar Land Rover ends up with an Indian company best known for building the world’s least expensive car — which also happens to have been a major flop in its own home market. The British ReincarnationsThen came the British miracle. Almost immediately after it purchased Jaguar Land Rover, Tata Motors of India started minting money with it; demand for the products improved worldwide. Even today, two of the cars selling fastest off American dealers’ lots are the new Range Rover (#1) and the Rover Sport (#5). On average dealers hold these cars for maybe 10 days before they are retailed. Sometimes less than that. For December Autobahn’s 43 Rovers were already sold before they ever got to the dealership, while the store’s sales of Jaguars more than doubled this year. Fifteen years ago most Americans didn’t really know what a Bentley was, other than “a poor man’s Rolls-Royce;” but through November of this year 2,522 of them had been sold in America alone. For comparison, in good years gone by Rolls typically sold fewer than 1,100 cars worldwide. So the Germans moved into the British motor industry, moved out of it and then moved back in. It was such a fiasco that most were sure it was marking the death of British cars. If billions of dollars hadn’t been changing hands and going into new product and facilities, it might have been laugh-out-loud funny. And yet through it all, with the addition of an Indian car company no one thought two cents about, this is truly the Golden Age of British Automobiles. It’s a sad statement that, in order to save the country’s motor industry, fabled English car companies had to sell out to everyone but the British. But wouldn’t you have loved to have been a fly on the wall at VW headquarters on the day BMW sent over that letter from their attorney? You know, the one reading, “Congratulations on buying Rolls-Royce out from under us. PS: You are hereby legally enjoined from using that name. Have a nice day.” © Ed Wallace 2013
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: email@example.com, and read all of Ed’s work at www.insideautomotive.com.