Round about the first time that BMW announced the sale of Rover to a bunch of wankers, err, bankers, I happened to be on a bit of a government-sponsored press junket to the U.K. Good timing, I thought. I spent a week hearing every dire prediction and wanton postulation on the future of the British motor industry imaginable. On my final evening on the island, I sought refuge from the elements in a pub in London, trying to make some sense of it all: Would Alchemy, the bankers’ group, make a go of it as the “MG Car Company”? Would Rover’s suppliers have to slash jobs? Would the sun finally set on the British motor empire?
I realize now that, in fact, I blew a great opportunity. There I was, wasting away on a barstool when I should have been hopping a train to Birmingham. For the price of my Courage that night, I could have bought Rover! Bollicks. I couldn’t have even afforded to purchase an entry-level Rover 25, yet for the measly ten quid that former Rover chief executive John Towers and his Phoenix group spent when the BMW-Alchemy negotiations fell through, I would have had the deal of a lifetime!
Or would I?
A few days beforehand, I was sitting in the office of Professor Garel Rhys at the Cardiff Business School in Wales. (Rhys is one of those experts on the British auto industry who is regularly trotted out for his pithy analyses.) We talked about all the buying and selling of companies, divisions, suppliers, plants, etc. that have been going on around the globe lately. Rhys made two especially interesting points:
1. The golden rule of mergers and acquisitions is that it’s necessary to buy things that make business sense, not just to buy things because they’re for sale.
2. As a general rule, global companies have no heart.
Now it’s obvious that if I were to buy Rover, it wouldn’t make a lot of sense, business or otherwise. But what about these Phoenix chaps with their 10-pound note? Did they buy Rover because it made any business sense? To all concerned, it seems that they bought Rover to “save jobs.”
I can certainly sympathize with this notion, as I am one of the (un)lucky ones with a rare personal perspective on GM’s devastating plant closures of the late ‘80s. (A perspective that could only be gleaned by virtue of a family vacation that involved driving across the state of Michigan to go to Flint’s now-defunct Auto World “amusement” park.) Nonetheless, my advice to the workers at Birmingham is that once they’re finished celebrating the fact that their jobs have been “saved,” they might want to start looking for a new line of work.
The fact that Phoenix may have a warmer heart than those cold-blooded Germans at BMW (not to mention those truly global plant-closers at Ford) is likely resulting in nothing more than a stay of execution. Need I mention that the heart’s classical foil is the mind? Might I ask which bodily organ you would choose to run your company? We live in a world of global business and unless your particular neck of the woods can hack it with the best, you’re liable to get that neck slit. Unless Phoenix focuses on making the changes necessary to compete with the global players, Rover isn’t going to survive just by returning to British ownership.
But will change actually become the strategy for Rover? One of the first developments in the aftermath concerned Towers’ faulty courting of Honda to become a Rover partner—again. Last time I checked, Honda was a global company who’d already been there, done that; the jury is still out on whether it has more heart than BMW. (Coincidentally, Honda claims not to be interested; I don’t blame them.)
Unfortunately, given the other recent upheaval in Her Majesty’s automotive industry—Ford’s announcement of plans to shutter Dagenham car assembly—I can only speculate that further bad things will befall the Brits. Although I may not be allowed to sit in on that first board meeting held by Mr. Towers, I do know one thing: most of the other “government-sponsored press junkets,” as I refer to them, have been held by developing nations, countries that have recently emerged from communist rule, or places in which the economy is bad enough that, in the eyes of the lawmakers, their only hope is to get foreign investment dollars. From heartless bastards, no doubt.