It's All About Focus

The second best sales year in the history of the U.S. market, 2001, saw General Motors make a profit of just 0.8 of a cent on a dollar.

The second best sales year in the history of the U.S. market, 2001, saw General Motors make a profit of just 0.8 of a cent on a dollar. Eight-tenths of a cent! My local supermarket did better than that. Perhaps GM should have invested in supermarkets.

Then there’s BMW, which reportedly earns 9% on everything it builds. Now free of Rover, the German car maker is concentrating on its core products, though it kept the new Mini for itself. Even though I haven’t driven it yet, from all reports it’s a front-drive BMW. That’s a very good thing. And who knows how much extra money the Bavarians are raking in from selling their powertrains, electrics, and other components to Ford for use in the new Range Rover.

Which brings me to MG Rover. What is strange is that MG Rover is still alive, and planning for the future. Who’d have thought it possible? Of course, you can survive when you buy the company for $10 and don’t have to carry all of the giant-size debts on your books, or when the departing owner lends you $500-million to take this albatross from around its neck. But MG Rover’s leadership also has been canny. It tied up with Lola Cars, a British race car manufacturer, and signed Peter Stevens–best known for his work with Lotus, McLaren, and the BMW and Audi sports car racing teams–to head the design department. Literally within weeks they showed high-performance versions of their current lineup, complete with handsome aerodynamic and styling tweaks from the talented Mr. Stevens.

Next, they bough the rights to the Mangusta from Qvale Automotive, reskinned the beast, and showed it at the 2001 Frankfurt Motor Show. Nothing like buying a federalized platform and component set in case you want to re-enter the U.S. market at a moment’s notice with a fully developed sports car. No dummies these folks.

And re-entering the U.S. market is on MG Rover’s To Do list. Some of you may recall the MG-F sports car on Chapman-Arup Engineering’s stand at the 2001 SAE Congress in Detroit, and the survey forms each person who stopped by were asked to fill out. Sure, there would need to be changes to the car to sell it here, but at least they were investigating the possibility.

Which leads us to the introduction of the MG TF, a revised version of the MG-F, and a vehicle much closer to U.S.-spec. than its predecessor. Whether it will make it over here or not is unknown, but the possibility is closer than ever before. I’m betting on 2003, despite a slight softening in the sports car market. That will pass as the economy improves, and the MG name is surprisingly well-known in the U.S.

Yes, MG Rover must partner with a major OEM to replace its aging 25 and 45 models (the 75 is nearly new) if it sticks with conventional design and assembly methods, but talks are underway about doing just that. If they fail, well there are always new approaches. And I have a sneaking suspicion Lola is investigating chassis built from flat sheets of honeycomb aluminum to replace conventional unit body structures (and their cost).

Why is all this happening? I contend it’s because MG Rover is more focused than it ever has been. The organization’s reporting structures are minimal at best, information flows in each direction with little filtering, and there are no secrets. Everyone is pulling in one direction, and they have a mandate–a rage–to succeed. Should they thrive, they may not reach BMW levels of profitability, but they will surely surpass GM’s. Of course, so did my supermarket.