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Topic Title: What actually killed the British car industry
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Created On: 28 October 2009 11:18 AM
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 20 November 2009 11:11 AM
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westonpa

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BMW initially wanted the 4 wheel drive technology and the mini from Rover. The Honda partnership was very good for Rover but as we know it was dissolved once BMW took over. BMW asset stripped Rover, as jencam pointed out, and sold the lesser parts of the company, for £1, to a lesser management team who simply lined their own pockets. BMW also lent Rover about £400 million.

I always drove cars made in the UK but as we know many did not and so maybe we also helped with the demise of Rover.

Regards.
 21 November 2009 10:51 AM
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jencam

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Originally posted by: westonpa
I always drove cars made in the UK but as we know many did not and so maybe we also helped with the demise of Rover.


There is also the issue of whether Rover / BL failed to produce the cars that people wanted. For a start, they exited the sports car market in the 1980s by not replacing the MGB and Triumph TR7. This allowed European and Japanese manufacturers to make huge inroads into sectors where MG and Triumph were traditionally strong in the 1960s and 70s. I personally think it was a terrible decision of the BL management to abandon Triumph. There were a number of very attractive Triumph prototype sports cars from the 1970s that were abandoned in favour of basic cars like the Metro and Maestro. Another Triumph prototype was the replacement for the Dolomite and could well have been Britain's answer to the BMW 3 series. The market for compact executive cars was expanding during the 1980s but Rover was not a serious player in this sector.

By the early 1990s Rover probably had the best selection of cars at any point in its history. After the takeover the BMW the range gradually dwindled and the cars became less competitive with those from other manufacturers. A question is whether Rover would have been more successful under British Aerospace or as an independent company.
 21 November 2009 12:00 PM
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westonpa

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OK Rover failed but let's face it at this moment in time some of the worlds biggest car companies have only survived because they have been bailed out by tax payer's money. Governments have either done this publically or by the back door but either way they have done it. The best lesson to learn is to become big enough such that you are not allowed to fail......or start a bank!

Regards.
 21 November 2009 03:34 PM
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jencam

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Originally posted by: westonpa

OK Rover failed but let's face it at this moment in time some of the worlds biggest car companies have only survived because they have been bailed out by tax payer's money. Governments have either done this publically or by the back door but either way they have done it. The best lesson to learn is to become big enough such that you are not allowed to fail......or start a bank!


The British government wanted to bail out MG Rover with a £100 million loan but was blocked by the EU. The EU legislation prohibiting national governments from bailing out companies does not apply to banks.
 22 November 2009 12:05 AM
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westonpa

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Originally posted by: jencam

Originally posted by: westonpa

OK Rover failed but let's face it at this moment in time some of the worlds biggest car companies have only survived because they have been bailed out by tax payer's money. Governments have either done this publically or by the back door but either way they have done it. The best lesson to learn is to become big enough such that you are not allowed to fail......or start a bank!


The British government wanted to bail out MG Rover with a £100 million loan but was blocked by the EU. The EU legislation prohibiting national governments from bailing out companies does not apply to banks.


Any comments on the German loan to GM for Opel?

Regards.
 25 November 2009 01:36 PM
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tickner

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Originally posted by: wilson479
So you could take the Coke logo for example, slap it on some tacky product and it will still sell for good money.

But not for too long. Producing an inferior product will reduce brand value and potentially effect sales of future products.

Rover may have had a negative brand value (probably by association with Austin) but arguably so did Skoda. Modern Skodas are pretty much rebadged VW's and you could argue that the brand value has improved - although it still carries some stigma.

If Rover had produced some class leading vehicles given time the perceived value would of improved - but it would of taken time (years). One question could be, would it of been actually better to shoot the old brand (Rover) and create a totally new one? Toyota sell their luxury cars as Toyota's in most countries, but in the UK they are branded as Lexus.

-------------------------
Mark Tickner CEng MIET
 25 November 2009 10:42 PM
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jencam

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Originally posted by: wilson479
In our business managment unit at college we learned that all brands have a certain value assigned to thier name / logo. So you could take the Coke logo for example, slap it on some tacky product and it will still sell for good money.


My advice to you is not to take everything college tells you as gospel. Tickner is right. The general public will soon realise how naff the product actually is. The Sunny D effect as my son calls it.

The problem with rover was that its brand actually held a negative value. So they could have taken the best selling car at the time, put a rover badge on, and people just would not buy it (I think thats kind of the case when they were owned by Honda). So pouring more money into them would not have guaranteed a safe future.


Rover was a very respectable marque back in the 1960s with its P5 and P6 before it was absorbed into the British Leyland empire. Honda never owned Rover. Honda just had a partnership with Rover.

We were also taught about the stupidly high wages that ALL levels of staff were on there. From senior managment through design and down to shop floor workers. I'm sure exact wage values could be found with a google search..


Were wages high in comparison to other car manufacturers in Britain?

Originally posted by: tickner
Rover may have had a negative brand value (probably by association with Austin) but arguably so did Skoda. Modern Skodas are pretty much rebadged VW's and you could argue that the brand value has improved - although it still carries some stigma.


I have always held the view that BMC tarnished the image of Rover. Critics of Rover even today point to the Allegro and the Marina despite the fact they were from the BMC stable and were not Rovers.

If Rover had produced some class leading vehicles given time the perceived value would of improved - but it would of taken time (years). One question could be, would it of been actually better to shoot the old brand (Rover) and create a totally new one? Toyota sell their luxury cars as Toyota's in most countries, but in the UK they are branded as Lexus.


I think this question needs to be looked at in reverse. Prior to the mid 1980s, the Rover badge was only found on large executive cars. It could be argued that they were the 'Lexus' of British Leyland. A decision was made in the mid 1980s by Rover bosses to stick a Rover badge rather than a Triumph badge on the car that became the Rover 200 and replaced the Triumph Acclaim. Did this move devalue the Rover brand? Would it have been more sensible to have reserved Rover for the large executive car and used Austin and Triumph for the smaller cars?
 12 December 2009 07:04 PM
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sbdesign

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What actually killed the British car industry? (Not quite dead yet?)
... Maybe it's the cost of living in the UK.
 14 August 2010 11:53 AM
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sbdesign

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Are we supposed to be talking about car manufacturing in Britain or British owned car manufacturing? Not the same thing, I guess.
 18 August 2010 04:51 AM
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jencam

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Originally posted by: sbdesign

Are we supposed to be talking about car manufacturing in Britain or British owned car manufacturing? Not the same thing, I guess.


Focus on British owned car manufacturing.

However, take into account that three Japanese car manufacturers currently own factories on British soil which proves (for the time being) that car manufacturing is still economically viable in Britain. Therefore, popular arguments such as high production costs, wages, and poor skills and education of the workforce being significant factors in the demise of British owned car manufacturers post 1980 could be exaggerated.
 19 August 2010 03:23 PM
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pc100

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First post, newbie, etc etc.

Perhaps I'm starting off on the wrong foot but there's some rather inaccurate comments in this thread. To begin, the UK car industry behemoth that became BMC Holdings came about from a recognised need by all parties to reach economies of scale and pool resources; with vital areas such as body tooling being gobbled up many firms joined in the combine to retain their body supplies - Jaguar is one particular example as Sir William Lyons was by then too old (and having lost his son a few years previously) and creating an in-house body shop was a project he decided he could no longer undertake. At the time it was widely considered to be a good idea - it remains a perfectly logical move - and it is wrong to summise that this is the reason why such a huge chunk of the UK car industry died.

If you consider the components suppliers to the industry, then it is to some extent valid that they share some of the burden as many parts were of poor quality. However, the car manufacturers cannot escape the spotlight as they signally failed to work propoerly with their supplier partners to sort out many fundamental issues in quality control - which the Japanese identified as an important part of the development cycle.

To look at the tie-up with Honda as being only good or bad is disingenuous. On the one side, the deal gave ARG access to platforms and components that improved their ability to produce a good product that consumers would buy. However, this partnership gives us arguably one fo the few times where we can compare a British and Japanese product on equal terms, this being the Project XX, which became the 800. For ARG it was a model that was very nearly a disaster, with a multitude of quality issues that cost the company dearly and scuppered the return to the US market. For Honda, it was a good car from launch. On the bad side, the partnership became increasingly one-sided, particularly when ARG was owned by BAE, and the company had little freedom to create cars that differed from the Honda sibling; the 400/ 600 models being a prime example here.

Hurtling forwards to BMW (which the dealer principle friend of mine described at the time as "a massive mistake"), the catalogue of mistakes and disasters is in retrospect makes for grim reading. For what is a very powerful company that enjoys monumental success, BMW frankly made a complete pig's ear of owning Rover. The initial 'hands off' approach meant that real benefits in component sharing was not investigated until far too late, while the clumsy decision-making cost valuable development time, particularly with R1/R59 and R40 (MINI and 75). But these two products were good, and it is very wrong to say the 75 was badly received on launch - it was viewed very positively. The millstone placed round the neck of this car were the combination of the appalling launch speech made by Bernd Pischetsrieder and the idiotic decision to move the launch date forwards for shallow reasons. In addition, the notion that BMW asset-stripped Rover is just wrong. The experience nearly ruined the Munich firm, and for the record the company did not take the front anf four-wheel drive technology from Rover either; the X5 shared no technology with anything from Land Rover (BMW had already built 4WD vehicles before in the 3 and 5 Series ranges), and had already invested heavily in developing its own FWD knowledge.

Rover's last gasp, in the form of the Phoenix Consortium, was at best going to be a very close-run thing, but it was clear by 2002 that the end was nigh and the clock was ticking. Product development was badly conceived, particularly the huge sums wasted on the deal with TWR and the purchase (or not as it was turning out) of Qvale for the completely nonsensical SV. But BMW inadvertently had a hand in this from the agreement to not allow any of the workforce to be reduced any further, effectively hampering MGR with a wage bill so large relative to their production that they simply couldn't do much else other than watch the money run out. While helping themselves to a nice little share of it in the process.

So what did kill the British car industry? Everything and nothing. The unions were very much a part of its demise, but successive Governments handled the industry terribly. Management were similarly culpable, but the entire culture and willingness to truly compete was missing in all areas. The industry is in many ways a mirror of the industrial malaise that afflicted this country over the last fifty years, and which I am far from convincved we have even begun to try and shake off. That this country has manufacturing plants owned by Honda, Toyota and BMW, all turning out high-quality product, is perhaps the most compelling evidence available that the closing of Rover can't be pinned down on one group, but on everyone involved.
 21 August 2010 12:50 PM
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jencam

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Originally posted by: pc100
To begin, the UK car industry behemoth that became BMC Holdings came about from a recognised need by all parties to reach economies of scale and pool resources; with vital areas such as body tooling being gobbled up many firms joined in the combine to retain their body supplies


Increasing economies of scale was one of the cornerstones of creating BL but is it safe to conclude that combining the car manufacturers was badly implemented by failing to discard the 'bad' parts of each individual company in the quest of obtaining the 'good' parts of each individual company?

If you consider the components suppliers to the industry, then it is to some extent valid that they share some of the burden as many parts were of poor quality. However, the car manufacturers cannot escape the spotlight as they signally failed to work propoerly with their supplier partners to sort out many fundamental issues in quality control - which the Japanese identified as an important part of the development cycle.


Lucas the prince of darkness!

I'm not very knowledgeable about the quality of the products of the components suppliers and their relationship with car manufacturers although I previously raised the question and the question about the Rover 800 using foreign electronic parts. Did BL / Rover have too much loyalty towards certain suppliers of low or invariable quality components (on the grounds they they were British, always supplied the company etc.) and were reluctant to buy higher quality parts from elsewhere. I am vaguely aware that some foreign car manufacturers (Volvo?) used many parts from British manufacturers so some of them must have been of good quality.

To look at the tie-up with Honda as being only good or bad is disingenuous.


Could Rover have produced cars similar in design and quality to the 200 / 400 and 800 during the early 90s without the Honda partnership? It became clear by 1988ish that the Maestro and Montego were ageing products with falling sales but would Rover have managed to create modern and competitive replacements for them? Would a 'reskinned' SD1 have been as good as the 800?

On the other hand, would Rover have created new cars in house or even kept Triumph alive?

However, this partnership gives us arguably one fo the few times where we can compare a British and Japanese product on equal terms, this being the Project XX, which became the 800. For ARG it was a model that was very nearly a disaster, with a multitude of quality issues that cost the company dearly and scuppered the return to the US market. For Honda, it was a good car from launch.


You are wrong here. The original Honda Legend was not up to the standards expected from an executive car, the suspension being a prominent example, and most of the design faults made their way through to the Rover 800. Sales of the original Honda Legend were low in Europe, so few people have experience of it, meaning that Rover ended up taking the flack for bad design from Honda. Invariable build quality of the Rover 800 and problems with the 2 litre engine were the fault of Rover rather than that of Honda.

On the bad side, the partnership became increasingly one-sided, particularly when ARG was owned by BAE, and the company had little freedom to create cars that differed from the Honda sibling; the 400/ 600 models being a prime example here.


Were the buyers concerned about this. Consumers are usually interested in buying good products rather than different products.

Hurtling forwards to BMW (which the dealer principle friend of mine described at the time as "a massive mistake"), the catalogue of mistakes and disasters is in retrospect makes for grim reading. For what is a very powerful company that enjoys monumental success, BMW frankly made a complete pig's ear of owning Rover.


When the news reached me that BMW had bought Rover I wondered why they wanted that company and how buying it could benefit them.

So what did kill the British car industry? Everything and nothing. The unions were very much a part of its demise, but successive Governments handled the industry terribly. Management were similarly culpable, but the entire culture and willingness to truly compete was missing in all areas. The industry is in many ways a mirror of the industrial malaise that afflicted this country over the last fifty years, and which I am far from convincved we have even begun to try and shake off. That this country has manufacturing plants owned by Honda, Toyota and BMW, all turning out high-quality product, is perhaps the most compelling evidence available that the closing of Rover can't be pinned down on one group, but on everyone involved.


A question that has circulated throughout certain (mainly nationalist) political circles for over 20 years is whether the attitude and culture of the British people is a significant factor in the demise of British manufacturing industries - certainly in relation to that of Japan and other European countries. Another noteworthy point (sometimes used as a counterargument) is that immigration over the past 40 or so years does not appear to have done anything to benefit or revive British manufacturing industries.
 25 September 2010 03:05 PM
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markjrounding

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The lack of adaptability.
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