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Originally Posted by Tannaton
I think that's mostly right - but I'm not so sure that BMW set out to "asset strip" Rover, although in effect they did in the end, I don't think they set out to, all things considered I think they may have come off worse.
BMW bought Rover for £800M at a time when there were waiting lists for some of their models (around 1993/1994 I think) which I think was more about their current owners - British Aerospace - streamlining as they exited civilian aircraft to focus on military equipment. BMW famously sold the car division of Rover for £10 in 2000 but they also sold Land Rover for just under £2Bn.
However there where times when they were consistently pumping several million pounds a week into the wider business to keep the payroll going. I know someone who has worked in the testing department at JLR for over 30 years and he's adamant that the first X5 prototypes where assembled at Solihull circa 1996/1997 - as soon as the mechanicals were sorted it was whisked over to Germany for finishing. That's hearsay though...
Phoecnix Group who bought Rover then started the real asset stripping, raping and pillahing selling off almost the vowels in Rover's name and renting them back. They would have known the inevitable outcome of stripping the business of assets and cash several years before they announced the collapse - cynically in the same week that campaigning started for the general election in 2005.
Was the demise of Rover inevitable? Well 1 year after BMW bought Rover, VAG Group acquired Skoda.... join the dots.
Also interesting is Ford did insist that Rover could never sell all wheel drive vehicles citing the similarities in their names (Land Rover/Rover). And BMW still own the rights and names to many historic car brands such as Triumph and Austin.
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You have to understand BMW bought Rover at a time Ford were sniffing around (and thinking of attempting to buy BMW - I know this as I worked for them at the time!) BMW made a few RWD three box saloons in various sizes and little else - for this reason analysts thought the future was bleak for BMW because the markets were doing something else - buying Rover (for peanuts) ensured BMW were saved from takeover - Ford didn't want the headache of taking on the whole Rover Group. Rover on the other hand had the best FWD brand in the world, the best 4WD brand in the world and cars in nearly every segment - what was sold to Phoenix was an empty husk of a company. A few elderly rebadged Hondas, MGF, the excellent 75 no new models in the pipeline - no SUVs (the fastest growing sector) and crucially - no MINI - they was asset-stripped by BMW - make no bones about it. BMW had also already sold off most of the land and most of the dealers.
The rumour about X5 was true - L322 Range Rover and X5 were essentially the same car - LR did all the initial (mechanical) development - most of the electronics systems and some of the reusable oily bits were off the shelf 7 series.
Now onto the really clever bit - what made up all the massive debt and writedowns used by BMW to sell the "English Patient" story - to sell the story that Rover was bleeding them dry? What were those investments?
Hamms Hall engine plant (kept by BMW - still going strong today)
Cowley refresh (kept by BMW - still going strong today)
R30 - kept by BMW - now called the 1 series.
MINI!
Longbridge enhancements - whoopee they got to keep that.
And they kept the rights to all Rover designs - Pheonix Rover had to pay BMW a fortune in royalties to make their own engines and to use the BMW diesel in the 75.
Essentially the vast majority of the big ticket Rover investments - debt used to prove Rover were a financial writeoff - ended up in BMW's hands.
They make a fortune selling JLR.
They made a fortune selling the vast swathes of land owned by the historic group.
They got the core of two new models developed on Rover's books (new 1 Series and X5)
The other company bidding for Rover at the time were Honda - what a shame PWC went with BMW.
BMW asset-stripped and dumped Rover - Phoenix was a clever distraction to distance BMW from killing Rover - because it was already doomed for the reasons I gave you - and to really kick Phoenix Rover in the teeth, they sub-contracted TWR to develop a new mid-sized platform to replace the R30 platform BMW pinched. TWR went bust, but somehow ended up owning the rights to the platform! Which got sold on to the Chinese by the administrators! What an own-goal by the Phoenix idiots.