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BMW comments irk Vickers
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March 4, 1998: 1:35 p.m. ET
Off-the-cuff remarks by BMW chief annoy head of Rolls-Royce's parent
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NEW YORK (CNNfn) - The head of German automaker BMW AG and the chief of Britain's Vickers PLC verbally sparred Wednesday over Vickers' handling of the sale of its Rolls-Royce luxury car division.
BMW has said it is interested in buying the Rolls-Royce auto unit from Vickers, but BMW chief Bernd Pischetsrieder said he is becoming impatient over a sales process that began last year, accusing Vickers of running "a poker game" by dragging out the process to elicit higher bids
Vickers Chairman Colin Chandler said he was "surprised" by Pischetsrieder's comments.
"This is not a fire sale of any sort. We are not desperate, so it will take a long time. I think we are weeks away from first bids," he said.
Chandler also responded to comments from the BMW chief that Rolls should not have rushed to launch a new car at the Geneva Auto Show this week.
Pischetsrieder said the car, known as the Silver Seraph, should not have been unveiled while the company's ownership situation is still in flux, and called Rolls' workforce unmotivated.
"Well, this demotivated workforce just produced a wonderful car in time for Geneva," Chandler retorted.
BMW may scare off buyers
BMW's claim that the sales process for Rolls is dragging on seems to be more credible. British engineering firm Vickers announced last October that it was putting its Rolls-Royce subsidiary, which it has owned since 1979, up for sale. The unit also makes Bentley luxury cars.
At the time, Vickers said it was looking to concentrate on its defense units. The company already has sold off its medical businesses.
There have been few buyers showing up publicly to kick the tires of Rolls-Royce. However, another German auto firm, Volkswagen AG, reiterated its interest in Rolls Wednesday.
"We're in the bidding process. We are checking whether we will make an offer and what it will look like," said VW Chief Financial Officer Bruno Adelt.
BMW has scared off potential suitors before. In November, British auto parts maker Mayflower backed off after showing interest in Rolls.
BMW's main weapon has been its threat to cut off the supply of engines to Rolls-Royce if a rival bidder buys the company. While BMW couldn't end engine deliveries overnight for Rolls autos, including the new Silver Seraph, the eventuality of a stoppage has been enough to give pause to some potential buyers.
BMW's Pischetsrieder sought to soften the company's perceived hardball tactics by pointing out the positive aspects if BMW emerges the winner.
Pischetsrieder said, if successful, his company would invest up to 1 billion pounds ($1.6 billion) in two new Rolls-Royce model lines over the next 10 years.
He also said he expected BMW to cut costs 30 percent within Rolls-Royce and to triple the company's sales with the addition of the new models. Pischetsrieder said the savings would come from combining distribution and supply systems.
-- from staff and wire reports
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