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Rover gets a new driver
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December 2, 1998: 10:49 a.m. ET
BMW puts new man at wheel of Rover subsidiary
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LONDON (CNNfn) - BMW placed a tighter grip on UK subsidiary Rover Wednesday, by announcing that Rover chairman Walter Hasselkus would be replaced.
BMW said that Dietmar Samann will take over at the UK automaker Dec. 31. also on Wednesday, Hasselkus announced that he would take early retirement.
"It's not a question of personal mistakes or management mistakes, it's a question of principle," Hasselkus told CNNfn.
Analysts said that BMW was disappointed in Rover's performance. "BMW's patience has run out," according to Philip Rosengarten, industry analyst at auto consultant Standard and Poor's DRI.
Analysts said BMW had become frustrated at Rover's inability to hit quality and productivity targets. A bitter row with unions further undermined Hasselkus's case for Rover to retain some independence from Munich-based BMW.
"BMW is getting a bit nervous that Rover has not achieved the initial goals that were set," according to DRI's Rosengarten.
BMW (FBMW) shares have been hammered in recent days as German press reports surfaced speculating on a dispute within the German group's board over who should take over at Rover. Board members were said to be reluctant to take the wheel at Rover because of the difficulties the group faces.
BMW chairman Bernd Pischetsrieder laid some of the blame for Rover's problems at the UK government's door, and said "it is unfair competition when the government supports products competing with us."
In Frankfurt Wednesday BMW shares dropped a further 10 marks to 1,197 marks.
BMW also officially announced a 2 billion pound ($3.3 billion) investment at Rover's Longbridge plant, and an accord with unions over flexible working practices and job reductions.
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BMW
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