Life of Automobile, The

by Parissien, Steven

  Lee Iacocca was sixty-five in 1989, at the summit of Chrysler long after contemporaries such as Roger Smith and Donald Petersen had gone. As historian Paul Ingrassia has observed: ‘Lee Iacocca had many talents, but knowing when to quit was not one of them.’ GM veteran Bob Eaton was suggested by Chrysler’s directors as a potential replacement; but while Iacocca liked him, and was prepared to install him as CEO, he still refused to vacate the presidency. It took subtle but relentless pressure from key Chrysler shareholders to persuade him to agree that Eaton should be nominated as his successor.

  On 1 January 1993 Lee Iacocca was finally ushered out of the door. Even then, he tried to hang on to his corporate Gulfstream and his two Chrysler-owned homes, and insisted that his already sizeable pension pot be topped up yet further and that he be given a two-year, $500,000 consultancy contract. The following August he sold some of his Chrysler shares for an astronomical $53.3 million. Despite this windfall, he showed precious little loyalty to the company that had made his name and his fortune. In 1995 he persuaded his friend, financier Kirk Kerkorian, to make a hostile bid for Chrysler. (It failed.) Two years later, he condemned Chrysler’s merger with Daimler, appearing to forget that many of the problems that now beset the firm were of his own making. Even in retirement, it seemed, the largest automotive animals were unable to let go.

  1 Technically, an SUV has less offroad capability than a true 4×4, but in practice the terms are often interchangeable. In Australia and New Zealand the term 4WD (for ‘four-wheel drive’) is preferred. In France, a 4×4 is simply a quatre-quatre.

  1 Its wartime predecessor, the AK of 1941–2, had been adapted from an American Jeep captured in the Philippines by the invading Japanese army.

  2 Typically, though, it was not until 1994 that the Range Rover itself was overhauled and upgraded.

  3 Initially badged the Wagoneer in the US in order to emphasize the continuity with the established Jeep wagon.

  1 GM’s Chevrolet Blazer/Jimmy, which originally appeared in 1969, and Ford’s Bronco, originally introduced in 1966.

  2 In the 1990s the twodoor SUV fell out of favour, as consumers rushed to big ever-bigger vehicles. The advent of the Range Rover Evoque of 2011 possibly signals a return to more modestly scaled, twodoor 4×4s.

  1 It is grimly ironic, then, that it was while riding in an S-Class Mercedes that Diana, Princess of Wales died in a Paris underpass on 30 August 1997.

  2 Although L. J. K. Setright stoutly maintained that the personnel carrier had first been introduced in 1950 in the shape of the Bedford Dormobile, ‘a slab-sided soggy horror that began as a smart resource for lively families and ended as a scruffy transport for builders’ labourers’.

  3 Today the Jaguar Design Centre. In 1978 Giorgetto Giugiaro came up with a similar idea for ItalDesign in the form of the boxy Lancia Megagamma concept car, which Lancia’s parent, Fiat, rejected as too radical and risky to qualify for mass production.

  1 Early in 1982, Thatcher had yet to reap the electoral benefits of the imminent Falklands War, and her government was increasingly unpopular.

  1 The Centre was sited just outside Coventry, on a famous old wartime base, adjacent to the factory where the eccentric Whitley bomber had been built.

  1 The Scorpio’s failure also ruined the prospects for Ford’s new American import brand, Merkur (German for ‘Mercury’), under which label the car was promoted in the US.

  1 GM’s Canadian operation was thrown into the mix merely to make up the numbers.

  1 By 2008 the two NUMMI partners had predictably fallen out. GM pulled out of the deal in June 2009, and on 1 April 2010 Toyota produced its last Corolla at Fremont, transferring production to Canada.

  1 The ‘X’ range soon won a reputation for abysmal quality, with thousands of cars were being recalled.

  1 As Smith’s biographer Albert Lee (formerly a GM speech-writer) noted, the new robots ‘frequently gave cockeyed instructions, ordering up the wrong bumpers, the wrong trim, the wrong welds, or the wrong paint, sending instructions to the next robot, which was too simple-minded to notice the errors. The paint robots were particularly cantankerous, slopping gobs of paint on one car, then not enough on the next.’

  1 Perot kept returning to the GM chairman’s opulent lifestyle, declaring of the twenty-fifth floor of the GM offices in New York, where Smith was based: ‘An entire teak forest must have been decimated for that floor.’

  1 A policy that was highlighted by Michael Moore’s unexpectedly successful film documentary Roger and Me of 1989, in which Smith unwittingly played the part of Moore’s tragi-comic stooge. Smith laid off two hundred thousand GM workers in the first two years of his tenure as chairman.

  1 In 1993 Lotus, too, was quietly disposed of.

  1 Mexican workers were about $20 per hour cheaper than their American equivalents.

  2 Petersen may have seemed far quieter than his more celebrated contemporaries, Smith and Iacocca, but he had an explosive temper, being notorious for shouting at his staff and for throwing his Rolex watches against the wall when crossed.

  3 The Taurus’s Mercury-badged twin.

  1 The most serious loss was that of Chrysler’s number two, Jerry Greenwald, who left to run United Airlines.

  15

  Merge In Turn

  The last decade of the twentieth century, and the first decade of the twenty-first, saw a worldwide realignment of the car industry. This tragi-comical game of corporate musical chairs dramatically brought to a conclusion issues and problems that had been simmering away for thirty years; the resulting cull of famous names, and the disposal of hundreds of thousands of jobs, was necessarily (and possibly overly) brutal. By 2010 – after worldwide recession had hastened the collapse of those walking wounded that still remained – it seemed that the sun was finally setting on some of the most distinguished American marques of the past fifty years, as well as on almost all of the famous British auto manufacturers of the preceding century. German and Japanese reliability, quality and market-awareness had, apparently, triumphed. Or had they? At the dawn of the twenty-first century, even the very largest car makers could not afford to be complacent.

  By the 1990s there was certainly little to be smug about in British auto manufacture. Like a punch-drunk boxer, Britain’s sole-surviving indigenous mass car maker, the Rover Group, staggered from disaster to disaster. BMW, which bought the sickly combine in 1994, initially seemed unsure exactly why it had made the purchase. When asked how he viewed Rover cars, BMW boss Bernd Pischetsrieder, the man behind the acquisition (and who was actually the great-nephew of Alec Issigonis), merely replied that he saw them ‘as cheap Jaguars’ – hardly an adequate description, for example, of the Honda-based 200 series of hatchbacks. Subsequently, a contrite Pischetsrieder declared that he also saw a market for the smaller Rovers, which he suggested might fill a notional gap beneath BMW’s 3 Series. But in 1994 Rover was barely equipped to fulfil either role. Aside from Land Rover’s impressive and expanding range, there was not much to boast about in the firm’s current portfolio. As we have seen, the supposedly upmarket Rover marque had become completely devalued since the 1976 withdrawal of the last Rover that could look Jaguar in the eye, the P6. By the mid-1990s Rover’s small cars were either ageing standbys like the old Mini and the Metro (farcically rebadged as the Rover 100 in 1994) or poor man’s Hondas. Many observers, puzzled as to why BMW had bought Rover in the first place, assumed that the Bavarians had acquired the conglomerate simply to get their hands on the profitable Land Rover business – which, in retrospect, seems to have been largely correct. Some critics were even more cynical. Motor journalist James Ruppert later wrote that ‘at a stroke, or rather £800 million, BMW had removed their largest single competitor in the UK car market’.

  Under BMW’s ownership, Rover did at least launch a genuinely new model. The MG brand was exhumed in the shape of the MGF, an attractive, lightweight twoseater, neatly designed by Rover’s Gerry McGovern. The first genuine MG for fifteen years, it
proved, despite some predictable reliability problems, to be a hit. In 2002 it was replaced with a more conventional version, the TF (named after MG’s TF Midget of 1953). This, too, earned respectable sales – particularly encouraging in a market crowded with outstanding, sporty world-beaters such as the Audi TT, the BMW ZX and the Mazda’s MX-5 (a model that the F and TF strongly resembled). The TF even survived the final collapse of Rover, being disinterred by the Chinese after 2007.

  Three years later, BMW also introduced a wholly new, executive Rover: the 75. The original idea was simply to re-skin the 600, but braver souls at BMW decided on a completely new model. The 75 was a serious upmarket contender, handsomely styled by Richard Woolley both to reflect contemporary mores and to acknowledge Rover’s illustrious past. It was also a genuinely British product: both the platform and the petrol engines were entirely Rover’s, and only the diesel power train came from BMW. The model won plaudits across the globe. It won the What Car? ‘Car of the Year’ accolade in 1999, the Italian ‘World’s Most Beautiful High Class Saloon’ award in 1999, Japan’s ‘Import Car of the Year’ prize in 1999 (and again in 2000), and the top European slot in J. D. Power’s revered customer satisfaction survey in 2001. Sadly, though, the impressive 75 was soon eclipsed by BMW’s hasty exit from Britain. Pischetsrieder used the occasion of the model’s unveiling at the Birmingham Motor Show not to celebrate the rebirth of Rover or to celebrate the 75’s qualities, but to lambast the British company’s senior management and to demand hefty government subsidies – without which, he threatened, BMW would pull out of Britain, closing its plants and throwing its British workforce on the dole. In the event, Pischetsrieder’s outburst was ill-timed. Tony Blair’s New Labour government was adamant that the 1970s had not come again and that it would not intervene either to prop up Rover or to subsidize BMW. The Bavarians, meanwhile, used the episode to force the unlamented Pischetsrieder to fall on his sword; he left BMW to join Volkswagen, whose chairman he became in 2002. (His tenure there lasted only four years, after which the mighty boss of the Volkswagen Group, Ferdinand Piëch, ousted him in a clash of titans.)

  But Pischetsrieder’s message had been essentially correct, and before too long the BMW board was demanding that the company get rid of Rover. When BMW announced it was walking away from the loss-making Rover operation, all it took with it was the new Mini (or, rather, MINI), along with the Cowley plant in which to build the new car, and the Land Rover know-how which it had in order exploited to plan its own SUV.1 The American-built BMW X5, manufactured initially only in Greer, South Carolina,1 and called by BMW a sports activity vehicle, rather than an SUV, proved a huge hit.2 Unsurprisingly, the first, E53, version of the X5 shared many parts with the Range Rover, but it still looked very much like a BMW with its quadruple headlights and double-kidney grille. The X5 proved such a success that in 2003 BMW added a X3 version, based on the smaller 3 Series platform.

  As they departed from Rover, BMW shrewdly bought the rights to Rolls-Royce Motors when Vickers, which had owned the luxury car maker since 1980, put both Rolls and Bentley up for sale.3 Volkswagen had recently bought both marques from Vickers – or at least it thought it had – but soon discovered that, while it now owned the rights to the trademark portico radiator and Charles Sykes’s classic Spirit of Ecstasy bonnet mascot, it did not actually have the legal right to build Rolls-Royce cars. Vickers itself had never owned all the rights to the Rolls-Royce name; Rolls-Royce plc, the aircraft engine manufacturer, still owned the right to license key trademarks, including the Rolls-Royce name and logo, to the company of its choice. And now it chose not VW but BMW, with which it had recently worked on a number of aircraft projects. Wolfsburg eventually agreed to license the flying lady and the grille to BMW for £40 million – an absurdly low price for such a valuable commodity – and held on to the Bentley brand, which it was able to develop as a recognizably separate entity for the first time in seventy years. Volkswagen subsequently (if unconvincingly) claimed it had only wanted Bentley all along. BMW’s management, meanwhile, licked their lips and counted their winnings.

  For British observers, it was all highly unedifying and depressing, as the Germans fought over British household names in a manner that would have been unthinkable in 1945 or even 1965. As James Ruppert observed, ‘the heads of Germany’s industrial giants [were] carving up the spoils of their victory like a couple of bickering Wehrmacht generals’. The rights to the Rover name, however, went not to the Germans but to Tata Motors, who in 2007 bought Land Rover and Jaguar from Ford, along with the Rover, Daimler and Lanchester marques. Tata paid BMW £1.8 billion for this – £1 billion more than BMW had paid for the whole of the Rover Group in 1994. Once again, the Germans had won.

  Now in German hands, both Rolls-Royce and Bentley prospered. In 2003 BMW opened a new Rolls-Royce factory at Goodwood, in Sussex, and launched the new Rolls-Royce Phantom which shared parts with and was powered by an engine taken from the new BMW 7 Series. Volkswagen, meanwhile, spent £500 million revamping the old Rolls-Royce factory at Crewe and revitalizing the Bentley line-up. The result was staggeringly successful. Demand for the new Bentley Continental GT and its four-door variant, the Flying Spur, so overwhelmed the Crewe works that for a few years the Flying Spur was made at VW’s prestigious ‘Transparent Factory’ in Dresden, a glass-walled, maple-floored plant built by architect Gunter Henn, which had originally been intended merely to assemble VW’s top of the range Phaeton.

  Meanwhile, what remained of the Rover Group collapsed in ignominious circumstances. At first it seemed as if the Rover business could survive and prosper in the hands of the four British white knights who offered themselves as the company’s saviours and called themselves the Phoenix Consortium. Phoenix’s actions, though, soon showed that such optimism was sadly misplaced.

  The first of the Phoenix Four, John Towers, had joined Rover from Massey Ferguson tractors and had risen to become managing director of the Rover Group by 2000. None of his colleagues, however, had ever been a major figure in the car industry. Nick Stephenson was an engineer; Peter Beale was an accountant and former car dealer; and John Edwards had run a network of twenty dealers. Nevertheless, in May 2000 the Phoenix Four succeeded in convincing an obscure bank in North Carolina, First National, to lend them £200 million.1 Despite their brave talk of a renaissance, the partners themselves only invested a miserly £60,000 each in the business. BMW agreed to pay them £500 million to help pay for mass redundancies and restructuring.

  The Phoenix Four were like a gaggle of little boys with a new toy. They uprated the existing 25, 45 and 75 models, adding revamped engines and tauter suspension to create the boy-racer Z range (the MG ZR, ZS and ZT, respectively). As a sign of their desperation, they added a union flag on the bonnet for good measure. The Z cars actually drove rather well, though the pimping of the sedate Rover 75 into the ‘full-fat’ MG ZT looked rather like watching an embarrassing old uncle don student clothes. Inexplicably, the Phoenix Four then travelled to Italy, bought an ailing sports car manufacturer, Qvale, and, using BMW’s severance money, attempted to adapt Qvale’s last foray into the motor business, the famously unconventional Mangusta, to American tastes. Next, they accompanied racing car experts Lola (for whom Stephenson had once worked) to Le Mans, blowing thousands of pounds on entertainment without anything to show for it. They also bought the massive nineteenth-century pile of Studley Castle in Warwickshire as a conference centre, at the same time selling off the Longbridge site for a housing development and leasing back only the footprint of the car plant.

  The Phoenix Four were not just naive, they were also greedy. In 2002, the year MG Rover (as it was now called) made a pre-tax loss of over £77 million, they set up a £13 million trust for themselves and their families, and on top of that paid themselves £15.1 million in salaries. In that year, too, the realization belatedly dawned on them that they would need to work with a proper automotive partner if they were to produce any sort of mass-market car. Honda, Fiat and others turned the
m down flat as a liability, but Tata Motors agreed to supply them with a cheap, budget car, the Indica, which MG Rover would rebadge as the CityRover. While they bought each Indica for £3,000, they sold them on – after a bit of modest redesign (which included sticking another union flag on the bonnet in a vain attempt to conjure some patriotic sentiment) – for £7,000 a pop, at which price the CityRover could not hope to compete with better-built and more sophisticated models like Fiat’s Panda, Toyota’s Yaris, Vauxhall’s Corsa or Ford’s Fiesta. Poorly designed, unreliable and with high running costs, the CityRover was a disaster from the start. Even the Phoenix Four implicitly acknowledged as much when they refused to make one available for the BBC’s hugely popular and influential Top Gear TV series. The producers borrowed one anyway, and presenter James May declared it to be the worst car he had ever driven on the show.

  The Phoenix Four were clearly ill at ease in the world of the supermini and soon retreated back into the fantasy land of the supercar – a market with which MG Rover had little in common. They finally succeeded in converting the Qvale Mangusta into a British racer, which in 2004 they launched as the MG XPower SV (SV stood for Sport Veloce). The name sounded like a gag from The Simpsons and the vehicle itself – partly styled by Peter Stevens, who had previously worked on the ultimate supercar, the McLaren F1 – looked like a teenager’s wet dream. The ostensibly British XPower was actually built in Italy from British-made body parts and bits of old Fiats; the headlights, for example, were culled from the Fiat Punto. And hardly anyone actually bought an XPower; aside from the prototypes, only eighty-two cars were ever made.

  Barely had the first XPowers rolled out of the factory than it was announced that the Phoenix Four’s fantasy was over. On 8 April 2005 John Towers placed MG Rover into receivership in the face of debts of over £1.4 billion. The Shanghai Automotive Industry Corporation (SAIC) had been interested in saving the firm but, given the scale of MG Rover’s losses, the Chinese government doubted that SIAC could fashion a success where BMW had failed. Finally, in July 2005 China’s Nanjing Automobile Group bought MG Rover’s remaining assets. (SAIC won the right to make both stretched and shortened versions of the Rover 75, but was forced to call these cars the Roewe 750 and 550, as it had not purchased the rights to the Rover name.)1 On 15 September 2005, in the ultimate humiliation for the British car industry, key ex-workers were contracted to begin to dismantle the machinery at Longbridge for shipping to China.