Sign in Subscribe
Transportation equipment industry

Rolls-Royce's Turbulent Sale Ends with Top Executive's Resignation

Strategic Insights

— 2 min read

In a dramatic finale, Graham Morris, chief executive of Rolls-Royce Motor Cars, resigned last week in protest of the deal that saw the brand's sale to Volkswagen and BMW. Morris had led the workforce at the Crewe plant, reassuring them that the factory would continue to produce both Bentleys and Rolls-Royces, whoever owned it. However, the sudden decision by the German companies to split the brands, with BMW taking control of the Rolls-Royce marque for £40m, proved too much for Morris to stomach. He cited the need for integrity and leadership, highlighting the Germans' failure to maintain credibility with the British workforce.

Key Takeaways:

  • Graham Morris, chief executive of Rolls-Royce Motor Cars, resigned in protest of the deal that saw the brand's sale to Volkswagen and BMW.
  • Morris had led the workforce at the Crewe plant, reassuring them that the factory would continue to produce both Bentleys and Rolls-Royces, whoever owned it.
  • BMW took control of the Rolls-Royce marque for £40m, with the likelihood that cars would be built elsewhere, leaving Volkswagen with the Crewe factory and the Bentley brand.
  • Morris's resignation was motivated by the Germans' failure to maintain credibility with the British workforce, which he felt undermined his leadership.
  • The deal saw Volkswagen paying £479m for the Crewe plant, while BMW acquired the Rolls-Royce brand for £40m.
  • German bankers have joked that Volkswagen's chief executive, Ferdinand Piech, suffers from megalomania, which may have played a role in his decision to let BMW acquire the Rolls-Royce brand.
  • Analysts have questioned the wisdom of BMW's decision to acquire the Rolls-Royce brand, citing the costs of building a new factory and the importance of know-how in maintaining the brand's quality.

Statistics:

  • £40m - the amount BMW paid for the Rolls-Royce marque.
  • £479m - the amount Volkswagen paid for the Crewe plant.
  • 2,500 - the number of workers at the Crewe plant.
  • 1,500 - the number of Bentleys produced annually at the Crewe plant.
  • 2,000 - the number of Rolls-Royces produced annually at the Crewe plant.
  • 5,000 - the projected number of Bentleys to be produced annually at the Crewe plant.
  • 10,000 - the upper limit of projected Bentley production at the Crewe plant.

Sources:

  • The Guardian - unknown publication date
  • Financial analysts and media in Frankfurt and London (cited in the article)
  • German bankers (cited in the article)
  • Hans Hartmann, analyst with Dresdner Kleinwort Benson in Frankfurt (cited in the article)
  • Gwyneth Dunwoody, local Labour MP (cited in the article)
  • Steve Taylor, union convenor at Rolls-Royce (cited in the article)

Read more