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Saturday, Aug. 1, 1998
Rolls-Royce CEO quits over division plan
Resignation comes after Volkswagen says eventual production will go to rival BMW
By DIRK BEVERIDGE
Associated PressLONDON - The plan by two German automakers to divide Rolls-Royce Motor Cars prompted the company's chief executive to resign Friday, bringing further uncertainty to the luxury carmaker.
Graham Morris said the shakeup announced by Volkswagen AG, which bought the factory, and rival BMW, which bought the Rolls-Royce brand name, made his position untenable.
``I now feel that it is in the best interests of all concerned that VW appoint a successor for my role,'' Morris said in a statement. He then left for vacation, declining further comment.
Morris' departure was the second sensational loss of the week for VW, which conceded Tuesday it will have to let its archrival BMW take over production of Rolls-Royces in a few years.
In an interview for Saturday's editions of German newspaper Die Welt, VW chief Ferdinand Piech suggested the two rivals could reach an accord allowing them to take a stake in one another.
Piech declined to comment on recent German media reports that VW and BMW were considering a merger, but he raised the possibility that they might take a stake of as much as 24.9 percent in one another.
``Such an interconnection would make the companies stronger, even unbeatable,'' he told the newspaper.
VW paid 479 million pounds ($790 million) for Rolls-Royce Motor Cars, but it will end up with only the Rolls-Royce factory in Crewe, England, as well as the lesser-known but better-selling Bentley line of luxury cars.
BMW, meanwhile, lost the bidding for the Rolls-Royce company but paid just 40 million pounds ($66 million) for one of the auto industry's biggest prizes - the Rolls-Royce brand name and logo.
BMW has announced plans to start up a new Rolls-Royce Motor Cars company on Jan. 1, 2003, but will let VW use the brand name for free until then.
The German deal was a devastating blow for the 48-year-old Morris. Ever since Rolls-Royce's former corporate parent, the engineering conglomerate Vickers PLC, put the carmaker up for sale in October, Morris had assured his 2,200 workers that all operations would stay in Crewe.
Morris said he decided to quit ``based upon the recent announcements that could potentially see the Rolls-Royce business move away.''
The tabloid Daily Mail reported that Morris told colleagues Thursday he would leave ``as a matter of honor'' after seeing his promises will not be kept under the new deal between BMW and VW.
The cloudy outlook at Rolls-Royce has pushed new orders down by about 30 percent since mid-June, Morris said earlier this week.
VW's hopes of running the whole Rolls-Royce operation were thwarted when it bought the factory from Vickers but was unable to obtain the brand name rights that were held by the British jet engine maker Rolls-Royce PLC. Rolls-Royce PLC preferred a pact with BMW, its partner in a major aerospace venture.
Despite his resignation, Morris predicted the VW-BMW deal ``will bring short-term stability back to the Rolls-Royce and Bentley businesses, and I am still convinced that the long term holds out very positive opportunities for our employees.''
Morris said he maintained ``the greatest respect'' for VW and Piech, who had stressed in a news conference Tuesday that he wanted to keep Morris in charge of Rolls-Royce.
Piech pointed out he had lost Morris as an employee once, when Morris left an executive sales job at VW's subsidiary Audi to join Rolls-Royce in April 1995. The VW boss said he had no intention of letting Morris get away a second time.
Morris said Friday he would stay in his job only until VW can find a replacement. VW offered no immediate hints about who it might hire, but plans to act ``as soon as possible.''Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web