NOVPUB
Chapter 84: Rover Group
The 1994 World Cup lasted for 31 days, giving Richard ample time to wrap up several important matters before the start of preseason.
At the top of his agenda was the bidding war for Rover Group, where he found himself in a fierce battle with BMW for control of the company.
Richard’s bid stood at £970 million, while BMW had offered £960 million.
The contest had its pros and cons for both sides. Richard, being British, meant that if Rover fell into his hands, the company would remain under British ownership. However, unlike BMW, he lacked experience in the automotive industry, whereas BMW was already a well-established global car manufacturer.
Despite BMW’s reputation, their £960 million bid was simply not enough to match Richard’s offer.
Desperate to sway the decision in their favor, BMW lobbied the sitting Prime Minister, arguing that Richard lacked expertise in the car industry, while BMW had decades of experience. The move was almost laughable.
At first, the Prime Minister seemed to lean toward BMW, possibly due to behind-the-scenes influence—or even pressure. But when rumors of the government’s bias began to spread, public outrage erupted.
A massive demonstration took place outside Parliament, forcing the government to reconsider its stance.
In the end, the decision was taken out of the Prime Minister’s hands.
At 3:30 PM, Tim Sainsbury, the Minister for Industry, addressed the House of Commons: "With permission, Madam Speaker, I would like to make a statement regarding Maddox Capital’s acquisition of Rover."
A murmur spread across the chamber.
"Yes, please..."
The discussion began, and after careful deliberation, the final announcement was made:
"This morning, British Aerospace announced its decision to accept Maddox Capital’s offer to acquire its wholly-owned subsidiary, Rover Group Holdings Ltd."
Finally!
Since July 1988, British Aerospace (BAe) had owned 80% of Rover Group, having acquired it from the government in a controversial £150 million deal. However, BAe had long made it clear that they intended to sell Rover once the required five-year ownership period had passed.
With BAe looking to free up capital to invest in its turboprop and regional jet business, offloading a cash-hungry car manufacturer became a strategic necessity—especially in the face of rising competition in the global defense sector.
Following the acquisition, numerous reports—both academic and from car enthusiasts—commended Richard for successfully maintaining Rover’s British ownership. His triumph ensured that Rover remained a homegrown British carmaker, a decision widely celebrated by nationalists and industry experts alike.
"At the time, Sterling was relatively weak, and combined with the UK’s less aggressive labor relations, it made Britain a cheaper place to produce cars than BMW’s German plants. This is a devious scheme from the European carmaker!" an expert raged on television.
"Indeed," another enthusiast chimed in. "It’s also been suggested that BMW was eager to compete with Mercedes and other premium brands in the SUV market but lacked the resources to develop its own models from scratch. Acquiring Rover Group meant securing the prized Land Rover brand—a strategic move that gave them an instant foothold in the market."
"Rover was cheap, a few of the BMW directors were very enthusiastic and underestimated what they were buying. It did not have profits or a strong balance sheet, and had been starved of cash for decades. But in terms of capitalisation and the capacity to build 700,000 cars - against BMW’s 500,000 - it was huge."
CLICK!
Richard muted the television and leaned back in his chair, deep in thought.
Saving Rover Group was now his responsibility, and he knew the challenges ahead would be immense.
"Sigh... I need to understand the company’s current situation first," he muttered before rising from his seat.
Rover Group’s headquarters was located at Rover Group Centre in Solihull, West Midlands, England, but its main manufacturing and engineering operations were spread across several key sites:
1. Longbridge, Birmingham – Also known as Austin Rover Works, this was Rover’s main production site for passenger cars.
2. Solihull Plant – The home of Land Rover production and Rover’s administrative headquarters.
3. Gaydon Engineering Centre – Located in Gaydon, Warwickshire, this was Rover’s research and development facility.
Today, Richard was scheduled for an important meeting at Rover Group Centre, with the primary agenda being Honda’s stake in the company.
Behind the scenes, Rover Group’s management had been scrambling desperately to avoid being swallowed up by the Germans. Now, with Richard taking over, they could finally breathe a sigh of relief.
As of now, Rover Group’s ownership was structured as follows:
Maddox Capital – 80%
Honda – 20%
This would be Richard’s first official meeting with Rover’s senior management, and the topic on the table was Honda’s desire to increase its stake in the company.
Since 1989, Honda had owned 20% of Rover, but despite their partnership, the Japanese company believed Rover was capable of surviving independently and was unwilling to take full ownership.
So why the Honda reluctance to acquire Rover?
First, it’s been attributed partly to Japanese sensitivities over the question of foreign ownership and no doubt there’s some substance in that: ’Honda would have been fearful of the public opinion if it was seen to take over the last British car maker.’
Second, for them, Rover’s British identity was a key part of its appeal. Stripping that away would diminish much of its value to them.
Now, however Honda had now made a proposal: they offered to increase their stake to 47.5%, with valuing the company at £600 million.
The management, fully aware of Rover’s financial difficulties, initially saw Honda’s proposal as a positive opportunity. However, Richard adamantly rejected it.
"Too low," he stated firmly.
Despite Richard’s refusal, Rover’s management was eager to maintain their collaboration with Honda. So determined were they that Rover’s boss, George Simpson, booked himself on the first available flight to Tokyo, hoping to persuade Honda to increase their offer.
Unfortunately, Honda stood firm and flatly rejected the request.
Following the announcement that Rover had fallen into the hands of Richard Maddox, many British experts lined up to advise the inexperienced chairman on how to transform the "mutt" into a pedigree. However, their wisdom was reportedly ignored.
After George Simpson returned from Japan, their second meeting was quickly arranged, but this time it would be much more comprehensive.
Kiyoshi Kawashima, the president of Honda, came all the way from Japan to join the meeting. He was also eager to meet the 27-year-old man who had successfully acquired Rover from the jaws of BMW.
The meeting kicked off with Richard taking the lead. As everyone settled in, he stood up.
"Good morning, everyone," Richard began. "Probably some of you have never met me, so I’ll introduce myself again. My name is Richard Maddox, and it’s great to be here with all of you today."
He looked around the room, his eyes meeting Kiyoshi Kawashima’s. "Mr. Kawashima, it’s a pleasure to have you here today. Honda has played an important role in Rover’s journey, and I look forward to continuing and strengthening our partnership moving forward."
Mr. Kawashima only nodded without rising from his seat, but Richard didn’t mind. He paused for a moment before continuing.
"I know we’re at a critical point right now, and there’s a lot of work to be done. But I’m confident that together, we can guide Rover into a strong and successful future. Now, let’s begin with the first agenda item to discuss..."
The first item on the table was the nomination of a new CEO to replace George Simpson, a decision that had been coming for some time given the struggles Rover had been facing under Simpson’s leadership.
Richard addressed the room with a calm, professional demeanor. "As we all know, the challenges we’ve faced recently have been immense, and we need strong, fresh leadership to steer this company toward a sustainable future," he began, locking eyes with the room. "I’ve come to the conclusion that it’s time to appoint a new CEO to take us forward. George, I want to thank you for your efforts during such difficult times, but it’s clear that the company needs a new direction."
George Simpson sat quietly, nodding in understanding, though anyone who looked closely could see the weight of the situation on him.
He’d been with Rover through thick and thin, but lately, it seemed like the company’s problems had been taking more of a toll on him than the cars. In fact, his hairline had been slowly but surely retreating—so much so, it looked like it was trying to escape the whole situation.
But despite the obvious stress, George kept his seat, because, well, no one else was brave enough to take on the "hot potato." So, there he was, still holding the reins, even if his hair was trying to give up first.
"I understand," Simpson said, with a hint of relief in his voice. "It’s been a tough journey, and I respect the decision. I’ll step aside and hand over the reins peacefully. Rover needs a fresh approach now."
Richard gave him a sincere nod. "Mr. Kawashima, do you have any objections to this decision?"
Mr. Kawashima shook his head. Since the major shareholder had already spoken, there was no need to oppose this matter.
Next came the name Richard had nominated for CEO.
"Alan Mullaly, the former president of Boeing Information, Space & Defense Systems and senior vice president. He held this position until last year, but was forced to resign by their CEO. I’ve nominated him as the new CEO," Richard announced. 𝖓𝔬𝖛𝔭𝔲𝖇.𝔠𝔬𝖒
The room fell silent. Everyone was taken aback.
"Boeing?"
They exchanged bewildered glances.
Richard smiled bitterly. After two days and two sleepless nights of searching through hundreds of CVs and doing research, he finally came across this man—a visionary who transformed Ford Motor Company from a near-bankrupt relic into a global powerhouse, making Ford the number one brand in the U.S. and driving soaring profits.
Mr. Kawashima, clearly surprised, spoke up in fluent English. "Boeing? Are you sure? He’s from aerospace, not automotive. How does he understand the intricacies of running a car company like Rover?"
Richard shook his head. "British Aerospace’s refined engineering expertise and advanced manufacturing techniques have led to some significant improvements in Rover’s engineering practices. This is why they are confident in their ability to win the luxury SUV market. Some of the management strategies and problem-solving techniques from aerospace manufacturing have been integrated into Rover. That’s one of the key reasons I nominated Mr. Mulally."
Mr. Kawashima frowned. "Mr. Maddox, I understand your point, but aerospace engineers focus on high-stakes, precision engineering for flight safety. Automotive engineering, is more about mass production, fuel efficiency, handling, and customer needs. The two fields are quite different."
"I understand," Richard replied, "but right now, what we need is to build on the legacy left by British Aerospace. We’re talking about high-performance materials—lightweight alloys, advanced composites, and other technologies. These were all innovations from BAe, and it would be a missed opportunity to abandon them."
He paused again, choosing his words carefully. "What I want for Rover is to embrace BAe’s focus on precision and safety, a culture of high-quality engineering, and apply that attention to detail in vehicle assembly and component quality, just like Volvo. This is how we’ll differentiate Rover in the market—by drawing from the best of aerospace engineering principles."
Everyone in the room was taken aback by Richard’s response. One of the directors, unable to hide his curiosity, asked, "Mr. Maddox, have you ever worked in the automotive industry?"
Richard paused for a moment, pointing at himself in mock surprise. "What? Me?" he began, then quickly realized what they meant and burst into laughter. "No, no, no, I know all of this from our chief engineer," Richard said.
It was only then that the room seemed to catch on—they had seen this young man coming and going, passing through the manufacturing plant since the early hours of the morning, fully immersed in it.
This young man, who they had initially assumed was simply looking to make a high-profile move or had some hidden agenda by acquiring Rover Group, had come fully prepared. He was genuinely eager to learn and determined to make Rover thrive.
It seemed they had misjudged him.
