A British factory expects to fail in its bid for a £20m contract to build a transfer line for the new Rover engine plant at Hams Hall, Birmingham because of the traditionally close links between BMW and German machine tool manufacturers.
US company Lamb Technicon, which has a transfer lines factory in Birmingham, said the order would represent 40% of its turnover.
The contract is expected to go to German rival Grob because of BMW’s familiarity with Grob’s equipment.
`If we were 10% cheaper, BMW might put pressure on Grob to cut 5%,’ said a Lamb insider. `Being at the same price, we haven’t got a chance.’
BMW promised a £400m new engine factory at Hams Hall at the end of last year, and will build it with a £40m grant from the Government and the European Commission. The plant will build engines for BMW and Rover.
Grob is expected to win the contract to make the cylinder head transfer line. Giddings & Lewis, which has factories in Germany and the UK, is expected to get an order for the block line.
Rover said: `We place our order with whoever’s going to provide the best equipment at the contract price.’