The latest reports from Germany, that Volkswagen intends to transfer Bentley production to an Audi facility in Germany, show why the British team has fought so hard to keep Rolls-Royce Motors British. VW does not understand premium brands and the planned production level of 60,000 units a year is unsustainable in the long term. In going for volume at the expense of quality VW is making the same mistake Packard made.
VW is looking at the future of Rolls-Royce and Bentley solely from a German perspective, with a view to what is best for shareholders. The interests of the Crewe workforce or British national interest will count for nothing in the VW boardroom.
The only way to stop Crewe’s future being decided in Wolfsburg (or Frankfurt) is to buy the company. The British team at Crewe Motors are still working on that VW has not yet bought Rolls-Royce Motor Holdings and the vote of Vickers shareholders in favour of selling to VW was subject to a Vickers board’s undertaking to consider a higher bona fide offer from another bidder.
The price of failure could be the closure of Crewe. BMW’S decision to withdraw technical support has cast a cloud over the new Silver Seraph and Bentley Arnage. VW has an alternative engine from Cosworth (it considered its own W-12, which is an interesting engine reminiscent of the failed attempts at coupled engines during the Second World War).
But BMW supplies about 30% by value of the cars the air conditioning and ZF transmission are mated with the engines in Munich. BMW also supplies suspension componentry and some switchgear.
The transmission is a problem when we considered the Cosworth unit VW is proposing (we are aware of its specifications) our preliminary engineering assessment was that it could not reliably be mated with the ZF transmission and would need the GM400 gearbox. This, in its developed version, is used on the Bentley Azure and the Continentals.
Rolls-Royce engineering principles require that the powertrain be understressed, and with these torque outputs that means the big and beefy GM400, which in turn means retooling the transmission tunnel. VW would need to retool the engine bulkhead as well, which means a total re-engineering sum of nearly £100m.
That would amount to an increase of about 50% in the development cost for the cars with no appreciable improvement in performance, quality and refinement, and no opportunity to pass those costs on.
The business case for VW continuing with Seraph and Arnage production beyond July 1999 is not convincing, and continued production of the two-door Bentley alone at Crewe would not be economic. Crewe Motors, however, would continue with the Silver Seraph and Arnage in their existing form: our notice period for termination of the engine and component supply contracts would be three years and BMW has not even intimated that notice would be given if we acquired Rolls-Royce Motors.
VW also faces problems with Ford, which is likely to withdraw most of Cosworth’s racing business, which will not appease the shareholders.
The business and engineering case for an independent Rolls-Royce is overwhelming, and is backed by 94 successful years. Volkswagen does not supply components to Rolls-Royce; there are no technical or distribution synergies here.
The loss of Rolls-Royce would be a huge blow to our national prestige and would signal our retreat from manufacturing in favour of the service economy with all that means for the balance of payments and the future of skilled jobs. The service sector is important, but we are and should remain a proud manufacturing nation ready to lead the world. Under independent British ownership Rolls-Royce would flourish.
Michael Shrimpton is a London barrister and chairman of Crewe Motors Limited