Originally created 08/01/98

Rolls-Royce chief quits after Germans split carmaker

LONDON -- The boss of Rolls-Royce Motor Cars Ltd. resigned today rather than go along with two German automakers' plans to move production of Rolls-Royces out of its current factory.

Chief executive Graham Morris expressed "deep personal regret" at leaving Rolls-Royce, which has just been purchased by Volkswagen AG for $790 million.

But Morris said he felt unable to stay amid plans by VW and its rival BMW to carve up the company into two groups, one making Rolls-Royces and the other making Bentleys.

When VW bought the Rolls-Royce factory in Crewe, England, from the engineering conglomerate Vickers PLC, it was not able to buy the rights to the Rolls-Royce brand name. VW signed a deal Tuesday that eventually will let BMW produce Rolls-Royce cars at a new factory that BMW insists will be somewhere in England.

BMW bought the Rolls-Royce brand name and logo for $66 million from Rolls-Royce PLC, the jet engine maker that controlled them for years. Rolls-Royce PLC wanted BMW, its partner in an aerospace venture, to make Rolls-Royce cars beginning Jan. 1, 2003.

VW will then rename its part of the company Bentley Motor Cars as of Jan. 1, 2003. VW then will keep producing the luxury line of Bentleys in Crewe.

This did not sit well with Morris, 48, who said earlier in the week that uncertainties over the future of Rolls-Royce had pushed new orders down by 30 percent since mid-June.

"I now feel that it is in the best interests of all concerned that VW appoint a successor for my role," he said in a statement.

The tabloid Daily Mail reported that Morris told colleagues Thursday he would quit "as a matter of honor," after assuring the 2,200 employees in Crewe for months that Rolls-Royce would stay there after Vickers sold it.

Morris' statement said he maintained "the greatest respect" for VW and its chairman, Ferdinand Piech, who had stressed in a news conference Tuesday that he wanted to keep Morris in charge of Rolls-Royce.

Asked about management plans for 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.

"No. He's mine," the German executive joked.

Morris said today he would stay in his job long enough to let VW find a replacement.

It was unclear who might get the job or when the successor would be chosen. VW spokesman Kurt Rippholz did not immediately return phone calls placed to his office at VW headquarters in Wolfsburg, Germany.


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