Title: Re-examining the BMW-Rover affair: a case study of corporate, strategic and government failure?

Authors: David Bailey; Alex De Ruyter

Addresses: Coventry University Business School, Priory Street, Coventry, CV1 5FB, UK. ' Canterbury Christ Church University, North Holmes Road, Canterbury, CT1 1QU, UK

Abstract: This paper analyses corporate and government strategies during the purchase, period of control and divestment by BMW of the car manufacturer Rover over the period 1994 to 2000. This paper examines three types of 'failure'. It views BMW's purchase of Rover as a 'corporate failure', with British Aerospace keen to sell Rover to raise cash and with BMW not realising the real condition of Rover. It then moves on to examine BMW's 'divide and rule' strategies with regard to working conditions and subsidy-seeking and its decision to sell Rover as an example of 'strategic failure'. Finally, it considers the 'hands-off' nature of British policy towards such transnational firms, and BMW in particular, as an example of 'government failure'. This paper concludes by raising the possibility of an EU-wide policy towards transnationals, especially in terms of monitoring the activities of such firms.

Keywords: BMW; Rover; takeover; disinvestment; transnationals; strategic failure; monitoring; corporate failure; government failure; automobile industry; automotive manufacturing; UK; United Kingdom; government policy.

DOI: 10.1504/IJATM.2012.046858

International Journal of Automotive Technology and Management, 2012 Vol.12 No.2, pp.117 - 136

Available online: 11 May 2012 *

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