Critics Cry Foul as Rolls-Royce Plans to Install a German Engine

British luxury-car firm will save the cost of developing a new engine

HAS a deal between Rolls-Royce Motor Cars and BMW AG diluted the character of Britain's most prestigious product - the Rolls-Royce automobile?

Critics claim it has. The decision by the superluxury British carmaker to power future models with German BMW engines has triggered the resignation of Rolls-Royce chief executive and riled trade unions and the opposition Labour Party.

Collaboration with the Munich-based BMW automobile manufacturer is being viewed as an acknowledgement that Vickers, the parent company of Rolls-Royce, cannot afford to develop the next generation of engines.

Instead, from the turn of the next century, BMW will supply engine units that are not only powerful but also able to meet stringent fuel-economy and emission standards imposed by the European Union. It is expected that BMW will also provide the engines for Rolls-Royce's ``sister'' marque, the Bentley.

Announcing the move Dec. 19, Sir Colin Chandler, Vickers's chief executive, said it would stabilize Rolls-Royce ``for future growth.'' But Peter Ward, CEO of Rolls-Royce, reportedly quit Dec. 22 over the collaboration with BMW. He was not available for comment.

Rob Golding, a motor-industry analyst with Warburg Securities in London, estimates that the deal will save Rolls-Royce 15 million British pounds ($23.4 million) a year, but the prospect of perhaps Britain's most distinctive product being fitted with foreign engines has also sparked criticism from the Labour Party.

``It is a pity that British engineering skills will no longer be deployed at the heart of cars which are seen worldwide as a symbol of excellence,'' said Brian Wilson, the party's industry spokesman.

Jim Thomas, the national officer of the engineering union MSF, added that collaboration with BMW ``continues the trend of British engineering slipping into foreign hands.''

Last January, BMW purchased Rover, the last British-owned volume automobile manufacturer. Former British automotive firms Vauxhall, British Ford, Jaguar, and Aston Martin are now all United States-owned.

Before Rolls-Royce opted for a BMW link, it tried to negotiate an engine-supply deal with the other German luxury carmaker, Mercedes-Benz. Mr. Ward is believed to have favored a deal with that firm.

The prospect of sleekly elegant models, such as the Silver Shadow and Silver Spirit, being powered by German engines dismays the 400 British workers who make engines for the automobiles called ``Rollers'' by their owners. But Garel Rhys, a motor-industry analyst at the Cardiff Business School in Cardiff, Wales, says that, in economic terms, there was no other option.

Rolls-Royce sells only 1,400 vehicles a year worldwide. To purchase a Roller and gain the right to slide into its hide-upholstered seat and peer over its stately vertically fluted radiator topped by a gold-plated Spirit of Ecstasy costs a person up to 220,000 British pounds.

Mr. Rhys says Rolls-Royce would have had to spend around 50 million to develop a new generation of engines, whereas BMW V-8 and V-12 engines can be bought ``off the shelf.''

The engines that now power Rollers were designed 28 years ago and are based on a design developed by Buick of America.

Already, 30 percent of Rolls-Royce components come from other countries. General Motors Corporation supplies the automatic gearboxes, though it has been reported that BMW would like to provide them in the future. The starter motor on a Rolls-Royce is Japanese. And the electronic engine management system and antilock brakes are manufactured by Germany's Bosch company.

Although Rolls-Royce has not widely publicized the fact, the body panels fitted to its models come from Rover. So in the future, BMW, through its ownership of that company, will have a stake in the automobile's bodywork as well as its engines.

Sir Chandler notes that BMW has not acquired any equity in Rolls-Royce and insists that Vickers will retain full ownership of its car subsidiary.

``Rolls-Royce is not for sale, nor would it be for the foreseeable future,'' he says. ``People who buy Rolls-Royce cars will still get the style, quality, luxury, and systems engineering which makes the cars unique. That does not change.''

Vickers's future plans do suggest a close working partnership with BMW, however.

Chandler says the companies will cooperate on developing a small coupe, to be called the Bentley Java, using BMW engines. It will be targeted at a less exclusive market than the current generation of Rollers and cost about 100,000 British pounds.

Rolls-Royce's future reliance on a German engine has prompted nostalgia among British commentators.

A writer in the London Times, bemoaning the linkup with BMW, describes the Roller as ``the last bastion of the British motor industry.'' The deal with BMW would ``engender the sort of dismay that greets the news that your auntie has fallen on hard times and is taking in lodgers.''

But at least two items on a Roller are likely to remain British-made: solid silver fruit bowls and walnut picnic tables ... except that the walnut will come from America.

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