VW, BMW, and Rolls Royce (No specific E3, Quattro, or GLX Content..)

["Reed Hitchcock" <services@fedbar.org>]

Hey Folks..  Just when you thought it was all over and you were going to get
that VW Silver Spur...

L O N D O N,   July 28 — The grandest name of British motoring, Rolls-Royce,
was shaken up today in a deal that will see separate German automakers
producing Rolls-Royce and Bentley models in the next decade.

     Rolls-Royce PLC said it would sell the Rolls-Royce auto brand name for
$66 million to BMW, which plans to create a new Rolls-Royce company.

     Meanwhile, Volkwswagen AG will keep the old Rolls-Royce factory it just
bought and continue producing the Bentley line of luxury cars.

     Rolls-Royce Motor Cars Ltd. had made both Rolls-Royces and Bentleys.

     VW paid $790 million for that company early this month, but it remained
unclear why Europe’s biggest automaker didn’t even try to buy the
Rolls-Royce brand name and logo from the British owners.

Engine Maker Prefered BMW

Those were held by Rolls-Royce PLC, the jet engine maker, which had hoped
the luxury carmaker would be sold to Germany’s BMW.

     BMW said today that VW can use the Rolls-Royce name for free until Dec.
31, 2002, but after that BMW will take the name away and create a new
Rolls-Royce Motor Cars Ltd.

     The VW chairman, Ferdinand Piech, disputed suggestions that the deal
was a defeat, insisting at a news conference that VW paid a fair price for
what it got. Piech said today’s accord was a better solution than a
drawn-out legal fight over the name.

     “I would have preferred to keep both brands, but the way—how it
developed today—I am very satisfied,” Piech said.

     The uncertainty over what would happen at Rolls-Royce has pushed new
orders of Rolls-Royce and Bentley cars down by about 30 percent over the
past six weeks, but Rolls-Royce Motor Cars chairman Graham Morris predicted
they could rebound now that the rival German carmakers have made their
peace.

Bentleys: 70% of Output

VW will keep the Rolls-Royce factory in Crewe, England, but the company’s
name will be changed in 2003 to Bentley Motor Cars Ltd. and VW will produce
Bentleys, the other line of luxury cars now made by Rolls-Royce that
accounts for about 70 percent of the cars sold by the company.

     It remains unclear how much BMW will spend to set up a new Rolls-Royce
company or precisely where it will be located.

     BMW chairman Bernd Pischetsrieder would say only that Rolls-Royces
would be made in England, but probably not in any of the manufacturing
plants it now owns through its Rover subsidiary.

     Rolls-Royce Motor Cars was put up for sale last autumn by the British
conglomerate Vickers PLC, which wanted out of the automotive business to
focus on other operations including defense contracting.

     As part of today’s deal, BMW withdrew its earlier threat to cut off
engines it supplies to Rolls-Royce Motor Cars.

Copyright 1998 Associated Press.