The right location to roll out history

"You can't have Rolls Royce next to a Pizza Hut." That's the simple rule as applied by Fred Fruth, a BMW veteran of 25 years sent to Britain in 1998 to find an appropriate location for the production of one of the world's premier cars.

Upon the announcement that BMW had taken over the name, several British towns bid for the plant.

However, according to Fruth, with 80 per cent of Rolls Royce customers paying a visit to the plant, its look and location were just as important to the image of the firm as the stylish showrooms and glossy brochures.

"Some of the locations on offer were quite expensive and in the heart of an industrial estate." Not the best setting to sell a car sold here for €600,000.

According to Fruth, whose previous experience includes working with Rover in the dark days when BMW mistakenly took them under its wing. However, his contacts and lessons from operating in the British environment paid off when he was appointed to the project team set up to build the Rolls Royce marque to its current level.

When it finally opted to build its premises in the 3,000-acre Goodwood estate of Lord March, despite assurances that it would blend in with the rolling hills, and the appointment of Sir Nichlas Grimshaw to design it, locals were less than impressed. "On your bike BMW", screamed the local papers.

However, with the aid of some stunning architectural plans, which included sedum-covered roofs - a mix of grass and moss that changes colours with the seasons - and semi-elliptically shaped buildings, matching the rolling hills, the public was won over.

The estate also features the Goodwood horse racing track, the Goodwood race circuit, home to the Goodwood Festival of Speed, a small aerodrome. Throw in a four-star Marriott Hotel and you begin to understand BMW's eagerness to locate there.

There was another link to the Goodwood area for Rolls Royce. Of the five difference sites where Rolls Royce has been built since its creation, the Goodwood area has history. Sir Henry Royce was one of the first successful kidney transplant patients, and doctors advised him to live in a milder climate, so he moved to Dover in 1910. He brought his car business with him.

However, with the onset of the first World War, it was thought that Dover was within range of German fighter planes so he moved slightly north, to a spot near Chicester, and eight miles from the current location. He became great friends with the then Lord March, who was himself a car fanatic, travelling everyday to work incognito as Freddie Marsh in a Bentley dealership as a mechanic.

Once the location was agreed and building work begun, it was now time to build the car. A team of 24 designers came together in a derelict bank in Mayfair, London, where BMW set up a studio. Here they worked full-time for nearly a year, submerging themselves in the history and tradition of the brand and all the time working feverishly to create a car that would meet the history of the marque. According to Fruth: "We were determined that we would not simply build a 9-series with a fancy grille. It had to be from Rolls Royce heritage, only using the BMW links when it was felt their technological advances could be of assistance."

In late 1999 the team, split into two groups, presented their work. John Blatchley, octogenarian designer of the Silver Cloud was invited to offer his views. And so the Phantom's current look was agreed.

Throughout this time the January 2003 deadline set by BMW when they took control of the firm, hung over the project. Several handmade one-offs were built in Germany in order to get testing underway, a programme that took two years and included dual summer and winter testing at various worldwide locations. By spring 2002 they were finishing testing in Tokyo, summer city stop/start, when production tests were finalising under tarpaulin, as the glass was not fitted in the factory.

These days, through the glass façade which looks out onto the courtyard, some of the 450 staff work to build five cars a day, with a total expected production for a full year set to peak at 1,000. While the aluminium body comes from Germany, and the 6.75-litre V12 engine is built by BMW, the more authentic touches are carried out in the backrooms of the factory. Here inspectors looking for blemishes closely examine leather hides. In another room carpenters - many hired from the local south of England boatyards - work on the interiors. This work includes building up the dash. One particular customer wished to use wood from his own forest, which he had also used on his boat. Rolls Royce duly obliged.

Finally, the massive 30-inch tyres screech over the lacquered floor surface and out onto the open road. From here, for us, the fun begins.

Battling for love of the silver lady

The story of how BMW trumped Volkswagen to control Rolls Royce is a tale of corporate gamesmanship and crossed strategies, writes Michael McAleer. Add in some big business egos and you have the makings of a city drama.

In 1971, when Rolls Royce entered receivership the British government split the firm into two operations - cars and aircraft engines. However, the rights to the name were given to the aircraft side. The car arm could retain the premium name. Once sold to a foreign player, the title to the name would return to the aircraft engine division. The car firm was taken over by Vickers the result, some suggest, of pressure from Downing Street. The arms manufacturer has little or no interest in the car firm. The result: little or no investment in the firm for 20 years. By 1997 Vickers was keen to shed its non-core businesses, and looked for a potential buyer. So there was an offer of £340 million from BMW, a partner and supplier with several links to both the car and aircraft engine firms.

At the time, BMW's initial idea was to buy its way into the mass market, and bring new life to a brand which once brought us some classic cars. It had lost its way but the folks at Munich thought they knew how to save the day. They did not.

Fingers burnt, there was even rumours that BMW could go bankrupt and a constant stream of bad press fed the rumour mills that others such as hungry VW were going to buy the firm out. "It was a hard time but we all knew it was nowhere near the end," says Fruth. BMW was now realising that far from mass markets, its competence was in premium markets, be they small or large. So the decision was to retain MINI and the move to take over Rolls Royce.

Cut to Wolfsburg, where VW boss Piëch is busy expanding his brand empire, with much the same idea as BMW, to buy its way into different market segments through takeover. The imminent sale of Vickers' Crewe operations, which included the Bentley marque, seemed appealing. So, with weeks to go to the finalising of BMW's takeover, VW put in a bid of 430 million, along with another 70 million for the Cosworth arm, then also controlled by Vickers. According to Fruth, despite a letter of intent between the arms firms and those at BMW, the Germans knew it was too attractive for Vickers to turn down and pragmatically accepted the inevitable. While we may doubt it was taken that pragmatically in Munich, BMW knew it had the trump card up its sleeve.

As VW announced the takeover of the Crewe operation, BMW dropped the bomb: "We knew from the start that Vickers only had Bentley and the Crewe production facility and not the Rolls Royce name, but Piëch did not so we let him have it."

BMW announced that it had done a deal with Rolls Royce PLC to buy the title for an automotive enterprise. The cost: €40 million.

The move was not as easy as it seems. BMW was working from zero, with no production facilities and nothing but a name to work off. There were also a number of irritated traditionalists who considered the sale of the name to go against the original awarding of the title to Rolls Royce PLC. But the title came with two stipulations: firstly, it must only be for automotive products and peripheries like accessories; it also cannot sell on the name, which in some eyes may suggest that it's merely leased from the air engine business rather than bought.

There was one other proviso for BMW. Without premises or experience, they could not continue production without the support of VW's Crewe plant. This at a time when fears about BMW's survival meant some were wrongly suggesting the firm would sell off the marque to cover the cost of the Rover venture. To keep these rumours at bay BMW made a commitment: it would bring out a new Rolls Royce model by January 2003.

Yet it was estimated it would take between four and five years to get their own operation up and running and until then they had licensed production to VW. However, BMW soon realised that if they crowed too much about the takeover, they risked annoying their German counterparts who might have driven the brand to the wall before BMW had the chance to get its own act together. So the decision was made to keep away from announcements about what we could expect by 2003. Instead dealers and the Rolls Royce clubs were left to speak for the firm.

In the midst of the fight for control of the brands, it seemed VW made a fatal mistake. It never lobbied the tight-knit community of customers, banded together in the Rolls Royce Enthusiasts Club. This is more than your typical fan club. It represents the archive for the marque, the only club to do so for any car firm. Without its support, or even a courtesy call to the chairman, Sir Ralph Robins, it seems VW was treating it as yet another corporate venture. For Rolls Royce it was so much more. In a market like this, tradition and a history of relationships pays off.

Next week: we test drive the Rolls Royce Phantom