Walter Hasselkus, chairman of BMW's troubled British subsidiary Rover, resigned unexpectedly yesterday as reports of a boardroom split at the German carmaker and worries about Rover triggered a sharp fall in BMW shares.
BMW stock fell by more than 5 per cent, dropping DM63 to close at DM1,142 amid reports of differences between Bernd Pischetsrieder, BMW's chairman who masterminded the Rover takeover, and Wolfgang Reitzle, the group's number two who is believed to have been unenthusiastic about the deal.
Mr Hasselkus meanwhile resigned to shoulder responsibility for the poor performance of Rover in the fiercely competitive UK car market.
Mr Hasselkus, a BMW board member sent to sort out Rover's problems in September 1996, will be replaced by Werner Samann, an engineer and academic. Mr Hasselkus's resignation came as Rover's shop stewards agreed to a radical cost-cutting plan that should save £150 million sterling ($247 million) a year from 2000.
The scheme should help to staunch Rover's spiralling losses. Analysts expect the company will lose about DM500 million ($293 million) this year, based on BMW's conservative accounting principles. Mr Pischetsrieder declined to give a 1998 forecast, but said the figure would be swollen by provisions for the job cuts.
