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Marque of Excellence

Can Rolls-Royce, Britain's Name of Distinction, Weather Separation from Its Kid Brother, the Bentley, and Adoption by the Germans?
Paul A. Eisenstein
From the Print Edition:
Orlando Hernandez, Mar/Apr 99

(continued from page 2)

It is an ancient land, the homes cut into solid outcroppings of weathered limestone. Wisps of smoke curl from chimneys that emerge from the hillsides 100 feet above. A soft morning light gently caresses the Loire Valley, giving one the sense of having awakened inside a Monet canvas. Only the roar of old motors coming from a convoy of cars nearly as primitive as the landscape itself disturbs the tranquillity.

The Blower has taken the lead as the procession sweeps through a small French town, curious villagers pointing and waving. The driver's eyes are shielded from the cold air by yellowed goggles, his hair by a cracked leather helmet, perhaps the very one used when the old Bentley naviga- ted the circuit at Le Mans nearly 70 years earlier. The Blower Bentley, its massive supercharger hanging from the front bumper, never took the checkered flag. Ironic, perhaps, that it's become the best-remembered example of its breed. But in those early years, when one could claim some small victory by simply enduring the grueling 24 Hours of Le Mans, W. O. Bentley and his boys achieved the type of dominance that forever enshrined the British marque's place in racing lore.

A privately owned, three-liter Bentley was the first car to cross the finish line in 1924, and the factory team repeated the feat in '27, '28 and '29--when Bentleys came in first through fourth--and again in 1930. So, if any automaker can claim Le Mans as its spiritual home, it's certainly Bentley.

The Bentley's early racing successes were not matched on the corporate ledger, however, and sales were devastated by the Depression. The exclusive marque would have vanished had it not been bought by its British competitor, Rolls-Royce Motor Cars Ltd., in 1931. Over the years, the Bentley brand lay fallow, like an old work of art languishing in a forgotten wing of a seldom-visited mu-seum. But a decade ago, it began a return to glory founded on that spiritual kinship, the comeback ignited by an ultraluxury performance sedan, the Turbo R. Despite weighing in at 2.3 tons, the Turbo R accelerated faster than many sports cars and peaked out at a breathless 140 miles an hour. "I tend to look at [the Turbo R] as the car for the guy whose granny won't fit in the backseat of the Porsche and Ferrari anymore, but who still wants to enjoy that driving experience," says former Rolls chief executive Peter Ward, who began the process of reviving the Bentley brand.

Appropriately, the latest step in the revival process played out at Le Mans, where the automaker staged the introduction of its newest sedan last spring. The Arnage takes its name from the tight, right-hand corner where far too many racers have prematurely ended their runs at Le Mans. With a lineup of classic Bentleys providing the backdrop, the Arnage made a formidable, if implausible, entrance, performing a series of aggressive burnouts down pit row. Even with a 350-horsepower, 4.5-liter supercharged V-8 to power its 2.5 tons of metal, glass, burlwood and Connolly leather, a $200,000 automobile isn't what one might think of as a muscle car.

But if the past is a prelude to the future, the Arnage wasn't the only thing weighing on the minds of those gathered at Le Mans last spring. For the moment the future of both Bentley and Rolls-Royce seemed decidedly uncertain. The staid world of the British luxury car industry is rarely stirred and seldom shaken. Yet that's precisely what happened when, in late 1997, the British conglomerate Vickers PLC announced that it was putting Rolls-Royce Motor Cars up for sale. Hopes that somehow the legendary brands would remain in British hands were quickly dashed. The only serious bidders, it soon became apparent, did their accounting in deutsche marks. For some, the thought of moving Rolls-Royce across the channel was akin to asking the queen to clear her things out of Buckingham Palace to make room for the Bavarian tourist trade.

To the British, Rolls-Royce Motor Cars is perhaps among the last vestiges of a once-great empire. Though India, Australia and those pesky American colonists all bolted the Commonwealth, the sun continued to shine on the Rolls-Royce dominion. The very name constitutes one of the world's best-known brands, second only, perhaps, to Coca-Cola. It is an unquestionable symbol of status attained, a mark of distinction and a marque of aspiration.

Curiously, Rolls-Royce had come under German assault once before. During the Second World War, its plant in Crewe, in northwestern England, was a prime target for the Luftwaffe, which was propelled by BMW- and Volkswagen-built aircraft engines. But the Royal Air Force, depending upon British Spitfires powered by Rolls's Merlin engines, turned the tide of war in the Battle of Britain. Fifty-seven years later, the two German companies were back, this time seeking to claim the automaker intact. Yet, in this industrial battle, Rolls aeronautics would again determine the outcome.

The intensity with which the bidding war was waged, indeed the very fame that surrounds Rolls itself, was in inverse proportion to its production numbers. In its 94-year history, the company has adorned barely 130,000 automobiles with either the Rolls Spirit of Ecstasy hood ornament or the Bentley "B" badge. For a carmaker the size of Volkswagen, that's little more than a week's total output.

In the world of Rolls-Royce, where automobiles serve as jewelry rather than as appliances, there is no such thing as planned obsolescence. Fully half the "Rollers" and Bentleys ever built are still on the road. In a small annex of the plant at Crewe, you'll find logbooks on the cars that were assembled in the past decade. These are hand-built and custom-crafted automobiles, so the precise pattern of each car's leather and the cut of its wood is recorded in meticulous detail should replacements ever be needed. The records for another 100,000 vehicles fill files at the Rolls-Royce museum, a few hours away in the town of Paulerspury Northants. The records are not so much an archive of technical documents as a history in minutiae, a legacy of a company that was created with a handshake when Henry Royce and Charles Rolls agreed to build cars together.

This was an unlikely pairing in class-conscious Britain. Rolls was an aristocrat who had taken to selling hand-built luxury automobiles. Royce, the son of a failed miller, had an extraordinary skill for things mechanical and had become a machinist. The two men may have been born in different worlds, but their shared love of machines forged a passionate bond. They began collaborating in 1904 and, three years later, unveiled their first car, the Silver Ghost. It quickly earned a reputation as the best car in the world.

"It deserves that sobriquet in the same way you deserve your belief in your God," asserts Lt. (read: "Leff-tenant") Col. Eric Barrass (retired), the unapologetic president of the Rolls-Royce Enthusiasts Club. He is busy directing traffic at the annual British gathering of Rolls owners (and the smattering of odd Bentley enthusiasts, who have been allowed to enter the grounds in the interest of diversity). Nearly one out of every 100 cars ever to roll out of Crewe will gather on the castle's grand lawn on this day. Even as the sheep greet the warm dawn with casual indifference, the colonel is already hard at work as the cars arrive, in ones and twos. "No," he shouts, ever the military man expecting precision drill. "This row is for Silver Shadows. For God's sake, man, you're driving a Corniche!"

A special place is reserved for the rarest of the breed, a Silver Ghost dubbed Mystery. It's a fitting name, for the archives are silent on how it was selected. It was christened by Claude Johnson--often described as the "hyphen in Rolls-Royce"--who gave individual names to some 45 of the company's first automobiles. As was the norm for most ultraluxury cars produced during the first half of the century, the Silver Ghost's chassis and mechanicals were produced at the factory but its body was designed and constructed by a coach builder. In Mystery's case, the latter task was assigned to one of Britain's finest coach builders, Holmes of Darby. The car featured cantilever springs and acetylene lighting. Forget chrome--Holmes had the headlights and pipes silver-plated.

A gathering like this really tells only half the story of Rolls-Royce, though. Charles Rolls's other passion was the airplane. Indeed, he was killed in a crash in 1910 at the age of 33. But his partner continued to tinker, and in 1916 the company's first aircraft engine, dubbed the Eagle, made its maiden flight. In 1919, nearly a decade before Lindbergh made his solo crossing, a team of pilots made the first nonstop transatlantic flight in a Vickers plane powered by Eagle engines.

Britain owes its continued existence to the Eagle's successor. The Merlin-powered Spitfire proved to be the last line of defense in the Battle of Britain. It overwhelmed a seemingly superior force and compelled Hitler to call off his planned invasion of the island.

But Rolls aeronautics couldn't withstand an assault from the economic recession of the early 1970s. The carmaker was deep in debt when the ill-fated development of the RB211 aircraft engine nearly drove it into bankruptcy in 1971. Perhaps as payoff for Rolls-Royce's role in the war, the British government stepped in, nationalizing the aircraft operation, while the automobile division was split off and floated on the stock market. In 1980, Vickers acquired Rolls-Royce Motor Cars for a paltry £38 million (about $89 million).

It was never a happy marriage, according to Graham Morris, who served as Rolls's chief executive from March 1997 until this past December: "They were the wrong owners." Vickers' accountants found it hard to place the value of a brand on their books. The conglomerate doled out cash with an eyedropper, leaving Rolls starving for the kind of capital it takes to keep "the best car in the world" truly the best. As a result, Rolls and Bentley began to be eclipsed on a technical level by their German rivals, BMW and Mercedes-Benz.

Yet the image persisted. In the go-go years of the mid-1980s, when image was everything, Crewe was stretched to capacity. Despite waiting periods of up to four months, sales posted double-digit gains one year after the next. The company seemed unstoppable, even by the American gas-guzzler and luxury taxes, which, former Rolls spokesman Reg Abbiss declared, would cause a potential customer to think twice "only if it came down to a choice between a Rolls-Royce and a second swimming pool for the horses."

Then the bubble burst. As the Reagan era ended, the social theorists pronounced a new age, one of constrained consumption. Almost overnight, the luxury market collapsed. In 1991 alone, Rolls's volume slumped 48 percent, from 3,333 to 1,731 vehicles. The blue-blooded automaker was hemorrhaging red. Vickers started slashing. It halved the workforce at Crewe, then closed the ancient Mulliner Park Ward factory in London where its most expensive models were hand-tooled for clients such as Queen Elizabeth.

Each time rumors surfaced that Vickers would put its troubled subsidiary up for sale, company officials swatted them down. With the economy--and sales--starting to revive, the conglomerate invested £40 million ($64 million) in the mid-'90s. Vickers gave the go-ahead to a wave of new products and shelled out for a new assembly line--the first true assembly line to operate at Crewe. But the rumors were on the mark: Vickers was setting Rolls up to be sold.

In Crewe, the announcement brought stunned, if mixed, reaction. No one was satisfied with Vickers, but there was no way to guess what a new owner would bring. With morale sagging, then CEO Morris made the bold promise that production would "never move" from Crewe. The declaration ultimately caused the well-liked executive to announce that he would step down.

The bidding war proved disconcerting, and a bit too unseemly for many potential Rolls and Bentley buyers as well. As it played out in the press last year, sales fell 30 percent, despite the introduction of the new Arnage and the Rolls brand's Silver Seraph, the company's first completely redesigned vehicle since 1980. With an average of five other cars in their garage, potential buyers could easily wait to see what happened. In March 1998, Vickers tentatively accepted BMW's bid. A day later, Volkswagen upped the ante to £430 million pounds ($835 million), £90 million more than BMW. In April, the board gave a seemingly final nod to BMW, but Volkswagen chairman Ferdinand Piëch threatened to take his case to shareholders if his bid was rejected. Piëch was a man possessed. Descended from the legendary Porsche family, he was intent on shedding Volkswagen's image as "the people's car." He had already bought an Italian supercar maker, Lamborghini, was bidding on Bugatti, had upgraded VW's Audi division and was toying with a $150,000 Volkswagen sports car. But Rolls-Royce Motor Cars would be the capstone, the feather, the affirmation. Knowing it would have to up its bid or fold its cards, BMW gave in. On May 7, Piëch claimed victory. Or so he thought.

Though BMW appeared to have given up, "We were saying we had four aces," BMW chairman Bernd Pischetsrieder now recalls with a laugh. "VW thought it was saber rattling." The card that was up Pischetsrieder's sleeve was Rolls-Royce PLC, the aerospace operation that was spun off in 1971. In an Alice in Wonderland twist, Rolls-Royce Motor Cars didn't own its own name. The jet maker did. Even as VW was proclaiming victory, BMW was quietlynegotiating its own deal, buying the Rolls name for $66 million. Rolls-Royce PLC chairman Sir Ralph Robbins delivered the unsettling news during a golf outing with Piëch.

Though Volkswagen continues to suggest that there may be yet another twist in the plot, it appears the deal making is done. Piëch, who declared a truce through clenched teeth, gets to continue building cars with each nameplate through the end of 2002. Then he keeps the Bentley marque but hands over the Rolls brand to BMW, which has announced plans to build its own factory, most likely in England. In the end, apart from bruised British egos, Morris was the only casualty of the bidding war. Feeling that he couldn't maintain credibility after failing in his promise to keep Rolls at Crewe, Morris said he would step down as CEO, though neither of the two new owners seems to be in a rush to replace him.

With the takeover battle behind it, Rolls is recovering in style. Sales of the Seraph and the Arnage are soaring, and in September the automaker rolled out the Bentley Sedanca Coupe, which features a removable T-top roof over the front seat and a fixed yet expansive glass roof over the rear seat. Notably, the Sedanca body is unique to Bentley. Like Siamese twins, Rolls's two brands have, throughout the years, shared virtually everything except their badges. With the Seraph and the Arnage, Rolls is trying to create separate identities. For example, the Seraph features a BMW-built V-12 instead of its Rolls-built supercharged V-8.

Now, with separate owners, it's likely that Bentley and Rolls will finally achieve true individuality as they develop their future models. Indeed, Piëch has some aggressive plans in the works. A "Baby" Bentley is in the wings, he says, which will carry a price tag of around $150,000. With the new model, Piëch would like to push sales up to between 9,000 and 10,000 cars a year, more than triple the all-time Rolls-Royce sales record and about five times today's volume for both marques combined. "We believe the Bentley marque has more stretch in it than the Rolls-Royce marque," suggests Julian Hadril, the brand manager for Bentley. Bentley accounts for about 70 percent of the company's volume, up from just 5 percent a decade ago, prior to the introduction of the Turbo R in 1988.

BMW's Pischetsrieder admits he would have liked to own both brands, but insists that he's satisfied with Rolls, "the summit of the Himalayas." Pischetsrieder expects to improve on the brand, giving Rolls a much-needed infusion of capital and an equally important upgrade in its technology. He's likely to expand its model range, but is reluctant to attempt the same down-market move VW plans. Instead, he says, "BMW can grow up into the Bentley segment."

The bidding war may be over, but a new battle is about to begin. For the better part of a century, the Rolls-Royce and the Bentley have represented the ultimate--not just in automobiles but in life. In the years to come, with two separate owners, the two marques will be competing to present their own distinct interpretations of what it's like to drive to the pinnacle of the automotive world.

Paul Eisenstein runs The Detroit Bureau, an automotive news service, and publishes an Internet magazine at www.thecarconnection.com.

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