Thatcher forged lasting imprint on Europe's luxury brands
|Richard Johnson is managing editor of Automotive News.|
Britain's auto industry changed dramatically on Maggie Thatcher's watch. Japanese carmakers began setting up assembly plants in the UK in the 1980s, starting with Nissan in Sunderland in 1986. It was Europe's first Japan transplant and was a particular triumph for the Iron Lady.
Thatcher died on Monday at age 87.
Her real impact on the global auto industry had more to do with the fate of luxury-car companies. Her legacy is the 1989 decision to change course and allow foreign ownership of British carmakers -- beginning with Jaguar.
In October of that year, Thatcher lifted the government's "golden share" in the company, which had prevented the sale of Jaguar to a foreign carmaker.
That immediately set off a bidding war between General Motors and Ford, which considered the Jaguar name a trophy of almost incalculable worth. Ford won the sweepstakes a few weeks later, spending $2.5 billion dollars ($4.6 billion in today's money) on the prize. GM immediately responded by acquiring 50 percent of Saab.
Suddenly Ford and GM were in the European luxury-brand business, and it would be an enduring headache for both of them.
From then on every luxury-car maker in Europe was a target: Volvo, Land Rover, Rolls-Royce, Bentley and Maserati. A lot of energy was expended on buying and then trying to manage those companies.
The removal of Jaguar's "golden share" marked a major change of direction for Thatcher. In 1986, she wouldn't allow state-owned Austin Rover Group to be acquired by Ford. In 1985, when Jaguar was pulled out of Austin Rover and privatized, it was the prime minister who insisted that the government retain its "golden share."
The special stake was due to expire at the end of 1990, but rather than extend it, Thatcher and her advisers decided to remove it more than a year early -- possibly because of growing buyer interest in Jaguar. The change of heart was sudden and unexpected. Even Jaguar's executives had not been informed.
What would have happened if Jaguar had been protected and nurtured for a few years? Yes, the company had been hurt by the 1987 stock market collapse, but Jaguar might have found its footing in the Go-Go '90s.
Meanwhile, in 1994, the renamed Rover Group (which combined Austin Rover cars with Land Rover) was acquired by BMW. By 2000, that experiment had failed. The Land Rover unit was sold to Ford, becoming part of the ill-fated Premier Automotive Group, along with Volvo and Aston Martin.
Eventually, Jaguar, Land Rover, Volvo and Aston Martin were all sold by Ford. (Gosh, if Ford had not loaded up on so many luxury brands in the 1990s, Lincoln might have received some much-needed attention.) GM unloaded Saab, which has since been closed.
If Jaguar had survived as an independent, Saab, Land Rover and Volvo probably would have had the opportunity to do the same. The 1990s would have looked a lot different. But there were deals to be done and careers to be made, and the British and Swedish governments were unwilling to shield those national treasures.
Healthy and vibrant small luxury-car companies might have flourished in strategic partnership with larger companies rather than as subsidiaries.
Maggie Thatcher usually went with her gut. Back in 1989, maybe she should have stuck with her original instinct and hung on to Jaguar's "golden share."
For more coverage of Thatcher's death from Reuters, click here.
You can reach Richard Johnson at email@example.com.