AFTER SPENDING $775 million to buy Rolls-Royce Motors Cars, Volkswagen still did not own the rights to the Rolls name. Did Ferdinand Piech blunder?
Piech knew that he wasn't buying the name, but it didn't deter him. He may have been beguiled by the scent of a woman - the flying lady.
BMW was outbid, but acquired the name, the grille and the lady for $66 million. Because of ties with Rolls-Royce plc, the jet engine maker, it had them all along.
BMW will be free to build Rolls cars starting in 2003. VW will be left with Bentley, and the Crewe factory where Rolls and Bentley cars have been constructed by hand since 1946.
The battle for Rolls will go down as one of the strangest auctions in automotive history. And Piech will have to prove to historians that he did not captain the losing side. As it stands, he appears to have been out-maneuvered.
That was not immediately apparent when the bizarre three-way deal was announced. For a few hours at least, carving up Rolls-Royce seemed a fair compromise for both sides. Piech wore a broad grin at the press conference announcing the deal.
But Piech had to show up for the press conference and he had to smile, (though some still thought he looked glum.) Otherwise, he would have conceded defeat.
Still, BMW spent a relatively tiny sum for the Rolls name that chairman Bernd Pischetsrieder craved. BMW's new Rolls factory, somewhere in England, will be a purpose-built site and thus benefit from all the efficiencies that can be designed into it.
Yes, Piech avoided a protracted legal battle. But why was VW in a position where a protracted legal battle had to be avoided?
Piech's single-mindedness is a great asset for VW, but it sometimes leads to trouble - like the clumsy hiring of Ignacio Lopez a few years ago. In the case of Rolls it led to a mistake.
Or did it?
VW keeps Bentley, which has far more volume potential than Rolls-Royce. Earnings from selling Rolls cars would be a drop in the VW or BMW bucket. Bentley could be much more, especially if sales rise to more than 10,000 annually as VW plans.
Rolls-Royce is better known, but the worth of Rolls' halo on other brands in a big car group is hard to measure.
Was Bentley the secret agenda? The real prize? There was no way for Volkswagen to pry Bentley away from Rolls-Royce Motor Cars. Yet did an ingenious Piech find one?
More likely the allure of Rolls simply led to careless thinking by both buyer and seller. Pischetsrieder accused Vickers management of hawking the company 'like fake Persian carpets.' Vickers maximized the price, though might have damaged the brands in the process.
But both Rolls and Bentley have great resilience. Even the twists and turns of the last few months won't harm them much.
And the convoluted BMW-VW deal is somehow understandable. Rolls-Royce is a perfume, a siren song. It drives grown men to excess. That's what it is supposed to do.