BMW in the News

[Tobin Finley <tfinley@xxxxxxxxxxx>]

Saturday February 6 12:23 AM ET

BMW Fires Chairman, Appoints Engineer To Post

By Paul Gallagher

FRANKFURT, Germany (Reuters) - BMW AG, seeking to stem years of losses at
its British Rover unit, dismissed Chairman Bernd Pischetsrieder Friday and
replaced him with engineering chief Joachim Milberg.

The management change immediately prompted speculation from DaimlerChrysler
AG (NYSE:DAJ - news) Co-Chairman Robert Eaton that the luxury
automaker may be ripe for a takeover, but not by his firm.

``I figure by Monday, there will be at least three or four companies
bidding for BMW,'' Eaton said at an automotive seminar in San Francisco.
``We're not one
of them, I guarantee you.''

Eaton indicated General Motors Corp. (NYSE:GM - news), which Thursday
flatly denied holding discussions with BMW, may be among the bidders.

However, GM has seen its rival Detroit automakers grow stronger in Europe,
first with Chrysler's merger with German automaker Daimler-Benz last year,
and
then Ford Motor Co. (NYSE:F - news)'s takeover of the car operations of
Sweden's AB Volvo last month.

BMW's largest shareholder, the Quandt family, Friday reaffirmed their
commitment to BMW and denied any takeover rumors.

``The family firmly underscores its commitment to the firm,'' a spokesman said.

The company declined comment on British government and union concerns about
its commitment to its biggest British Rover plant as fears grew that
thousands
of jobs could be axed among Rover's 34,000 UK employees.

The appointment of engineering and production chief Milberg as chairman
ended weeks of conjecture that Pischetsrieder would be replaced after BMW's
failure
to turn around Rover since acquiring it from British Aerospace in 1994.

However, BMW's decision to appoint Milberg, 55, following an all-day
supervisory board meeting in Munich, was a bolt from the blue.

Milberg, who has been responsible for boosting production at BMW's plants
and supervising the introduction of flexible working practices throughout
the
group, will now be entrusted with moving Rover out of the financial doldrums.

The Munich-based luxury car company last week reported 1998 group earnings
fell for the first time since 1995 as Rover sapped profitability.

BMW said last month it expected Rover to break even in 2000 following a
radical shake-up at the subsidiary, including around 2,500 job cuts.

Following the BMW management shake-up, British Trade and Industry Secretary
Stephen Byers said he would put the case for Rover's Longbridge plant, which
employs 14,000 people, in talks with BMW's new chairman over the weekend.

The Munich-based Sueddeutsche Zeitung, which historically has had close
contacts with BMW, reported in its Friday edition that analysts were not
ruling out the
possible closure of Longbridge under a new BMW chairman.

In addition to Pischetsrieder's departure from the top job, BMW
unexpectedly announced that Wolfgang Reitzle, widely tipped as the firm's
most likely
successor, was stepping down from his management board position.

Rover operates three production plants in Britain. Longbridge, its biggest,
manufactures the Mini, MG and Rover 200 and 400 models. It produces the new
Rover 75 model in Oxford and its Land Rover models at Solihull.

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End of bmw-digest V9 #969
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