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Car Forum / BMW Cars / August 2005

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GMW?

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Vuestra Merced - 09 Aug 2005 01:58 GMT
There are rumors flying around that GM is about to gobble up BMW. Hoax,
I'm sure.

Has anybody heard anything in this regard - anything that's remotely
smells like fact, to be specific ?
djtep - 09 Aug 2005 11:30 GMT
I've heard nothing, but it would not really shock me.

GMH do own Opel and they certainly used them well here in Australia.
Of course, the familiar car (Sentator/Omega) is the Holden Commodore.

Have a look at the Holden (www.holden.com.au) website and have a look
at the Torana TT36 car and you'll see an interesting resemblence.

--
Jason
8MP
Australia

| There are rumors flying around that GM is about to gobble up BMW. Hoax,
| I'm sure.
|
| Has anybody heard anything in this regard - anything that's remotely
| smells like fact, to be specific ?
Ross Garrett - 09 Aug 2005 12:40 GMT
> There are rumors flying around that GM is about to gobble up BMW. Hoax,
> I'm sure.
>
> Has anybody heard anything in this regard - anything that's remotely
> smells like fact, to be specific ?

I think, with the advent of Deutsche Bank lowering it's ownership of Daimler
and moving towards divesting entirely, that we will see the breakup and
sell-off of Daimler-Chrysler first and then a little bit down the road, BMW
as well.

It's become almost inevitable, particularly with the paradigm shift in
relations between German banks and German industry (the Quandts act,
essentially, in the same way towards BMW as banks do to Daimler and
Volkswagen....creating that mutual circle of protection). Though it isn't
dictated that the buyer will necessarily be another car company.
Class 1 - 09 Aug 2005 13:59 GMT
Doubt it: GM are too busy f.cking up Saab, Subaru, etc to start f.cking
up BMW.
GM is a huge company, but they can f.ck up only so many brands at
once....
Don - 09 Aug 2005 17:22 GMT
> There are rumors flying around that GM is about to gobble up BMW. Hoax,
> I'm sure.
>
> Has anybody heard anything in this regard - anything that's remotely
> smells like fact, to be specific ?

Total horseshit.

There were rumors that Ford was going to take over BMW a number of years
ago.

Big problem - the majority share of BMW stock is held by one FAMILY -
who put it in a non-revokable foundation that won't allow any single
member of the family to sell their share. The family (Quandt - if you
want to search the web) has never made any mention of ever selling BMW.
It has made the family one of the richest in the world, and they seem to
like the cars.

Usual bullshit internet rumor.. are you sure you're not trying to start it?

http://www.forbes.com/finance/lists/10/2002/LIR.jhtml?passListId=10&passYear=200
2&passListType=Person&uniqueId=324H&datatype=Person


http://www.bmwgroup.com/e/nav/index.html?http://www.bmwgroup.com/e/0_0_www_bmwgr
oup_com/verantwortung/stiftungen.shtml

Ross Garrett - 09 Aug 2005 19:34 GMT
> Big problem - the majority share of BMW stock is held by one FAMILY -

Despite "internet rumours" (are you trying to start another?) to the
contrary, the Quandt family, cumulatively, does not own or control 50% of
BMW shares. They hold the biggest block, but not the majority of shares.
They are close, but the cigar is not yet theirs. So. all things being equal,
there is indeed a possibility the company could be sold against their
wishes......it'd be tough, but no one ever though an American would gain
control of Man U either.

> who put it in a non-revokable foundation that won't allow any single
> member of the family to sell their share.

No it's not. The holdings of Johanna and her 2 children were moved from
personal ownership to company ownership in the mid-'90s (which is why the
stock continues to be valued at book rather than market cap), which created
more difficulty in selling on the market, but by no means stifled their
ability to do whatever they wanted with their shares individually or
together.

The reality is this...the Quandts create a buffer between the hungry
business world (takeover) and BMW, and BMW allows the Quandts to imply more
influence on the car company's business than would normally be afforded the
major stockholder (think Kerkorian, Chrysler and Daimler's buyout). But
given the Quandt family expectation of social responsibility, justice for
the workers and service to the community over concerns for the bottom line,
there could easily come a time the needs of BMW would not measure up to the
expectations of the family.
Dori A Schmetterling - 09 Aug 2005 20:55 GMT
And I thought I read that the Quandts might have been ready to sell over the
Rover affair.

DAS

For direct contact replace nospam with schmetterling
---

>> Big problem - the majority share of BMW stock is held by one FAMILY -
>
[quoted text clipped - 24 lines]
> bottom line, there could easily come a time the needs of BMW would not
> measure up to the expectations of the family.
Ross Garrett - 09 Aug 2005 21:28 GMT
> And I thought I read that the Quandts might have been ready to sell over
> the Rover affair.

I know I read that it was their impetus and influence that caused both the
Rover sale as well as the release of Rietzle and  Pischetsrieder, so I don't
see why had BMW not sold Rover the Quandts might not have considered selling
off some/all BMW shares.

The truth is that BMW needs the Quandts in their corner given the share
block they control. If those shares were scattered about the world
otherwise, the prospect of a BMW takeover would have probably been realized
long ago.

The Quandts protect BMW from takeover attempts, and BMW satisfies the
Quandt's bottom line and social agenda. It's a nice relationship, but it is
not a lock.
Don - 09 Aug 2005 21:20 GMT
>>Big problem - the majority share of BMW stock is held by one FAMILY -
>
> Despite "internet rumours" (are you trying to start another?) to the
> contrary, the Quandt family, cumulatively, does not own or control 50% of
> BMW shares. They hold the biggest block, but not the majority of shares.
> They are close, but the cigar is not yet theirs.

According to Forbes - they've had the cigar for quite a number of years.

> No it's not. The holdings of Johanna and her 2 children were moved from
> personal ownership to company ownership in the mid-'90s (which is why the
> stock continues to be valued at book rather than market cap), which created
> more difficulty in selling on the market, but by no means stifled their
> ability to do whatever they wanted with their shares individually or
> together.

Yes it is. You've fallen behind on the history. The stock of ALL the
family members was moved to the foundation with the specific intent to
keep any one family member from selling off their stock and getting the
family below the magic 51% share point. This was covered in a BMW-CCA
Roundel article back when the Ford (bogus also) rumors were floating around.

> The reality is this...the Quandts create a buffer between the hungry
> business world (takeover) and BMW, and BMW allows the Quandts to imply more
> influence on the car company's business than would normally be afforded the
> major stockholder (think Kerkorian, Chrysler and Daimler's buyout).

I think the reality is - the Quandts like and enjoy owning BMW.
Certainly Johanna does - there are several non-US spec cars kept for her
use in NYC, and she drives them herself.

But
> given the Quandt family expectation of social responsibility, justice for
> the workers and service to the community over concerns for the bottom line,
> there could easily come a time the needs of BMW would not measure up to the
> expectations of the family.

Your paragraph above is self-contradictory. If they decided BMW didn't
measure up and abandoned it - how would thier expectation of social
responsibility, justice for the workers* and service to the community be
served? Certainly by controlling BMW - they could better direct how the
company fulfills these goals.

* = are the workers injustly treated? Exactly WHAT does this mean? It
sounds like something the USSR would have printed in Pravda in the '50's.
Ross Garrett - 09 Aug 2005 22:02 GMT
> According to Forbes - they've had the cigar for quite a number of years.

You are extrapolating with error. Read it again for fact.

> Yes it is. You've fallen behind on the history. The stock of ALL the
> family members was moved to the foundation with the specific intent to
> keep any one family member from selling off their stock and getting the
> family below the magic 51% share point.

The family doesn't have quite 50% let alone 51%.  And the shares are in
company control. Yes, their companies, and it creates a difficulty with
selling shares. But under no circumstances have they abdicated their right
to sell shares mutually or individually. That would be patently
absurd....and they are far to successful to act with absurdity.

> This was covered in a BMW-CCA Roundel article back when the Ford (bogus
> also) rumors were floating around.

I get Roundel, have for many many years, and I have never seen an article
about the Quandts that makes the claim you are making here.

> I think the reality is - the Quandts like and enjoy owning BMW. Certainly
> Johanna does - there are several non-US spec cars kept for her use in NYC,
> and she drives them herself.

The Quandts were very close to releasing their BMW stock during the "English
Patient" affair. The idea that they are romantic about any of this is silly.
Their tie is doubtless enriched by the father's legacy, but they can always
drive a BMW without owning the company.

> Your paragraph above is self-contradictory. If they decided BMW didn't
> measure up and abandoned it - how would thier expectation of social
> responsibility, justice for the workers* and service to the community be
> served?

By investing in companies that would follow their particular vision of how
things should be in this world. In contrast to what power you think they
have, they do not have the power to tell BMW what to do, if BMW doesn't want
to listen. Therefor if and/or when BMW takes a road the Quandts disagree
with the options become few...power struggles.....courts.....sale.

> Certainly by controlling BMW - they could better direct how the company
> fulfills these goals.

But their control is allowed, not decreed. Simply owning the shares doesn't
afford them control in everyday management decisions. They have that because
BMW permits it and allows places on certain boards for the family members.
The minute their influence is mitigated (and they become nothing more than
passive shareholders) they are long gone.

You seem to think because they own the stock they run the company.
Dori A Schmetterling - 10 Aug 2005 12:56 GMT
1)    Quandt family status report from Mar 2000 (BBC)

http://news.bbc.co.uk/1/hi/business/679563.stm

2)    The Quandts own 46.6% (Forbes from 2003)

http://www.forbes.com/finance/lists/10/2003/LIR.jhtml?passListId=10&passYear=200
3&passListType=Person&uniqueId=SWC0&datatype=Person


3)    Example of mis-reporting, Quandts have a majority?  (San Diego
Metropolitan, Jun 2003, as shown in Google and URL)
Or have they upped their share?

http://www.sandiegometro.com/2003/jun/roadtest.html

4)    46.6% confirmed in an article no older than 2002
(Lexikon.freenet/Wikipedia):

http://lexikon.freenet.de/Familie_Quandt

5)    46.6% confirmed and interesting fact that 40% of 'distributed'
shareholding (i.e. about 19% of total shareholding) is in the USA added
(Boersenzeitung Jun 2002)

http://www.boersen-zeitung.com/online/redaktion/aktuell/vollansicht_st.php?artik
elID=12_108_6_146_12_224_59_221
_

6)    Nugget:  Guenther Quandt's first wife, Magda, left him for Joseph
Goebbels sometime befire 1945....

http://www.br-online.de/kultur/literatur/lesezeichen/20021020/20021020_1.html

7)    A more recent analysis (early 2005?) confirms 46.6%

http://www.wer-zu-wem.de/firma/BMW.html

None of the reports mentioned the possibility that the Quandt shares enjoy
disproprotionate voting rights (a feature not found in 'Anglo-Saxon'
economies), so we can assume that their vote counts 'only' for 46.6%.

Some of the reports have mentioned that the Quandts are not involved in the
nitty-gritty of the business, but one can imagine that with such a large
shareholding (next-biggest c. 5% by an insurance company) they probably just
need to murmur a request for the management to jump to it...

DAS

For direct contact replace nospam with schmetterling
---

>> According to Forbes - they've had the cigar for quite a number of years.
>
[quoted text clipped - 48 lines]
>
> You seem to think because they own the stock they run the company.
Ross Garrett - 10 Aug 2005 15:22 GMT
"Dori A Schmetterling" <ng@nospam.co.uk> wrote in message

(snip some excellent research cites)

> 7)    A more recent analysis (early 2005?) confirms 46.6%
>
[quoted text clipped - 6 lines]
> Some of the reports have mentioned that the Quandts are not involved in
> the nitty-gritty of the business,

They all hold seats on BMW boards. Stefan and Susanne are on the Supervisory
Board (and I think Stefan is head of that board), so they are pretty
involved in the corporate decision making of the company...not only by
ownership influence but by actual appointment as well.

> but one can imagine that with such a large shareholding (next-biggest c.
> 5% by an insurance company) they probably just need to murmur a request
> for the management to jump to it...

I tend to agree, but only on the premise that BMW believes the Quandt
ownership is vital to their independence. If BMW ever decides they don't
need the Quandts, then they can effectively completely shut of their
influence on the company. I don't believe it will happen anytime soon, but
it is the case.

In the manner that German banks have always protected German companies via
close-to ownership (which was an integral part of the rebuilding of German
industry after WWII), the Quandts are valuable to BMW in the same sense.

Despite my having "fallen behind the history" as Don claims, there are a
number of fabulous books about BMW as a business and all of this exists in
them. 2004's "Driven" is an exceptional read that every BMW lover should get
an opportunity to enjoy. They don't only build great cars...I think they are
a great company. Of course they are basically small-fires, so greatness is
easier maintain under that circumstance. A couple hiccups in recent
history...Rover for example...hasn't altered what is essentially an
exceptionally well managed and integrated firm. It is very impressive to
read how that company functions on a day to day basis as well in long-look
strategic planning sessions.
Dori A Schmetterling - 10 Aug 2005 21:43 GMT
So it seems.  Highly focussed.

I knew a chap who was an engineer in Munich and wasn't looking forward to
his assignment at Rover...

I find it interesting that the BMW unit sales in the first four months of
the year were noticeably above Merc's (ballpark 400 000 v 360 000).  Of
course total sales at DB (even without Chrysler) are still much greater
because of lorry and bus sales, but BMW certainly is showing 'em how to do
it.  Maybe DC management is wasting time on Chrysler and, above all,
aerospace.

DAS

For direct contact replace nospam with schmetterling
---

[...]
> 2004's "Driven" is an exceptional read that every BMW lover should get an
> opportunity to enjoy. They don't only build great cars...I think they are
[quoted text clipped - 4 lines]
> read how that company functions on a day to day basis as well in long-look
> strategic planning sessions.
Ross Garrett - 10 Aug 2005 22:05 GMT
> So it seems.  Highly focussed.
>
[quoted text clipped - 7 lines]
> it.  Maybe DC management is wasting time on Chrysler and, above all,
> aerospace.

Well, right now Chrysler is the star of Daimler-Chysler.....they're carrying
the load. And Mercedes is plugging along at a 3.2% margin. Pretty bad in a
segment where 5% is considered close to failure. I believe BMW is still well
above 7%

There was a very good article about Mercedes in last week's edition if
BusinessWeek. I had no idea Merc was suffering so and having such a hard
time divesting themselves of bad decisions, bad execution and bad customer
satisfaction. Apparently their cost-cutting program of 7 or 8 years ago
really did result in a quality cutting program as well.

But we must remember that the guy who brought Chysler back from the ashes
for daimler is now the top guy at Merc now that Shrempf (sp) has decided to
move on. It's too good of a company with too long of a good histroy to stay
down in the dumps for long....but I did find it interesting that Deutsche
Bank has divested from 11 % to 6 % and the street says they are looking to
get out altogether.

> DAS
>
[quoted text clipped - 10 lines]
>> read how that company functions on a day to day basis as well in
>> long-look strategic planning sessions.
Dori A Schmetterling - 11 Aug 2005 13:42 GMT
Indeed, Chrysler is holding up (financially) the DC car business, but I
still think that Merc is suffering the consequences of its 'adventures'.  I
bet you did not know they were into electrical household goods for a time.
One disastrous diversion after another.  Hard to remember that BMW was once
so far down in the dumps in the early fifties that Merc almost bought it.

I agree that this is unlikely to continue, especially now that Schrempp is
gone (notably without a seat on the advisory board or big payoff).  Mercedes
still owns the top end of the car market with the S-Class enjoying far
higher standing globally than the 7.  Statistically invalid anecdote: quite
a few of the drivers of my local London 'minicab' company (not the famous
black cabs) have Mercs and when I ask them why they tend to buy Mercs (never
BMWs) they answer  that the clients who specify specific models always ask
for Mercedes.

It is only my guess, but I think that the three-pointed star is a far more
recognised logo than the roundel globally.  Some years ago I read that in
fact the star was number three or thereabouts in the world recognition and
respect stakes, up there with Coke et al, but since then many things have
changed, not least the rise of Microsoft/Windows.

In the UK Merc have taken radical steps to deal with customer service; so
far all the dealerships in London, Birmingham and Manchester -- the three
biggest cities -- that were not already in Merc's hands have been bought up.
So now one is, for example, a customer of Mercedes-Benz London and one can
go to any of the outlets in the city, with service records being held on a
central computer.  In some cases service points have been separated from
sales, and some used car sites have been separated from new sales.

We'll see how effective this is.

As regards the issue of quality, there is varying experience but the top
management has publicly acknowledged that it's an issue.  There is an urban
story (myth?) that in the 'old' days (approx pre-early nineties, say) a car
was designed and built to certain technical standards and then priced.  Then
they started building to price points.  No doubt there were signs, such as
the damping (lack of) of ash tray lids.  Perhaps it was only a reaction to
the increasing competition, but there were consequences for the marque
itself.

Mercedes has been at the forefront of automotive development literally from
the beginning and it would be a great shame if it all goes to the dogs.
Nothing that a bit of management humility and attention to quality can't
fix.

DAS
Signature

For direct contact replace nospam with schmetterling
---

[...]

> Well, right now Chrysler is the star of Daimler-Chysler.....they're
> carrying the load. And Mercedes is plugging along at a 3.2% margin. Pretty
[quoted text clipped - 28 lines]
>>> very impressive to read how that company functions on a day to day basis
>>> as well in long-look strategic planning sessions.
Neil - 09 Aug 2005 17:41 GMT
I seem to recall seeing a car listed on Roadfly a few months back as being a
GMW.  I believe it was an E30 -- but could be mistaken -- that had a GM
engine.  Why anyone would do such a thing is beyond me.

Not an answer to your question, but related nontheless.
Neil - 09 Aug 2005 17:49 GMT
> I seem to recall seeing a car listed on Roadfly a few months back as being a
> GMW.  I believe it was an E30 -- but could be mistaken -- that had a GM
> engine.  Why anyone would do such a thing is beyond me.
>
> Not an answer to your question, but related nontheless.

Ok, it was an LS1 engine, and I was right about it being an E30.  But it's
worse, it was an E30 M3.  Sacrilege!

http://bimmer.roadfly.com/bmw/forums/e30/5364127-1.html
 
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