Ford may make new approach for BMW

Ford, the world's second biggest carmaker, is understood to be considering a bid for BMW in a dramatic move which would also give it control of Rover.

The US company has already offered to buy the entire Rover group in return for being allowed to take a stake in BMW. But the Quandt family, which holds a controlling 48 per cent stake in the German carmaker, rebuffed Ford's approach.

Instead, BMW agreed to sell Land Rover to Ford for £1.85bn. But the American carmaker is still thought to be keen on buying a stake in BMW as part of a wider alliance, leading eventually to a full takeover. BMW is valued at £13bn.

A Ford spokesman yesterday described suggestions that it might take over BMW as "speculative", adding: "We do not comment on such speculation."

However, BMW would fit well into Ford's recently formed premier automotive division which consists of Jaguar, Lincoln, Volvo and Aston Martin. The division is run by Wolfgang Rietzle, a former BMW board member who was ousted a year ago after a power struggle with Bernd Pischetsrieder, the then BMW chairman. Mr Pischetsrieder was also forced out.

An alliance with BMW would safeguard Ford's takeover of the profitable Land Rover business after confirmation yesterday that General Motors, the world's biggest car maker, is considering tabling a rival bid.

However, it is less clear what would happen to Rover's car manufacturing operations. BMW's current plan is to break up Rover, selling the Longbridge plant in Birmingham to Alchemy Partners with the loss of thousands of jobs and retaining Cowley in Oxford to build the new Mini and the Rover 75 under contract for Alchemy.

The Conservatives attempted unsuccessfully to sell Rover to Ford in the mid-Eighties when it was still in state ownership. The plan failed after an outcry over the high level of job cuts. It is not clear what Ford would do with Rover's car plants if it succeeded in a takeover now since it has surplus capacity in Europe and is preparing to end car production at its Dagenham plant.

Meanwhile John Hemming, the West Midlands millionaire leading the "Rover Future" consortium, said he had submitted a formal expression of interest in buying the carmaker to the BMW chairman, Professor Joachim Milberg.

A "huge" public backlash has been provoked by BMW's decision to sell Rover, with six out of 10 people now less likely to buy a car from the German company, according to an ICM poll published yesterday. The survey also found that more than three out 10 BMW owners say they are less likely to buy another car from the German firm.

Sir Ken Jackson, leader of the Amalgamated Engineering and Electrical Union, which commissioned the poll, said it constituted clear evidence of a backlash against BMW and its treatment of British workers.

Two Midlands Tory MPs, Julie Kirkbride and Sir Norman Fowler, said yesterday that they plan to sell their BMWs in protest at the sale.

However Sue Brownson, a BMW dealer in Wilmslow Cheshire and president of the National Franchised Dealers Association, said the reaction among her customers had been "enormously positive".

Meanwhile a survey of Rover dealers by the magazine Motor Trader showed that two-thirds reported a drop in sales last week following news of the BMW sell-off while nine in 10 said BMW had a moral obligation to compensate them for money invested in premises, stock and signage.