Scrutator: Silver damsel in distress

IN THE order of things that can never happen, the disappearance of the Rolls-Royce comes somewhere between the abolition the monarchy and the scrapping of The Archers. Yet last week the possibility of RR driving silently off to a rather special part of car heaven was seriously mooted. The company said it was shedding 950 jobs - its Crewe workforce will fall to 2,100 from 4,850 two years ago - while sales have fallen by 65 per cent in the last 18 months. Vickers, its parent, headed by Sir Colin Chandler, will be hard pushed to find the cash to keep its subsidiary motoring.

It would be easy to write reams on the meaning of Rolls-Royce. A symbol of excellence, of the best of Britain, a splendid anachronism. Or a symbol of waste, social division, an appalling anachronism. Pundits are probably sharpening their quills even now.

It is more useful to consider whether Rolls-Royce can and will survive. For on that depends those 2,100 jobs, considerable foreign exchange earnings and - why not admit it - no mean national pride.

First, there is the question of image. Was the Financial Times right to say that Rolls-Royce has a problem because it is 'designed to appeal to a disappearing sense of British status'?

Only half. The problem is not a long-run diminution in the sense of status, but a short-term hike in the sense of embarrassment. For every executive who accepts an outrageous pay rise, several decide either to keep their Roller going for another year or to trade it for something less ostentatious.

This phenomenon first manifested itself in the last recession, when Rolls sales fell almost as dramatically, only to recover strongly when the embarrassment vanished with the next boom. And if the British gave up their embarrassment, the Americans never suffered from it. The Roller remains one of the great carrots of the capitalist system. If people stop wanting it, the free market is in deep trouble.

Secondly, there is reality. A belief persists that Rolls-Royce still trades on the Silver Spirit, its first model and 'the best car in the world'. The company continued to use the slogan as motoring writers poured scorn on the unwieldy gigantism of cars that bore its badge.

Yet people went on buying Rollers for more than the image. They have always been extraordinarily well made and to a level of opulence that Mercedes cannot match. A walnut fascia in a Rolls looks like walnut; the Mercedes equivalent looks like plastic.

In the past 10 years, the company has made up ground elsewhere. Its best cars do not bear the badge, because it thinks that people like a true Rolls-Royce to wallow a bit. But its new Bentleys are something else. Car magazine declared the Turbo R to be the best car in the world, combining speed with a luxury the Germans or Japanese could never match.

Rolls-Royce is not a dinosaur. There is no fundamental reason why it should die. If it does, there will be much sociological navel-gazing. What there should be is an examination of the financial system, to determine whether it will allow anything of economic value to survive in the long run.