The Motorcycle for the Die-Hard Rider
It is said with pride that for a long time, BMW motorcycles were more famous than the automobiles and that they were compared to Triumph, BSA, Norton and Harley Davidson after the war. But oh, then came the Japanese flood causing the demise of most of the European manufacturers.
All except a few Italian ones … and BMW. Why?
In France, the motorcycle patrols of the Garde Nationale (National Guard) ride BMWs and are imitated in that in more than a hundred countries. But the orders of these “die-hard” riders cannot explain the production volume. At the end of the 70’s, BMW decides to develop the GS 800, a recreational machine to participate in the Paris-Dakar Rally. Success comes and proves that BMW has glamorously made the switch from a utility to a recreational motorcycle. The company is soon going to celebrate 80 years of motorcycle production.
Incidentally, this longevity is explained very well in Munich. The motorcycle has twice allowed BMW a rebirth. It is logical that the car had to push the motorcycle somewhat, too.
The motorcycle department has attacked the Japanese on their favourite ground – the cycle for young people – and BMW has produced the F 650, the first “European” motorcycle (the engine is by Rotax; Aprilia is responsible for the assembly). This machine shows that the brand is able to compete in all areas.
Production of the F 650 can barely keep up with the demand, which proves that the goal has been reached: The motorcycle pays for itself and supports the image of BMW.
In 1999, the appearance of the C 1 hits like a rocket. This two-wheeler provides a roof (or: a survival cell) that protects against bad weather, and a seat belt. In other words, the advantages of a motorcycle without its disadvantages. All that for less than DM 13,000.
Once again, this hits the jackpot, and the order books are full.
A One-in-a-Million Car Mechanic
At BMW, the engine cult goes back to the first days of the company in 1917. The 30’s were rocking with the sound of the six-cylinders. Ten years ago, the company re-introduced the V 12 after 50 years’ absence. Not to mention the two-cylinder boxer and the current turbo diesel with direct injection.
Before BMW became a design engineer, it was an excellent metalworking shop. The style and the aesthetics of the characteristic engines contribute to the success of the models.
However, instead of racing to the bitter end which often leads to excess, the people from Munich bank on refinement. The buyer of a BMW demands an engine with a generous torque, to be sure, but it should also be quiet, pleasant and sporty. Primarily, however, it needs to be beautiful. BMW wins first prize here in every aspect, and the whole world cherishes the typical “Old World” engines.
The group accepts any technological challenges: The 750i (V12) uses no more than a six-cylinder of 1992, and the extremely abstemious 330d and 530d are at the same time the most powerful on the market for turbo diesels with direct injection.
The BMW engines have reached such a state of perfection that they are now entering a relationship with Rolls Royce. In 2003, the company will produce a new model to be manufactured in the Goodward plant, presently under construction in South England.
From this very perspective, BMW premiered the new Mini at the Paris Motor Show held in October 2000. The stand was always crowded, indicating a nice economic success for the little German/English model to be produced in the modernised plant in Oxford.
“Driver Enjoyment” Above All
Some drivers say: “I drive a Golf” – others simply answer: “I drive a BMW.” Here you can see the success of a marketing strategy, which has slowly but surely created a homogenous clientele. Because BMW does not sell metal but a lifestyle if not the symbol of social acceptance. A bit like Ferrari – nice compliment.
The first buyers in the 60’s resembled the fans of the Citroën: so excited by the technology that they forgave small flaws. Being part of the avant-garde more than compensated for a few troubles. At that time, the “BMW-fanatics” were mostly sportsmen such as rally-drivers, race drivers, etc. And the clientele remained (too) limited.
In order to switch from the clientele of the rally cars to that of executives, the BMW image needed to be improved. The brand had to become the worldwide specialist for luxury vehicles.
Therefore, Munich selected a target group: the young wolves with a great future (and much buying power).
Aviation, Continuation and End
“In September, 1994, the testing of the BR 710 began.” This laconic statement announces the return of BMW, 40 years before then the first creator of a military plane engine, to aviation. The airplane engineer BMW starts again, but this time in civil aviation.
Founded in 1990 in Oberursel near Frankfurt, the company targets top-of-the-range business planes and regional planes for 60 to 130 passengers.
However, despite investments of 400 million marks in the Dahlewitz plant (near Berlin), the BMW-Rolls-Royce company ceased operations in the mid-90’s – not profitable. Nostalgia has definitely become too expensive.
The Great Adventure FIZ
The greatest adventure of the 80’s was definitely the FIZ, the research and engineering centre. The point was to combine the 30 offices, spread all over Munich for spatial reasons, in a new building.
The FIZ combines several functions: Development, manufacturing, purchasing and organisation. Von Kuenheim also uses it to break up bureaucracy and hierarchy.
A highly regarded study shows that communication in a company depends on the closeness of the offices to each other. If the distance is more than 40 m, then communication is a disaster. If the offices are spread over several stories, it is reduced to almost zero.
So the FIZ is built without dividing walls and without stories: the exact opposite of the “four cylinder” with its 22 stories. The offices are organised by the “intellectual flow”, resembling the movement of the parts in the plants, and their arrangement corresponds to the logical sequence of the production of a model.
Almost 4000 engineers and more than 1200 “blue collars” are working here on the prototypes. In between offices you find workshops connected with each other by a network of bridges. This “experimental factory” is able to produce more than 3000 vehicles per year. Ideas are tested here as well as their feasibility. The result: It used to take five years to develop a new model. Today it only takes three.
At the FIZ, there is no discrimination between white-collar and blue-collar workers. They use the same entrance, the same car park, the same canteen and the same sanitary installations. The facility, flooded with light, resembles an airport. Finding anyone here turns into an endless search, because nothing is fixed: neither the walls nor the work groups. They get together for a project, and after the job is done, they go their separate ways. This way, about 35% of the employees move within the FIZ every year.
The offices are divided into three categories: Open-plan offices, group offices and single offices. They all implement the board of directors’ maxim: “Walls are an obstacle enticing idleness.”
The FIZ has become a landmark that is visited by 3000 architects, sociologists and company directors on an annual basis. Needless to say, the “organised chaos” has been imitated several times all over the world.
Financially Extremely Independent
BMW is allergic to banks. Ever since 1959 and the episode with the Deutsche Bank, the company has never again wanted its fate to be influenced by a banker.
For more than 40 years, the Munich financiers have been very creative in covering investments as much as possible by cash flow.
Because nobody is to be able to dictate to BMW what to do.
No Armament, no Lorries
This passionately defended independence is reflected against the state as well as possible customers. Fearing any involvement with the military, BMW has given up any activity building ship engines and lorries. Very much unlike the big companies such as Ford, Fiat, Renault, Toyota, Volvo and Saab, not to mention Mercedes, today Daimler-Chrysler.
However, politicians have applied consistent pressure especially concerning aviation. Though it may have been tempting for BMW to continue its famous aeronautical history, the company has refused because this difficult area might cause the company’s finances to lose their balance, endangering its sacrosanct independence.
Could it be that BMW had a good hunch there? Re-unification of Germany has caused the military orders to shrink, and this crisis has, in addition, caused a recession in civil aviation.
So the Munich people leave aviation and armament to the people from Stuttgart. Above all to get into debt.
The World Standard
Though they may be lovers of the 7 series, the Golden Boys of Wall Street are not giving anything away. The financial strength of BMW could only be established because of the close relations between the main shareholder, management and the employees.
One of the set rules of the company is that at least 10% of the capital has to be available in form of dividends. This way, you are always prepared for any hard blows.
This privileged situation would not be possible without the efforts of everyone, from the board of directors to the shareholders as well as the dealers.
How the Profits are used
What are all these ethics good for? Should all the years in Munich have been spent sensibly just to eventually fall for the charms of a beautiful English lady? One could have easily believed that when BMW bought Rover and Land Rover in the mid-90’s. BMW seemed to have pondered the sale thoroughly and did not seem to take any financial risk.
Would Pischetsrieder follow the example of the megalomaniac Piëch, the VW executive? A few years would suffice to change his mind. And most of all the ever-present influence of the almighty Quandt.
They are going to replace Pischetsrieder with Joachim Milberg, a managing director without moods. But it was a close call.
Whatever, you can bet that BMW is yielding a first-class weapon with its new Mini on the market for city cars, and that the investment is going to pay off.