Rolls on the Block

The name Rolls-Royce has been synonymous with elegance on wheels for nearly three-quarters of a century. All the more embarrassment, then, when Rolls-Royce Motors Ltd. was unceremoniously put on the auction block last week by a British bankruptcy receiver to help pay off old debts.

The old Rolls-Royce company went bust in 1971, overwhelmed by the cost of producing advanced jet engines for American planes; its aero-engine division was nationalized by the Crown and a new operation, Rolls-Royce Motors, was created to continue making cars, diesel engines and turbine parts. The motor business has done well; it posted nearly $10 million in pre-tax profits last year on sales of $110 million. So Receiver Edward Rupert Nicholson had planned to sell shares in it to the British public and use the proceeds to settle bills run up by the aero-engine operation. But a prolonged slump in the London stock market has prompted Nicholson to invite sealed bids from would-be corporate buyers instead.

Among likely bidders are Unilever, the Anglo-Dutch industrial complex, and a consortium of British companies led by British Leyland Motors, producer of Jaguars, MGs, Austins and bodies for Rolls-Royces (General Motors, Ford and Chrysler insist that they have no interest). If there are no bids above an undisclosed "reserve" price, estimated by London financiers at $120 million to $150 million, then the sale is off. Otherwise, the company's physical assets will go to the highest bidder, British or foreign--but only if the buyer is a British company will it be allowed to keep the Rolls-Royce name.

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