Honda Rover : Crafting an Alliance Essay

570 Words 3 Pages
The British Aerospace wanted to get rid of its noncore and loss making business - the automobile subsidiary - Rover. Rover was operating in a collaborative relationship with Honda. BL was in urgent need of a midsized car that would help improve its image, quality, efficiency, boost its capital and expertise to enable it to continue,
Honda was identified as the partner who would provide and would fit in the political environment. Also, a Japanese firm did not appear threatening to the British competitors. Honda wanted to expand internationally. As benefits Honda was looking at using Rover's design studios, and selling engines to Rover. Also, the fact that no other European company would agree to a partnership with Honda combined with
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The British Aerospace wanted to get rid of its noncore and loss making business - the automobile subsidiary - Rover. Rover was operating in a collaborative relationship with Honda. BL was in urgent need of a midsized car that would help improve its image, quality, efficiency, boost its capital and expertise to enable it to continue,
Honda was identified as the partner who would provide and would fit in the political environment. Also, a Japanese firm did not appear threatening to the British competitors. Honda wanted to expand internationally. As benefits Honda was looking at using Rover's design studios, and selling engines to Rover. Also, the fact that no other European company would agree to a partnership with Honda combined with Rover's weak position made the chances of a partnership very strong. A technical licensing agreement was signed between BL and Honda.
Honda brought benefits from its R&D, proprietary manufacturing machinery, shortened product cycles and quality improvement. Honda shared management and production approaches. As a part of information exchange, joint development programs were initiated. Rover implemented and improved parts carry over system, strategic supplier relationships and also got access to supplier for JIT (just in time) systems. The workers were better with more authority and more amenities.
For Rovers administrative costs declined b 9%, assembly line scrap cost declined by 50%. Quality improved while defects decreased by 10-90%. The

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