COUP OF THE YEAR

How do you get a sport-utility and expand your model-range downward without having to spend millions on research and development or building new factories? Move with lightening speed and outwit the Japanese.

That is exactly what BMW AG did last year when it acquired Rover right from under Honda's nose.

BMW knew British Aerospace Ltd. wanted to sell Rover. Honda Motor Co., a 15-year partner, was also interested but was proceeding slowly and not willing to take a stake of more than 47.5 percent. So BMW acted fast. BMW directors approved a takeover bid on Jan. 19 - less than five months after BMW expressed its initial interest - and the deal was signed on Jan. 29 for $1.2 billion.

Honda, which has licensing agreements with Rover and supplies engines, felt betrayed and angry. Some said, if it hadn't been for Honda, Rover wouldn't have learned about lean production and quality or renewed its car range -most of which is based on the Japanese makers' models.

The deal was done, but BMW now had to content with Honda. Besides the technical agreements, Hondaheld 20 percent of Rover UK and Rover had 20 percent of Honda UK. Negotiations began between Munich and Tokyo. There was talk about Honda's 'trump cards' and that Rover still needed its Japanese partner. But in the end, Honda agreed to exchange its 20 percent cross-holdings with BMW and continue the licensing and technical agreements. No one knows to this day how much BMW paid to soothe Honda.

But BMW walked away with Land Rover, the most prestigious sport-utility range in the world, and Rover Cars, one of the leanest automakers in Europe.

Second in the voting for Coup of the Year was Japanese sales gains. Getting the third most votes: Saturn's homecoming, which attracted 43,000 Saturn loyalists to Spring Hill, Tenn., June 24-25.

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