Blog : An unpatriotic act?
March 4, 2013
· 
Keith Adams · 
30 Comments
Ian Nicholls
On 3 February 1986 the Conservative Government of Margaret Thatcher admitted it was in talks about an American take-over of a large chunk of what remained of the British-owned vehicle industry. The talks were described as being at ‘an advanced stage’. General Motors was interested in acquiring the loss-making Leyland Vehicles division. Ford wanted to buy Austin Rover, Britain’s last home-owned volume car manufacturer. Labour Front Bench spokesman John Smith asked: ‘Is there nothing not for sale.’
And Workington MP Dale Campbell Savours accused the Government of ‘dropping the Union Jack and raising the Stars and Stripes over British industry once again.’ This was at the time of the Westland crisis when two cabinet ministers resigned and the Government was accused of selling out the national interest to American big business. On 6 February 1986, the Government discontinued the Ford/Austin Rover talks.
Not long after this the General Motors/Leyland dialogue also ceased as the Government climbed down and all British car fans breathed a sigh of relief as the Government backed down from performing a despicable act. Of course, at the time opinion was polarised – many Britons, particularly in Scotland, Wales and north west England despised Margaret Thatcher and her politics.
The Government climbdown was seen as a victory for common sense. Or was it? This blog concerns the abortive attempt by Ford to purchase Austin Rover. The Government tried to offload Austin Rover after a dire 1985 in which the company performed badly in the sales charts.
The Ford Escort was most popular car of the year. Ford also remained in front overall with 26 per cent total sales, followed by Austin Rover with 17 per cent and Vauxhall with 16 per cent. The ten top selling cars in 1985 were:
- Ford Escort
- Vauxhall Cavalier
- Ford Fiesta
- Austin Metro
- Ford Sierra
- Vauxhall Astra
- 7 . Austin Montego
- 8 . Ford Orion
- 9. Vauxhall Nova
- 10. Austin Maestro
This was the full first year that the Metro, Maestro and Montego were on sale. The Maestro was even outsold by the Orion, the booted version of the Escort.
Although there was fierce discounting, another factor that hurt Austin Rover sales was something that could not be mentioned in the media at the time, the poor quality and unreliability of the early Maestros and Montegos. Fleet buyers had burnt their fingers in 1984/85, and repeat sales evaporated. This suggested that something was seriously wrong with Austin Rover itself - whoever ran the organisation from BMC to Leyland to the state could not get a grip on the quality issue.
In 1986 no one wanted Ford to buy Austin Rover, but you had to be insane to buy an Austin Rover car! So that was the background to the sale. But was the breaking off of the talks with Ford the right move?
In the 7 February 1986 edition of the Glasgow Herald, Hugh Hunston wrote, ‘The only solid reasons for Ford wanting Austin Rover within their global empire could have been the use of the state owned firms market share to help fight off General Motors British sales threat, or the exploitation of names like Triumph and MG to create a marketing niche for Ford.’
At the time Ford had a 25% stake in Mazda. Only a few days earlier, on January 18th 1986 Mazda had approved for production a project codenamed V705, which became the Mazda MX-5 of February 1989. If Mazda felt there was a market for a traditional sportscar, then no doubt Ford agreed with them. And two of the best known sportscar brands were MG and Triumph, owned by Austin Rover.
Sir Michael Edwardes had discarded these brands because of adverse exchange rates made them unviable to export to the American market. And yet they were the one type of car that Ford and General Motors had no comparable rival for. I argue that the decision not to sell Austin Rover to Ford was in the long term calamitous. Spurned by the Government, Ford went on to buy Jaguar and brought in their top knotch production engineers to bring the Coventry firm’s manufacturing facilities up to scratch and improve quality.
Austin Rover soldiered on, renamed Rover. In the autumn of 1989 Rover took the decision to develop a new generation sports car, the same year as Mazda launched the MX5 (below). By the time the MGF was launched BMW owned Rover and saw the new sportscar as a threat to their Z-series roadster. As a consequence of this the MGF was not marketed in the United States and a whole market went begging.
The rest of the story is well known. BMW pulled out in 2000 and MG Rover ceased trading in 2005. The Chinese moved in and now the MG brand seems to be going the same way as Rover, Austin and Morris, with poor sales for the new generation MG saloons. MG was a great brand just like Mini, but it has been appallingly neglected and underexploited.
History may judge that Ford was the right suitor for Austin Rover, but it was partnered disastrously with British Aerospace, BMW and the Chinese.
Related posts:
- Archive : Ford, BL in Talks
- Archive : Austin’s share drops
- Archive : Vauxhall tops the car league
- Archive : Fury over BL’s sell off talks with US car men
- Archive : GM talks on BL broken off
30 Responses
An MG badge on the MX5? now that would have been a seller I think. The Septics would have lapped it up!
Even at this stage the Chinese being included as another bad chapter. Will the trend ever be reversed?
Calamitous that Ford didnt buy Austin Rover? For Austin Rover maybe, for Ford the luckiest of escapes!
Ford would have fixed the K series toute suite
Ford have proven themselves to be far better custodians of brands than GM, with the former Premier Automotive Group in a reasonable shape while the likes of SAAB and numerous other european factories under GM have closed.
However, I fear ford would have diluted some of A-R’s USP and brand idientity, just as it has with it’s former brands through component and platform sharing.
Not that I am happy with the way things turned out of course. But I feel the eventual downfall of the BL empire was not wrong decisions made in the 80′s, 90′s or 00′s, but maybe those made in the 60′s (austin/morris merger, union prolifferation) and 70′s (BL creation, nationalisation, more union prolliferation).
Lack of proper investment by the government meant that cars were developed on a shoe string. This coupled with poor management and labour relations, and an enforced marriage that made BL, was the recipe of the downfall. Luckily JLR is booming and BMW MINI is not doing badly either.
Thatcher started the fashion of flogging things off. Despite being the 6th largest manufacturing country, 60% of the industry is non UK owned. One can draw a number of conclusions.
One point in the article jumps out as being the explanation to a lot of things.
“……another factor that hurt Austin Rover sales was something that could not be mentioned in the media at the time, the poor quality and unreliability of the early Maestro’s and Montego’s.”
Why could it not be mentioned in the media at the time? Why was the truth not published to the world at large? Why did everybody bury their head in the sand and pretended everything was going ok and the cars were great?
So the press were telling the punters to go out and buy this product which was flawed; the buyers found they had bought lemons, so they ditched poor quality BL products and went for Japanese and German.
I think we should draw caution with Ford as being viewed as a “likely saviour” to Austin Rover Group. Firstly, despite Ford’s imense efforts with Jaguar over a near nineteen ownership period, they never managed to make Jaguar profitable in all that time. True, they expanded the range, updated the factories, improved productivity and raised quality to unimiaginable levels compared to previous generation models. But in the case of the X Type (itself a good car with few vices), the association with Ford did not help its quest to deliver an aspirational model in the Compact Executive market that sold in high enough numbers (for Ford). The ignorant were always making the most noise about the sum of parts shared with Ford.
Also, in the late 1990s, Ford decided to pull out of volume car manufacturing in the UK. Ford’s factories were probably on par with the productivity of Rover Group’s main assembly plants at Cowely and Longbridge. What would have happened to them if they had been owned by Ford?
That said, if Ford had aacquired Austin Rover Group, they may not have been so keen to acquire Jaguar Cars in late 1989, instead seeing both the Rover and Triumph names as convincing premium brands to take on the might of the big three from Germany, based on the need to deliver well designed and engineered products with a noted quality and aspirational image.
@krs – March 5, 2013
“Ford would have fixed the K series toute suite”
With the disaster that was the early 90s Zeta engine?
Ford of the late 80s was not in a good way, increasingly led by accountants. This would’ve harmed AR, any projects would’ve been costed to a minimum. The Maestro/Montego would’ve been replaced by something similar to the mk5 Escort-based VW Pointer/Logus.
The Honda tie up would’ve been cut short, instead US bosses would’ve insisted that Rover produce twee retro cars, more in keeping with the P4 than the SD1.
With early LR technology, they could’ve had an early leg up in the luxury SUV market, their then Explorer could’ve been a real contender to the Grand Cherokee.
An MG MX5 would’ve been an interesting proposition, though would it have caught on?
The Mazda-based Probe as a replacement for the Capri didn’t. Car buyers tend to prefer their Japanese cars to be badged Japanese, and their US/European cars to be US/European.
Would’ve been interesting to see what they could do with Triumph, perhaps some sort of Mercury tie-up.
Hmmm, the first image shows a confused old woman taking a walk down the fast lane of a motorway, with what looks to be a Police SD1 in the background, no doubt to ferry her back to a nice secure institution…
Anyway, back to the subject at hand… I doubt very much that Ford needed Triumph and MG had they been minded to produce a traditional sportscar- they could have done it quite cheaply using their own components and built it in Mexico for the American market. The lack of a traditional badge never hampered Mazda when they decided to field the MX5/Eunos/Miata. It could be suggested indeed that having a Mazda badge rather than MG or Triumph actually helped that car, because Mazdas have never been saddled with a woeful image of chronic unreliability and poor build quality.
And although Ford may not have made Jaguar profitable, it made Jaguar a viable propositon as a producer, and now Tata is reaping the rewards. Ford’s selloff of Jaguar came at a bad time, as they were not factoring in the explosion of demand for luxury cars in the Chinese market. I think Ford could quite conceivably have made AR a goer- hard to tell how they would have run it based on how they ran Volvo or Jaguar.
Surely Ford would have just bought AR and then closed down the out of date, under-equipped factories the moment there was overcapacity in the car industry – which I seem to remember was pretty much throughout the 90s? Bringing forward what happened in 2005 by 10 years.
MINI would’ve looked something like the Ka?
Big Rovers based on Lincoln chassis?
Triumph as a bmw competitor?
BL should have had proper investment by the government, like Renault. Germnan companies benefit from the powerful investment from their regioanl governments, Jananese from the complex company ownership madel instigated by the US after the war. France is very protectionist. What happend with BL would never happen outside the UK. Manufacturing is still treated as ‘trade’ and as an engineer the kudos attached is miles away from that in Germany for example. In addition our financial institutions do care about manufacturing unless the can make a profit out of shorting or mergers and aquisitions. Only now are governmnet understnding the benefit of home grown manufacturing. We flogged off our nuclear industry to EDF meaning that building a nuclear power stations are too expensive.
Finally we have a public who get agitated about very minor meddling by the EU and increasing support for UKIP, but in the same breath slag off anything from a UK company and activly by non-UK product. Before some people comment, I buy what is best, perferably from a UK owned company if availble. If not from another EU owned company.
I vaguely recall these plans to sell AR to Ford. Of course at that time Nissan were just getting established in UK car building, making the situation for AR even more tricky?
We’ll never know if a Ford/AR deal would have worked. I always thought a Honda takeover of Rover would have been better but that never occurred either… more’s the pity?
@13
I often wonder about this, the UKIP supporters, do they drive their 3 serieses or Boras down to the voting station?
Were they the same ones watching Clarkson and scoffing at MGRover in the mid 2000s?
A Honda takeover / merger would have been best. Look at Renault / Nissan where the reverse has happened.
Merlin,
I am agree with you.
In the rest of the world being actively involved in manufacturing is a matter of pride.
I am an MD, and am doing work on the shop floor to make sure export orders go out on time…a lot of city types would never want to get thier hands dirty.
My background is technical textiles, and after it got royally shagged by everyone in the supply chain, it was given away in tatters.
I find this all very sad.
Ford wanted AR mainly for the K series engine, realising its existing 4 pot petrol engines were getting old. If they had got the company, what would it have meant for Halewood and, ultimately, JLR?
Honda would have been a better bet, if handled properly. BAe was just a political convenience.
The problem as I see it with the arguement about lack of investment is that BL did recieve large quantities of taxpayers money, but it was not spent in the right places because the government, the NEB and BL itself lacked the knowledge of production engineering that existed in Ford.
In 1993 Ford replaced the ancient Browns Lane production line that Jaguar had purchased second hand in 1953. Why hadn’t BL replaced it ? Surely that was part of the remit of the Ryder plan? Was it because no one in BL and Jaguar had thought of doing so?
As for why the media did not publicise the quality issues associated with the Maestro and Montego, may be it was out of deference to Britain’s last surviving motor manufacturer, the threat of legal action, the advertising revenue that ARG gave some sections of the media or some other reason. But the fleet buyers would have known the running costs of the competing models and the average time they spent off the road.
I think we in Europe underestimated the kind of brand values that MG and Triumph had in the USA. They had a youthful image, but the market was handed on a plate to the Japanese by BL’s withdrawal.
“In 1993 Ford replaced the ancient Browns Lane production line that Jaguar had purchased second hand in 1953. Why hadn’t BL replaced it ? Surely that was part of the remit of the Ryder plan?”
But BL inherited all sorts of run down factories, and money went towards re equipping Longbridge and Cowley. At least browns lane survived, unlike Canley, Abingdon etc
I don’t know what Ford wanted out of ARG back in 1986, as ARG back then wasn’t the upmarketish Rover Group that BMW bought in the 90s, but rather a producer of run of the mill family cars, basically volume products that didn’t sell enough, rather than niche products.
The oddity was that Land Rover was lumped in with Leyland Trucks, when even back then the growth was in car like SUVs (the Shoguns and Land Cruisers), and in Range Rover BL had the ultimate luxury SUV, a vehicle that by 1986 had moved well away from its agricultural roots.
@4 – Indeed they would. Production would have stopped immediately – or never started – and CVH and Zetec engines would have been stuffed into Metros and Maestros.
@19 – The Ryder plan was full of good intentions, all unfunded. The profits from Jaguar where siphoned off to compensate for Mini losses! There was simply no money to invest in production facilities.
I don’t think Ford would have acquired Austin Rover with a view to investing in it and re-establishing it as a successful, separate company. I seem to remember thinking at the time that Ford really just wanted the extra market share. But who knows? In 1994 I thought BMW was the ideal parent….
Strategically Roy Axe was spot on. All ARG cars should have had Honda engines/gearboxes but British chassis, styling and interiors! Then the British imput would have been what we do best and the Japanese imput (quality) was what they do best. Rover R8 cam closest but would have been even better with an 800 type fascia and a japanese 1.3 engine instead of the brilliant but unrelaible K series. Rover 600 would have been perfect with a UK designed interior. Rover 75 was lovely but again the curse of the K series has blighted a very fine car. I run a 1.8 but wish it had a Honda VTEC engine. Everything else is perfect. I like the engine but worry about the head gasket!!
Interesting mention of Dale Campbell-Savours complaining about “the lowering of the British flag of industry” for it was he who approached the Volvo board (who had declined twice before) directly to stir some interest in buying Leyland Bus and told everyone who would listen about how much effort and time he was spending securing the future of the company.
The same MP who again waxed lyrical about his help in securing the Leyland Bus management buy out only for the Leyland Bus management to eventually sell out to Volvo less than 18 months later after some “creative” book keeping which cost Volvo millions of pounds and dozens of UK operators who supported an independent Leyland Bus by placing orders to feel duped.
The same MP who made great publicity by sniping at Volvo again and again for redundancies and subsequent closure of Workington because of the fatal losses incurred by a failing UK bus market, millions in BR railbus warranty claims & countless stock chassis Leyland tried to fob off as ordered units.
The same MP who helped negotiate redundancy payouts with Volvo only to withdraw his support 10 days before the `92 general election and stating his reason for having “other things” on his mind!
Politicians and the motor trade eh? I dunno!!!
I don’t think Ford would have been a white knight for what remained of BL. They competed in same market, for mass market cars. Why would Ford continue developing seperate platforms and engines for BL? Of course they wouldn’t, they would just be rebadged Fords, until BL disapeared altogther.
The big problem for BL, the British car industry and most of British industry, is no long term investment. BL would start to develope a car, the money would dry up and development would stop. This led to a stop/start development process, that left the company with cars that were dated before production even started. Often with too little money to develope more modern engines, or transmissions. Blighting new cars with old equipment.
Basically we lost faith in British manufacturing in the 80′s, we didn’t have the faith to guarantee funding over a 5 or 10 year timescale. Allas the same is true today in too much of British manufacturing and that is why there will be no march of the makers.
Quote “Of course, at the time opinion was polarised – many Britons, particularly in Scotland, Wales and north west England despised Margaret Thatcher and her politics”
You forgot to mention most people in north east England also despised Maggie – and still do. I remember her accusing those who objected to a sell off to the USA of being “anti-American”. They weren’t – they were pro-British !
The Ryder plane intended to inject £1 of taxpayers money for every £1.50 British Leyland made in profit. Except strikes meant that they did not make any profit. It was a way of trying to make the workforce behave themselves. Yes, British Leyland suffered from under-investment, but it was self inflicted.
Ford wanted the ‘Rover’ and ‘MG’ names and to exploit them in markets like the USA…
Fords big shake up in Jaguar was with the staff. They were hard. But fair. A few years back chatting with an ex-union rep on a Jaguar factory tour, he admitted the blue ovals no nonsense approach to staffing was really the saviour of Jaguar.
#15 Who is this Clarkson fellow of whom you speak?
#27 I believe we have read on this website about just how fundamentally flawed the Ryder Plan was (even Michael Edwards realised that).
Leave a Reply