Essay : Did Government kill MG Rover?

The history of BMC and its decendents has been inextricably linked to that of whoever has been resident at Number Ten Downing Street… Be it Conservative or Labour, the Government has been unable to maintain a watching brief; always favouring a more ‘active’ role…

IAN NICHOLLS takes a look at how each successive government has handled the company since the creation of BMC in 1952…


HOW much did the British Government contribute to the downfall of the British owned motor industry? In this article each Government’s performance in dealing with BMC>Rover will be analysed, to see how much of a contribution it made to its downfall. Ability and competence seems to be of secondary importance in political leaders compared to those who posess good public speaking skills. I do not believe any politician deliberately set out to destroy the British motor industry and often they meant well…

Harold Macmillan (1957-1963)

THE Macmillan Government’s main contribution to this story was to force British motor manufacturers to build their new factories in areas far from their Midlands base. This resulted in more costly manufacture using new and untrained workforce. Rover was repeatedly thwarted in its attempts to expand in Solihull, but it perservered, and was able to build the P6 assembly block at its main factory.

Rover seemed to be the exception, though. Leyland Trucks had to go to Bathgate in Scotland, and Triumph went to Speke in Merseyside. In addition to these future BL plants, the Rootes group went to Linwood in Scotland where the ill-fated Hillman Imp was built. By the Seventies, the appalling militancy of the Speke workforce and the consequent shoddy workmanship, all but destroyed the reputation of the Triumph marque.

However, with Merseyside’s reputation for militancy, the factory should not have been built there in the first place. Speke, Bathgate and Linwood all closed. Why did the government force manufacturers to build factories in these places they did not want to go to? Perhaps the answer lies in the personality of Harold Macmillan?

Macmillan came from a wealthy background and survived the horrors of the trenches in the first world war. Entering parliament after the war he witnessed the land fit for heroes become a nation of social injustice and poverty for his fellow survivors of the terrible conflagration. He became one of a select group of MPs on the left of the Conservative Party who argued that more should be done to help the poor, particularly after the Wall Street crash of 1929 plunged the world into the Great Depression.

Macmillan saw the damage mass unemployment could inflict on the fabric of society and this would help shape his economic policy when he became premier. Macmillan remained a backbencher until the second world war when a series of appointments under premier Winston Churchill brought him to the fore. One of the unfortunate by-products of the Labour landslide of 1945 was that many politicians of the other parties who had worked in the wartime coalitition govenment for final victory lost their seats.

The leader of the Liberal Party and Air Minister, Sir Archibald Sinclair, was one of them and Harold Macmillan was another. Macmillan, however, was more fortunate in that in a by-election held later in 1945, he managed to get back into parliament. Churchill and his annointed successor, Anthony Eden, were foreign policy specialists with little time for domestic issues. The task of rebuilding the Conservative party after the drubbing of the 1945 election fell to MPs like Macmillan and R.A Butler who recognised the British voters wanted a land fit for heroes and they would have to acept the welfare state as the new political consensus and adopt the “New Jerusalem” philosophy of the Labour party.

The Conservatives were returned to office in 1951, and Harold Macmillan was appointed Housing Minister. The need for new houses was huge in the post war period and record numbers of council dwellings were built under Macmillan’s stewardship. Macmillan rose through the ranks and following the Suez debacle under the auspices of PM and foreign policy specialist Anthony Eden, Macmillan became Premier in early 1957. Macmillan’s economic policy was based on the principles of John Maynard Keynes and full employment was maintained at all costs, and the true financial cost would not become apparent until 1964. The Government’s concern about maintaining low unemployment led to industry being denied the opportunity to expand where they wanted and being forced to build factories in unemployment blackspots such as Speke, Linwood, Bathgate, Halewood and Ellesmere Port. Wait a minute though, the last two factories are still open. Ford and Vauxhall have managed to make their factories viable and their older UK bases, Luton and Dagenham have ceased car production. So what did they do that British Leyland and Rootes couldn’t do?

Harold Macmillan soldiered on as PM until 1963, when ill health forced him to resign. By that time he was being portrayed as an out of touch Edwardian, his Government was tarnished by scandal and it was under attack by a new breed of trendy satirists, many of whom went on to lead more scandalous lives than the man they were mocking. “Supermac” was replaced by Alec Douglas-Hume and the Conservatives lingered on in power until late 1964 when they narrowly lost the General Election to Harold Wilson’s Labour party. When Wilson and his team closely inspected the books they found Britain was practically bankrupt and went cap in hand to Washington for a loan.

Harold Macmillan’s reputation today rests on his maintainence of full employment, which was an admirable achievement but he broke the bank to do so.


Harold Wilson (1964-1970)

IN THE Eighties, it was fashionable for the left of the Labour Party to deride Harold Wilson for having practiced watered-down socialism. But what is forgotten is Wilson was a winner. He fought four General Election campaigns and won three – no mean achievement. Wilson narrowly won the 1964 General Election, overturning a 100-seat Conservative majority in the process, by promising a new and vibrant Britain using the “white heat of technology”. He was marketed as the British version of John F. Kennedy, which seems laughable now as he was slightly podgy and not good-looking!

Harold Wilson’s team believed it could have a planned economy, and this would be the route to prosperity. On assuming power the new Labour Government found the economy was in a mess, there was a balance of payments deficit and Britain was practically bankrupt. The first stop was Washington to negotiate a loan to prop-up the ailing economy.

The Wilson Government cut defence expenditure and hastened Britain’s withdrawal from empire in an effort to balance the books. The planned economy concept took a severe knock with the 1967 devaluation of sterling. This led to Wilson becoming a target of satirists as public disillusion set in only a year after Labour had been re-elected with a thumping 100-seat majority. However, Wilson salvaged the situation by getting Chancellor of the Exchequer, James Callaghan, and Home Secretary, Roy Jenkins, to swap jobs. By common consent Roy Jenkins was one of Britain’s most successful post-war Chancellors of the Exchequer. A wartime Bletchley Park codebreaker, he left the job in 1970, with the economy in better shape than in 1967 – or indeed 1964.

However, it was James Callaghan who ultimately became Premier while Jenkins was exiled to Brussels. The “white heat of technology” philosophy was symbolised by the Labour Government’s backing of the Anglo-French Concorde project. At times they may have had cold feet about the programme and it may have led to clashes with Paris, but ultimately they stuck with it. It is only with hindsight that the project came to be seen as a financial mistake. The metal fatigue problems with the early Comet jet airliners had given the American aircraft manufacturers such as Boeing and Douglas a huge lead and Concorde was a justifiable gamble to regain the initiative.

That an energy crisis lay ahead and the American Government would put economic pressure on Governments not to buy Concorde for their state owned airlines could not be forseen. The Minister of Technology associated with Concorde was one Tony Benn and he would be a major player in the formation of British Leyland.

The above outline of the 1964-70 Labour Government is meant as a guide to the kind of thought process that existed in the corridors of power. The formation of the British Leyland Motor Corporation was entirely in keeping with the Wilson administration’s concept of a modern Britain. Rather than nationalising the remaining British motor manufacturers at great cost to the taxpayer, they would be persuaded to merge amicably and the formation of BLMC took place in the belief that it was in the national interest to have a large British manufacturer to take on the American and European giants. If one takes the view that the original formation of BLMC was a mistake, then the Wilson Government was culpable and a villain of the piece, but nobody thought so at the time. And who to lead the new grouping? I can but repeat a line from a previous article:

“Harold Wilson was looking for a way of creating a British motor industry to take on the world and Donald Stokes was the obvious man for the job. BMC’s financial results certainly did not point to Sir George Harriman as the man to lead the British motor industry into the Seventies.”

Where the Wilson Government can be held at fault is over the thorny issue of legislation to control Trade Union power. In 1968 a white paper entitled “In Place of Strife” appeared. It proposed restricting trade union power and the debate within the Labour Government had two main protagonists. Advocating “In Place of Strife” was Barbara Castle and opposing was James Callaghan who had relied on trade union support to ascend the political heights.

Callaghan won the argument and the proposed legislation was shelved. When James Callaghan became premier in 1976 he fired Barbara Castle from his cabinet…

“In Place of Strife” was a lost opportunity. The Seventies political landscape was dominated by strikes and Trade Union power that destroyed Britain as a major industrial power. British Leyland was brought to its knees by endless strikes that financially destroyed it from within and tarnished the reputation of its products. One can only speculate what the British motor industry and indeed Britain would be like today if Barbara Castle had won the argument…


Edward Heath (1970-1974)

Edward Heath’s Conservative Party unexpectedly won the 1970 General Election. At first the new Government practiced an early form of moneterism, indulging in public expenditure cutbacks. However, when unemployment hit the one million mark in 1972, it embarked on a rapid U-turn and began pumping money into the economy.

This reduced unemployment to half a million by 1973, but also resulted in chronic inflation and a balance of payments deficit. The high inflation rate also caused more industrial strife as workers sought to keep pace with the escalating cost of living. The Heath Government’s Laissez Faire attitude to industry was put to the test in 1971. Rolls Royce went bankrupt and the Government stepped in to nationalise the concern on strategic grounds. Also that year the government decided to close down the loss making River Clyde shipyards. The Daily Mirror had the emotive headline “CLYDE BUTCHERED” and the shipyard workers responded by organising a sit in led by their articulate senior shop steward Jimmy Reid.

This resulted in widespread public sympathy and the government backed down. Indeed, many strikes did have the support of the public. The Government did legislate against Trade Union power but in the public relations war it was successfully portrayed as an attack on the working class. Heath had two run-ins with the National Union of Miners in 1972 and 1973/74 and lost on both occasions.

The last occasion combined with a power workers strike resulted in early evening power cuts and a three-day working week. To many on the right of the Conservative Party, Edward Heath had proved to be a weak premier, lacking the resolve to see things through to the bitter end, to floating voters the Heath administration seemed all at sea with its vision of Britain.

Edward Heath went to the polls in February 1974 in the midst of the second miners’ strike in order to obtain a mandate from the British people over who really governed Britain. The public decided it wasn’t Edward Heath and Harold Wilson’s Labour Party gained a few more seats. Heath tried to negotiate a deal with the other parties in order to cling onto power, but it was Harold Wilson who entered Number 10 Downing Street.

So how did Edward Heath’s Government affect British Leyland? Not directly or immediately but decisions taken by his Government did have some long term effects. Both Macmillan and Wilson had failed to gain Britain entry into the European Union (or Common Market as it was then known), Edward Heath pulled it off and in 1973 Britain became a full member of the EU. The dropping of tariffs on imported EU cars gave consumers more choice and exposed British Leyland to increasingly tough competition.

In the Sixties, European small cars were often seen as quaint and technically outdated with strange engines in all the wrong places. By the Seventies, the European family car was a much more competent creature and products such as the Renault 5, Fiat 127 and Volkswagen Golf increasingly found favour with British buyers. EU membership also enabled Ford and Vauxhall to import cars into Britain from their European factories and bring into play their greater economies of scale.

The production of some Ford models was even transferred to Germany. The Granada and Capri were made in Germany and imported into the UK where they competed against BL products that were badly assembled by a workforce who had been brainwashed into not caring about their jobs. In the late Seventies, the Society of Motor Manufacturers went on endlessly about the threat of imported Japanese cars, but kept quiet about the vast quantity of cars some of their members were importing from their continental factories. And by the Eighties, this had become a torrent of imported cars, and many of their buyers honestly believed they were buying a British-built car.

If this sounds like an anti-European diatribe then I must state the opinion that a Europe working together after centuries of bloody warfare is a noble concept.


Harold Wilson (1974-1976)

HAROLD WILSON’S Labour Party returned to power in February 1974 and increased its parliamentary majority in the October 1974 general election. As the Heath Government had in reality been brought down by the Trade Union movement, Wilson was in debt to them and his new Government had a more left wing agenda than that of 1964 to 1970. Wilson appointed as Trade and Industry Minister Tony Benn, a cradle-to-the grave socialist, who believed (and still does) the state should provide full employment and top notch public services without explaining where the money to pay for it would come from. Between 1964 and 1970 he had reinned in these views, but became more vocal after 1974.

The Wilson Government gave in to the miners and began to impose higher taxation on the wealthy. But the Britain of 1974 was a much more divided nation than that a decade earlier and it would remain that way for another two decades. Within months of coming to power, British Leyland became a matter of the greatest urgency for the Government. BLMC ran out of money in December 1974 and went to the British Government for financial aid.

Although BL would become a major headache for successive Governments, Harold Wilson and Tony Benn had little real choice but to save British Leyland from going under – if BL had folded then the economic damage to the Midlands would have been enormous. But where Harold Wilson’s Government can be brought to account is how the now state-owned British Leyland was managed.

Tony Benn imposed on BL something called “industrial democracy” to disastrous effect. This was operated in BL’s factories, presumably to reduce the number of stoppages and produce an atmosphere of industrial harmony. In reality, the factories were controlled by the workers representitives, the shop stewards, who indoctrinated into the workforce the concept that all symbols of management from foreman to chairman were their natural enemy and not rival car firms.

“Industrial democracy” may have worked in theory, but in reality some individuals are naturally lazy and Tony Benn’s naive concept that the workforce would pull together to rescue BL without the whiphand of management was undermined by the shoddy workmanship of many individuals who couldn’t be bothered to do their jobs properly.

And these individuals knew they would be protected by the shop stewards if management did try to remedy matters. During this period the build quality of BL cars was truly appalling. One car badly affected was the ADO71 18-22/Princess which had the potential to be a great success. It must be remembered that BLMC had asked the Government for aid because of cash flow problems, it had a series of exciting new cars in the pipeline and with state aid there was no reason why the company should not have been a great success. “Industrial democracy” put paid to this and a look at the sales charts reveals a continuing of the decline in BL’s market share since 1973.

However, in 1973 BLMC still had many ageing models, by 1976/77 they had some new and exciting cars such as the Princess, Rover SD1 and Triumph TR7 and still the sales decline continued. This has to be put down to the shoddy workmanship in the factories and the lack of will in the DTI to remedy the problem. This period probably in reality marked the end of any dreams that BL could be saved in its current form and remain a world player. Too many stories of BL cars’ appalling build quality and unreliability abounded for it to survive without major surgery.

In 1976 Harold Wilson announced his surprise resignation and his place as premier was taken by James Callaghan.


James Callaghan (1976-1979)

James Callaghan inherited a mess. Britain was broke again, unemployment stood at 1.5 million, inflation hit 26 per cent, strikes ravaged the country and the Chancellor of the Exchequer, Denis Healey, had to go cap in hand to the International Monetry Fund for a loan.

The price for this was that the IMF demanded public expenditure cutbacks and public services began to feel the squeeze. To control inflation James Callaghan persuaded the TUC to restrict their wage demands to an agreed level and during 1978 this began to bear fruit. The economy began to stabilise and the possibility that the Labour Party could win the next general election against the opposition Conservative Party under their dynamic new leader Margaret Thatcher looked like it could become a reality.

As far as British Leyland was concerned, James Callaghan at last took some decisive action to help the ailing company and fired Tony Benn as Trade and Industry minister. In his place he appointed the far more realistic Eric Varley who displayed such competence that he was later able to leave politics for a business career. Callaghan was astute enough to realise that the endless scenes of striking BL workers that went into every home through the television screen was politically damaging and the company had to be turned around. New BL Chairman Sir Michael Edwardes had Callaghan’s ear and there is every evidence that the premier had the best interest of the company at heart.

Back in 1968 James Callaghan had opposed the proposed “In place of strife” legislation to restrict Trade Union power. In late 1978 he was about to be hoisted upon his own petard. In 1978, the Labour Government proposed a 5 per cent ceiling on the next wage round. At that years TUC conference the unions rejected this, advocating free collective bargaining, to use the phrase of the era, and the TUC were set on a collision course with the Government. At the 1978 Labour Party conference James Callaghan was expected to call a General Election when the odds of victory were good.

Instead, Callaghan sang a music hall song and the country would have to wait until 1979. Then Ford workers went on strike after rejecting a 5 per cent pay offer. The Government had stated that it would inflict penalties on any company that settled above 5 per cent, but Ford UK under Sir Terence Beckett did just that and soon other workers went on strike for higher pay. The scene was set for a chain of events that would lead to 18 years of Conservative rule. Public sector workers all over Britain went on strike, rubbish piled up everywhere and the Callaghan Government’s economic policy collapsed in tatters.

This period was christened by the media as “The winter of discontent”. Anti-trade union feeling grew and the demand for something to be done about union power grew and many voters began listening to the right wing agenda of Margaret Thatcher’s Conservative Party as their worst fears had seemed to have been realised. James Callaghan finally called a General Election in May 1979 and the result was a foregone conclusion, although the Conservative majority was only 30-odd seats. The Labour Party then embarked on a period of infighting as the left, led by Tony Benn, blamed the party’s defeat for not practicing radical socialist policies. James Callaghan, like Edward Heath, was overwhelmed by outside events and lacked the will to take on those elements seeking to de-stabilise both his government and the country. His successor as PM would take on a more pro-active approach.


Margaret Thatcher (1979-1990)

SATAN’S representitive on earth or national saviour? The jury is still out. The descriptions of the preceding governments were necessary because they explain the reasons for their demise as well as their competence. However, Margaret Thatcher displayed an indomitable determination to stand firm against strikes, wars and three Labour Party leaders, only to be brought down by her own jittery backbenchers. By and large the Thatcher Government controlled events as opposed to her predecessors who allowed events to control them.

Margaret Thatcher came to power in May 1979 with a mandate to break the power of the Trade Unions who had just brought down their second Government in five years. The TUC may have defeated the Callaghan Government’s 5 per cent incomes policy but it was a short term victory that had put into power a hard line right wing Conservative Government that was determined to smash the TUC as the de-facto third force in British politics and by 1981 wildcat strikes and sympathy strikes were outlawed.

BL Chairman, Sir Michael Edwardes, managed to convince the new Government of the need to continue to support the company and all went well to start with. The Metro was launched in 1980 and the Government agreed to fund the development of the new K-Series engine. The Tories wanted BL returned to the private sector as soon as possible and Jaguar was indeed privatised in 1984.

The BL board had hoped that the forthcoming LM10 and LM11 medium cars would provide the company with the profits to enable it to go it alone and provide the funds for the next generation of models. These cars were launched as the Maestro in 1983 and the Montego in 1984. For reasons outlined in the respective development stories, the cars simply did not sell in the numbers expected and this led to the Thatcher Government becoming frustrated at the inability of BL to free itself of the state life-support machine.

All this disenchantment became public knowledge which did the company’s market share no good at all, as the media speculated over the company’s future. In 1986 it was revealed that the Government was trying to sell the volume cars division to Ford and Land Rover to General Motors. On the face of it, this was a disgraceful state of affairs and the media outcry forced a climb-down. However, to be fair to the Thatcher Government, they had been sold a business plan that had failed and were now expected to pump yet more taxpayers money into a company that seemed incapable of producing cars that the public wanted to buy. And as the patriotic fervour that had surrounded the launch of the Metro dissipated, more and more people were asking questions about BL’s prospects.

A night of the long knives followed and the Government appointed a new BL Chairman in the shape of Graham Day. A clearing out of old management occurred which itself was the subject of a BBC Panorama documentary and the company was re-christened the Rover Group. However, the Thatcher Government was determined to rid the public purse of the money pit that had been British Leyland and, in 1988, the Rover Group was offloaded to British Aerospace. Was this a right move?

It would have been had BAe been determined to make a go of a non-military business which would have been desirable as the cold war was gradually winding down. BAe had agreed to hold on to Rover for five years and, if there was any will to make Rover succeed it soon disapeared as penny pinching, cost cutting and asset stripping of Rover occurred by BAe. Thus, the Thatcher Government has to be held to account for finding the wrong partner for BL/Rover if indeed it should have sold off the company when it did.

The Government adopted a new approach to the British motor industry and that was to start afresh with new factories making the cars of foreign investors. And who were the foreign investors. Why the Japanese car manufacturers who needed to build cars in Europe to circumvent EU tariffs. The Japanese were persuaded to set up in the UK and those buyers who wished to purchase a British-built car had a wider choice than for a long time. They could choose between Rover, Ford, Vauxhall, Peugeot, Honda, Toyota and Nissan.

Inevitably this would hit sales of the longer established UK manufacturers, more choice means less market share. In two decades Ford’s share of the UK car market slumped from 33 per cent to a measly 14 per cent in 2005. By 2004 the Nissan factory at Sunderland was producing more cars than any other British factory, so clearly there is a demand for these Anglo-Japanese vehicles.

The Thatcher regime ushered in the era of consumerism and freedom of choice. Consumerism would have happened anyway, the Thatcher Government sped the process up. Consumers became more cosmopolitan in their choices and the days when people blindly bought British cars was over. If consumerism and freedom of choice is wrong then the Thatcher Government can be blamed for that.


John Major (1990-1997)

JOHN MAJOR succeeded Margaret Thatcher as a compromise candidate and, against all odds, defeated the hapless Neil Kinnock’s Labour Party in the depths of a severe recession in the 1992 General Election.

It was an era of never-ending incompetence and ineptitude. The Conservative Party only had a small majority but behaved like it had won a landslide and would be in power for all eternity.

The party was racked with scandal, both sexual and financial and, on Black Wednesday 1992, Britain was forced to withdraw from the ERM. This policy kicked off the Euro-sceptical procrastination that has since stopped the UK taking on the Euro – and was cited by BMW as being a major economic handicap for any company producing cars in the UK.

No sooner had the last ballot paper been counted in the 1992 General Election then Britain began regretting re-electing John Major’s Government.

After the “Iron Lady” the John Major years marked a return of the weak style of government of the Seventies and the total collapse of his party at the 1997 General Election revealed the contempt most British people felt for it.

The main contribution to the Rover story played by the Major administration was in assisting BMW buy the Rover Group off BAe… and then ensuring that the subsequent economic climate in the UK was far removed from the Euro-centric policies followed in Germany, just at the time BMW needed all the help it could get in making Rover cars viable for export.

Should the Major Government have done more to persuade Honda to take a majority share in Rover? It was probably out of its hands, even though Honda was the ideal partner for Rover. The BMW deal may have ultimately proved disastrous but, at the time of its annoucement in 1994, many people in government thought it was a winning combination…


Tony Blair (1997-2007)

TONY BLAIR is an election-winning machine; three landslides in a row. Blair seems to have learned from the mistakes of the past and has adopted a strong but pragmatic approach to government. He knows the public don’t want a dogmatic government, just a competent government that tries to do its best for the people whatever their background or social standing.

The Blair Government’s first encounter with what remained of BL was in 1999 when BMW wanted the Government to offer state assistance to help re-develop Longbridge for production of the upcoming R30 model. In the end, Trade and Industry Minister Stephen Byers offered some of the money BMW was offering, but not the original amount of £130m, and, shortly afterwards, the company took to talking to the Venture Capital Company, Alchemy about purchasing remnants of the Rover Group for £50m.

Once BMW was well on the way to committing itself to offloading the Rover Group and its Longbridge factory to Jon Moulton’s Alchemy Group, Byers stepped in again and became a player in the deal that saw control of Longbridge pass to Phoenix Venture Holdings.

After the final collapse of MG Rover in 2005, the media accused the Government of backing the wrong horse but what must be remembered is that Jon Moulton and Alchemy were subject to a vicious media campaign aided and abetted by the trades union over the number of redundancies they intended to implement at Longbridge. The Government simply backed what seemed like the best option at the time.

By the time MG Rover did finally collapse in April 2005 it was well beyond government aid.


Conclusions

SO, did the politicians kill BMC/BL/Rover?

Well, yes and no.

Who, then, was the prime suspect? If one selects Margaret Thatcher, then her defence would be had the Maestro and Montego been more desirable motor cars then she would not have acted as she did – the fact that the Maestro and Montego were not desirable motor cars can be blamed on BL management.

Certainly some figures emerge with credit. One wonders what would have happened if Eric Varley had been Trade and Industry minister responsible for BL from 1974 instead of 1978. So who else could I demonise? James Callaghan for opposing laws curbing Trade Union power in 1968, as Britain stared into the industrial relations abyss that became the Seventies?

However, in the end, I have to settle for socialist hero Tony Benn whose simplistic world view entrances so many to this day but whose “industrial democracy” experiment at BL between 1975 and 1977 resulted in so many badly built and unreliable cars that those unfortunate enough to buy one vowed never to buy a British car again and told the world and the world decided not to buy British either.

Tony Benn: Would you buy a car from this man?

Tony Benn: Would you buy a car from this man?

Posted in: Essays
Keith Adams

About the Author:

Created www.austin-rover.co.uk in 2001 and watched it steadily grow into AROnline. Is the Editor of Classic Car Weekly, and has contributed to various motoring titles including Octane, Evo, Honest John, CAR magazine, Autocar, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, Classic Car Weekly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, and the the Motoring Independent... Likes 'conditionally challenged' motors and taking them on unfeasable adventures all across Europe.

55 Comments on "Essay : Did Government kill MG Rover?"

Trackback | Comments RSS Feed

  1. Stephen Allcroft says:

    It was BMC who had the bathgate plant, not Leyland.

  2. Triumph Nuts says:

    The Blair regime (you can’t call them a government) are the only ones with blood on their hands as to why 5000 manufacturing jobs were lost. They were happy to pump in BILLIONS to save the banks in 2008 but put could not cough up a few quid to smooth over the Chinese deal – ABSOLUTELY DISGRACEFUL. No other country would have let this happen – who can forget the images of the blair cronies driving around in Mercs, BMWs and Lexus. Do you remember the images of the police turning up in foreign police cars at Longbridge in 2005 – Even our police force did not support their own national product – they should have been made to like in France and Germany. I am proud to say all cars in my family are made in the UK (albeit none were bought new) MG ZT, MG ZR, Jag X-type, Land Rover Discovery & a trusty old triumph. Rant over.

  3. John says:

    Very interesting…

    John.

  4. nicholls1966uk says:

    I’ve just been re-reading my own article . I don’t mind admitting that I am a fan of Margaret Thatcher and Tony Blair and I don’t apologise for that . You knew where they stood , like it or not .
    The most fascinating period for me was the 1974-79 Labour government . What were they about ? They seemed to send confused messages out to the public .
    Where the Heath government was ejected in February 1974 the public seemed to think they were getting a return to the competence and stability of the 1964-70 Wilson administration.
    It seems Harold Wilson and Denis Healey may have thought that . But Tony Benn , now at the DTI , had veered strongly to the left whilst in opposition and had convinced many in the Labour party that future industrial policy should involve nationalisation , workers control ( by which he meant shop stewards ) and other measures hostile to the business community , rather than working in co-operation with the private sector , as had been the case in the 1960’s .
    The Ryder report was a hopelessly conceived fudge that tried to be all things to all men .
    Ryder talked of injecting £1.4 billion of taxpayers money into British Leyland to replace both models and plant . There was no concession from the Trade Unions to agree to new flexible working practices to operate all this new equipment , courtesey of the public purse . These had to be bludgeoned through by Sir Michael Edwardes in April 1980 , in yet more public washing of BL’s dirty linen as the company took on Moss Evan’s TGWU .
    Also there was no demand on the Unions to rationalise their own shop floor organisation to eliminate the myriad of rival unions competing for members and causing demarcation disputes within British Leyland .
    Perhaps the reason the Ryder report did not make demands on the unions was because revoloution was in the air ?
    Many people believed Britain was heading in a socialist direction , regardles of what the electorate thought . Edward Heath found in 1974 what would happen if he stood his ground . The lights would go out , and the people had no stomach for prolonged hardship . And later James Callaghan was to find out the hard way what happened when the unions had had enough of his pay restraint agreements .
    In a nutshell , in 1975 the unions seemed to have the whip hand as the de-facto opposition to the government .
    So was post-Ryder British Leyland to be run as a financially sound business or a socialist exercise in worker management and job creation ?
    It appears it was both .
    While Tony Benn was at the DTI there were no attempts to shed labour , reduce overmanning and the numerous BL plants scattered around the country , even though the Minister knew as far back as 1968 that these things had to be done.
    At the same time the chairman of the state owned British Steel Corporation , Sir Monty Finiston , wanted to rationalise his company , but this was vetoed by Tony Benn, who had now completed the journey from the pragmatic Minister of Technology to the socialist Industry Minister .
    Although the Ryder Report demanded worker participation , there were no shop floor elections to select representatives to put the case for the workers in the efficient running of each plant .
    Simply some shop stewards joined a discussion group with various managers . But those individual shop stewards in effect only represented the men in the section of the factory in their union that voted for them . This meant that any greivances by workers whose shop stewards had no representation on these discussion groups , were sometimes not given a proper airing . This frustration often boiled over into unnofficial strike action , to the detriment of all .
    In 1976 ITN filmed an uneasy Geoffrey Whalen of BL signing a worker participation agreement with Eddie McGarry , joint head of the BL Shop Stewards Committee , senior steward at Triumph , and the man who had been the leader of the month long strike that had crippled Triumph in late 1974 , and had broken the financial back of the old BLMC . During the dispute , McGarry , a communist , had shown little concern about the company’s finances . Now he was having a say in the company !
    In 1977 , new prime minister James Callaghan and his chancellor Denis Healey demanded pay restraint in the public sector . The unions treated BL as if it was just another part of the public sector like the NHS or civil service , not an organisation fighting for its life , and demanded a whooping pay rise , whether the company could afford it or not .
    Finally Tony Benn was replaced by Eric Varley and a more pragmatic approach was employed when Michael Edwardes took charge of BL in November 1977 .
    This tortuous tale did not end with Labour’s defeat in May 1979 . In opposition Tony Benn convinced the Labour party that his way was the best as it veered leftwards . Massive state intervention in industry , worker participation , withdrawal from the EU and import controls . The more moderate ministers in the Callaghan government were branded ‘Tories’ for their more pragmatic approach .
    Former junior minister at the DTI , Leslie Huckfield now became Labour’s shadow industry spokesman and had the nerve to march with Derek Robinson in protest at the sacking of the Longbridge shop steward and against the management team he had been working with only weeks before .
    The November 1981 BL pay dispute has to be seen against this background . The Thatcher government was deeply unpopular , and it seemed only a matter of time before the Labour party was returned with a manifesto written by Tony Benn . Sir Michael Edwardes was now despised by the Labour movement for having bludgeoned through many reforms without the agreement of the combined British Leyland shop stewards organisation . This ignored the fact that the shop stewards had said no to these necessary reforms , which is why they were bludgeoned through in the first place .
    Labour also demonised Sir Michael Edwardes as a Thatcherite hit man inflicting misery and unemployment on thousands of workers and their families for unjustified reasons .
    In the November 1981 pay dispute Edwardes won through , but the unions probably thought they only had to bide their time before a new Labour government would remove Edwardes , if he was still there , and his close consorts like Ray Horrocks . When this happened , efficiency and profit margins would cease to matter and British Leylands main function would be as a job creation scheme , whether the product was any good or not .
    Instead what happened was the game changing Falklands war , which resulted in the Conservatives crushing defeat of Labour and their Tony Benn influenced manifesto , described as the “greatest suicide note in history” by Gerald Kaufman , one time deputy to Eric Varley at the DTI .
    In came an era of consumerism in which people wanted value for money and did not want to buy cars for simply patriotic reasons .
    The past is a strange place to go .

  5. francis brett francis brett says:

    The government should have rationalised and shut most of the plants in the very early seventies,SAIC now are possibly doing what the sucessive governments should have done and are now starting the company up from the ground.Everyone has had thier rake off from this firm>

  6. Ken Strachan says:

    I had the impression that Ryder’s biggest achievement was to use the same grille on the Mini Clubman as on the 1275GT. Two crucial years wasted by a man who didn’t know about cars.
    Meanwhile, did the militant trade unionists ever wonder whether their children or grandchildren would have jobs?

  7. Jason1.8TC says:

    Could this be summerised as to what killed ’em off?

    Weak Governments
    Weak Workforce
    Weak Management

    Good foreign cars with quality and reliablity….

    BMW wanted to cull when they took over and were derided for it, so backed down. I wonder if BMW had grasped the bettle in 1994/95 things would have been different?

  8. nicholls1966uk says:

    As I understand it , the Labour government promised Lord Stokes in 1968 government orders and cheap steel from the state owned BSC , none of which materialised .
    Stokes personally felt it was his job to sell more cars to take up the slack in BLMC rather than fire people and close plants . Also he felt that any drastic slimming down could cause problems with the government that said it would help him .
    Another factor was that any redundancy programme would inflame the unions and BLMC was too financially weak to survive prolonged industrial action .
    As I have outlined , Britain was a different place in the 1970’s , and too answer Ken Strachan’s point ,
    “did the militant trade unionists ever wonder whether their children or grandchildren would have jobs?”,
    I think they did think their children would have jobs . In their vision British Leyland would still exist , with the capacity to produce over 1 million vehicles a year , but subsidised by the taxpayer , as a national assett , regardless of its economic performance .
    The product might not be any good , they might be stockpiled on disused airfields in their thousands , but the jobs and skills would be retained in the UK .
    Of course the view that British Leyland was a strategic national assett was only really valid in times of war when auto production would be switched to arms production .
    The arrival of the nuclear age and the prospect of a short sharp cataclysmic war somewhat rendered such a philosophy obsolete .
    But the Ryder report was a complete fudge that ignored sound business practices in favour of the political zetgeist of the day .

  9. Jonathan Carling Jonathan Carling says:

    Politics is a funny old trade – consistency does not come as standard. Callghan’s views in 1968 may have been the same as in 1976, but circumstances were such that he ended up doing different things.

    While BL was a private company in the early 70s, Stokes had the opportunity to bludgeon through the kind of rationalisation that Edwardes achieved later on. There was so much scope for sharing components, rationalising the dealer network, and cutting costs – including shutting surplus or unproductive factories, and yes reducing over-staffing too. That was the time and the opportunity to consolidate BL and face-down the unions, and Stokes didn’t have the guts to do it.

    On a pedantic point, Wilson won 4 elections out of 5, not 3 out of 4!

  10. Andrew-P AndrewP says:

    I think politics is a different matter and all governments up to and including the Major government tried to do the right thing – albeit with limited success.

    In terms of the automotive industry the Thatcher government brought us the Japanese makers such as Nissan who are now a resounding British success.

    Tony Benn’s heart was in the right place and I am certain everything he did was with the best of intentions.

    The real villain of the piece is the Blair government as they had the chance to save MG Rover for £130m – much less than was spent by the government as a result of the closure. Also during their watch we also lost Dagenham Assembly, GM Luton, Volvo Irvine, LDV Birmingham – which should have been saveable. But then again you don’t need manufacturing when you can have a degree in media studies.

    The unions are interesting – from being a disprutive factor in the 60s and 70s they now deserve significant credit for the renaissance of the UK car insudsty.

    The big thing with BL (in all its incarnations)is not why did it fail but how did it last so long?

  11. francis brett francis brett says:

    @10 The unions of the day were bolshie militants,stuff was walking out of the plants on a biblical scale when the unions should have recognised that the elephant in the room was the sheer size of the firm-the british empire was no more,if BL culled half of the workforce,made cars people wanted and adopted japanese work ethic and attitude we could have been looking at rover sunderland instead of nissan.On the youtube BL speke film a chap so eloquently orates exactly what was wrong and nobody listened,of course it was a political hot potatoe but the nettle should have been grasped i remember an article in CAR magazine with the usual suspects and i feel i must doff my cap to Micheal Edwards,he said that he was to address the workforce- “i had two sets of notes with me,one was get behind us,post derek robinson and lets build the metro the second was announcing the complete closure of BL”.A very brave man.

  12. nicholls1966uk says:

    I think the Blair government was haunted by the spectre of British Leyland and the money pit it became .
    Consumerism reached new heights in the New Labour era , with the internet becoming a source of information for the prospective car buyer .
    As for saving MG Rover , ask your self this – did it deserve saving ?
    A company everybody knew used to be the troublesome part of British Leyland , now unconvincingly re-christened Rover , which fooled no one ,a culture of blaming everybody else for their problems except themselves and worst of all they produced the K-series engine , fantastic piece of engineering when it stayed together , but head gasket failure seemed to come as standard with the cars . And despite all the well publicised problems with the car , MG Rover were in denial and did nothing to rectify it .
    I feel sorry for the 6000 workers who lost their jobs in 2005 . After all the vile bile heaped on them in the 1970’s and 1980’s , they knuckled down and did the job , it’s just a pity they didn’t have more saleable products to build .
    I know Tony Blair isn’t exactly flavour of the month at the moment , but he was right not to expend taxpayers money rescuing these company’s . It is easy to criticise , but car making is investment intensive , and not for the faint hearted .
    Remember , if Britain had wanted MG Rover to survive , then the cars would have sold in much greater numbers .
    The New Labour era did produce some successes, the new MINI , the Nissan Micra , the Nissan Quashkai , the Vauxhall Astra up in Ellesmere Port , the new Range Rover , the Honda Civic from Swindon and probably some more I have omitted .
    As for the unions , they have transformed their reputation into organisations genuinely interested in creating a vibrant British motor industry . What has to be remembered before lambasting the unions for past misdemeanors was that some car factories were genuinely unpleasant and unhealthy places to work . At the PSF body plant in Cowley , now the BMW MINI factory , workers had to breathe in unpleasant fumes which caused disease . This was a breeding ground for militancy . Management are more pro-active in dealing with health and safety issues . Consumers expect a quality product from European manufacturers , and quality is not arrived at by treating workers like dirt . Those consumers in the market for a cheap and nasty product instead look for something made in the Pacific rim .

  13. nicholls1966uk says:

    As for the demise of LDV , do we really know what happened there ? Like TVR , LDV was taken over by the Russians , seemed a viable company with a future and next they were gone.

  14. David 3500 says:

    For me the saddest loss in all this was the Rover name.

    A great name that was a small, but earnest profit maker in the 1960s with some great products in production and some additional new ideas in the planning stage, some of which were almost ready to get the production green light.

    True, the Rover Company Ltd was happy to entertain talks with Leyland about the Rover Company Ltd being taken over. Sadly Rover would be the biggest casuality in all this, closely followed by Triumph; I really am amazed that a loss-making concern such as Jaguar managed to remain one foot ahead of execution for so long, even into the 1990s.

    Then from July 1986 the Rover name was applied to the remains of the British Leyland car division to become the Rover Group. A bit like plastering the inside of your recently purchased former council house with expensive velvet wallpaper and fitting double glazing with lead insert partitions in the glass on the outside, to turn monotonous architecture into something with instant snob value.

    This was a very tall order to turn a well respected purveyor of luxury saloons into a beacon name to add lustre to the rest of the products, without any negativity of the company impacting on the brand itself.

    Very sad indeed.

  15. Mikey C says:

    But Rover is actually one of the great survivors of BL, while people here may think about P5s, SD1s and 75s, the rest of the world will consider the Land Rover and Range Rover as their great creations, and Solihull still exists producing them. The RR is one of the great creations of the British car industry, and truly fitting of the Rover half of its name, much more than small hatchbacks like the 100 and 25.

    Triumph was far more of a victim…

  16. francis brett francis brett says:

    Maybe in 30 years time and MG is possibly a big hitter it will be a lesson from history – it should have broke up years ago and rationalised,maybe if BAE was a better company it could have flourished,now we will see in a timely fashion if it will under chinese stewardship.

  17. Dave Smart says:

    All valid points, and yet again unions and socialism take a battering as a major player in the downfall of the British Motor industry. But if you are going to use the rise of socialism as a reason then the story must go back further, primarily to the end of World War 1 and reinforced at the end of World War 2, when yet again the battlefields of Europe were littered with the bodies of the working classes.The rich (or management) dont fight wars, they declare wars, get rich from wars and when they’re over its “right lads, thanks a lot, now get back in those stinking factories and filthy coalmines, we’ll pay you as little as we can get away with and dont you dare try and better yourselves”
    Bit like how the banks and politicians have treated us for the last 4 years!!
    Two further points,both valid if you walk in the footsteps of these examples.
    Its 1971, you are 49 years old working in British Leyland. Your manager tells you the company has to streamline to survive and adopt Japanese working practices in the coming years. In 1945 you were 23 and shipped back to England after 4 years in a Japanese prisoner of war camp, how many fingers would you stick up?
    30 years after the Falklands war I still wont buy anything from Argentina, even if I’m told its good for me.
    In 1984 I walked into the toolrooms of Pressed Steel in Swindon to have a tea break with my father in law, a toolmaker. His lathe was date stamped 1955, the year the factory opened.
    Militants (or people who riot) dont happen in a fair society.
    Your 4 weeks paid holiday, decent pay and conditions and looking after your health and safety weren’t given to you because your boss loves you, they had to be fought for by a generation that had balls and very bad managers in suits with rich daddies.

    Dave

  18. David 3500 says:

    @ Mickey C:

    From a Rover perspective I definitely do not moarn the passing of cars such as the Metro/100 or CityRover.

    Yes, the Range Rover is undoubtedly one of the Rover Company Ltd’s best creations (alongside the original Land Rover, P4, P5 and P6). But it is shame that its core appeal in building luxury cars such as the 75 rather than ‘just’ luxury SUVs has gone and that what was produced in its latter years was heavily constrained by using either existing designs or being constrained by licensing agreements and the internal politics of its owner.

  19. francis brett francis brett says:

    @17 very well written,how could anyone disagree? it can get emotive,i am no fan of capitalism (greed)anymore than i am of communism (corrupt) we will never have a fair society.

  20. Glenn Aylett says:

    The real shame of the Leyland years was the destruction of once popular makes of cars like Triumph and MG, which earned millions in export sales in the sixties. Triumph, when BLMC was created, was a noted producer of sports cars like the TR4, the small Herald saloon was a very successful car, and the 2000 had become a favourite among the middle classes. Fifteen years later the brand was reduced to assembling a Japanese car and then killed off, while MG was starved of funds throughout the seventies, producing very dated sports cars that were never improved after 1974, before being killed off and revived as a sporting brand of Austins and Rovers that was a cynical exercise in brand engineering.
    I would really have loved these two companies to have survived, as Triumph especially knew how to market good cars and its designs were cutting edge, but sadly it wasn’t to happen, as money was lavished on trash like the Austin Allegro and the ill fated Rover SD1 and two decent brands of cars were destroyed.
    I know it sounds harsh but I would much rather BMC was left to wither on the vine, as all their products from the Landcrab onwards failed, and Jaguar Rover Triumph, with an updated MG Midget, survived as their products in the late sixties were far more exciting and profitable. Who knows this company, Leyland MG, could have been as successful as BMW?

  21. Jaguarundi says:

    A very succinct summary.

    It makes me wonder if, during 2008 and 2009, the U.S. government was aware of the history of government intervention in the British motor industry when it looked into possible strategies to save the American motor industry. Of course, it did help that the 2000s American motor industry, though beleaguered, was far healthier than Britain’s from the 1960s onwards. World-beaters like the Cadillac ATS were already in development. There was real potential for success within the existing structure while the British motor industry had to be carefully restructured to make it a going concern.

    At the same time, the UAW and CAW unions were very much business-oriented and had a history of successful co-operation with the American car companies. They were willing to share in the sacrifice in the short term in order to maximise the motor industry’s chances of long term success, while also safeguarding American and Canadian workers’ fair treatment and preventing a callous dumping of all jobs in China and Mexico.

    It didn’t hurt that George Bush was willing to throw money at them in order to stave off a collapse or that Barack Obama was the epitome of a business-friendly economic nationalist, a far cry from the likes of Tony Benn.

    @ 20, Glenn Ayelet

    I agree that there should have been a concerted effort by the British motor industry to excel at the premium end of the market. However, combining Jaguar, Rover and Triumph into a single company was historically very destructive. Under BL, Rover’s upward expansion was curtailed, largely at Jaguar’s behest. Far better, in my opinion, would be a situation similar to that of the German motor industry: multiple high-end car manufacturers competing at home and taking this vibrant competition into export markets. Competition drives improvement and expansion.

    So ideally, Rover would have remained a competitor to Jaguar rather than a low-end stablemate. It would be the BMW to Jag’s Mercedes. From Shanghai to Stuttgart, Jag fans and Rover fans would be at loggerheads. There was potential for this sort of rivalry to develop as late as the 1980s and 1990s.

    For this reason, the emergent success of Jaguar Land Rover will always be quite bittersweet, knowing that Jaguar and Land Rover (nee Rover) were once competitors and could have developed a glorious rivalry. BMW was at one point in danger of being bought out by Daimler-Benz. That would have been a tragedy for the German motor industry, depriving it of one of the business’ greatest rivalries.

  22. Simon Hubbard says:

    A very interesting, emotive and appropriate piece, which is well written. A period of time I find fascinating, sadly as we know all know, now for the wrong reasons.

  23. Steve says:

    The Labour party has been responsible for all the trouble in this country, the lazy, everything for nothing attitude to living, the “give away everything to people who give nothing to the economy or society” attitude that prevails even today is the major cause for the gradual degradation and de-valuation of this once great and proud country… At the least the Conservatives have the UK’s interests at heart (and aren’t a bunch of arrogant thick working class halfwits)

  24. Glenn Aylett says:

    Margaret Thatcher, as you probably know, has died today and for all she was a controversial figure, I disagreed with some of what she did and someone at work said he was glad the old bitch was dead, she probably saved the British car industry. While it is sad Rover have gone, and Ford and Peugeot have closed their British factories, Thatcher encouraged the Japanese to set up factories in the country and Britain now produces more cars and exports more cars than in the seventies Big Four era.
    Also in the Thatcher era the subsidies to British Leyland finally stopped, so the company could no longer run to the government when a product wasn’t selling, and consequently incompetent management and militant trade unionism were replaced by talented managers like Graham Day and a more responsible form of unionism. I know Rover eventually collapsed, but the privatised company of 1990 selling cars people wanted to buy and making a profit was far better than the state run monolith making massive losses and making cars buyers were increasingly ignoring when Thatcher came to power in 1979.

  25. MGBmarvel MGBmarvel says:

    Forgive me if I am been Naïve here but I have always wondered why we need to privatise all the traditional industries? we have an example at the moment the east coast main line has been state run since National express pulled out and it is making money now again why cant we have privatised industries run by good managers ( I know the financial rewards in the private sector are much better) but surely if we can find people to run the ex national companies and turn them in to making a profit then that can only be good for the country but I am guessing I am not factoring the “greed factor” in we used to have a manufacturing base of over 27% of GDP I believe its now down to 7% we don’t make anything badly anymore (that we own) the fact is we don’t make anything for ourselves
    just a thought

  26. francis brett francis brett says:

    R.I.P Mrs Thatcher.The ONLY conviction politician of our time,even if you did not like her she stuck to her guns.
    She showed the world what would happen if your tried pissing about with embassies and the Falklands.
    The scum that represent us are not fit to even mention her name.

  27. Roger A says:

    Without wishing to detract from any of Ian’s excellent analysis here, I think it’s worth reminding ourselves about the other (Governmental) elephant in the room, and that is the EU. Would suggest that strict EU rules on State Aid would have hampered more recent UK Governments (esp. Blair’s) from providing support which they might otherwise have wished to have provided.
    Others may suggest that other Member State Governments may appear able to circumvent these rules

  28. Roger A says:

    Sorry, I submitted point 26 before I had quite finished.

    As I was saying …others may suggest that other EU Member State Governments may appear better able to circumvent EU State Aid rules, I don’t know. But the strict rules do exist and the EU also has tough rules it can impose on Member States that are alleged to fall foul of such EU rules.

    I don’t wish to appear to defend the Blair government, merely that we should be realistic about the level of power available to Government at Member State level compared with Brussels.

  29. Paul Taylor Paul Taylor says:

    Well said, Francis.

    Have to say I was impressed with Ed Miliband’s tribute to her today. Many of his predecessors (and current colleagues) would have used it as an opportunity to have a dig at her and her party. At least he displayed some of the dignity that is sadly lacking most of the time.

  30. Paul says:

    @2 – Not that old chestnut again. If the banks had collapsed in 2008 we would all now be living in tents and standing in line at soup Kitchens. You could forget the banks, MG Rover and just about every other business in the country. It would have been catastrophic. Letting MG Rover collapse on the other hand was tragic for the few thousand workers at the company but had absolutely no effect on the wider economy. In fact trying to bail the company out would have just been throwing good money after bad – and there had been an almost continuous stream of bad money since nationalisation in 1975. No the mistakes where made by the Wilson government in 1968. If they had not engineered a merger the real British Leyland – Rover, Triumph etc would have remained a going concern probably to this day. BMC was an albatros round its neck that drained it or resources leading to bankruptcy in 74/75. That said a large chunk of BL remains doing fantastic business in the shape of JLR and MINI – actually producing far more – and much better cars than BMC/BL/Rover/whatever ever managed.

  31. Paul says:

    ………….In fact why do we keep having these maudlin, self pitying diatribs on this site bemoaning the loss of the national embarressment that was British Leyland/MGR when all the evidence suggests the British Motor industry has never been in better shape!

  32. DaveP says:

    Answer; because we don’t have a British motor industry. We have foreign owned companies making cars in Britain which obviously a very different thing.

  33. Ian says:

    Alas, Tony Benn must take the blame for creating BLMC, and taken with the conclusion above, he is doubly dammed!

    Longbridge and BMC (not Jaguar and MG) poisoned the great Leyland Truck, Rover and Triumph. Profits at Austin, thanks to Issigonis’ genius and dogma, were in a parlous state by the end of the sixties, it’s such a shame that all these companies had to be brought together, and to wither in a massive, uncontrollable and ill-conceived conglomerate.

    However, it is fair to say that Longbridge was transformed by the 1990s, but at what cost?

    As bitter a pill as it would have been in 1986 and 2000, with hindsight it would have been better if VW or Alchemy had taken over at these very different stages in the company history. There would then have been no MG Z range, but Austin might now be what Seat or Skoda became?

    Elsewhere, government insistence that Rootes Group locate to Scotland certainly didn’t help their fortunes, either.

    However, Paul’s point above is a very good one – the UK automotive sector is doing very well, with the best March ever for JLR in the UK, with a much broader spread of sales across different world markets. And I’ve never known a range of cars from UK brands – albeit foreign owned – that we didn’t have to make excuses for. We just need to re-shore more of the supply chain back to the UK, so automotive manufacturing helps restore the balance of payments.

  34. Andrew-P AndrewP says:

    Here we are in 2013 with Jaguar Land Rover investing in new factories and Nissan at record production – things are looking better than anyone dared to hope not that many years ago (even allowing for things such as the unfortunate closure of Ford in Southampton etc)

  35. Will M says:

    JLR, Nissan, Toyota, MINI all prove that the UK can make volume cars at international quality at a profit.

    Plenty of engineering talent too, most F1 teams have bases in the country.

    What the UK doesn’t seem to have are manufacturing owner-management that can steer a car company long term. Plenty of people who can fiddle spreadsheets, for good or bad.

    @Roger A – EU member state aid doesn’t seem to affect the likes of Renault, the French wouldn’t let them go to the wall.

  36. James Riley james says:

    The one thing that stands out throughout all of this is society’s role, individuals are rarely blamed because it is hard to give them a neat label. It’s either ‘The Government’, ‘The Unions’, ‘The Management’ but throughout all of this we also have the majority of the players involved which are the people themselves, whether they be cleaners, factory workers, engineers, management or the designers. Collectively they couldn’t pull together and it’s all too easy to blame the people at the top whilst allowing all those workers who happily let shoddy workmanship past their stations, striked for the silliest of reasons and couldn’t see, or refused to see, the bigger picture even if it was rammed down their throats. This was narrow-mindedness in its worst form, and the same narrow-mindedness that today sees many people take such limited and vitriolic views towards people like Thatcher whilst being completely blind to any wrongdoing by their own countrymen/colleagues/family members.

    There were tens of thousands of British people working in BL at the time that allowed cars out of those factory gates that were substandard and they knew it, they could see by watching the news the damage their actions were having on the British public, anyone with half a brain and certainly one working within must have seen the decline in sales, the decline in public appetite – the question is did anyone actually see that as a problem? or did they just think that with a powerful enough Union they would be kept on the payroll indefinitely even with no cars rolling down the tracks? It certainly seems that way to me.

  37. Jaguarundi says:

    @ Paul, 31

    “………….In fact why do we keep having these maudlin, self pitying diatribs on this site bemoaning the loss of the national embarressment that was British Leyland/MGR when all the evidence suggests the British Motor industry has never been in better shape!”

    Another answer:

    Better shape than the utter depth to which BL sank is a laughably low standard. It’s also wrong to say that the motor industry has never been in better shape. In the decades following WW2, with the rest of Europe in tatters, the UK was the world’s second biggest car producing nation after the USA. It was indeed recognised that this state of affairs could not last and efforts were made to make the British motor industry more competitive.

    BL was the culmination of this effort. It failed spectacularly, but the vision of a UK which could take on the likes of Germany, the United States, Japan and South Korea in the global automobile market remains a seductive one. This is the vision of Austin being a household brand name from Alaska to Zimbabwe and Rover luxury performance cars being lusted after by affluent consumers in Peterborough and St. Petersburg. BL represents that vision, and there was always potential for this to be realised right up until the end as globalisation accelerated and the British motor industry lost out. The potential was squandered, of course, but there is no universal law that dictates that there could not have been a globally significant, independent rival to Hyundai-Kia, Daimler, Volkswagen Group and General Motors based out of the English Midlands.

    So it seems you’re falling for what Voltaire would call the “best of all possible worlds” fallacy. With JLR, MINI, Nissan and a handful of smaller companies, the British motor industry is doing quite well, but it’s common consensus (particularly outside the UK) that other countries are doing much better. The UK could have done better.

  38. Rammstein says:

    On the continent back then, the Princess 1800 and 2200 were welcomed as being refreshing in design with a sniff of Britishness; against the Opel Rekord, Peugeot 504, Renault 20 and even the low range BMW 518 and Merc 200.
    Not for long, the poor reliability and actual lack of built quality and any form of quality control killed this car off within two years after its launch.
    The later 2 litre with the ‘O’series engine proved to be a real good car , but nobody believed it anymore.
    Same goes for the Rover SD 1, it was quite popular and an alternative for a BMW, Mercedes or the long forgotten 604 by Peugeot.
    But also this car was shot down by missing any form of built quality or quality control, with as darkest hour a long term Rover 2600 test car for ‘ze German’ magazine Auto Motor und Sport, that found out that their poorly running 2600 had one piston fitted from a 604 Peugeot, somethng went wrong during the milling of the engine and the solution was to patch it up by installing a different size piston.
    Of course BL were not alone, let us be honest, Italians made appauling electrics, the French cars of that period one could hear rust, but at least these learned -at last- from their mistakes.
    In the sixties the whole European car industry were living on a silver cloud, selling off whatever they could.

    Ironic is n’t it that if you look at the state owned Renault company in those days, being produced in a semi-communist country, Renault were able to make innovative cars like the Renault 4 and the Renault 16 and make a profit.

    Then for BL there weas the hughe difference in culture, I am convinced that the earlier merger of Austin and Morris into BMC or BMH, there was still rivalry between those two and under British Leyland all arch-enemies were forced to live as one happy family.
    Apart from this, the BL cars were all competing with each other, and what to think about the sudden overflow of “British Leyland” dealers.

    Let me make one thing clear, the British do know how to make a motorcar, just look at the success of the Japanese manufacturars like Honda, Toyota and Nissan.
    But the lack of management, quality control and labor relations killed off the British motor industry.

  39. delboydenmark says:

    We can all sit here and moan about all of this but I believe now that MG,MINI and Jag/LandRover are seperate companys it is probaly best in the long run.Not sure if Longbridge will ever see mass production again but there is hope for these companys.Pity none of them are British owned.

  40. Comical_Engineer says:

    Q: “Essay : Did Government kill MG Rover?”
    A: No, Red Robbo and his crypto-communist ilk did.

    If the workforce (in the 70s and early 80s) had done their jobs properly and worked reasonably hard and built QUALITY vehicles then we would still have a big motor industry to rival Germany and Japan. A friend of mine did 35 years at Halewood and has tales of strikes because there was no milk in the coffee machine, strikes because it was sunny, strikes because it was more fun to take the “p” out of the management than work etc.

    The motor industry in the UK was the author of it’s own downfall.

    Then there were numerous cases of stoppage after deliberate sabotage of key equipment, the demands for more pay because the management wanted them to learn to use a spanner as well as a screwdriver. You think I am kidding? I wish I were. No, it wasn’t all down to the workers, some of the management were pretty incompetent too.

    This forum contains numerous examples of potentially great cars spoiled because of lack of investment and poor quality and internecine fighting. The Triumph Stag that always deserved a Rover V8, the Maxi that always deserved a decent gearchange, the Marina and Ital that used a suspension from 1948. Never mind the seriously dodgy quality on any Ford Escort Mk3/4 or Orion, the instant-rust Alpine & Solara (just add water). Later on, the K-series problems from lack of development.

  41. Paul says:

    @32 – Thats nonsense. Of course we still have a British Motor Industry. JLR may ultimately be owned by Tata, but all its production and R&D is done in the UK. The vast majority of MINI production from body in white, engine and drive train production and final assembly is also done in the UK. Nissan’s European models are designed as well as manufactured in the UK. Because we dont have clapped out, inefficient factories delivering the odd Marina and Allegro on the days they turn up for work doesnt mean we dont have a British Motor industry.

  42. KT says:

    “Leyland Trucks had to go to Bathgate in Scotland, and Triumph went to Speke in Merseyside. In addition to these future BL plants, the Rootes group went to Linwood in Scotland where the ill-fated Hillman Imp was built. By the Seventies, the appalling militancy of the Speke workforce and the consequent shoddy workmanship, all but destroyed the reputation of the Triumph marque.

    However, with Merseyside’s reputation for militancy, the factory should not have been built there in the first place. Speke, Bathgate and Linwood all closed. Why did the government force manufacturers to build factories in these places they did not want to go to?”

    A little unfair to Merseyside in specifics there I think. Merseyside did not have an especially millitant reputation in the 1950s, certainly no more so than any deprived industrial area. That came later. Liverpool didn’t even have a Labour Council till the 1950s due to secterianism.

    The Speke plant actually dated back to World War Two, pre-SuperMac, when a local safe manufactuer began to do large pressings for the War effort in a new Speke plant. They continued this after the War supplying the motor industry, including Standard-Triumph who, keen to have more capacity, bought and expanded the plant. Where the Government did force Triumph’s hand was the erection of the larger, full-assembly ‘Speke No2’ plant, opened in 1970, at the height of industrial militancy across the UK, which, with a brand-new workforce made up largely up the young and those who had been refused jobs when Ford and Vauxhall had opened a few years previously, was indeed, largely as terrible as you describe. However, even British Leyland noted while ‘Speke No1’, the original plant, was hardly Porsche, it never had the problems of its younger sister and actually outlasted the new plant’s closure in 1978 by several years.

    It should also be pointed out much of the problems with the TR7 had to do with its running gear and electrics, made in the Midlands heartland of the motor industry!

    You do mention the other two Merseyside car plants and that they are still going, but then don’t really ask why or ackowledge that this partially contradicts what you say earlier that plants should not have been built there. Ford at Halewood and Vauxhall at Ellsemere Port both saw industrial relations and quality problems, but not much more if at all than Dagenham or Luton. However, both plants survived despite this ultimately beacuase, unlike Speke or Linwood, they made cars people wanted to buy in large numbers. Today, these are some of the most productive, high-quality and succesful car factories in Europe. Ellesmere Port is more productive than most of GM’s German plants and Halewood’s product is on sale succesfully from L.A. to Mongolia.

    Speke No2 was uniquely bad, but that was as much down to the national climate when it openeded, the company it was part of and the products it made as any specifics about where it was located. Halewood and Ellesmere Port’s current success prove today that the relocation of industry was not always a bad thing and, as was seen later on with Nissan at Sunderland and Honda at Swindon, if you have the product and the management style, the workforce will follow.

  43. Comical_Engineer says:

    #41 “JLR may ultimately be owned by Tata, ” …. and Nissan, and Honda and BMW Mini and Toyota and GM Vauxhall of course. But we do have a BRITISH motor industry don’t we?

    That would depend on your definition of British. 😛

  44. francis brett francis brett says:

    @40,Im not convinced Derek Robinson was as bad as painted.
    When the toolmakers went on strike for weeks he moved heaven and earth to try and avoid it,he even recognised how damaging it was.Boy did he play a part in the mess-that cannot be denied,but throw into the mix lazy bastards,bolshie shop stewards that would have the whole plant out if you didnt stir the tea at the correct frequency and you can timeline the demise of any given industry.

  45. John W. King says:

    Having overseas firms build cars that people actually want to buy, in the UK is of course better than a dead-duck national embarrasment draining money from the public purse. They provide jobs in the UK after all.

    HOWEVER, overseas firms like any investor – invest with the intention of taking out more than they put in. Had BMC/BL/Rover been turned around in the way that VW was turned around after WWII (hilarious now that Lord Rootes saw no potential in the company!) then more of the profits would be retained and circulated within the UK, rather than sent off to the parent company.

    Moreover, like most of Europe we can no longer make things like TVs, HiFis and so on meaning we have to import them from Asia or Eastern Europe.

    Whilst France and Germany may be in the same boat with TVs etc, at least they have companies like Renault and VW exporting and setting up parterships in emerging economies such as China and India – valuable exports that help pay for all the stuff they have to import – meanwhile Britain looks on from the sidelines.

    When you think about it, for most families a car is their biggest single expense after housing – yet they have to either buy a wholly imported car or a British built one for the profit of an overseas firm – that’s a huge drain on the economy and it’s no wonder our borrowing is at record rates just trying to stay afloat.

  46. Will M says:

    @45

    VW by the late 60s were known as some quirky rear engined car company.
    It was only by buying Audi from DaimlerBenz that VW were able to get FWD watercooled tech that prevented them from going under, the resultant mk1 Passat and Golf saved the company.

  47. christopher storey says:

    #45 : The grasp of economics in this post is somewhat suspect . In fact, the UK now exports more cars than for over 50 years . The industry is not a drain on the economy at all and is assisting the balance of payments considerably . There is absolutely no connection at all between excessive public borrowing , which is largely the result of excessive welfare spending , and the trade balance

  48. Darren says:

    In reflection, the best bits of the old BL group were slowly cherry picked off over time, until just Longbridge survived in the MGR era.

    No other maker or aspiring maker was going to take on the Liabilities of Longbridge, an old sprawling plant which must have had an horrendous maintenance bill without considering the pension liabilities of the workforce.

    Honda probably did the sums and realized it was far better off with a compact new factory without heritage baggage.

    Rather than thinking about the demise of Longbridge, Canley, Speke and Abingdon etc, perhaps we should be glad that Cowley, Solihull, etc survive.

    I still hold out hope for a new generation Rover saloon from Solihull, one that exudes the style and desirability that JLR currently inject in their executive and four-wheel-drive offerings.

  49. The Wolseley Man says:

    @42 “the ill-fated imp” – in what way? More myth than fact again methinks.
    Apart from a water pump problem on early models the thing sold by the thousands and was far more practical than a mini – and was great fun to drive. I know, I used to rally the blessed things!
    And it made more money for Chysler than the Mini ever made for BMC!

  50. The Wolseley Man says:

    @43 – I know what you mean. I’m not a football fan but never get the idea of the English team being made up of mostly foreigners! (So I’m told).

  51. mm says:

    When Edward Heath called a General election on the “Who Governs Britain” ticket, the conflict with the miners, over a rejected payclaim, a payclaim in breach of Heath’s ceiling figure, the bombshell for Heath, within days of the call, the Civil Service had provided incorrect figures for miners wages, with correct figures their payclaim was in fact within Heath’s ceilng. there was no going back, Wilson was elected, the miners received their pay award

  52. John W. King says:

    #47 I didn’t say that the industry is a drain on the economy I said that not having an indiginous industry meaning people having to import their car or buy one for the profit of an overseas firm is a drain on the economy.

    Are you seriously suggesting that exporting more and importing less doesn’t affect the wider economy?

    In it’s heyday BL cars largely used a midlands based supply chain, whilst now a large percentage of components imported – so you’re not comparing like-for-like export figures, though of course some export is better than none.

    It’s not just government borrowing, personal borrowing is at record levels too with all kinds of conjuring tricks going on like letting house prices rocket so that we feel artifically richer.

    #46 That was what was needed to turn around the dead-duck, it’s a shame successive governments and managers at BL could’t do the same thing.

    btw how long before we start importing Mini’s from India?
    http://www.bbc.co.uk/news/business-22184453

  53. Will M says:

    @52

    If BMW want to introduce a cutprice Mini (Rocketman?) then producing it in India would be a good idea.
    The Suzuki Alto and Nissan Pixo are already imported from India as cheap little hatchbacks.

  54. maestrowoff says:

    MINIs will be produced in India for the same reason that Freelanders are produced there, for local consumption (I presume there are high import duties)

  55. Ian Nicholls says:

    I have just stumbled on this

    http://news.bbc.co.uk/1/hi/7598647.stm

    I am currently researching the ‘Winter of Discontent’ era.
    Michael Edwardes did a remarkable job in keeping BL out of ‘the Winter of Discontent’ in that he got the workforce to accept a 5% pay rise as per government wishes in November 1978 before the Schweppes hit the fan at Ford and in the new year. Anyway, well worth a listen.

Have your say...