Essay : Lord Stokes, the case for the defence
Ian Nicholls looks into the policies of the man everyone loves to hate – Donald Stokes.
The argument is – was he the villain that history has painted him since the end of his tenure at BL, or was he simply a victim of cruel circumstance?
WHEN seeking an explanation for the collapse of the British car industry, pundits like to select militant trades union and incompetent management. The former usually brings mention of Derek “Red Robbo” Robinson and the latter brings forth the name of Sir Donald Stokes, (from 1969, he became Lord Stokes of Leyland).
The attack on Stokes is usually led by Mini and MG enthusiasts. The MG fraternity loathe Lord Stokes because, in their view, he neglected the MG brand and decided the corporate British Leyland sportscar, the TR7, should be badged a Triumph, thus signing the death warrant of MG at Abingdon. The attack from the Mini contingent is led by people who accuse Stokes of axing the Mini Cooper and replacing it with the supposedly inferior 1275GT.
The critics were led by none other than John Cooper himself, from the platform of his column in MINIWORLD magazine. The Mini enthusiasts also criticize Stokes for not proceeding with the Alec Issigonis designed 9X, thus sidelining the great man himself. A lot of other car enthusiasts have their gripes with Stokes, but I argue he has become a victim of hindsight.
Much of the debate hinges on the true state of health of BMC in late 1967, early 1968. According to the likes of John Cooper, everything was wonderful in the BMC camp at this time, with 9X and the revised 1100/1300, the ADO22, under development. The genius of Alec Issigonis would provide BMC with a great future.
Maybe this viewpoint is more based on the personal friendships that existed between Cooper, Issigonis and senior BMC management, and a reluctance to see that friends were fallible. In the Nineties, John Cooper stated that he could still not understand how the BMC/Leyland merger had come about. Financial analysts and the British government with less emotional attachment to BMC’s products saw things differently.
In 1967 BMC achieved sales of £467 million, and yet lost £3 million. This stark fact pointed to grossly incompetent management. To lose money suggests that consumers were not interested in BMC’s products, when they were market leaders in an era when British cars were highly regarded. The Mini and 1100/1300 ranges were sold at a loss, the 1800 simply didn’t sell in the numbers expected, and there were too many overmanned factories spread across the UK. Barney Sharratt’s 2000 book “Men and Motors of the Austin” has many quotes to back up that view.
Charles Griffin, one of BMC’s senior engineers remarked on the prospect of financing new models around 1967. He said: “The place was actually falling down around our ears so there simply wasn’t the money.”
Chairman Sir George Harriman appears to be the main culprit in this respect. As a person he seemed to have had similar qualities to Field Marshall Sir Harold Alexander, later Earl Alexander of Tunis, Commander in Chief of Allied forces in Italy 1944-45. Both men seem to have been universally popular and well liked by all who encountered them, but weak and ineffective at their jobs. Following his promotion to technical director Alec Issigonis appears to have held sway over BMC, in effect controlling product planning and having the ear of his chairman. In 1966 Harriman appointed as managing director Joe Edwards who had previously worked at BMC until 1956.
Edwards later commented: “Technically BMC was way ahead of anyone but most other aspects had been badly neglected. On my return to Longbridge I found that George Harriman spent all his time downstairs in the styling studio talking to Alec Issigonis-all the time – didn’t do anything else. That’s how he ran the company. Apparently that’s what he had been doing while I had been away and the place had just disintegrated.”
To his credit Joe Edwards, embarked on a programme of reducing overmanning and hired from Ford product planner and stylist Roy Haynes to sort out the model programme. However it proved to late for the Wilson government who feared BMC were on the brink of collapse and resolved to take action.
Harold Musgrove, later boss of Austin Rover 1980-1986 added: “It wasn’t just Issigonis who did what he wanted under Harriman. Production did what they wanted, sales and marketing did what they wanted, and the unions did what they wanted. There was no co-ordination, no strategy. It wasn’t just that we lost our way, we were all going in different directions”.
So in conclusion, BMC’s financial ineptitude and weak management had squandered their technical advantage and there simply was not the money in the kitty to fund the next generation of Issigonis designed front wheel drive cars and powertrains for the Seventies. This, then was the situation that confronted Sir Donald Stokes and his management team on the formation of British Leyland in 1968.
Stokes’ men take over
Lord Stokes said of Longbridge in a 2001 interview: “Longbridge was clapped out. Everything was clapped out. It had just carried on after the war. It was very peculiar – the place had grown like Topsy. There was a foundry in the middle of the works! In one factory I remember seeing machines that had been there since 1914-It was quite unbelievable.”
Sir Donald’s experience of car manufacturing came from Standard-Triumph and latterly, Rover. He transferred many personnel from those firms to the former BMC now renamed Austin-Morris. Stokes has been criticized for removing many able ex-BMC men, but it BMC was failing and Rover-Triumph, successful. They made making profitable cars; something that could not be said BMC’s range. The most prominent casualty of the cull of BMC personel was the technical director himself, Alec Issigonis.
It may now seem criminal and misguided to sideline the creator of Britain’s best selling car of the era, but one has to look at it in the terms of the reality of 1968. If a car designer is likened to a recording artist then, Alec Issigonis had not had a big hit since 1962 with the 1100/1300. The 1964 1800 had been a minor chart entry, and the forthcoming ADO14 Maxi threatened to fail to make the charts altogether! The master seemed to have lost his touch, and his enormous ego had blinded his judgment to what consumers wanted.
The decision to appoint Harry Webster in Issigonis’ place was entirely logical. The Webster engineered Triumphs were profitable and are still highly regarded in classic car circles today. Not everbody in the Sixties drove an Issigonis front wheel drive design. The Triumph Herald counted Beatles record producer George Martin and future cabinet minister Sir Geoffrey Howe amongst its fans. To have continued with Issigonis would have been like Sir Alf Ramsey selecting a player who had not performed well since the 1962 World Cup for the England squad in the 1968 European Football Championships.
Jeff Daniels of CAR magazine was particuarly critical of some of BMC’s products in 1968/69, but had plenty of praise for the Harry Webster engineered Triumphs. The idea that Issigonis had to be replaced was re-enforced by the under-developed Austin Maxi. While the concept of a five-door, five-speed car was right, its execution was lamentable. Issigonis had sanctioned the use of a boxy body, a new engine (E-series), and an appalling gearchange. BMC had invested heavilly in the E-series, building a new manufacturing facility at Cofton Hackett, yet it never replace the A- or B-Series units.
BMC should have done what their successors did in the Nineties, and design an engine to meet all their needs through the use of both four- and six-cylinder versions derived from the same basic design (see K4 and KV6 engine). The stark interior of the Maxi showed that BMC had no understanding of the needs of prospective customers.
Indeed, Alec Issigonis was quoted as saying: “Market research is bunk! It is the designer of the car who knows best what is good for the prospective car owner. I never consulted sales people about what cars they are going to get”.
Another car ready for production was the Austin 3-Litre. The car received a “soft” launch, to use modern parlance, in late 1967. This was followed by a full launch in late 1968. The car received a pasting from critics, most notably, Jeff Daniels from CAR magazine. BMC seemed incapable of realising that highly paid executives demanded more of their cars than this. They wanted style – something they got from the likes of Rover, Triumph and Jaguar. Why on earth would they buy an Austin 3-Litre?
To quote from the ECONOMIST magazine: “BMC market research is light years behind that of Ford”.
The Austin 3-Litre sold 9912 cars in its short lived production run, and it was an unmitigated disaster and was further evidence that BMC had lost its way.
Maybe Sir George Harriman realised that the game was up. Increasing speculation in the media as to the true state of BMC’s finances during 1967 and the strain and stress of running a large corporation may have contributed to the breakdown of his health during the merger negotiations with Leyland in 1967/68, and his relatively early death in 1973 at the age of 70. Had the merger with Leyland not occurred and BMC had survived as an independent company, it probably would have needed state aid and the government would have demanded major changes to how the company was run.
After the Maxi and the 3-Litre, came a revision of another Issigonis car, the Mini MK3 (ADO20). Issigonis was very resistant to any sort of revision to his baby and despised the wind up windows (the most prominent change). For years, the press had been clamoring for this feature, and had been expecting it to appear on the MK2 Mini in 1967. To the end of his days Issigonis bombarded BL/Rover with demands for the return of sliding windows, and had his own personal Minis converted to this configuration.
Also part of the ADO20 programme, was the Mini Clubman and its sporting derivative, the 1275GT. Sir Donald Stokes has been slammed for gradually phasing out the Mini Cooper between 1969 and 1971. But, by 1970, the Mini was a spent force in motorsport, as the Ford Escort became the hot car of the moment. The 1275GT was a direct replacement for the 998cc Mini Cooper. It was better equipped, had better brakes and shared its engine with the ADO16 1300. Not publicised by the car’s critics, was the fact that for £125, BLMC dealers could supply a Special Tuning kit to give it Cooper S performance.
In December 1971, MOTOR magazine tested a converted car and it appears the fitting charge was the only price difference between a Special Tuning 1275GT and an end of line MK3 Mini Cooper 1275S.
On the whole subject of the Mini, Lord Stokes said in 2001: “I liked Issigonis very much, but he resisted any changes whatsoever to the Mini, to make it more fashionable. It was an expensive car to make – there were so many different body pressings. We lost about £20 per Mini. Then people wonder why I scrapped the Cooper. We were giving more money to Mr Cooper than we were making in profit.”
From a sales point of view, the MK3 Mini was the most successful version of Issigonis’ baby, with sales peaking at 318,475 in 1971. One final word about the Mini Cooper/1275GT saga: the management which axed the Mini Cooper, was the same one which introduced the Triumph Dolomite Sprint in 1973.
Perhaps, the real problem with Alec Issigonis, was not the man himself, but how he was handled. After the Mini and ADO16, BMC had allowed him too much freedom to do what he wanted. When he designed a car for a given market slot, his true genius had shone through. Unfortunately Lord Stokes preferred to discard Issigonis instead of harnessing his talents for the good of BLMC. It would not be until 1973 and the appearance of the Austin Allegro, that the error of sidelining Sir Alec Issigonis would become apparent.
Triumph sports versus MG
We now come onto the tricky subject of MG. Many pro-Abingdon pundits have condemned the decision to badge BLMC’s corporate sports car as a Triumph. This, they argue, was the death knell of MG at Abingdon, condemning the factory to an agonising and slow death.
Lord Stokes later said of Abingdon: “It was a bloody awful factory. It was efficient as long as you forgot all the transfer costs (of components arriving at Abingdon from other parts of BL) – and all those figures were fiddled. Anything to do with BMC in particular was fiddled. I don’t blame them. They fiddled things to make it seem advantageous for them to carry on with their marques. Triumph did the same.”
Whether this was true or not, there is some logic to badging the corporate sportscar as a Triumph. The most recent MG product, the MGC had been botched. Its overweight engine destroyed the handling of the car, and although it could be rectified by the likes of Downton Engineering, MG seemed incapable of despatching an improved car to the showrooms. Production, therefore, halted after just two years.
Back in October 1968 CAR magazine said of the MGC: “One gets the impression whilst driving the C that it is a last ditch desperate attempt by cost-concious engineers, fearful of BMC’s huge losses in the recent past, to replace the Healey 3000 with a very cheaply developed machine using existing parts. Unfortunately, the amalgam just hasn’t worked”.
Also unimpressed by the MGC was Donald Healey. He vetoed a badge engineered Austin-Healey version of the car. Meanwhile, Triumph’s sportscars just got better and better, the 2.5-litre TR5 was the kind of musclecar the MGC should have been, and the improved TR6 was on the horizon. Triumph were on a roll and it was entirely logical to entrust them with the design of the corporate sportscar, that became the TR7. Of course, Triumph then blotted its copybook with the Stag and its overheating engine!
Another stick used to beat Stokes and co., is that they destroyed marque loyalty within British Leyland’s workforce, removing the old marque signs from the workplace. While this was understanderble, it is common practice when a firm is re-branded. Stokes said: “You had to try to get a new culture going in the place. First of all Austin and Morris were scarcely speaking to each other. You had to break this down as quickly as you could. These were minor things. You couldn’t let it go on. If you did, it would just get worse. We were trying to drag them out of the past. You had to go in and say who was boss.”
Quite simply BLMC had too many marques and a process of re-branding was inevitable. But it was a tool used to undermine management by politically motivated shop stewards at a time of industrial instability in Britain. Ultimately that brand was Rover, built at the old Morris and Pressed Steel factories at Cowley and the Austin factory at Longbridge.
One of the major critisms of Lord Stokes is having inherited an empire of numerous sprawling factories all over the country he failed to rationalise it, with a closure programme and mass redundancies. We’ll let the man have his say first: “I thought we could run an industry and keep people employed. I didn’t reckon it was my job to get rid of people – I wasn’t brought up in that tradition. I suppose that’s one of my many faults… We couldn’t afford to cut back on our model range, because if you stopped making the cars you didn’t make any money. We had to make the money to pay for the pressing plants and so on to make all those platforms. We were completely undercapitalised”.
Stokes is alluding to the fact that he was seen by the Wilson government as the saviour of the British motor industry, not a hatchet man who would close it down. He also claims BLMC could sell everything it made, seeing increased production as the soloution, not cutbacks. He added: “We were making and selling about a million vehicles a year of one sort or another. We could have sold more, and we could have paid for all the development we needed to modernise the factories, if all the factories had been working efficiently.
“If we could have got that extra bit of production, which we had the facilities for, if we had sold one and a quarter million vehicles, we would have been making so much money that our problems wouldn’t have mattered. It’s that extra bit over the top that makes the difference. You’ve got fixed overheads, so once you get over a certain level you’re making money you can invest in new plant and equipment.”
The references to the factories not working efficiently probably allude to strikes, more of which later. The claim that BLMC could sell everything it could make is questionable in the case of the Austin Allegro – which never sold in the quantities of the 1100/1300. Had the demand been there, then Allegro production could surely have been increased?
The other case against factory closures was the inevitable damage to industrial relations and Lord Stokes felt he had to tread carefully to avoid strikes shutting down production across BLMC. Later generations have become used to factory closures, redundancies, downsizing and cost cutting, but back in the 1968 to 1974 time scale the memories of the Thirties economic depression was still a fresh experience for many, and the post-War political consensus was to avoid the re-ocurrance of mass un-employment. In some ways the very concept of mass redundancies in the British motor industry would have been a psychological national defeat, unthinkable to many at the time.
It was a business strategy that didn’t come to the fore until the Thatcher era. And in a sense Lord Stokes was right. When the state owned BL under Sir Michael Edwardes drastically slimmed down between 1978 and 1980, it lost the economies of scale to compete with Ford and GM. This in turn led to loss of market share and the expected profits became losses. The company was now to small too be a world player and generate the profits to survive as an independent company.
Another accusation against Stokes is that he was in league with the Labour government and the trade unions. On this very website Raymond Baxter when interviewed by Keith Adams stated: “…and Stokes was very left wing, and therefore in sympathy with the unions.”
This statement can be dismisssed quite easilly. A search through the internet quickly reveals that Lord Stokes sits as a cross bencher in the House of Lords. Although he may have counted Harold Wilson as a personal friend that does not mean he agreed with his politics. 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.
And this inevitably brings us on to the subject of industrial relations and Lord Stokes’ handling of the trades unions. The 1968-74 period was a time of consensus politics, and not the confrontational attitudes of the Thatcher era. In 1966, mass sackings by GEC soured industrial relations in Britain for a long time and the political radicalisation caused by the Vietnam War, led to increased industrial strife in Britain. Between 1964 and 1979, the British electorate chopped and changed governments, unable to decide what kind of country it really wanted. It was a time of political instability.
The reaction of Lord Stokes to the industrial strife sweeping Britain was to talk to the Unions. It is easy with hindsight to castigate him and say he should have played it tough, but this was not an era of confrontation. Also it must be remembered that between 1970 and early 1974, he was denied the support of Harold Wilson, following the Labour party’s unexpected defeat at the polls in 1970.
The 1970-74 Conservative government soon found itself on a collision course with the trades unions, and the opposition Labour party was obliged to support the latter. Had Labour won the 1970 general election, then Harold Wilson could have acted as a mediator between BLMC and the unions. Suppose Lord Stokes had confronted the unions like Sir Michael Edwardes later did? In the climate of the time it would probably resulted in shutdown of all BLMC’s factories through strike action, and the company would have been forced to climb down to avoid a financial disaster.
Sir Michael Edwardes had the support of the government, which also happened to be British Leyland’s principal shareholder. He could afford to hold out for what he wanted. British Leyland avoided being destroyed by one big strike, but was gradually financially weakened by a thousand stoppages. One of the areas of conflict between management and unions was the ending of piecework. For BLMC to progress, then piecework had to go. It was the one area where Lord Stokes and hs management team stood firm, if he hadn’t terminated it, then his successors would have.
Also beyond Lord Stokes’ control was the worsening economic situation. As inflation rose in Britain, the understanderble demands for wage rises to keep pace with the cost of living caused another industrial flashpoint. “Mini car, Mini pay”, as one slogan of the time stated. It must also be remembered, it was still a time of poor housing, so it was not as if the unions did not have a valid case.
What was needed to deal with the union militancy was low inflation, economic stability and anti-trade union legislation. The government proved incapable of delivering the former, and the latter was to prove problematic for both Labour and Conservative governments. The first attempt to legally restrain trade union power was 1968’s “In Place of Strife”, which was advocated by Barbara Castle and opposed by James Callaghan. Callaghan won through and the white paper was shelved. The Heath government did legislate against the Trades Unions, but this was portrayed as an attack on the working class, and led to the Conservative defeat at the polls in February 1974 as the Labour movement united in opposition.
The incoming Labour government was more left-wing than the 1964-70 regime, with nationalisation as part of its manifesto, and it soon repealed the anti-trade union legislation. It wasn’t until 1980 that further laws to restrict the Trades Unions materialised, and have remained in place ever since. This was cold comfort to Lord Stokes, who had to deal with the reality of 1968-74, where the unions held the whip hand. Pundits in hindsight expected of Lord Stokes a kind of Thatcherite ruthlessness that simply was not possible at the time.
Thatcherism (or perhaps consumerism) did not really begin until Trade Union power had been broken around 1984/85.
Where Lord Stokes can be criticised is over some of the BLMC model programme. The Triumph Stag should have been fitted with the Rover V8 as soon as possible, and Austin-Morris should have looked at re-skinning the ADO16 instead of developing the Allegro. The decision to develop the Morris Marina was a sound one, and perhaps it should have been the only Austin Morris over 1275cc.
The public loved the ADO16, but above that, it wanted the Ford Cortina, Vauxhall Viva, Chrysler Avenger and Morris Marina. The front wheel drive revoloution had not caught on in the fleet sector, and maybe BLMC should have accepted defeat. Had the landcrab and Maxi been axed at the launch of the Marina, then some of their sales volume transferred to the new car (and the funds saved from axing the ADO71 Princess could have gone into improving the Marina and developing its successor).
GM did not produce a front wheel drive fleet car until 1981, and Ford waited until 1993 with the Mondeo. Car manufacturing is about making money, not advancing the design of the automobile. On the subject of the Morris Marina, Lord Stokes said: “The biggest competition we had was from Ford, who were getting all that fleet business because they built a simple, straightforward car at a very competitive price. So we produced that awful Marina, which didn’t fit the bill at all. But our experts from Ford told us it was the car we needed”.
Perhaps his Lordship is being uncharitable to the most successful BMC/BLMC volume car since the 1100/1300.
Too many factories
The decision to manufacture the Triumph TR7 at Speke was perhaps the fatal blow to the marque, as the workforce subsequently decided that assembling cars correctly offended their employment rights and numerous stoppages ensued. To Stokes’ credit, he backed the Range Rover, which really was the most significant car since the Mini.
Another area where Stokes has been panned is the decision to close the competitions department at Abingdon in 1970. Yes, it probably was a mistake, but the days of rally winning were over. Although Competitions Manager Peter Browning lamented the closure of his department, he was unable to come up with any ideas to keep BLMC at the front rank of international motorsport. In order to remain competitive, BLMC needed a Ford Escort beater, and the Triumph 2500 PI and Landcrab were neither.
An MGB fitted with the Rover V8 might have been viable, but it would have to wait until 1973 before the factory produced such a car.
There is no evidence that Lord Stokes personally profited from running BLMC. He was certainly no fat cat, nor was he an asset stripper. When, on December 9th 1974, it was announced BLMC had run out of money and had asked the government for assistance, Stokes quickly became a scapegoat. In his defence he said: “I don’t think anyone else could have done any better… It was a Herculean task. You felt you were cleaning out the Augean stables some of the time. I think everyone tried. We tried to do our best with a complex situation… It was a can of worms. The trouble was that we didn’t have enough can openers.”
The Ryder Report of 1975 demanded Lord Stokes’ head, and he was duly sacrificed. Yet it is difficult to see what anyone else could have done. Stokes had been asked to take on the job of running most of the British automotive industry. One major component, BMC, had been incompetently managed – and as a consequence, had insufficient funds for a new model programme. All this at a time of increasing trade union militancy and strikes.
Harold Wilson may have promised Stokes help, but when the Labour party lost the 1970 General Election, and was succeeded by the Conservatives, a more laissez faire attitude to industry surfaced. Between 1970 and early 1974, BLMC was on its own, struggling to avoid the abyss. Maybe Lord Stokes was out of his depth, but back in 1968-74, very few people had any idea how to rescue ailing companies. That would come later as Britain slid further into economic decline.
And what happened after Lord Stokes departed the scene?
The Ryder Report resulted in administrative re-organisation. The Industry Minister responsible for the now nationalised British Leyland was Tony Benn, a Socialist hero to many on the left. With British Leyland, he practiced what he preached, introducing what was termed, “industrial democracy”, to the shop floor. In reality this meant the shop stewards controlled the factories.
The media relished covering the depressingly frequent strikes – BL was national news, now that it was owned by the nation. If anything, the cars were built worse than ever, and failed in the market place. With the cashflow problems sorted, BL should have succeeded brilliantly, but the shop stewards managed to sabotage everything and morale among those in the company slumped.
With industrial relations, Lord Stokes had been forced to use the carrot method of management. Following his departure, British government continued to use the carrot, and let BL drift ineffectually. In November 1977, Sir Michael Edwardes arrived at the helm, and he used the stick method. But, in the preceding 35 months, so much damage had been inflicted on BL, the pruning Edwardes felt was required, would limit car production to 700,000 vehicles a year. This caused problems with economies of scale when the company found itself in a bitter price war with its American owned rivals in the mid Eighties.
The first 35 months of state ownership were an utter disaster, with long term tragic consequences, and yet those responsible were not made scapegoats. Instead everyone blamed Lord Donald Stokes of Leyland.
Indeed they still do.