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History : British Leyland, the grand illusion – Part Four

Ian Nicholls, AROnline’s own resident historian, follows up his excellent run-down of the British Motor Holdings story with a five-part study of the British Leyland years, 1974-1977.

In the fourth part, we see the whole operation begin to become irreversibly unstitched.


Meltdown

Eric VarleyBritish Leyland’s self destruction continued into 1977. At first the main trouble stemmed from the Castle Bromwich body plant, which had a dire productivity record. A strike there soon crippled production at Leyland Cars. On 11 February 1977  Eric Varley (right), the Secretary of State for Industry, went to a strike-affected Longbridge to tell workers of the urgent need for fewer strikes and more cars.

He found himself the focus of a mass demonstration against any extension of the Government’s pay restraint policy, which was intended to reduce inflation. About 4000 workers downed tools at 9.30am and marched behind banners to meet him. It was a move carefully organized and timed by shop stewards, some with loud hailers.

Varley’s convoy, including a police escort, slipped into the huge factory complex by a side entrance. The stewards had expected that, and marshalled the demonstrators across the entrance to the exhibition hall, where the minister was to be in the chair at a meeting with shop stewards. He was greeted with roars of ‘No more restrictions on pay.’

Varley tells it like it is

Jack Jones, of the Transport and General Workers’ Union (TGWU), and Hugh Scanlon, of the Amalgamated Union of Engineering Workers (AUEW) , walked through the good-humoured crowd, acknowledging friends with smiles and whispered conversation. Inside, the hall the scene was much more orderly. About 600 shop stewards and managers from most of Leyland Cars’ 36 plants were gathered for an open discussion with Varley, Alex Park, Chief Executive of British Leyland, Derek Whittaker, Managing Director of Leyland Cars, Jones and Scanlon, all members of the Tripartite Committee for the Motor Industry – that was the organization set up by Varley in 1976 to enable union leaders and motor industry chiefs to maintain regular contact with each other.

Varley spelt out the difficulties facing the motor industry. He said the Tripartite Committee was seeking to increase car exports this year by a fifth. To achieve that, production had to be lifted from 1.3 million cars to 1.5 million The Committee also wanted productivity to improve from the present six to seven cars a man-year to the 12 cars regularly produced by continental competitors.

Whittaker set out details of the latest crisis facing Leyland Cars with so many of its factories shut by strikes and dealers crying out for supplies. However, when questions were invited, it was obvious that the shop stewards had not come to be lectured. One after another they beat the drum for a return to free collective bargaining in August 1977 as the answer to British Leyland’s ailments.

There are many enemies of British Leyland who want to see it fail, and it is up to all of us in the Government and trade unions to prove them wrong.” Eric Varley, Secretary of State for Industry

They were taken aback when Scanlon said they were being naive to suggest, as many had, that the present outbreak of strikes was caused entirely by unrest over the pay policy. The Committee would be wasting its time if it had come to Longbridge only to hear complaints about the national pay policy.

When finally the meeting got down to discussing British Leyland’s troubles, shop stewards made some harsh comments on the shortcomings of management. They also urged the company to introduce an incentive scheme covering up to a quarter of the workers wage packets. They suggested that that would provide the stimulus to lift production, which has fallen off since the traditional Midlands piecework system was replaced by standard day work.

Asked who the enemies were, Varley quoted speeches by Conservative politicians urging that British Leyland should be broken up and the unprofitable parts sold off. Unfortunately for Varley, the ensuing events and those in the weeks ahead would demonstrate that many within British Leyland were in denial about the company’s problems and were immune to the threat posed by rival manufacturers.

Industrial action takes over

The Castle Bromwich strike had put 25,000 British Leyland workers out of work. The strikers returned on 21 February 1977, by which time the 6000 Leyland Cars tool makers had struck.

Through a breakaway group of shop stewards, who were recognized neither by the powerful British Leyland shop stewards’ combine nor the Amalgamated Union of Engineering Workers to which they belonged, the tool-room men were demanding separate negotiating rights and restoration of skilled differentials which they insisted had been seriously eroded. The toolmakers’ stoppage meant that breakdowns could not be rectified.

Derek Whittaker said that 1977 was crucial. ‘This year we are approaching the end of our last opportunity to show what we can do in marketing our products aggressively in Britain – let alone in Europe.

The simple truth is that 1977 is the crucial year for Leyland Cars and the survival of the British motor industry as we know it. Failure meant plant closures and ‘drastically reduced’ employment prospects.” Derek Whittaker, Managing Director of Leyland Cars

Whittaker’s statement made no attempt to disguise the fact that Leyland Cars was failing to meet the requirements it undertook as part of the re-organization plans agreed with the Government. He said, that in order to match up to these plans, for every £1m provided by the National Enterprise Board, British Leyland’s car manufacturing had to find a further £1.5m out of profits.

‘So far,’ Whittaker reported, ‘we have not made any.’ Workers were warned that their industry was in danger of ‘forfeiting its birthright.’ Whittaker said the company was faced with an increasing challenge from cars made abroad.

Impending collapse – victory for the enemy

While the toolmakers were out there were strikes involving paint shop men at Triumph Canley, maintenance engineers at Cowley and testers at Longbridge. Eric Varley, confined to bed with ‘flu, was being kept up to date with the mounting crisis. His Under-Minister Gerald Kaufman said in Coventry on 25 February that a collapse of British Leyland would be a victory for its ‘political and commercial enemies.’

He said they were longing for the failure of this ‘crucial venture of public ownership, linked with worker participation.’

A senior Government official told the Daily Mirror that British Leyland had now reached the point of no return. ‘Either we can get an effective working relationship which will stick and which will produce the cars at competitive prices or there will be some surgery. There is no other choice.’

A recovered Eric Varley told the House of Commons on 2 March 1977: ‘I want all workers at Leyland, including those on unofficial strike today, to be quite clear that their own future employment and the future of their company is now in their hands. They can kill it or they can save it. They will have no one else to blame or to thank.’

Derek Robinson said in response: ‘We shall not be accepting any threats from the Government… If the Government and Mr Varley think this sort of threat is going to work then let me tell them now they have another think coming. We are sick and tired of threats and sabre rattling. We are not going to listen to this sort of blackmail. And if that means using our industrial strength to safeguard our jobs then we are prepared to take them on.

‘The only way the Government can get industrial peace within a month throughout Leyland is to scrap Phase Two of the Social Contract now. British Leyland’s management must be allowed to sit down across the table from the trade unions to discuss a rational wages structure.’

That damaging toolmakers’ strike

Robinson’s blistering reaction contrasted with that of his Vice Chairman, Eddie McGarry, Convener at Leyland Cars’ Triumph works in Coventry. McGarry appealed to the 3000 striking toolmakers to call off their strike for the sake of all the workforce. He said: ‘If the company were to give in to the toolmakers’ claim it would open the floodgates to many similar claims from other areas.’

Hugh Scanlon of the AUEW met the striking toolmakers at Birmingham Town Hall. He was greeted with jeers. He told them: ‘Nobody wants to see a publicly-owned British motor manufacturer go to the wall, but that is what could happen. Do you appreciate the enormity of the danger? Thousands of jobs could be lost as a result of continuing a strike which you cannot win.’

The final blow came when he asked: ‘Is it really worth it, brothers, to carry on?’ The answering roar of ‘Yes’ could be heard above the city centre traffic outside. When a vote was taken, only 11 hands were raised in support of a return to work.

David Andrews, the Managing Director of British Leyland International, said at the Geneva Motor Show that the industrial disputes in Britain had undone two years work of re-establishing confidence and credibility in the company abroad. Customers did not distinguish between the situation in the car group, where 90 per cent of lost time occurred, and other parts of the company. He gave the example of a man who had rung up to cancel an order worth £1m for 100 bus chassis.

After a month on strike the toolmakers returned to work and, although the damage to British Leyland was terminal, the pretence that the company could remain a world force continued.

British Leyland’s future under new scrutiny

Austin ADO88 design clay model

Meanwhile, both the Government and the National Enterprise Board looked at future options for British Leyland and ordered the company to review its programme. A substantial reduction in the labour force at the Longbridge factory in Birmingham, accompanied by a one third cutback in production of the new £200m Mini/ADO88 development (above), was one of the proposals the company was studying in the Government-enforced re-appraisal of its operations.

Sources within the area reported that up to a fifth of the 19,000 manual workers at Longbridge could lose their jobs if the National Enterprise Board (NEB) and Varley, the Secretary of State for Industry, accepted the proposal as an alternative to dropping the Mini/ADO88 project altogether. Existing plans called for a few thousand new Minis/ADO88s to be built in 1979 (its first year) rising to 170,000 in 1980, 230,000 in 1981 and reaching a peak of 300,000 in 1985. The proposed compromise would reduce all those targets but achieve a maximum of 200,000 well before 1985.

As all those figures related to planned capacity, which was seldom achieved in British car factories, actual output would be even lower. Longbridge already had, on paper at least, capacity for 500,000 cars a year. The best it had ever achieved was 376,781 in 1964/65, when the ADO16 was at the height of its popularity. The Allegro had been a disappointment and that had left Leyland Cars with considerable spare capacity. The Allegro’s poor sales performance, as much as the need to clear the decks for the new Mini/ADO88, explained why plans called for production of this model to be switched to the much smaller assembly plant at Seneffe, in Belgium.

Its removal would leave Longbridge heavily over-manned, even if Varley decided to take a risk and go for the 300,000 target. It was principally for that reason that Derek Whittaker faced several confrontations at Longbridge to obtain a full commitment from the labour force for substantially higher productivity and more job mobility. However, the risk factor involved in the compromise would be lower and therefore have a smaller impact on the rest of the group if it ran into trouble.

In 1976, Longbridge produced about 160,000 Minis, half of which went to overseas markets, mainly Europe. It was hoped that with continuing support for an 18-year-old model, Leyland Cars would be able to sell up to 200,000 new Mini/ADO88s without too much trouble. However, opponents of the compromise - and there were many within the company, including Whittaker and Alex Park – suggested that it would inevitably lead to reduced profit margins.

The Leyland fight-back

‘If we lower our sights on the new Mini we shall be building an import stopper that may help the balance of payments but do nothing for our profitability,’ was how one British Leyland manager put it.

There were four proposals by Leyland Cars:

  1. Existing business plan set out in Lord Ryder’s report.
  2. Closure of volume car business to concentrate on Jaguars, Rovers and the sports car range.
  3. Withdrawal from new Mini/ADO88 venture to concentrate on new medium car.
  4. Retaining new Mini/ADO88 and reducing Leyland Cars’ range to one new car based on the Austin Allegro.

The most far-reaching of proposals involved more than 60,000 job losses out of Leyland Cars 130,000 labour force and four major British plants would be closed. The review study named the threatened plants as Longbridge, Cowley, Castle Bromwich near Birmingham and Liverpool, as well as the Belgian assembly plant at Seneffe. These plants employed more than 60,000 workers.

Their closure would wipe out Leyland Cars entire volume car operations leaving it dependent on the much smaller up-market Jaguar, Rover, Triumph and MG cars.

LC10 would have to be put on hold so that ADO88 development could be completed.

LC10 would have to be put on hold so that ADO88 development could be completed

The study was understood to contain a unanimous recommendation from British Leyland’s board that the proposed £200m project to build a new Mini/ADO88 should be retained with minor cost saving modifications. It also set out a number of choices ranging from a switch from the new Mini/ADO88 in favour of the proposed LC10 medium saloon, to the complete abandonment of the Mini/ADO88 project and the closure of assembly operations at Longbridge and Cowley.

The British Leyland review study contained every alternative to the existing business plan, however hare-brained, which had been advocated over the previous 10 years by frustrated minorities within the company, former management and the media.

The reference point for the whole report was the company’s 10-year plan based on the Ryder Report. That was subjected to an item-by-item review which questioned such things as projected dates for new model launches, work load for design, engineering and production facilities, the delaying effect of the three -months’ freeze on capital investment, the prospects for attracting urgently needed technical staff and, most important of all, the feasibility of the Mini/ADO88 project.

Metro vs Maestro?

Ford Fiesta Mk1

Fiesta: The benchmark

The anti-Mini lobby had been much influenced by its late arrival, still some two and a half years away, and the fact that it was falling further behind because of the standstill on orders for plant and machinery. They insisted that this section of the market was already more than adequately covered by such well-established contenders as the Fiat 127, the Renault 5, the Volkswagen Polo and, more recently, Ford’s impressive new Fiesta.

The month-long investigation produced two developments, which, according to the recommendations now before Lord Ryder, indicated that far from being weakened, the case for the new Mini/ADO88 had become stronger. It was no secret that Leyland Cars used the retail price of the Ford Fiesta as its yardstick in forecasting the profitability of the new Mini/ADO88.

At that time the Fiesta was still on the secret list. It had since been launched at an appreciably higher price than Leyland Cars used in its calculations. The rising cost of petrol and the growing demand for energy conservation were seen as strong plus factors for a new small car.

The argument for closing Austin-Morris

The first alternative to the existing business plan was conceived as the most profitable approach. By general consensus this was the closure of the entire volume car operation to enable Leyland Cars to concentrate all its resources on meeting the unsatisfied worldwide demand for Jaguar, Triumph, Rover and MGs.

It would call for the closure of a large part of Cowley, almost the whole of Longbridge, the troubled Castle Bromwich paint plant, the assembly plant at Seneffe in Belgium and Triumph Liverpool. The latter was not part of the old Austin Morris empire, which still constituted British Leyland’s volume car operation, but, according to information given to shop stewards, was included because of its poor performance over the years. At a stroke of the pen this would dispose of more than 60,000 jobs, nearly half Leyland Cars’ entire labour force. The effect would be catastrophic not only for whole communities in the traditional car centres of the West Midlands but also for the hundreds of component manufacturers supplying Leyland Cars.

However, the crunch apparently came when investigators studied the potential of the surviving specialist car factories. To their surprise the figures indicated a lower return on capital employed than for the ‘axed’ volume car plants. What is more, they also suffered from more disruptive strikes. The comparison did not end there. The specialist car factories had not made anything like the improvement in productivity achieved over the previous two and a half years by the Austin-Morris factories.

In May 1977, Leyland Cars management told senior shop steward members of the Joint Management Council that this improvement in productivity was enabling them to meet their target of 20,000 cars a week with 16,000 fewer employees than would have been required to achieve the same output in January 1975. A large problem for the ‘specialist cars only’ scheme would be financing the next generation of engines and gearboxes for new models.

The development and tooling for these expensive components, already well under way, was based on their use in a much wider range of cars. However, it was the effect on Leyland Cars already worried 2800 distributors and dealers, which seemed to clinch the case against this course. The number of desertions already taking place would become a flood if the network lost the volume provided by the Austin-Morris range.

Alternative futures – dropping Mini or Maestro?

A less-frightening alternative proposed Leyland Cars withdrawal from the Mini market to concentrate on a slightly restricted but more profitable new medium car. At present this called for the three closely-related new models, LC10, 11 and 12. A compromise would drop LC12.

Another proposal retained the new Mini/ADO88 but replaced the whole of the LC range with a new car based on the mechanics of the Austin Allegro. This would be a much cheaper route and one often used by Ford, but there was a significant difference. Ford’s ‘re-skinning’ jobs had always been based on successful models. Not by any stretch of the imagination could the Allegro qualify as a successful model. It had in fact been a bitter disappointment, never coming within sight of even the most pessimistic targets. It could, of course, be said that the Allegro’s basic problem was its dumpy unattractive looks and it was now a well-sorted car in dire need of a facelift.

There were other proposals, but they were variants of the four listed here. For instance, one suggested that the ADO88 should be replaced by a hatchback, updated version of the 18-year old Mini. British Leyland had passed on the chance of a hatchback Mini in 1968 and 1974.

Improved productivity the key

It was understood that the Joint Management Council, the top participation body, had sent a separate document to the NEB. It pledged full support of shop stewards and management for action to improve productivity, labour relations and wage negotiating machinery if the Government approved the new Mini/ADO88 and the LC10, 11 and 12, the planned new medium cars, the first of which was scheduled to appear in 1981. LC10 became the Austin Maestro and LC11 became the Austin Montego.

This review was delivered to the Government on 25 April 1977.

In British Leyland Mirror, the group’s newspaper, Alex Park wrote: ‘The vital thing is to plead our case. It is one thing to write the report, but persuading people to accept our recommendations is another and we have a lot of persuading to do.’

He said that better production in the previous few weeks since the disastrous toolmakers’ strike meant that Leyland Cars had reached the first of three milestones set by the Government. ‘We have got back to work. We have brought production to the required level (understood to be 20,000 cars a week) and now we must attain the second objective, that of sustaining production. If we can do that it is going to have an enormous effect. If output is not sustained then we have a big battle on our hands.’

He warned employees that Leyland Cars credibility was the main stumbling block. ‘We have to face the fact that our credibility is cracking at the seams. I appreciate the worry that so many employees have about the future but we must improve our credibility and everyone must play their part.’

On 26 May 1977, Eric Varley told the House of Commons: ‘During March and April British Leyland undertook a searching analysis of the courses open to them in future. The NEB reported to me on 5 May. The NEB concluded that if the conditions set out in the Ryder Report could be met, it would still be in British Leyland’s and the country’s interests for the company to remain a producer of volume and specialist cars.

‘The most vital of these conditions is a substantial improvement in industrial relations and productivity. The NEB considers that, even allowing for the achievements of recent weeks, progress so far has not been encouraging. There have been real advances in productivity, but these have been short-lived. The participation machinery holds out important prospects for progress, but it has not been accepted everywhere. I take the opportunity of urging all in British Leyland to make use of this machinery.

‘In the light of this, the NEB recommended that a final decision on the choice of strategy should be deferred to enable it to review British Leyland’s investment plans in greater detail and it will be reporting to me later in the year. The work undertaken in the review has demonstrated to the satisfaction of the NEB that the Mini replacement programme has a vital part to play in re-establishing British Leyland’s position in volume cars. If the company is to meet its launch date an immediate decision is required on this programme on which the company ordered a halt during the toolmakers’ dispute.

‘I have therefore authorised the NEB to allow work on this programme to be resumed as soon as it is satisfied that sufficient tangible progress is being made towards measures that will put industrial relations on a new basis. The Ryder Report envisaged that British Leyland would require a further tranche of £200m from public funds in mid-1977. The NEB now advises me that it expects British Leyland’s requirement in the summer to be considerably less than this, but it expects that further funds will be needed within the current financial year.

‘If progress is sufficient to justify an approach to the House for further advances, I shall accompany the request with a report by the NEB on performance to date. The House would be right to expect this as a basis on which it can form its judgment. It was this Government who saved Leyland in 1975 and safeguarded hundreds of thousands of jobs. We as a Government remain ready to play our part in backing British Leyland. But the massive contribution required from public funds can be justified only by linking funding to performance. We have some good recent evidence, and we shall be looking for more before returning to the House.’

Lord Ryder steps down, Turnbull approached

ryderreport_01

On 30 June 1977, it was announced that Lord Ryder would be standing down as Chairman of the National Enterprise Board on 1 August 1977. He would be succeeded by Leslie Murphy. Behind the scenes it was clear that the Government wanted change at British Leyland. During February 1977, during the toolmakers strike, Sir Peter Carey, Permanent Secretary to the Department of Industry, went to South Korea, presumably to see former Austin Morris Managing Director George Turnbull, then Vice-President of Hyundai, who resigned from BLMC in September 1973 after disagreements over policy.

Turnbull’s tenure with Hyundai had now ended and he was a tax exile living in a villa in Ibiza. On 12 July 1977, at the invitation of the British Government, George Turnbull visited London. The Government appeared to want to utilise Turnbull’s considerable experience, with speculation in the media that he would either rejoin British Leyland, join the National Enterprise Board or become a paid consultant to that body.

Instead of trying to shut the Japanese out, we should say “you are welcome, but if you want to sell more vehicles here, you must invest in setting up British-based assembly and manufacturing plants’.” George Turnbull, former Austin Morris Managing Director

George Turnbull had preliminary discussions with Leslie Murphy, the NEB’s Chairman-designate and then Deputy Chairman. The talks centred on the possibility of Turnbull working for the NEB on an annual contract basis as a consultant initially concerned only with the British Leyland business. The discussions ruled out Turnbull joining the NEB on a permanent basis. Any suggestion that he might return to British Leyland itself was also firmly ruled out.

News of this meeting brought angry private reactions from senior management at British Leyland, who apparently resented another ‘master’ being added to the already complicated chain of command stretching from their Marylebone headquarters to the NEB, the Department of Industry and even the Cabinet Office. Faced with the possibility of resignations at a time when the group was just emerging from another crisis, Lord Ryder’s sudden resignation from the Chairmanship, Leslie Murphy delayed making a formal offer of a job.

However, all the speculation was ended on 25 July, when it was announced that George Turnbull would be joining the Iran National Company, in Teheran, as consultant to the Chairman and Managing Director on a two-year contract.

Turnbull said: ‘It would have been a different story if there had been more time, but I have still not received a formal offer from the NEB and could not delay my decision any longer. I telephoned Murphy yesterday to inform him of this. I spent a week in Iran and was very impressed with the production facilities there and their plans for substantial expansion and entry into world export markets.

‘Of course, the remuneration is very good, but that’s not the only consideration. Like South Korea, this is something I can get my teeth into without too many restrictions.’

He defended his decision not to return to Britain. ‘Of course, some people will say that, but I believe that is a short-sighted view. The world is becoming smaller all the time and, in an international business like the motor industry, you cannot shut yourself away from reality. For instance, I believe we are taking the wrong approach to Japanese motor imports. Instead of trying to shut them out, we should say “you are welcome, but if you want to sell more vehicles here, you must invest in setting up British-based assembly and manufacturing plants”.’

George Turnbull had, with that, just predicted the long-term future of the British motor industry.

Strikes continue to cripple British Leyland

Eric Varley revealed that in Leyland Cars in the first six months of 1977 there had been 304 disputes which had led to the loss of 9,086,000 man hours and a vehicle production loss of 117,394. After the toolmakers strike, Leyland Cars had made surprisingly good progress but, in August 1977 it found itself back on the ropes again as a six week strike at components supplier Lucas, by 1200 of its own toolmakers, began to bite.

Leyland Cars created a special team to scour the globe for Lucas components in order to keep its UK production lines running. As the production lines halted one by one, Alex Park wrote in the group’s newspaper about the campaign now building up in his plants for wage increases of nearly 50 per cent at a time when the TUC had agreed with the government on a 10% limit.

Park said: ‘The Government owns 95 per cent of British Leyland. It is plain that we must follow Government pay-policy for as long as it exists, whatever the company and the unions might wish to do. We have no option, and it is important that we all understand this.’

At Longbridge there was a workers revolt and a planned strike over pay rapidly collapsed.

Workers vote against increase in SD1 production

In September 1977, 4000 men employed at the Rover plant at Solihull rejected company plans to introduce a night shift because they claimed night working disrupted family life and caused health problems. They rejected the management’s argument that night-shift working was essential if Leyland Cars was to exploit the tremendous demand for the European Car of the Year, the new Rover 3500.

Dealers were quoting delivery delays of between six months and a year for the model, which Leyland Cars executives had predicted would become British Leyland’s biggest export winner of all time. Shop stewards at Solihull mounted a strong campaign against the re-introduction of night working after an interval of two years and circulated a pamphlet claiming that men working nights had to give half their lives to the company. Not only were the hours unsociable, but the disruption to normal routine led to family problems, digestive complaints and even affected men’s eyesight, the pamphlet said.

From a 21st century standpoint this was a laughable situation and demonstrated an ignorance of the economic reality confronting Britain, the need to pay its way in the world. The product was right, the demand was there, it was just the will to produce the product was not. The Solihull SD1 plant had been designed to produce 4000 cars per week at John Barber’s behest back in November 1972, now such a figure was the object of dreams.

The Lucas strike ended on 12 September 1977 after 10 weeks. Although forgotten by history, the long Lucas strike had hit Leyland Cars hard. Ten of its 36 car factories were affected, with production of the Princess, Morris Marina, Austin Maxi,  MG Midget, Triumph Spitfire, Dolomite and TR7 at a standstill because of a components famine and 17,500 of its workers had been laid off.

The return to work call came just in time to prevent production of the Mini and the Austin Allegro at the huge Longbridge in Birmingham grinding to a halt, just as it was being reported that in August 1977 imported cars had grabbed 51% of the British market.

A Leyland Cars spokesman said: ‘Just because it is over, that does not mean we are out of the woods. We have lost a considerable number of vehicles when we could least afford it. The strike dealt us a double blow. It cut down our production and it allowed foreign cars to get a substantial share in the market while we had to sit back and watch, unable to do anything about it.

‘The strike came at a time when we were getting back in full swing with good production figures and recovering from the effects of our own toolroom dispute.’

Sir Richard Dobson resigns

Sir Richard Dobson

During early October, British Leyland was hit by another spate of strikes and then part-time Chairman Sir Richard Dobson was forced to resign after allegedly making racist remarks at a private function, which was recorded and issued to the press.

Left-wing Labour MPs called for the new Chairman to be chosen by the workers or vetted for favourable socialist leanings. However, Leslie Murphy, the new head of the National Enterprise Board, already had a man in mind, a man the labour movement would come to loathe as he rode roughshod over the shop stewards movement in the years to come.

This was the man from Chloride, Michael Edwardes.

Back to: BLMC, the grand illusion : Part Three – A job for life?

Keith Adams

About the Author:

AROnlineholic between 2001 and 2014 - editor of Classic Car Weekly, and all round car nut...

38 Comments on "History : British Leyland, the grand illusion – Part Four"

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  1. Tony Evans says:

    Teriffic write up.

    I am struck by the following quotes:

    “A recovered Eric Varley told the House of Commons on 2 March 1977. ‘I want all workers at Leyland, including those on unofficial strike today to be quite clear that their own future employment and the future of their company is now in their hands. They can kill it or they can save it. They will have no one else to blame or to thank.’ ”

    Spot on absolute bull’s eye.

    “Derek Robinson said in response: ‘We shall not be accepting any threats from the Government… If the Government and Varley think this sort of threat is going to work then let me tell them now they have another think coming. We are sick and tired of threats and sabre rattling. We are not going to listen to this sort of blackmail. And if that means using our industrial strength to safeguard our jobs then we are prepared to take them on.”

    Head in the sand crypto-communist rhetoric by someone intent on making Britain a communist state.

    Robinson & his misguided cronies killed the industry. I lived through the era and remember my uncle coming home from Speke after yet another wildcat strike saying that he was off to find another job … he was a skilled maintenance engineer who ended up driving a van for a grocery company because he had lost so much money whilst being on strike that he could not pay his rent.

    Typical strikes at Speke were — no coffee in the coffee machine, toliets blocked, wanting more money every time a change was made to the production line and frequent sabotage of facilities.

  2. Glenn Aylett says:

    I completely agree with Tony, the militancy and stupidity of the unions was killing British Leyland. People like Derek Robinson and his far Left cronies had little interest in making British Leyland succeed, all they seemed interested in was class warfare and destroying capitalism.
    Also Speke was a disaster of a factory, run by Bobby Grant style militants, which when it was not on strike, was producing cars that fell apart.
    Actually Liverpool’s history of union militancy and low productivity proved to be its undoing as firms pulled out of the city in droves in the seventies and eighties.

  3. Hilton D says:

    Interesting to note that in 1977, Rover workers voted against a nightshift to boost SD1 production… ironic that Nissan, in the very late 80′s introduced a night shift at Sunderland to boost Bluebird domestic production and for LH drive exports. How times changed.

    Although I owned 3 MG Rover cars in the post year 2000 (and liked them all) I was never that attracted to BL products in the 70′s.

  4. mm says:

    A productivity for BL of 6 to 7 cars per employee / annum against 12 for theompetition, contrast that with the same parameter at Nissan Sunderland plant 100 cars

  5. ExPatBrit says:

    The Solihull SD1 plant had been designed to produce 4000 cars per year at John Barber’s behest back in November 1972, now such a figure was the object of dreams.

    So less than 15 cars a day, no wonder they went belly up?

    Or maybe there is a couple of zeros missing.

  6. Ian Nicholls says:

    That should be 4000 per week.
    Please Mr Keith, can you alter that?

  7. Nate says:

    Would a new car based on the mechanics of the Austin Allegro in place of the LC range have essentially been an “Ambassadorized” Allegro or would it have likely received LC-derived rebody?

    It is interesting that a proposal suggesting that the ADO88 should be replaced by a hatchback updated version of the 18-year old Mini was mentioned, as it could have very well been a Pre-Minki Mini as it were (albeit without the K-Series) though given the circumstances am glad ADO88 got the go ahead in the end.

    A pity though that the Mini never received proper updates such as a hatchback, front/rear-interconnected Hydragas suspension, K-Series units and others prior to BMW appearing on the scene.

  8. Paul says:

    Would a re-bodied Allegro have been worse than a Maestro? Well with Hydrogas suspension and gearbox in sump the Metro was effectively a short wheelbase Allegro and that didn’t seem to do it any harm, or at least it wouldn’t if it hadn’t stayed in production for 17 years. If the Allegro facelift route had allowed the car to come to market earlier perhaps it would have made more impact than the Maestro eventually did. Would have been better still if it had let Bertone scale up its Innocenti Mini style rather than go with David Baches lash up.

  9. Nate says:

    7) Paul

    Like the idea of a re-bodied Allegro with Innocenti Mini-inspired Bertone styling though like the Metro with its supermini opposition, had the re-bodied Allegro reached production earlier it would likely be left behind fairly quickly as its rivals like the Golf grew in size.

    Such the idea though could have worked had it appeared when the Allegro was first launched in 1973.

    Anyway could O-Series be fitted into an Allegro? Seem to have some vague recollection of such conversions having been done years back (possibly also with related M/T-Series units).

  10. Richard16378 says:

    The Allegro was designed to take the E series, so I presume the O series will fit.

  11. Tony Evans says:

    The Allegro should have been strangled at birth and thrown into the same pit as the Marina which should have been treated likewise. The Golf Mk1 was a seminal product that really showed the world the way in terms of build quality, packaging and driveability. The Allegro was not even in the same era, never mind the same decade.

    In those days I was happy to fork out my own cash on a slightly older Triumph product than a newer Austin / Morris one and with good reason. Even despite the Canley issues, Triumphs were generally better built than Austin / Morris products, even post-BL.

    Incidentally, my cousin, son of the uncle who quite Speke at the height of the strikes, now builds Evoques at Halewood. How times have changed.

  12. Paul says:

    The E series could still have been developed into the S series with EFI on a 1750 version. With regards the size, your absolutely right. But I was assuming that an Allegro derived Maestro would have come to the market well before 1983 when it would have been about the right size and certainly similar to a Mk3 Escort. Assuming they got it right it would have generated enough revenue for a mid 80s replacement. That is a very big assumption I know!

  13. g scoth says:

    I had a old worn out 1300.if I had the later 13oo a+ engined one it would have been good enough for me , although 5 door is the best for me ,

  14. Ian Nicholls says:

    I had a feeling the proposed Allegro re-style would stir up a debate.
    Whether anything was actually done we don’t know. Maybe as a matter of course stylists redesign existing products as part of a days work, albeit rough sketches. The Reverend Colin Corke is writing a book on the Allegro, maybe he will find out?
    But yes, I think a hatchback Allegro with state of the art styling and 1.3 and 1.6 litre engines would have been better than the Maestro. But then again LC10 was related to the larger LC11, the Montego, so they came as a package.

  15. Ian Nicholls says:

    Just to let you know, there is going to be a part 5 in this 4 part story…

  16. christopher storey says:

    Tony Evans @10 : it is plain from your remarks that you never drove a Mark 1 rhd Golf. I had from new an early 1800 Gti , and although I loved the brio of the thing , it had some very serious defects . The brakes on rhd cars were never up to the ( splendid ) performance of the thing because of the rather curious mechanism linking the brake pedal to the servo . Also, it suffered from quite appalling torque steer, and a rapid exit from a t junction could see one proceeding in a series of left/right swerves which were both unnerving and difficult to bring under control. Strange , really, if BMC cars were all such creations of the devil , that my 1965 Cooper S is definitely better behaved on the road , and pretty much as fast at all normal road speeds

  17. Gareth says:

    Another great essay and I have learnt more about the company. Half of me wishes that BL had gone bankrupt in 1977. The workforce and the unions were clearly in cloud cuckoo land… It was in these years, clearly, that the die was cast and regardless of some great new products over the subsequent years, the buying public had voted with their feet to the delight of the French, German and Japanese manufacturers.

  18. Jemma says:

    It does make you wonder when on the one hand you have tax refugees (Turnbull) and on the other left wing nutcases (Robinson) how BL managed to last as long as it did..
    Its also interesting that no one seems to have taken much notice of all the outside strikes – workers are hardly going to be in the mood to “save the BL” when because of outside influence they cant guarantee having a job next week even if they work their little socks off. Morale is important and given whats detailed here – I imagine the atmosphere in BL to be something similar to that of Army Group Don circa Winter 1943 – the major difference being there was no Von Manstein available..

    If you wanted to cover BL in one sentence I think “So many screw ups, so little time” would cover it perfectly.

  19. Dave Dawson says:

    ” A recovered Eric Varley told the House of Commons on 2 March 1977: ‘I want all workers at Leyland, including those on unofficial strike today, to be quite clear that their own future employment and the future of their company is now in their hands. They can kill it or they can save it. They will have no one else to blame or to thank.’

    Derek Robinson said in response: ‘We shall not be accepting any threats from the Government… If the Government and Varley think this sort of threat is going to work then let me tell them now they have another think coming. We are sick and tired of threats and sabre rattling. We are not going to listen to this sort of blackmail.”

    Eric Varley is explaining the harsh economic reality. Seems incredible that Derek Robinson regards this as blackmail. Could he not see that a company already with many problems could not possibly compete, survive with a striking workforce. Could he not see he was risking far more through striking than the benefit he was hoping to gain by striking?
    He obviously thought the government would continually provide a bail out and so allow repeated strike action.

  20. Glenn Aylett says:

    Dave @19, Red Robbo and his extreme Left comrades were only interested in establishing a communist republic, which judging by the tiny support for far Left parties in Britain in the seventies was never going to happen. Instead they turned the car industry into some kind of Marxist warzone that ultimately led to the death of British Leyland.
    In my lifetime I have seen people well to the left of most of society destroy the coal industry, a large part of the car industry, the shipyards, the docks and the printing industry to support their warped aims. Even now we have Comrade Bob Crow, who lives it up in Rio and five star restaurants, calling Tube strikes during the worst flooding the country has seen for decades.

  21. Ian Nicholls says:

    Gareth@17
    You have hit the nail on the head about the point of this whole series of articles. After 1977 British Leyland ceased to be a viable concern, and although there would be moments of optimism in the years to come, too many potential customers had been alienated by the shenanigans detailed in these articles. The Rover 800 and R8 are cases in point. They were great cars that should have sold more, but they were the products of a tarnished manufacturer, and many consumers had no intention of touching them with a barge pole. The damage had been done. BL/Rover’s customer base had shrunk to the point that only something as revolutionary as the Mini and ADO16 could restore its fortunes, and no such product was forthcoming.

  22. Kevin Steele says:

    You know it’s funny when you look back at old Haynes manuals for British cars of the 1970s and into the ’80s. Huge swathes are given over to covering anything up to four different makes of alternator, starter motor, fuel pump – you name it. With the benefit of 20/20 hindsight we can see the reason of course for this was the need for BL, Rootes, Ford etc to insulate themselves against Lucas, Smiths, QH and all the rest going on strike and bringing production to a standstill.

  23. Glenn Aylett says:

    At least the early eighties offered some hope for British Leyland with the Metro, the Acclaim and a revived Jaguar. Also the dismissal of Red Robbo dramatically reduced the amount of strikes. It did seem the company was getting it right and market share was inching up again. Even a stopgap model like the Ambassador at least addressed one issue, it came with a hatchback, and also put the ancient Maxi to rest.
    I was always in a small minority at the time who thought the Ambassador was a good car. Yes the quality wasn’t that good and the dash looked cheap, but it offered a fantastic ride, was very comfortable, had a huge boot and had proven engines.

  24. Pedro the parrot says:

    @16. Correct, the Golf really wasn’t so great. For some time sales were sluggish and the
    GTI was particularly difficult to sell initially.
    @18. Comparing the Wermacht to BL is certainly a new concept! It’s startling how much the Germans achieved and for how long, what with their delusional boss and such shortcomings in terms of equipment and manpower. One of the reasons for Russian success from ’43 on was the removal of political officers from the front and the downsizing of units.
    I too agree it would have been preferable if BL crashed earlier. That goes for many industries after the war. More might have been saved and we might have a more balanced economy today if that had been the case.

  25. francis brett francis brett says:

    Why use “Red Robbo” as a universal whipping boy without qualification?

    Cowley had much more hard line Trotskyist union men anyway.

    If I remember rightly, Robbo wanted participation between convenors, shop stewards and management- to prove politically the workers could run the company successfully, maybe that idea could have worked if you had a Labour government that was not shit scared of the unions or a Tory one hell bent on destroying anything with the word commies in it.
    The issues were far, far more complex and political to blame one man.

    The combine was way too big thanks to Benn. Even Robbo could not stop the toolmakers walk out that was massively damaging to BL and he said so.

    Harsh economic realities? A Unimatic robot can do the job of five men, so what do the guys do that are surplus to requirements?

    In the “good ‘ole days” scores of hundreds of thousands worked in the motor industry, how many now?

    Say what you want about Robbo, he had conviction, which is more than can be said of the trio of scum in the main political parties we have now.

    Also worthy of note is the MI5 plot to undermine him at BL, a excellent documentary some years ago painted a completely different picture too, Robbo spent most of his time trying to prevent strikes.

  26. Glenn Aylett says:

    Actually Cowley did have a major strike in 1983, again blamed on extreme left wingers who infiltrated the plant, that held up production of the new Maestro. Longbridge by this time seemed far more peaceful and probably the left wingers there had been forced out earlier.
    I don’t think Derek Robinson was the sole cause of trouble at Leyland, as there were far more militant union men at Cowley and Speke, but he certainly didn’t help to try and end the turmoil at Longbridge in the seventies.
    Also, the unions can’t be blamed for the design of such dismal cars as the Austin Allegro and Morris Marina, which even if the unions behaved like the Japanese, would have still been terrible.

  27. KT says:

    “Glenn Aylett – February 15, 2014

    I completely agree with Tony, the militancy and stupidity of the unions was killing British Leyland. People like Derek Robinson and his far Left cronies had little interest in making British Leyland succeed, all they seemed interested in was class warfare and destroying capitalism.
    Also Speke was a disaster of a factory, run by Bobby Grant style militants, which when it was not on strike, was producing cars that fell apart.
    Actually Liverpool’s history of union militancy and low productivity proved to be its undoing as firms pulled out of the city in droves in the seventies and eighties.”

    Why focus on Liverpool Glenn, given that this article highlights just how bad militancy/poor productivity was also in Longbridge, Canley etc as well?

    Yes Speke 2 was a crap plant. There were two BL Speke factories remember and Speke 1, which grew out of the long-established Milner’s Safe Factory in the city, didn’t have half the problems of Speke 2 and actually outlasted it. Speke 2 opened in 1970 and like the Solihul East Works opened for the SD1 a few years later, had the unfortunate fate of being a new plant at the total height of British union militancy and thus recruited extremely militant and disloyal workers – see also no night shifts at Solihul – who had no connect of tradition to longer-established plants. A recipie for disaster. It also made cars few people wanted to buy. Ford at Halewood was equally troubled by strikes, but people wanted Escorts so it survived and lest we forget, now under Jaguar Land Rover, it is one of the most respected and productive car factories in the world.

    There are many reasons for Liverpool’s industrial decline in this period, militant workers being one of them, but also a range of complex factors including the heavy reliance on a small number of large firms, the generally low skills base and the decline in ‘Empire’ markets amongst them, to blame it all on ‘Bobby Grants’ is a bit crass, especially when, as you mention, Red Robbo was busy dragging things down in the ‘heartland’ of the motor industry.

  28. Paul says:

    @27 – A large proportion of those Escorts came from Saarlouis, so many in fact that Ford found it easy to lose Halewoods capacity when the Focus was launched in 1998 and source all the cars from Germany.

  29. Paul says:

    @23 Indeed, I struggle to understand how an Ambassador was worse than a Montego. In the alternative plan the Allegro derived Maestro would have sold into the 80s alongside a better developed Ambassador with an EFI O Series and Montego style dash. I doubt it would have performed less well than the Montego did for a fraction of the development cost.

  30. francis brett francis brett says:

    @1
    “Typical strikes at speke were…..”
    Not to mention stoppages because incorrect panels for the TR7 were sent from the midlands causing stoppages or incorrect fastenings.

    By no means an excuse, but to imbue a sense that Derek Robinson brought down the BL “empire” was disingenuous in itself.

    Don’t forget imports from the far east were new blood and didn’t have to be unreliable.

    Most of BL’s products were parts bins cars- there ancient Morris 1000 front suspension of the Marina to name one, in fact, the Ital was a latter day sandero!

    It makes me chuckle this slavish drone like following of “free markets” “capitalism” and “harsh economic realities” just repeated without a second thought.

    Some of us have to work till we are 70 because of the above paragraph.

  31. Glenn Aylett says:

    Paul @29, the Ambassador was a fairly reliable car mechanically and with a better front end, a diesel option and a five speed gearbox could have gone on for a while. The O series, which ended up in the 2 litre Montego, was a far more reliable unit than the S series and I can’t see any reason why an updated Ambassador using a PSA diesel and O series engines couldn’t have lived on.

  32. Kevin Steele says:

    A discussion on BL always descends into people’s political tendencies coming out (boring) – the right wingers are always first to point the finger at the unions and the Red Robbos of this world, whilst the lefties blame the management and the government. It’s like 1974 all over again. Time to move on ladies and gentlemen.

    For me the tragedy was that BL was on the right lines, with trying to build a “house of brands”, but just didn’t manage to rationalise the mess quickly enough to make it work.

    Because look how devastatingly effective the “house of brands” model is when it is implemented properly – Volkswagen have done it to perfection – they now have a car for every demographic; Skodas and SEATs for everyman, VWs if they have a little more to spend, Audis for the well heeled, and Bentley, Lamborghini and Bugatti for those that don’t need to ask the price.

    Perhaps the key to it is that the volume brand in your empire has to be thoroughly sorted out first before you can do anything. Volkswagen spent nigh on 30 years getting its own house in order before it started nurturing Audi into a luxury brand (which is now its cash cow) and then building up SEAT and Skoda. BL started the other way round – with two strong upmarket brands (Rover and Jaguar), but the entrenched problems in BMC was always going to drag the profitable bits down. And so it came to pass. Interestingly, Ford made the same mistake recently – a huge portfolio of luxury brands with loads of potential, but ultimately undermined by the loss-making bread and butter side of the business. Luckly Ford nipped the problems in the bud and sorted it – BL simply hoped for some good luck and a following wind and the problems would somehow disappear.

  33. Nate says:

    29) Paul
    31) Glenn Aylett

    Could see the point if the Ambassador was lightened a bit, received better styling as well as a 5-door estate variant though the Ambassador as it was would probably still struggle in terms of performance. Even when equipped with the 115 hp 2.0 O-Series unit from MG Montego EFi, short of being uprated to 129 hp and receiving the 150-160 hp turbocharged O-Series unit on the MG Ambassador models.

    An earlier 2.0 O-Series Perkins Prima Turbodiesel would have proven to be a useful diesel engine for the alternate Ambassador as well as possibly even an in-house production version of the turbocharged 1.8 B-Series diesel prototype unit to serve as a stopgap for the former, with the latter would likely to put out figures not that much different to the 1.8/1.9 PSA XUD units.

  34. Ian Nicholls says:

    The problem with advocating alternative model strategies is that all the strikes detailed burned through taxpayers money meant for product development. An example is the OHC A-series engine.

  35. Glenn Aylett says:

    The sad thing is British Leyland was a mess that brought down the whole British owned car industry. The militant unions might have been a cause, but a hugely bureaucratic corporation with its own rivalries and some awful products like the Allegro and TR7 was also to blame.

  36. tr_man says:

    @35 actually the TR7 wasn’t such a bad product once they got quality sorted.

    It really is sad that a company which owned so many brands who built desirable cars at some time in their past got it so badly wrong. You have to blame it on a combination of poor management, suicidal workforce and some really poorly engineered products.

    There were occasional signs of light at the end of the tunnel with the Metro for example. This was a really great car even if the transmission chain was old when it came out. I still remember driving my parents 1.3 and later an MG Metro Turbo with great pleasure, especially the latter.

    Now we’re effectively left with only JLR as a “heritage” manufacturer it is good to see them being a success, regardless of ownership. It would however be good to see our state run enterprises like police actually use them rather than foreign cars.

    Concerning early Golf’s they were rubbish rusting at about the same speed as an Alfa Romeo when made out of DDR steel, a frequent occurance in those days.

  37. Glenn Aylett says:

    @ 37, sadly the TR7 did come good when it was moved to Canley and was developing a big following in America, but it was too little too late and the company canned the car just as it was coming right. Also last generation Princesses, Maxis and even Allegros seemed to be acceptable and big discounts at the dealers must have tempted some people.
    I’m not totally anti-union, as the other extreme of trying to destroy them has been just as bad, just I wished the Leyland unions could have stopped being so militant when the company was at its weakest. However, Red Robbo was probably less extreme, being a communist, than the Trotskyite ultra left who were active at Cowley as late as 1983 and probably even regarded Robbo as too right wing.

  38. Tony Evans says:

    “Tony Evans @10 : it is plain from your remarks that you never drove a Mark 1 rhd Golf. I had from new an early 1800 Gti , and although I loved the brio of the thing , it had some very serious defects . The brakes on rhd cars were never up to the ( splendid ) performance of the thing because of the rather curious mechanism linking the brake pedal to the servo”

    No, never did get my hands on anything better than a [borrowed] 1300 Mk1 Golf. Did over 140,000 miles in my beloved Mk2 GTD though in 7 years until growing family forced a move to a Mk4 estate.

    @32: “A discussion on BL always descends into people’s political tendencies coming out (boring) – the right wingers are always first to point the finger at the unions and the Red Robbos of this world, whilst the lefties blame the management and the government. It’s like 1974 all over again. Time to move on ladies and gentlemen.”

    Robbo was merely a figurehead. You could also mention lesser known figures like Alan Thornett, Arthur Cook, Reg Parsons, Frank Horsman, Tony Mcqade et al.

    PS, I’m neither left nor right wing. they are each as bad as the other — equal and opposite. Please don’t judge people’s politics so readily. I know several left wingers with degrees in PPE who almost weep at what the Trade Unions achieved in the 1970s.

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