The BMC>MG Rover Story : Part Two – Formation of an Empire, BMC is created

Lord Nuffield (left) and Leonard Lord (right)

Lord Nuffield (left) and Leonard Lord (right)

In 1952, old rivalries and suspicions were allegedly slaked when The Nuffield Group and Austin joined forces to become the British Motor Corporation. The idea behind BMC was a good one; to form an enormous British car company in order to fight the very real threat posed from overseas manufacturers – and assure the future of the British motor industry. Problems with the BMC organization very quickly manifested themselves, though.

In terms of managing the new Corporation, the Nuffield Group had definitely lost out right from the beginning. Although Lord Nuffield had stepped down to become the President of BMC in 1952 – at the age of 75 – it was quite understandable that he had lost interest in running the daily affairs of the giant company. Austin chief, the forthright and opinionated Leonard Lord (pictured above, with Lord Nuffield) had, therefore, taken the reins and oversaw the day to day running of the company and as such, ensured that Austin men were installed in just about all of the key management positions.

Lord had forsaken Morris in order to take Herbert Austin’s job at Longbridge, which Morris obviously did not appreciate one little bit. This event meant that a new low was reached in the already terrible relationship between Austin and Morris, so when further executives followed Lord from Cowley to Longbridge, most notably his right hand men, George Harriman and Joe Edwards, the rivalry between the two companies intensified.

All this, supposedly came to an end in 1952 when BMC was created from the two sparring partners, but parties affected by the merger had their own vested interests and so, in this instance it seemed that the interests of Austin and Longbridge came before those of Morris and Cowley. High-ups from the Nuffield Group saw the merger as nothing more than an Austin takeover and therefore became defensive of their own roles within the corporation. When they saw Austin executives taking key roles within BMC, it would appear that they were perhaps right in thinking this.

Not only was this evident high up in the company, but at all levels; employees still felt part of the ‘them and us’ culture within the company, which was being perpetrated by the management’s actions. The dealer principals remained trenchant in their insistence that a separate network of dealers was maintained, and just like the old days they would have separate and distinct model ranges to sell.

Rationalising Austin and Morris

The Issigonis-designed Minor was an extremely advanced car when it was launched and became the first BMC car to sell more than a million. The problem with the Minor was that it was left in production for far too long and so became adored by millions around the world. By the 1960s, Issigonis considered it a product of a bygone era, gave it no further development and it was not until 1971 that it finally got the axe.

The dealers were right in their fears that cuts in their organization would need to be made in order to fully amalgamate Austin and Morris, but they wanted to maintain the status quo by not accepting a single loss in the range and they fought very hard to do so. Not only this, but they would not accept losses in their distribution network, either. They used their influence with Lord to ensure that there would not be a single compromise made.

The dealer principals could do this because they had direct access to Leonard Lord and as such, had an exaggerated influence over direction of BMC. They ensured that not only that Lord maintained separate Nuffield Group and Austin model ranges, but also successfully persuaded him to accept that the corporation required autonomous dealer networks to sell them. If there had been a will within BMC to break this stranglehold, then the dealer groups could call on written contracts defining their positions, in some cases stretching back 50 years.

The idea of separate franchises and separate model ranges may have had outward appeal because it was a marketing model that worked well for General Motors in the USA, but the reality was somewhat different: BMC was now effectively controlled by Austin at Longbridge. The parallels did not run any further than that, because whereas General Motors in the USA operated a system that each company may have shared componentry, but they operated as separate companies with separate management, BMC did not. BMC had neither the resources, nor the overall production capacity to maintain a policy like GM’s.

Leonard Lord may have been browbeaten into acceding to the wishes of the people that sell the cars, but he knew that his plans for the future would involve much component sharing, first of which would be the sharing of engines between the Morris and Austin ranges. Furthermore, the process would not stop there; it would be a lot more widespread than the simple policy of sharing engines. For Leonard Lord and George Harriman would continue the widespread policy of ‘badge engineering’ first started by Nuffield before WW2, and would become endemic within the company 10 years hence.

So, the boom years of the mid-1950s were not the time when the ruthless rationalisation of the corporation was seriously considered, let alone entered into. The problem, of course, is that it should have been because as the company grew and grew, it was built on this foundation laid from the two companies instead of one strong one. As time went on and the factories became more numerous, the empire more widespread, it would prove to be increasingly difficult to administer from Longbridge.

The management and factory situation may have been riddled with problems as a result of the merger, but the range of cars that the newly merged company offered surprisingly little overlap and should have formed the basis of a homogenous and logical progression of models:

  • Morris Minor
  • Austin A40
  • Morris Oxford
  • Austin A70
  • Morris Six
  • Austin A125 Sheerline

The Morris Minor was an amazing and advanced car, which re-wrote many of the small car rules of the day, but in the post-merger management environment, it was isolated amongst an Austin-dominated range. Morris design at Cowley was slowly wound-down piece by piece and the Austin Drawing Office at Longbridge would eventually handle all design work from the end of the 1950s when the Farina designed cars came on stream: all subsequent cars developed by BMC would have ADO (Austin Drawing Office) development tags.

After 1952, signs of the Austin domination soon began to manifest themselves. The first evidence of this was in the range of engines employed by BMC. The rationalisation that should have happened within the management and distribution system of the company did take place in the model range. Well, the seeds of rationalisation were sown, maybe. In short order, a range of mainly Austin-derived engines, named logically enough, the A-, B- and C-Series, would power the entire range (the C-Series was designed and built by Morris engines in Coventry, using Austin design philosophy). Significantly, they would all enjoy a long life, the A and B-Series especially so.

In very little time, the Morris Minor was revised in order to use the 803cc Overhead valve Austin A-Series engine from the newly launched baby A30 model. In 1954 a new Morris Oxford emerged, which was powered by a version of the B-Series engine found in the Austin A40, this time enlarged to 1.5-litres. These changes made to the power unit were also carried over to the A40, which was re-named the Austin A50 Cambridge – no doubt named thus to signify the close relationship between Austin and Morris by this time. The large cars, the Austin Westminster and the Morris Isis were finally launched, both using the 2.6-litre six cylinder C-Series engine.

The slimming down of Austin and Morris was beginning to take hold. The point had been made; a full range of cars could be maintained, using a smaller range of engines. Huge economies of scale could be maintained by this engine sharing and the dealers would still remain happy, as they all had their full ranges of cars to be sold. Customers did not care that the engine in their Morris Minor or Oxford was an Austin unit, so everyone was happy.

At this point, it could be argued that it was the best of a bad situation. The dealers could not, would not, accept any slimming of BMC’s model range, but at least the management were ensuring that much in the way of resource sharing took place, so that if the Austin and Morris franchises wanted their own cars, they would make sure that they would produce both options as economically favourably as possible.

The logical solution should have been to drop the separate Austin and Morris badges at this point, encourage all the dealers to stay on board with generous incentives and to sell a single range of Austin-Morris cars, badged as BMCs. The obvious conclusion was not drawn though, because people throughout the company were paralysed rigid with the fear that a single loss would have led to sales surrendered to the opposition.

Luckily, throughout the 1950s and into the early-’60s, BMC sales were shored up so much by Harold Macmillan’s economic miracle throughout the country and the post-war boom overseas in general, that the obvious conclusions were not drawn. It was a seller’s market and because car ownership was growing rapidly, no longer the preserve of the middle and upper classes, BMC could sell cars as they pleased. The successes of the company financially and on the marketplace meant that any tough decisions that should have been made at the start could be deferred, not considered until it was absolutely necessary to do so.

One problem that began to manifest itself in a big way – and one that would sadly leave an indelible mark on the events in the company for the following 30 years – was that of strikes and union unrest. The problem of course was that following the Second World War, there was almost unlimited demand for cars – and in order to satisfy that demand, BMC were prepared to do whatever it took to build as many cars as they could. When Unions approached Leonard Lord for pay settlements, no matter how inappropriate, he would be forced to cave in because the cost of these wage settlements would be outweighed by the potential cost to BMC through lost cars built and therefore, lost sales.

As time went on and the burden of these Union demands became increasingly severe, Leonard Lord began to lose patience: following a particularly disruptive strike in 1956, Joe Edwards was tasked by Lord to deal with the Unions, by taking on a role in Labour relations. Edwards refused to do this as he saw himself more as a production man, and as a result, a huge falling-out occurred between both men, which ultimately led to Joe Edwards resigning from BMC.

Edwards’ resignation did have lasting effects on the company not only because he was popular with the Longbridge workforce (hence Lord’s offer to deal with them), but also he was a man of great conviction – someone that would try very hard to maintain the success of BMC in the years that he was there.

So instead of rationalising the model range to offer a cohesive product line, what Leonard Lord did was, in fact, the opposite of this agreeable and logical policy. Resources were now shared and offering what was outwardly the same car in two different manufacturer’s guises could further make economies of scale. Sure enough, in 1958, with the launch of the Farina saloons, we saw the first example of major post-merger badge engineering would take place in the Austin and Morris ranges.

In retrospect, it was a ridiculous situation offering identical cars through differing dealer networks, but people did not seem to mind, as the situation back in the fifties was somewhat different to how it is now, when customers were loyal to a marque, or even the garage that was closest to them, and as such did not so much mind what the company or garage served up.

Pininfarina adds style

The cars that BMC offered at the time were thoroughly conventional, uninspiring and somewhat stolid, and it was as a backlash to this thinking that Pininfarina were invited restyle the cars, giving them a corporate look. Lord and Harriman, however, were pleased with the success they were making of their badge engineering policy and it comes as no surprise that they would pursue this policy actively with their next wave of new models.

With great efficiency, Pininfarina produced its proposals for the new cars, the first of which they launched in 1958 to great acclaim. This car was the A-Series engined A40, a rebodied A35 incorporating smart Italianate styling and a novelty for the time, the Countryman version offered a split tailgate – a prelude to the hatchback design (despite a designation that hinted at Estate car status). The A40 was priced at a premium over the A35, but it proved popular nonetheless because it was smart-looking and more importantly, it hit the market at precisely the right time, just as effects of the 1956/57 Suez crisis had switched people on to buying more fuel efficient cars again. Because of these circumstances, the A35 was left in production, BMC figuring that it would do no harm at all to offer as many cars as possible in bottom end of the market.

Next to come were the B-Series engined cars, the Cambridge and Oxford replacements, launched right at the end of 1958. What Pininfarina served up here was regarded with mixed feelings by trade and the public, alike. The problem with the Farina models were that they were exclusively powered by the B-Series, a not-too energetic 1.5-litre engine and as the new bodywork, so similar in style to the Peugeot 404, managed to make the car both large and heavy. This saddled the car with less than spirited performance. The tail fins, large hooded headlights and the narrow track with wide body also conspired to make the car look over-bodied, which exacerbated the situation. This confused image that the car portrayed did not endear it to the motoring press and buying public, and although the car had its devotees, it was never the sales success that BMC had hoped it would be.

However negative the response to the initial Wolseley badged model may have been, the Farina models came thick and fast. Following on from the Wolseley 15/60, the inevitable flood of badge engineered models followed in quick succession: the Austin A55 Cambridge, the MG Magnette III, the Morris Oxford IV and the Riley 4/68.

The final model in the Pininfarina styled triumvirate was the pair of large C-Series engined cars, the Austin A99 Westminster and the Wolseley 6/99. The styling of these two cars was similar to the B models, but more in keeping with the engine capacity and market aspirations of this model.

The Pininfarina styled Austin A40 model was launched in 1958 as a replacement for the A35. Styling was smart, but underneath though it was tediously conventional.

The Pininfarina styled Austin A40 model was launched in 1958 as a replacement for the A35. Styling was smart, but underneath though it was tediously conventional.

By mid-1959, the range was complete. There were the A models represented by the new A40 (The 35 and Minor were throwbacks that would remain in production to satisfy fuel-crisis demand for small cars), the B Models, represented by the Farina cars and the C Models right at the top of the range, the large Wolseley and Austin Westminster. The range was homogenous, the cars were neat and contemporary looking and above all, they were a success.

The underlying worry, of course was that beneath that smart styling, they were painfully conventional in their engineering and BMC were beginning to receive a certain amount of criticism over their engineering timidity. The last thing they would do though, is tell the world that they were working on some advanced alternatives. In their quest for a more contemporary identity, BMC had investigated various different models, notably a rear engined saloon that would have offered nothing, except a whole load of awkward questions to the public. Apart from this, Alec Issigonis had been locked away working on something far more radical than people would give the conservative company credit for. As far as BMC as a producer of cars was concerned, this conservatism was to change in the most profound way on 26 August 1959, when BMC launched the fresh new Mini.

The “Farina” bodied mid-sized car, the Morris Oxford. Not the most inspiring car on the road to drive, but it was reasonably stylish and went on to live a long production life.

The Farina-bodied mid-sized car, the Morris Oxford. Not the most inspiring car on the road to drive, but it was reasonably stylish and went on to live a long production life.

As the 1950s became the ’60s, the whole complexion of the market began to change. Competition began to become a whole lot tougher and as merger mania began to take hold of the industry, BMC’s policy of badge engineering separate Nuffield and Austin ranges began to look like the foolish policy of a bygone age. In the wider arena, Jaguar swallowed Daimler in 1960 and in 1961, Leyland Trucks absorbed Standard-Triumph to become the Leyland Motor Corporation, the Lancashire based heavy vehicles company being headed by the ambitious Donald Stokes.

In 1960, British car production also broke new records when 1.36 million were built in total, but this would appear to be the absolute zenith for the British car industry, a culmination of the momentum gained in the golden years of the ’50s. The following year, disastrously, production dropped back to just over a million, but worse than that, for the first time in the modern era, France had built more cars than Britain to line up second behind West Germany in the European car production league.

With the health of the company looking so good, George Harriman announced a huge expansion plan for the company, making the announcement that it was the intention of BMC to produce a million vehicles a year. The £49m government assisted programme involved opening new factories in Llanelli, South Wales, Bathgate in southern Scotland and Ravenscraig – all areas of high unemployment and badly in need of government investment.

The results of this investment soon bore fruit, with the output of BMC increasing significantly, so that by 1964 the company produced a record 731,000 cars. The seeds of disaster however had been sown; investment had been made in manufacturing, but at the cost of a viable new models programme. The evidence of this is not hard to see: after the launch of the ADO16 in 1962 and the ADO17 in 1964, no new cars of any substance appeared until well after the Leyland takeover in 1968.

The new factories must have looked like a great idea at the time, but by moving away from their Midlands heartlands, BMC management were for the first time, being overstretched with the task of overseeing the this vast new empire. Human resources were stretched and industrial relations began to suffer accordingly. Profits began to drop on the sales of new cars as well, compounded by the double whammy of a poor pricing policy, which was defined right from the top, and high warranty costs on the troublesome Mini and 1100.

For an example of the Corporation’s slap dash pricing, one had to look no further than the new Mini. Leonard Lord’s famous quote that, ‘if you build bloody good cars, they’ll sell themselves.’ was certainly the case with the Mini and the 1100, both being excellent products, but the downside of this was that they made a disastrous error in pricing the Mini too low. This marketing ineptitude resulted in the basic Mini costing £496, which not only was the same price as the Ford 100E Popular, but £100 cheaper than the new 105E Anglia. When Ford’s costing engineers stripped down the Mini in order to work out how on earth BMC could sell it so cheaply, they estimated that BMC were actually making a loss of £30 on each one built.

Leonard Lord dictated this pricing policy himself believing that BMC’s cars would only sell if they were the cheapest in their class – the result was that the product range was horrendously under priced on the home market. Of course this philosophy of his dated back to when he was the head of Austin and would always deliberately price his cars below Nuffield’s cars, regardless of the profit implications.

The trouble, of course with the Mini and 1100, was that they were new concepts and as such, did not have direct rivals. BMC were worried about customer resistance to both cars and so, priced them in such a way that they cut their own throats. John Barber, who was the finance director at Ford at the time, but later went on to become the Managing Director at British Leyland, stated that, ‘We priced at what the market could stand. Then, almost as an afterthought, we would cost it and if it showed a loss, we would have to cost it again. BMC should have said: Where do we slot into the market? We’ve got the most sophisticated car in the world. We can afford to charge £100 more than the wretched Ford runabout. Then, having got the Mini into the wrong slot, they did the same with the 1100 successor.’

It was not until Barber himself moved over to the company as finance director, that the price of the Mini would be jacked up to a sufficient level that at least it was not losing any money.

Men on the move taken at the Racing Car Show in 1965 (Left to Right) John Cooper, unknown, Charles Griffin, Bill Appleby and Alec Issigonis. (Picture: Ian Nicholls)

Men on the move taken at the Racing Car Show in 1965 (Left to Right) John Cooper, unknown, Charles Griffin, Bill Appleby and Alec Issigonis. (Picture: Ian Nicholls)

The financial performance of the Mini and 1100 were demonstrated potently by the fact that in 1960, BMC had made a £26m profit on total sales of £347m, but by 1967, when it was building and selling more cars, it made a loss of £3m on total sales of £467m. Turnover and sales were good for BMC during the 1960s, with the Mini and the 1100 being the company’s best sellers, but as no profits of any significance were being made on them, no investment was being made for the future. The issue of the future, or more precisely, the lack of forward planning for it was becoming more and more pressing as the ’60s wore on.

By this time, Leonard Lord had stepped down as the company chairman, replaced by George Harriman, who had been BMC’s managing director since 1956. Lord, who became Lord Lambury in 1962, would stay on at BMC as Vice-Chairman and would remain firmly in touch with the Corporation’s policy until his death in 1967. When Harriman took overall control of BMC, he ensured that Alec Issigonis was promoted to become the technical director of BMC, ensuring that these two men alone would dictate control of future model policy. Both men shared a close relationship, but in a way, this bond may have blinkered Harriman’s judgment with regards to future model development.

Fresh from the successes of the Issigonis-penned Mini and 1100, this same formula was used in the creation of the medium sized car, the ADO17, Austin/Morris 1800. It could be said that model policy took a disastrous turn for the worse with this car, because with the ADO17, the focus of the car was lost.

BMC 1800 – the first stumble

Morris 2200

The ADO17 was designed as a replacement for the 1.5-litre Farina models to buoy up the Corporation’s sales in the middle market, but when the B-Series engine was enlarged for the MGB to 1.8-litres, Issigonis allowed the width and weight of the ADO17 to increase in order to make the best use of this new power unit. Not only was the car widened, with the result that it was moved out of the market it was intended to compete in, but the styling of the car was an extremely unhappy mix; and perhaps it was this that allowed potential customers to perceive the ADO17 as being a larger car than the Farina saloon it was meant to replace – it was not. Whereas the Mini had not been styled as such – and that was essential to its charm, the ADO16 completely the opposite – being a highly styled car, the ADO17 was neither fish nor fowl.

Where the 1800 went wrong was that Issigonis styled (or more correctly, non-styled) the original car and then Sergio Farina re-jigged the design in order to put some style into it. Because the 1800 was awkwardly proportioned it a conceptual stage, it would prove difficult for the Italian designer to improve upon the design – and looking at the development pictures, it is evident that he merely tidied up the overall design as opposed to producing his own concept. What compounded this strategic error was that BMC seriously believed that they would be able to produce the ADO17 at the rate of 4000 a week. To put this into perspective, this was a higher rate of production than the ADO16 and that was Britain’s best selling car.

Of course, it was soon realised by all that not only was the car not right for the market it was intended for, but it was not even suitable to replace the aged and costly to produce farina saloons. The seeds of BMC’s downfall were now well and truly sown: at one end of the spectrum, there were the brilliant new Mini and 1100, which were selling in bucket-loads, but not making the company a bean. Then there was the hulking great ADO17 which was not selling at anywhere near the rate predicted for it. While at the other end of the spectrum were the elderly and labour intensive Morris Minor and Farina saloons that the corporation was unable to replace.

By 1965, the first full year of ADO17 production, BMC’s output began to fall, but Harriman did not feel yet that this was a cause for concern, because output from the industry as a whole was falling. What he was concerned about though, was the question of forward planning within the corporation, or more precisely the lack of it. This was a problem that had been endemic since the late Fifties, but was now becoming increasingly pressing as competition, most notably from Ford became more intense.

The question was finally answered, but it took the failure of the ADO17 to act as the catalyst. In response to these concerns, a director of planning, Geoffrey Rose was finally installed in 1965, whose responsibility it was to ensure that the company’s cars were priced correctly and future planning was directed in the correct way. His installation then led to the formation of a market research department, which for BMC was definitely a step in the right direction. Before this, there was no market research as such; mainly in the past, new cars were developed and launched in response to what the engineers wanted and management instinct. The result of this was the ADO17 appearing on the market in the form it did.

This department mainly comprised of inexperienced university graduates and certainly did not operate on the same scale as the Ford equivalent, but it was a step in the right direction and one of the first results of this was the formation of a product-planning department for commercial vehicles, which appeared late that year.

Alec Issigonis still had overall responsibility for cars, but with an eye on the failure of the ADO17, management would ensure that the marketing strategists would have a great deal more say on the direction of future model policy. Perhaps, it was already too late for the corporation, who’s management now must have seen the writing on the wall, especially when they could see that their only products in development were the Austin 3-Litre and the Maxi. It cannot have made good viewing.

But still, the matters of internal efficiencies were not addressed and yet the expansion of BMC continued afoot. With the purchase of Pressed Steel during 1965 (which was then merged with Fisher & Ludlow to become Pressed Steel Fisher), BMC had finally brought the manufacture of the company’s body shells in-house.

Outwardly seen as a good move, the purchase was made using nothing more than company funds – no external funding was required – and it would provide a source of income from Pressed Steel’s other customers. Pressed Steel not only produced BMC’s body shells, but also those of the Rootes Group, Jaguar, Rover, Rolls Royce and Leyland’s cars and so, in one fell swoop BMC now had inside knowledge of what the opposition were planning to build in the future and more importantly, how much it was costing them to do so. This was a fantastic coup for BMC and yet, this unfair advantage was never really capitalised upon. The purchase also heralded the return to the fold of Joe Edwards.

Joe Edwards returns to BMC

The return of Joe Edwards (right) co-incided with the increase in Westminster's interest in BMC. Here, he meets Conservative party leader, Ted Heath at Cowley in 1967... (Picture: Ian Nicholls)

The return of Joe Edwards (right) coincided with the increase in Westminster’s interest in BMC. Here, he meets Conservative party leader, Ted Heath at Cowley in 1967… (Picture: Ian Nicholls)

George Harriman immediately offered Edwards a joint assistant managing directorship of BMC alongside himself, but Edwards was not interested in this, making the counter-suggestion that he could become the managing director of the company if Harriman were to take up the post of executive chairman. Harriman accepted this without hesitation because he knew that Edwards had the wherewithal to make the cuts within the corporation that would be needed in order to keep them fit for the challenge of the 1970s.

When Edwards took his post on 9 June 1966, he returned to the office that Leonard Lord had used to fire him, a decade ago. Just like the last time, Lord was present, only this time he would be smiling when Edwards returned, ‘There is only one man in this office today whose hand I want to shake’, Lord said to Edwards, ‘I should never have done what I did and I am delighted to have you back’.

When Edwards took over the running of BMC, he would have seen a lot of changes in the 10 years since he left. Firstly, the company was a great deal larger, having opened up new factories, they were producing new and advanced cars, but at the same time viewing the company with a fresh pair of eyes, he could see that there was a great deal of excess capacity in the company and that the factories were seriously over-manned. Sadly, it was also apparent to Edwards that the factory at Longbridge had been neglected badly during the intervening years – and that the workforce there was under-motivated and less productive than they should have been.

He instigated a programme of cuts, in order to improve the health of BMC. Late in 1966, he cut 14,000 jobs across the company and then he started on a programme of factory closures, significantly the body plants at Coventry and Castle Bromwich. Significantly, Edwards was also to re-join BMC right in the middle of protracted negotiations with Donald Stokes that would eventually lead to the BMC-Leyland merger of 1968. Edwards made it clear to Harriman that he did not feel that this was the correct path for BMC to take – but went further by saying that he was not interested in merger and would play no part in it – instead he would try and address the problems endemic at BMC which had arisen through the years of neglect.

The gathering storm at BMC

Maxi was vitally important for the company, but even before it was launched, Stokes and his management team knew that it was virtually unsaleable. The Morris Marina would be created as an antidote to the advanced, but ugly Austin. (Picture Supplied by Graham C. Arnold)

Maxi was vitally important for the company, but even before it was launched, Stokes and his management team knew that it was virtually unsaleable. The Morris Marina would be created as an antidote to the advanced, but ugly Austin. (Picture Supplied by Graham C. Arnold)

Edwards also tried to address the issue of lack of future model plans, finding it unbelievable that George Harriman and Alec Issigonis had perpetrated such a critical error of judgement. Upon viewing the upcoming 1.5-litre car (the ADO14 – Maxi), he ordered an immediate restyle of the front end styling – being far too late in the model’s development to do anything more radical. The body pressings for the Maxi had already been signed off and Pressed Steel was gearing up to produce bodies-in-white. He also commissioned newly recruited ex-Ford man, Roy Haynes to face-lift the Mini (resulting in the Mini Clubman), whist Issigonis himself worked on the more radical 9X.

By the summer of 1967, Edwards felt that times were becoming very worrying for BMH. Several issues that had been building over the past couple of years were now coming to a head:

  • Market share for BMH fell to a low of 28%.
  • BMH did not follow up the success of the Mini or ADO16 by producing replacement models.
  • Poor product planning led to the panic development of the Maxi.
  • The ADO17 was selling terribly, never bettering 1000 cars per week.
  • New cars were taking too long to reach the market.
  • Mini/ADO16 made no profit, other cars made very little money.
  • BMH inefficiency was rife; a perfect example of this, as Edwards observed, was that the 1100 was built at four factories and yet, the production volumes of this car did not justify this.

These cuts, especially those in the work force did not make Edwards a popular man, but it is true to say that he was only making cuts in the company that should have been made years before. Prime Minister, Harold Wilson was all too aware of these overmanning levels throughout the company and even if he did not want to see a single job loss, he knew that these cuts were necessary. At the 1966 Labour Party conference, as Wilson recalled later, a delegation of six BMC shop stewards were invited to address him in his hotel room. When the delegation arrived to say their piece, it comprised of 12 people.

Exasperated, Wilson said, ‘That’s what’s wrong with BMC, always needing 12 men to do what six should be doing’. Wilson still believed that the company was overmanned even after Edwards had made his cuts and he knew that he would in some way have to address this situation further in the future.

In the wider arena, Jaguar was now looking like rich pickings for both the acquisitive-feeling Leyland and BMC car companies. Donald Stokes approached Jaguar in 1965, offering a merger deal, where Sir William Lyons would take control of Standard-Triumph, as well as maintaining control of Jaguar. Lyons liked the deal, but at the last minute and on the golf course, he told Sir William Black (the then chairman of Leyland) that the deal was off and that the reason was that he feared that Jaguar would be engulfed and lose its identity in the new company. The response from Leyland management was swift – if they could not have Jaguar, they would pursue Rover. Within months, Stokes acquired Rover and now Leyland controlled an increasingly large slice of the UK market in the profitable premium end of the spectrum.

Sir William Lyons of Jaguar approached George Harriman the following year, due to his own fears for the long-term viability of his company and its vulnerability to a hostile takeover. Lyons also had private fears that his company could quite easily fall foul of BMC’s management and their acquisitive desires, using their ability to take away his supply of bodies (Pressed Steel supplied Jaguar).

However, 66-year old Sir William Lyons was a very canny negotiator and so, from what he may have considered was a weak bargaining position, he managed to ensure that he remained in complete control of the Browns Lane factory and also had a seat on the board of BMH.

As part of the deal, changes were made to the BMH range; the large and cumbersome Austin Princess was dropped, as was development of the new 4-litre Austin-Healey sports car (so not to queer the pitch of the Jaguar E-type). Unfortunately, the Austin 3-Litre saloon was too far advanced in its development to be scrapped, but it never was to endure a glittering career. Finally, BMH agreed not to build any saloons larger than the ADO17/1800cc.

Of course had Harriman had not been preoccupied with the matters of Leyland, he might have seen he was in a better position than Lyons made him believe that he was, but Lyons assuredly made the BMC Chairman aware that it was he who was responsible for the unprecedented growth of Jaguar in the previous 15 years (6647 produced in 1950, 25,963 produced in 1965).

There been real growth in the past, but there was also the real prospect of further product-led growth in the future; backing up this feeling was the fact that they offered the world-beating E-type and they had the XJ6 in the offing. It was the single-mindedness of this trenchant negotiating position adopted by Sir William Lyons (and his chief of operations, Bob Knight) that undoubtedly assured Jaguar’s independence during the merger and throughout the turbulent 1970s.

Follow up to the Pininfarina 1800 proposal of 1967, this fully engineered prototype built on Austin 1100 running gear was commissioned by BLMC, who had been impressed by the original. This car represents an even bigger missed opportunity than the larger car and its relevance is thrown into great relief by the absolute ugliness of the 1100’s replacement, the Allegro - and it comes as a disappointment to report that not only was this car passed over by British Leyland, but they reported to Pininfarina that they were “disappointed” with the design for being “too close” to the BMC-Pininfarina 1800!

Follow up to the Pininfarina 1800 proposal of 1967, this fully engineered prototype built on Austin 1100 running gear was commissioned by BLMC, who had been impressed by the original.

BACK: Part one, the formation of the British car industry

NEXT: Part three, the British Leyland years

Posted in: The whole story
Keith Adams

About the Author:

Created www.austin-rover.co.uk in 2001 and built it to become the world's foremost reference source for all things BMC, Leyland and Rover Group, before renaming it AROnline in 2007. Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Clsssics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent... Likes 'conditionally challenged' motors and taking them on unfeasable adventures all across Europe.

12 Comments on "The BMC>MG Rover Story : Part Two – Formation of an Empire, BMC is created"

Trackback | Comments RSS Feed

  1. Brian says:

    Yes well, Ford WOULD say that. Wouldn’t they? Industrial sabotage, I think it is called.

  2. Russell G says:

    I think BMC did enough to sabotage themselves without blaming Ford. Turnover was increasing but they were losing money. BMC could have charged more for the Mini and actually made some money out of the thing.

  3. Christopher Storey says:

    The Ford pronouncement was just sour grapes . Let us face it, at the time ( and for some 20 years afterwards ) all Ford could produce was successors to the ox cart such as the Cortina, which were transiently successful but required replacement every 3 to 4 years .Indeed, at the time the Mini was introduced Ford was still producing that E93A Popular whose design dated back to about 1937, all the other model ranges having notoriously short lifespans. As I have pointed out before, for the first 13 years or so of the Mini’s career BMC /BLMC were consistently very profitable, and they could not have been so if they had been losing money on every car sold

  4. Pat says:

    I wonder if Joe Edwards wasn’t sacked in the 1950’s would there have been enough development of the Morris Minor to match the Cortina? The BMC board missed an obvious point, the Mini and 1100 were not profitable and the market was not that keen on FWD. The BMC>Rover story is full of, ‘what if’s,’ and a quote I heard about BMC, ”..being an arrogant company but with no pride..” makes a lot of sense.
    The Mini and 1100 were innovative but you have to compare the sales of simple and well costed RWD cars at the time also.
    If the resources wasted with the 1800 had gone into improving or replacing the Minors gearbox, rear axle/suspension and properly modernizing the B-series engine just how hard would it have been to create a modern Cortina-like body?

    I think the BMC board just arrogantly ignored the obvious market trends. They knew fine well that the FWD cars were not profitable. You can see what Stokes was thinking about post merger needing a Cortina beater but the parts were not there to do it.

  5. christopher storey says:

    It is absolute nonsense to suggest that the FWD cars were not profitable. As I have pointed out elsewhere, Ford’s costing were based on a model replacement cycle of 3 to 4 years, and since a major part of the cost of any given model is the development and tooling, it is no wonder that Ford could not cost the Mini properly, since it turned out to have a 40 year life span ! In any event, as I have also pointed out, how was it that BMC were consistently very profitable for the first 13 years of the Mini’s production , and 10 years of the 1100/1300 , if they were losing money on every car produced ? It was typical Ford drivel , making the nation’s crappiest cars , and trying to palm them off on gullible customers by rubbishing the opposition

  6. daveh says:

    The problem was the warranty claims against the Mini and 1100 that were making the cars unprofitable – the Mini did barely cover the cost per car, but the 1100 was profitable but due to poor development – something of a BMC and later BL issue, the costs to repairs or replacements were damaging the business. As to the fact the FWD were not profitable is wrong – Ford made their profits by selling to the trade while BMC were selling to the public. The trade did not buy BMC products because they were unknown and under developed, while the Ford and Vauxhall offerings were reliable and well developed from mechanics that had been used over a long period of time.
    BMC’s problem was that they gambled everything on Alec being a genius and not providing the public what they wanted – a stylish mid range car – instead they gave them the 1800. Look at what the Australians did with the same car – if BMC had followed that lead they may have increased their sales 2 fold.
    Donald Stokes may have looked at BMC products as rubbish but, with the correct development and style these cars could have formed the basis of the range well into the late 1970s – instead they wasted millions on reinventing the wheel.

  7. Nate says:

    Would it have been possible for Austin to utilize the Issigonis FWD models, while Morris uses the Morris Minor as a basis for a range of more conventional RWD cars (albeit with fully-independent suspension or even FWD mated to a end-on gearbox) from the late-50s / early-1960s in place of the existing BMC Farina B models as a rival to the Ford Cortina?

    While understanding why BMC allowed both Austin and Morris to use badged-engineered versions of the Mini, ADO16 and the 1800. It seems almost criminal in some respects that the Morris Minor’s componentry were not better utilized in a more conventional range of early-60s Morris cars, to both cater for those still reluctant to buy FWD as well as to rival the Viva HA/HB and Cortina except as a desperate stop-gap in the form of the early-1970s Morris Marina.

  8. Richard16378 says:

    There was the decently styled Australian Morris Major / Austin Lancer based on the Minor running gear which could have filled the gap, if a little small for the category.

    I see the usual anti-Ford sour grapes are at play, I know they didn’t come up with a decent car every time (Classic, Zephyr Mk4) but at least managed to sort things out rather than drag out a bad design for years.

  9. Pat says:

    The Ford Motor Company is a very successful car manufacturer, then and now. Yes they can be cynical, they made a lot of cheap tinned muck once a model became popular and I don’t see how a BMC/BL somehow lasted longer than the average Ford.
    The way Ford took the lions share of the UK market in the 1970’s can’t be all to do with BL products being unappealing.
    If Ford management were parachuted into BMC in the late 1950’s its not hard to see what they would have done. BMC had the ingredients, probably the best small engine of the time, a decent range of cars, a large rather captive market and a good to middling reputation amongst the public at the time.
    Ford would not have made the 1800, they likely would have developed the Minor before going through with FWD and fluid suspensions. I believe if BMC had done exactly that in the late 50’s they would have survived the 1960’s and beyond.
    BMC was an old boys club, had the designs but then couldn’t build them at a profit. What other manufacturer would continue for so long ignoring the market obvious? Then into BL and the same mistakes are made, make cars that too many people do not want.

    If you look at Fords success in Europe in the 1960’s and 70’s it was down to manufacturing efficiency and knowing what the public wanted. BMC just thought they knew better. Now Ford of Britain was not an American company, it was its own corporation headed by Sir Patrick Hennessy who many say was the unsung managerial genius of the British car industry.

    As for Ford vs BMC, which were worse, I have heard so many people telling me regret stories about owning 1100’s, 1800’s and even the Mini. The number of people that replaced an 1100 with a conventional RWD Cortina, Escort, Viva or Avenger was significant.
    Was not until 1976 that Ford launched a FWD. Say what you like about the Fiesta but it made a profit. A lot of profit.

    If you read, ‘Wheels of Misfortune,’ the difference in attitude between Ford and BMC in the 1950’s created both of their futures.

  10. Nate says:

    Richard16378

    There was also a Gerald Palmer styled Morris Minor proposal that resembled a tastefully downsized MG Magnette ZA/ZB (and in better circumstances with all-independent suspension would have made a nice MG Mosquito 1600 Twin-Cam saloon), prior to Leonard Lord approving Dick Burzi’s proposal which became the Riley 1.5 / Wolsley 1.5.

    Speaking of the MG Magnette ZA/ZB, together with the Morris Minor could the component set of the Magnette ZB have not also formed the basis of Morris’s Cortina rival instead of the mk1 Austin A55 Cambridge based Farina B cars?

Have your say...