History : The BMC story – Part Five : 1963 – Rejection!

Carole Nash Classic Insurance Specialists

Ian Nicholls, AROnline’s historian-in-residence, recounts the history of the British Motor Corporation (BMC). He follows up his excellent run-down of the British Motor Holdings and British Leyland stories with an eight-part study of BMC from 1959 to 1966. 

Here, in part five, we look back at 1963 – the year the UK’s entry to the EEC was vetoed and BMC had to undertake a rapid re-evaluatation its export plans…

News Year’s Day was not a public holiday back in 1963. So, the year started early with the Ministry of Housing and Local Government commencing its planning inquiry at Rednal, a suburb of Birmingham. BMC wanted to build a factory extension of 300,000sq ft and trailer park at Cofton Hackett. 
The land was in the draft Green Belt adjoining the Austin works at Longbridge.

Throughout much of the day, the main part of the BMC case was put by Eric Blain QC, and by Bill Davis, the corporation’s Deputy Managing Director. Bill Davis said about 6 per cent of the nation’s exports were made by BMC.

The corporation’s exports had averaged more than £100 million a year for the previous five years, and they could be increased to no less than £220 million a year by the firm’s expansion plan. Half this total would be from the sale of cars produced at Longbridge.

Pleading a case for Cofton Hackett expansion

‘Many Longbridge buildings are waiting to be pulled down, but this cannot be done until new buildings are available,’ 
he continued. If the present buildings were pulled down before alternative accommodation was available, a loss of production would result and heavy unemployment would be unavoidable.

‘Workers’ cars are also a tremendous headache to us and to the local police. At the present time 2700 cars, 270 motor cycles, and 20 coaches are parked at the works daily. We estimate that in five years’ time there will be some 5000 employees cars requiring accommodation at the Longbridge factory,’ he added.

The new factory space, he said, was required for the manufacture of small parts for power units of less than 1300cc capacity. The units were being made at Longbridge by high-speed methods: it would be more expensive and less efficient to make these components elsewhere.

BMC needs to stay near Longbridge to survive

High speed production was centred on the Austin works and, if any large measure of it were moved away, higher costs would be bound to result. Bill Davis concluded: 
’Unless this development is allowed, the whole of the BMC development and reorganization programme will be disrupted. This would seriously disrupt this country’s export drive and the balance of payments.’

A request that Mr D Senior, the Ministry Inspector, should hold evening sittings for the Cofton Hackett residents was refused. Dick Etheridge, the Longbridge Convener of Shop Stewards, announced that if it were granted he wished to bring 15,000 BMC workers to give evidence on the other side.

Geoffrey Eyre, the company’s Building Projects Engineer, said the Longbridge works produced three vehicles every two minutes. It was hoped to increase the rate to more than two vehicles a minute. To do this it was necessary to carry out a rebuilding programme requiring a complicated series of moves by departments: this could not be done unless the corporation had a new 300,000sq ft building.

Employees back the expansion plans

The next day BMC’s plans to extend their Longbridge, factory in the face of local opposition was supported by representatives of their 23,000 employees. 
Dick Etheridge, Convener of the Austin Shop Stewards, said he was mainly concerned with the employment position. Expansion was necessary so that employment could be maintained in increasing automation.

The winter of 1962/63 was famous for its snowfall, which disrupted BMC’s production as workers struggled to get to and from their places of employment. On 7 January BMC at Longbridge took advantage of the heavy snowfalls to unveil its latest version of the ADO15 Mini platform.

This was the public debut of the Moke, albeit in a twin-engined form. Images of this event have been published in many books, but not many people know that it took place a full year before the standard single-engined Moke went on sale to the public.

Twin-engined Moke previews production model

Various personalities were seen driving the twin-engined Moke through the snow outside the Longbridge office blocks including journalists, Alec Issigonis, Charles Griffin, who was BMC’s Chief Engineer, Cars, and even comedian Norman Wisdom who was appearing in a pantomime in Birmingham.

Twin-engined Mini Moke

In a New Year message published in The Guardian on 11 January, BMC Chairman George Harriman wrote:

’Every time one of our factories fails to produce maximum output we start a downward spiral of higher costs, less competitive power, fewer sales, lower production and higher costs again.

‘In the past few years, often we have been face to face with the risk of the downward spiral… To have increased our potential by this amount is a great achievement in itself. But the real and essential achievement will only be realised when this capacity is fully occupied and a million vehicles a year are actually being produced.

‘Every time one of our factories fails to produce maximum output we start a downward spiral of higher costs, less competitive power, fewer sales, lower production and higher costs again.’ – George Harriman

‘This is the foundation of our success. Only by achieving the highest output for which our factories have been planned can our costs be kept down and prices kept competitive. We must all remember it is the customer who counts.’

Harriman promises to put the customer first

George Harriman
George Harriman

He added: ‘…And we shall only keep in his good books if we offer value for money, which means not only the price but the product must be right, right not only in design but in its quality of materials and finish and in its continued serviceability and reliability in use. We have a good reputation in these respects but, in common with other manufacturers in this country and those on the Continent, we are not always entirely free from criticism.’

On 14 January 1963, President Charles De Gaulle of France vetoed Britain’s attempt to join the European Economic Community (EEC) – otherwise known as the Common Market.

At a stroke, George Harriman’s strategy of refocusing BMC towards the European market by developing high technology cars that required high volume to be profitable became invalid. From this point BMC became dependent on the domestic market, EFTA, the Commonwealth and anybody else that would buy their products despite trade tariffs that inflated their retail price.

Vetoed from joining the EEC – effects soon felt

For the American-owned manufacturers Ford of Britain and Vauxhall, failure to join the EEC meant they could continue to sell to the EFTA members without interference from Ford of Germany and General Motors’ other European subsidiary, Opel.

With their sales ultimately restricted by the strength of the British economy, it became vital that they manufactured cars that were profitable on what were relatively low volumes, hence the need for cost control in all areas, and this discounted the development of more costly front-wheel-drive cars.

Many of the historical accounts of this period were written in the 1980s, when Ford was omnipotent in Britain. BL could not get it right, and UK-centric writers lauded Ford for its marketing brilliance in selling its made-to-a-price cars to conservative fleet buyers. We argue that rather than BMC making enormous management blunders, circumstances had panned out in Ford’s favour.

Why BMC’s losses were Ford’s gains

In the Mini and 1100/1300, BMC had two of the most advanced family cars in the world and there would have been everything to gain from an early-1960s entry into the EEC. It would have meant the end of the 30 per cent trade tariff on imported EEC cars. This probably would have hurt UK sales of BMC’s more conventional cars, along with those of Ford, Rootes and Vauxhall.

But did France, Germany and Italy really have anything as good as the Mini and BMC 1100 at the time? From this point, the British and European design ethos behind a profitable car began to diverge as the fleet buyers requirements held sway in the UK.

In January 1963, the situation did not seem that serious: BMC had still not peaked. And of the European motor manufacturing countries, only West Germany produced more. However, as the decade wore on, the EEC’s car market expanded, and Britain was left behind.

What could BMC have done to halt the coming decline?

If one is to use the luxury of hindsight, it could be argued that this was the moment that BMC should have axed the forthcoming 1800 saloon. If Alec Issigonis and BMC had researched in detail new car registrations for 1960, they would have noticed that a mere five per cent of cars were in the 1700cc-1800cc sector, while 19.6 per cent were between 1400cc-1500cc, a statistic that did not go unnoticed by Ford UK’s Product Planners led by Terry Beckett.

On 25 January, agreement was reached on further night-shift working at Cowley. Night shift working was to be extended the next month to a further 1000 workers to produce 800 more cars a week. The men had agreed to work alternately two weeks on days and two weeks on nights.

Morris had recruited several hundred workers in recent weeks to enable them to extend shift working.

BMC’s overseas launches

On 1 February, the first New Zealand-built Morris 1100 rolled off the production line at the Newmarket plant (above). Then, on 18 February, BMC announced that their Austin and Morris cars and commercial vehicles were to be built in Portugal.

Assembly would be undertaken by Industria de Montagem de Automoveis Lda. (IMA), in a new factory then under construction near Setubal, a port 25 miles south of Lisbon. The newly-formed company was a joint enterprise of BMC’s two distributors- JJ Goncalves, Sucrs., and AM Almeida. Lda., in co-operation with BMC.

The association thus established provided for full-scale technical assistance which would enable the use of certain Portuguese-made components to aid the development of a national industry. This new plant would provide capacity for around 600 vehicles a month. Production of commercial vehicles was expected to start in mid-1963 and of passenger cars by the year-end. Initially, employment would be given to about 200 persons.
 At the time BMC held 15 per cent of the Portuguese market.

ADO16’s waiting list grows

Two days later the Daily Mirror reported that BMC was producing 2300 Morris 1100s (above) a week, but there was still a waiting list.

In March 1963, the report ‘The Reshaping of British Railways, better known as the Beeching Report was published. The report is remembered for advocating the slashing of unprofitable branch lines and has been credited with causing a surge in the number of driving test applications. Whether the publication of the report caused an increase in car use is more debatable.

Also in March 1963, Mini Minor production ceased at Motor Assemblies in Durban during this month after 2424 cars. From then on, until 1983, all South African Mini production was at Blackheath near Cape Town.

On 2 April, BMC announced a new version of the Mini Cooper, the 1071S. This featured a new 70bhp A-Series engine developed jointly by Morris Engines and BMC consultants Downton Engineering. Featuring a new larger block and expensive materials, it retailed at a higher price than the existing Mini Cooper, which it supplemented.

BMC posts successful results

On 18 April BMC revealed its trading profits for the first 32 weeks of the financial year, which were some £3 million, or 55 per cent, higher at £8,500,000. 
This sharp rise was only partly due to an increase in output. Total production in the period rose about 17 per cent, from 385,720 to 454,122 vehicles. The value of exports rose by 27 per cent.

The company also announced the appointment of Alec Issigonis to the corporation’s board. The man himself was at Monza in Italy, where BMC announced that Innocenti of Milan, the Italian company, which had assembled more than 40,000 Austin A40 saloons since 1960, was to take on assembly of the Morris 1100.

The Milan company planned to produce more than 12,000 Morris 1100s before the end of the year, while continuing assembly of the A40, already running at a rate of more than 20,000 cars a year.

Innocenti success for BMC in Italy

James Bramley, BMC’s Export Director, said that the Innocenti-BMC association had led to substantial progress in consolidating the market for British cars in Italy, and this progress would now be accelerated. They were confident that the Innocenti Morris – to be known as the IM3 – would find an enthusiastic following in Italy.

The IM3 designation was chosen because the BMC 1100 was the third BMC model to be assembled by Innocenti, the others being the A40 and the Spyder, a sports car embodying Austin Healey Sprite components and of which more than 5000 had been built since 1960.

Italian motoring correspondents tested the Morris 1100 at Monza, and praised its lively performance, disc brakes and front-wheel drive. 
Alec Issigonis, the Technical Director of BMC, said: 
’They were enthusiastic about the car and all told me it will do very well in Italy.’ After Britain’s failure to gain access to the EEC car market, a deal with Innocenti was a back-door entrance.

BMC 1100 goes from strength to strength

On 6 May, a BMC spokesman revealed that production of the Morris and MG 1100 saloons had reached 3750 a week at Cowley. This was expected to be 4500 a week by mid-summer, but some customers had been waiting for nine months, and demand at home and abroad was still mounting.

About 40 per cent of the cars were being exported, assembly had begun at the Innocenti works in Italy and nearly 70,000 models had been produced since their introduction in August 1962. Despite BMC’s confidence, Cowley was plagued with industrial disputes. It seemed that no sooner was one resolved then another broke out.

In the first five months of 1963 there had been 134 strikes within the British Motor Corporation

Output of the Mini was running at 5500 a week, out of a total car production figure by the corporation of 15,000. BMC hoped that by the end of 1963, when its £49 million expansion programme was complete, total vehicle output would have reached 20,000 a week – or one million a year.

Personnel changes in the corporation

On 8 May, BMC announced the appointment of Harold J. Graves as Deputy Chairman of the British Motor Corporation (Australia) Pty. with effect from 1 August 1963. 
Mr R.L. Abbott was appointed Managing Director of BMC (Australia) as from 30 June 1963 in succession to Mr Graves, who now retired as an executive of the company on that date, after holding the office for four years. Mr Graves now also retired as a local director of that company.

On 30 July, BMC announced more appointments. Retiring at the end of the month after a long and distinguished career was Reginald A. Bishop, Director of Publicity. 
He was succeeded by Brian Turner, Deputy Director of Publicity for BMC since 1960.

Turner was succeeded by Mr John J. Field, Publicity Manager of the Nuffield Organization since 1957. Field was a wartime RAF pilot who had joined the Nuffield Organization in 1948.
Two new posts were created: Samuel A.C. Haynes, Publicity Manager of the Austin Motor Co. became BMC Publicity Manager (Home) and R.C. Harrison, Deputy Publicity Manager, Nuffield Organization, became BMC Publicity Manager (Export). Samuel Haynes had joined Morris Commercial Cars Limited in 1926.

Strikes, resignations and car developments

In late June more than 150 workers at the Morris Motors foundry at Wellingborough, Northants, went on to a four-day week because tractor production had been transferred to the new Bathgate factory in Scotland.

The same month Sir Henry Spurrier of the Leyland Motor Corporation resigned his chairmanship. His replacement was Sir William Black of the newly-absorbed ACV, much to the chagrin of Stanley Markland, who had been the anointed successor.

The Daily Express interviewed the BMC Chairman and Managing Director, George Harriman, in an article published on 8 August. Although the article was wordy, the only relevant and direct quote attributable to the BMC boss was: ‘People want a functional car with the smallest overall package but the largest space inside. Not to big, but it must be the latest in line and in mechanics.’

These were words that could have come direct from his Technical Director, Alec Issigonis.

BMC 1100 to live for another decade!

On 19 August George Harriman made the startling announcement that the BMC 1100 was to be in for a production run of at least ten years.
This, he said, would give the additional advantage that the customer’s investment was not swept away by a new version coming out within a year or so of his purchase.

In the year since the introduction of the 1100, production of Morris and MG 1100s had passed the 110,000 mark and was running at 4000 a week – of these, 44 per cent were being exported. Demand still greatly exceeded supply, but by November 1963 they would be producing 6000 a week in their different versions, so Mr Harriman claimed.

As it turned out the last BMC 1100 derivative was produced in June 1974.

End of one era

Lord Nuffield in 1962

Three days later Lord Nuffield (right), formerly William Morris, the founder of Morris Motors, BMC President, and philanthropist died at his home, Nuffield Place. He was aged 85.

On 2 October his will was published. The President of BMC left his home and about £500,000 to the Oxford college which bore his name. Two other colleges benefited from his will – Worcester and Pembroke. Both got £10,000.
 He left £3,252,764 gross. The net-amount was £3,154,885. Duty paid was £2,424,354.

Among the beneficiaries were George Harriman, who received 62,232 ordinary 5s shares of BMC stock, and James Woodcock, Deputy Chairman of Morris Motors Limited, who received the sum of £5000 ‘in recognition of his loyalty to me and to that company.’

And the beginning of another…

In its 28 August issue, The Guardian described the new Car Assembly Building 2 (CAB2) at Longbridge, which had now come into full operation.

CAB2 was described as a new, highly-mechanised car assembly building, with a capacity of 2500 cars a week. It would increase the capacity of the factory from 8000 to 10,500 vehicles a week.

The new building, which was for paint, trim, finishing and final assembly, was one of the biggest single contributions to BMC’s expansion plans under which productive capacity was planned to rise to 1,000,000 vehicles a year.

Initial production had begun in the glass-sided, 960ft long building earlier in 1963 and a proportion of Morris 1100s had been produced there to supplement output at Cowley. Full production on both assembly conveyors, each capable of dealing with 1250 cars a week, was now within reach, so the article said.

Quality improvements, faster manufacturing

The article described BMC’s quality checks and then quoted Harold Cross, Superintendent of the Car Assembly Planning Department as saying, ‘We think this new building will apply the most searching quality checks that have ever been known in motor vehicle manufacture.’

Two days later, and four years after its launch, BMC claimed that a total of 662,337 Minis of all types had been produced, and that 200,000 had been exported, with 50 per cent to Europe and 25 per cent to Australia. It was particularly successful down under, where the Mini was the second-best selling car after the locally produced Holden. BMC was by now producing 5750 Minis every week.

On 2 September, BMC announced some more appointments in its home sales division. Bill Hooper was to be Fleet Sales Supervisor; Christopher F. Milner was to be Home Market Co-ordinator; and I.E. Hennell was to be Riley Sales Manager. Milner had started his working life with Harrods in 1938 before wartime army service. Demobilised as a Major in 1946, he had joined Nuffield Exports Limited in 1949.

Austin model joins 1100 lineup

On 6 September 1963 the Austin version of the 1100 was announced.
 Production of the BMC 1100 was by now running at 5500 a week, and this was coupled with a weekly output of 6000 Minis.

With CAB2 on stream and with both Austin and Morris 1100s on sale to supplement the Mini, it was now full steam ahead for BMC.

In October, BMC unveiled another variant of the 1100, the Vanden Plas Princess, at the London Motor Show. Also making its debut was the Rover 2000. Shortly after, this Standard Triumph announced the Triumph 2000 for 1964 delivery. BMC may have had the right cars below 1100cc, but Ford had the right car for the fleet markets in the form of the Cortina; and the new 2.0-litre cars from Rover and Triumph would soon render larger-engined executive cars obsolete.

BMC Competitions gets serious

The BMC Competitions Committee held its monthly meeting at Earls Court, where the Motor Show was taking place. It decided to respond to the challenge from Ford by, ‘the development of single- and twin-overhead camshaft, five-bearing crankshaft, engines, in the A-Series (of 1000cc and 1300cc) should be pursued for use in advanced versions of the Mini Cooper S.

‘Development should go ahead on a seven-bearing 3.0-litre power unit for the MGB, possibly using single OHC on an aluminium head. Modification to the MGB to accept this engine should proceed in parallel. 
Target date for production May 1964.’

The A-Series was indeed enlarged to 1300cc, but remained resolutely overhead valve until the end of production in 2000, while the only 3.0-litre MGB produced was the ill-fated MGC, which used a revised version of the lumpen C-Series engine.

Profits double as output rises

On 6 November, BMC unveiled its financial results. Trading profits more than doubled to £21,970,470 in the year to the end of July 1963. This compared with £10,083,043 a year earlier.

Record production of 748,470 vehicles in the company’s financial year was announced at the beginning of August 1963. Based on these figures, BMC was making £29.35 profit for every vehicle it made.

Five days later a BMC spokesman was quoted by the Daily Mirror as saying: 
’We are now working at the record level of 18000 vehicles a week. Our prospects for the immediate future are excellent.’

On the day President John F. Kennedy was assassinated, George Harriman said in the yearly report, which was issued to its shareholders: ‘The immediate prospects are excellent, and we are preparing for the wonderful opportunities that the more distant future may have in store.’

BMC’s greatest success: small cars

Output rose to 748,470 vehicles, but in the last month of the financial year, production was running at the rate of 900,000 yearly. George Harriman revealed that whereas in the previous year 60 per cent of his sales were cars below 1000 cc, in 1962-’63 the proportion rose to 73 per cent of total output.

The BMC Chairman made the point that this made the company more than ever dependent on vast production in order to boost profits. With the profit on Minis far smaller than on the bigger cars, George Harriman said that a further lift in output was ‘the vital need.’

George Harriman was clearly aware that BMC depended on volume to remain self-sufficient. The Times claimed that the net profit on each Mini had been little more than £5, and that their market outside Europe had been negligible. Quite what that meant is difficult to quantify.

A mixed end to the year

The Mini was a success in Commonwealth countries and in the EFTA nations but, due to trade tariffs, had not replicated that success in the EEC where rivals like the Citroën 2CV, Fiat 500, Renault 4 and Volkswagen Beetle were considerably cheaper.

In December, it was revealed that Stanley Markland, once the heir-apparent to the Leyland Motor Corporation and the man who knocked Standard-Triumph into shape, was to leave the company at the end of 1963. The corporate reshuffles at Leyland in 1963 enabled a certain Donald Stokes to move further up the ladder.

During the same month, the Longbridge factory produced the first seven Mini Mokes as production stuttered into life. The next vehicles did not emerge until June 1964. In 1963, the Mini and BMC 1100 clearly hurt demand for the rival Ford Anglia, but this was more than compensated for by the runaway success of the new Ford Cortina.

BMC had the right car for the private buyer, but Ford appealed to fleet buyers.

Back to History : The BMC story – Part Four : 1962 – Big Brother arrives

Forward to History : The BMC story – Part Six : 1964 – The full Monte

Ian Nicholls

Born in Bedfordshire but now residing in Norfolk, Ian Nicholls is an ardent BL enthusiast. Currently he owns a Jaguar and two classic Minis. A stalwart of the Norfolk Mini Owners Club for nearly a decade he is an enthusiast for all things Issigonis. A stickler for historical accuracy he has recently performed the marathon task of mining the online newspaper articles for all BMC>MG related stories. Ian is unable to help with technical queries – he pays other people to fix his cars!

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4 Comments

  1. While 1960 new car registrations in the 1400-1500cc sector were 19.6%, is it known what the percentage of new car registrations in 1960 were in the 1500-1600cc sector, especially since ADO17 was originally conceived as a 1600cc engined car prior to growing into a 1800cc car (that arguably would have been better off receiving a 2000cc unit)?

    What other 1400-1500cc engines did BMC have in development? Aside of course the existing B-Series which even in 1489-1622cc form would not be able to compete against the 1.5/1.6-litre Kent engines used in the Ford Cortina?

    It was not until the late-1960s that BMC finally had an engine of similar displacement with the E-Series, unless there was a way to bring the E-Series or narrow-angle V4 prototype (of similar displacement) to production.

    Or would BMC have been better developing a 1400-2000cc B-OHC, possibly even a reliable full production version of the B-Series Twin-Cam?

  2. Nate : the vast majority of Cortinas were the 1198cc version ( later when the 5 bearing engines arrived c.1967 , 1297cc) .The 1498 and 1600 engines in the Mark 1 and mark 2 Cortinas were very much a minority interest.

    • That may be case, point is that BMC did not have an equivalent FWD model in the 1400-1600cc segment which is where ADO17 should have originally slotted into.

  3. It seemed in 1963, things seemed to be only getting better and better for BMC. In general 1963 was a very good year for the British car industry, with the Rover 2000, Triumph 2000, Vauxhall Viva and the Hillman Imp appearing, all of which seemed very competent and modern cars.

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