People : Forgotten chairmen – Sir Austin Bide
Every BMC/BL/Rover fan has heard of Lord Stokes, Sir Michael Edwardes and Sir Graham Day. They were the most famous chairmen of British Leyland.
But three other men occupied the post after Lord Stokes: Professor Sir Ronald Edwards, Sir Richard Dobson and Sir Austin Bide. Here’s the story of the last. By Ian Nicholls.
3: Sir Austin Bide
Sir Austin Bide was the man principally responsible for the transformation of Glaxo from a company best known for its baby foods into a world force in the pharmaceutical industry. During a 40-year career at Glaxo, he created a coherent group from a disorganised collection of companies and, vitally, doubled its expenditure on research.
Bide’s route to the top was neither easy nor straightforward. He was born in on 11 September 1915, the son of an artillery officer, Ernest Bide, who was killed at the Third Battle of Ypres two years later. The family lived in Kensington where regular trips to the Science Museum kindled in the young Bide an early interest in science.
As the child of a relatively humble background, university was not an option, and at the age of 17 he went to work as a government scientist. But he spent his evenings and weekends studying for a degree in chemistry at Birkbeck College and Chelsea Polytechnic, and in 1939 he was awarded first-class honours, an unusual achievement for a part-time student. In 1940 he tried to join the Royal Air Force, but was seconded to work for Glaxo as a research chemist at its laboratories in Greenford, west London, where he worked on the synthesis of vitamin B1 and then on the development of penicillin.
By 1947, at the age of 32 he had risen to be head of technical research. Four years later, he was entrusted with supervising the construction of a new factory at Montrose in Angus to produce penicillin, where he showed foresight in acquiring an additional 33 acres of land to cope with future extensions. His career took a curious turn when he was appointed first deputy company secretary and then, in 1959, company secretary, in what would normally have been a peaceful corporate backwater.
But in that post Bide saw the company’s activities from a head office that was lacking in any coherent control. His reputation was greatly enhanced by being one of a small group that successfully fought a takeover bid by Beecham, then best known for its pills and products such as Brylcreem, but which also had a flourishing penicillin business. By that time, Glaxo’s chairman was Sir Alan Wilson, a former director of Courtaulds, who had helped fend off an unwelcome bid by ICI.
Unfortunately Wilson simply could not cope with the situation and had a nervous breakdown, so the defence was left to a small group of younger executives, among whom Bide played a prominent role. Fortunately for Glaxo, in 1972 the Monopolies Commission ruled that the takeover would damage Britain’s research efforts into new drugs (though Bide lived long enough to see his company merged not only with Beecham, but also with the American firm Smith Klein).
The Commission also ruled against a proposed merger with Boots, at the time Glaxo had a substantial wholesale drugs business that it could have brought to the joint group. As deputy chairman (from 1971), Bide had already started planning the transformation of the group. His first step had been to merge the group’s numerous wholesalers into a single company and he planned to sell some of Glaxo’s unprofitable subsidiaries.
Bide was the natural candidate for the chairmanship when Wilson retired in 1973. He had worked for the company for more than 30 years, and had wide experience as a research chemist, factory manager and company secretary. He also took over as chief executive, serving in the post until 1980, and as chairman until 1985. Bide believed in sound administration and disliked the general corporate disorder of Glaxo’s UK subsidiaries, chaos which Wilson had done nothing to sort out.
He had already started a process of structural reform by rationalising Glaxo’s technical divisions which followed on from the creation of Glaxo Holdings the previous year. He then implemented the so-called “Orange Book” in which he had set out his plans, and transformed the structure of a group that had expanded rather haphazardly over several decades into that of a normal business, involving a Group Management Committee with directors responsible for different parts of the group. But he was tactful enough to ensure that the process of centralisation and the instillation of a group culture was not overly brutal so that the goodwill of such well-known subsidiaries as Allen & Hanbury was not dissipated.
Bide could be ruthless, but he was also one of the rare British executives to practise “management by wandering”, notably by informal visits to laboratories to meet the young researchers who were following in his footsteps. The year before Bide took over as chairman, Glaxo had opened a new pharmacology laboratory which led to the discovery of its most profitable drug, the anti-ulcer treatment Zantac. But during his chairmanship he greatly expanded Glaxo’s research activities, in the 10 years to 1982 they went from 3.8 to 5.8 per cent of the group’s turnover, and produced a steady flow of new drugs.
Bide’s other major contribution lay in instigating Glaxo’s expansion in the United States, where it had previously had only a small sales and marketing organisation. In early 1978, Glaxo took over Meyer’s, a modest family-owned pharmaceutical company based in Florida, at a cost of just £18 million. This modest purchase was greeted in the British financial press “with a sigh of disappointment”, but Bide revealed his strategy, and indeed his whole attitude to business, in a rare interview with The Times: “We thought it sensible to start with a business that was viable ab initio. We did not have the right to be over-venturesome. The US market can be a dangerous place for the unwary.”
And indeed, the purchase led to an unimagined expansion in the years following Bide’s chairmanship, largely due to the success of Zantac. Even before Bide retired as chief executive he had started to take on some outside roles. The first was rather unfortunate, as a director of J Lyons, formerly Britain’s leading caterer, which was in freefall after taking out a disastrous loan in Swiss francs in the early 1970s just as sterling was starting its precipitate descent.
But he was best known as a director and then, from 1984 to 1986, chairman, of Britain’s most expensive industrial casualty, the nationalised vehicle manufacturer British Leyland (BL). He arrived in 1977 as part of the clean sweep that brought in Michael Edwardes to try to rescue a group on the verge of meltdown.
Following his success at Glaxo, by then one of Britain’s most successful industrial concerns, Bide was justified, though unwise, in claiming that “my expertise in management is total”. It wasn’t. He was totally unused to coping with the tangled mess of competing trade unions, which were such a feature of life at BL. Indeed, at Glaxo, Bide had tried to avoid recognising unions by giving the existing “advisory committees” negotiating rights.
A private, generally unobtrusive personality, he was also unused to the unrelenting glare of publicity, which accompanied anyone involved with British Leyland. Edwardes himself was unstinting in his praise of Bide, writing that he “proved to be a tower of strength as we hit problem after problem”, particularly in providing support during Edwardes’ early confrontations with the unions and shop stewards like Derek Robinson. The history of the Edwardes era is cast in stone in the 1983 book ‘Back From The Brink’ in which Sir Michael left his version of events for posterity, claiming that by the time he left British Leyland in late 1982 he had greatly improved the situation, albeit at the cost of substantial government support.
Even Mrs Thatcher admitted in her memoirs that “there had certainly been improvements. Productivity was up, days lost by strikes were down, losses were down. But the management was still poor. Moreover, the same old bromides were used to justify failure. Next year or the year after was always the time when losses would be turned to profit as long as new investment was provided by the taxpayer today… Forecasts were always being revised downwards and then not met.”
When Sir Michael Edwardes joined British Leyland in 1977 its UK market share was 24.3% and it produced 651,069 cars. When he left its market share was 17.8% and it produced 383,074 cars. Was this success?
Sir Austin Bides appointment to the top job at British Leyland, succeeding the ebullient Sir Michael Edwardes (whose contract had not been renewed by the Conservative government), was not a public relations triumph. In the company reorganisation that accompanied his appointment the chairmanship was made non-executive, and the press had a field day with the man who was allegedly being paid £65,000 a year for a two-day week.
Press profiles dwelt on Bide’s unobtrusiveness, a portrayal he lived up to by going to ground. “Characteristically,” said the FT, when it came to commenting on his new position “Sir Austin was unavailable.” But Patrick Jenkin, the industry secretary, was said to feel that he had found the right man to take BL, or profitable parts of it, into the private sector, a key pledge in the Conservative Party’s 1983 manifesto.
As someone who had spent the best part of a decade with one foot in BL and the other in Glaxo, one of Britain’s most profitable and go-ahead industrial companies, Bide was said to have a unique perspective on industrial management and was well respected for his strategic sense and financial acumen. Sir Austin Bide inherited Michael Edwardes management team minus the man himself, who would not be around when the full fruits of his five year tenure at the helm of BL reached the showrooms.
Bide believed that his role was “getting BL to the point where someone may want to buy it”. But he was recorded as saying;
“I do not believe that the technological change on which the country’s future depends is any better managed in the private rather than the public sector. I am not sure that BL will attract better workers or managers if it were out of the government’s hands.”
At the end of 1985 he succeeded in persuading General Motors to buy Land Rover and Ford to buy Austin Rover, and to take them off the hands of the long suffering British taxpayer. But the timing proved fatal. In early 1986 Thatcher was battered by the resignation of Michael Heseltine over selling Westland to the Americans and was unprepared to allow a much larger British group to be sold.
In 1984 British Leyland had managed to sell off Jaguar, but a vicious price war between Ford and GM ensured that Austin Rover’s lacklustre mid-range cars, the Maestro and Montego, struggled and BL’s target of 20% market share was never reached. Unfortunately Margaret Thatcher’s gloomy assessment of British Leyland was on the money. The much vaunted Metro appears to have been bought by and large by former Mini owners, and talk of manufacturing 350,000 Metros a year, which had been mooted in 1977, was now pie in the sky as consumers increasing turned towards the Mk2 Ford Fiesta.
The early Maestros and Montegos were unreliable and badly built, and the effective Austin Rover PR machine could not hide this fact from the fleet buyers who had the running costs of the competing cars at their fingertips. Repeat orders dried up and British Leyland’s recovery programme not only stalled, but seemed to go backwards. To make matters worse, the Maestro and Montego were launched into a rapidly expanding car market. The UK based car manufacturers had screamed for decades for a buoyant expanding car market. When it finally arrived in 1983 and for the rest of the decade, by and large the customers bypassed the Austin Rover showrooms.
Sir Austin Bide’s fate was sealed when BL applied for £1.5 billion more aid in 1985 to compete with General Motors impressive range of front wheel drive cars. This was not what Mrs Thatcher wanted to hear. The Maestro and Montego had been approved and signed off for production by the Edwardes era management team and they ultimately carried the can for it.
In March 1986 a Thatcher favourite, Graham Day, was brought in from British Shipbuilders to replace Bide as full-time chairman, later to succeed in selling BL to British Aerospace in 1988. Also clearing their British Leyland desks were Ray Horrocks, Harold Musgrove and Mark Snowdon. Ray Horrocks had hoped to succeed Sir Austin Bide as chairman.
Until his late eighties, Bide was involved in a wide variety of activities: he was a member of the Adam Smith Institute and had an active role at the National Aids Trust. He was also a staunch early supporter of the Open University. His other major concern was the restoration of Salisbury Cathedral, a cause dear to the heart of his friend Edward Heath. He married Irene Ward in 1941. She and their three daughters survived him.
Sir Austin Bide died on 11 May 2008.
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