Essay : The road to 2005 started in 1985…

Carole Nash Classic Insurance Specialists

Ian Nicholls

In the first of our 2005-themed articles to mark the tenth anniversary of MG Rover’s demise, AROnline Contributor Ian Nicholls puts forward a well-constructed argument that the beginning of the end was 20 years sooner.

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1985 – THE DEFEAT OF AUSTIN ROVER

It may have been the year of Live Aid, but 1985 was also the year that it finally became apparent that Austin-Rover, the latest name for the volume cars division of British Leyland, had no hope of competing in the big league. All the investment by the taxpayer since 1975 had failed to revive BL’s volume cars division, and Austin Rover had only themselves to blame, as will be revealed.

In January 1986, the ’85 UK car sales figures were published. They made grim reading for Austin-Rover. The fierce showroom price war pushed new car sales in Britain to an all time high that year. The every-street-corner Escort was the most popular car of the year, and Ford commanded an overall share of 26 per cent. Austin Rover trailed with 17 per cent, and Vauxhall was close behind with 16 per cent. The number of imported cars — including Ford and Vauxhall cars made abroad — sold in Britain rose to 58 per cent.

The ten top selling cars for 1985, were:
1: Ford Escort
2: Vauxhall Cavalier
3: Ford Fiesta
4: Austin Metro
5: Ford Sierra
6: Vauxhall Astra
7: Austin Montego
8: Ford Orion
9: Vauxhall Nova
10: Austin Maestro

Ford's Escort Mk 3 - a very rare sight today, but by far the best seller in 1985
Ford’s Escort Mk 3 – a very rare sight today, but by far the best seller in 1985

New car sales in Britain totalled 1,832,408, 4.7 per cent up on 1984, and a further two per cent more than 1983, the previous peak. Analysis of the list reveals that the Maestro was even outsold by the Ford Orion, the booted derivative of the Ford Escort. Total Montego production for 1985 was 95,874, a similar figure to that of the Morris Marina in 1979, when that model was eight years old and overdue for replacement. Total Maestro production for 1985 was 88,849, a little more than the Allegro in 1978, when that model was five years old.

Austin Rover Production in 1985
Rover SD1                                        15,916
Austin/MG Montego                    95,874
Austin/MG Maestro                     88,849
Austin/MG Metro                         174,666
Mini                                                    34,974
Rover 200                                        65,844
Total                                                  476,123

Longbridge produced a creditable 275,484 cars, the best total since 1971/72. The Metro had its second best year, even though there were now better rivals on the market, the Honda-based Rover 200 continued to thrive and the veteran Mini still found some customers, even though Austin Rover Chairman Harold Musgrove thought it took volume away from the Metro.

Furthermore, 1985 was the first full year that all the cars funded by the state in the aftermath of the 1975 Ryder Report were on sale: the Metro, Maestro and Montego. They were all meant to be more competitive products than the Mini, Allegro, Marina/Ital and Princess.

The Maestro and Montego were built at Cowley, where the Rover SD1 was also now assembled, production having transferred from Solihull in 1981-82. Cowley built 200,639 vehicles. Austin Rover production had now slipped back to the kind of level last seen before the opening of Car Assembly Building 2 (CAB2) at Longbridge by BMC in 1963. Most of Austin Rover’s problems were focussed on the cars built at Cowley, once the most militant plant in the BL empire. But the world was moving on.

The changing industrial relations climate in Britain would mean that Austin Rover could no longer blame militants amongst its own workforce for its poor market share. The sun was rapidly setting on the era of trade union power. The long Miners’ Strike of 1984/85 was the last throw of the dice by the labour movement. Ostensibly a dispute over pit closures, the long-awaited confrontation between the shock troops of the labour movement, the miners, and the Thatcher Government, which had introduced hated new laws restricting union power, was a fight to the finish.

Mrs Thatcher inspects a rather plush Maestro - just the thing for ministerial transport?
Mrs Thatcher inspects a rather plush Maestro – just the thing for ministerial transport?

From a strategy point of view, the miners got it all wrong. The Thatcher Government had been re-elected only six months before the dispute began with a thumping 147 seat majority, and in expectation of a confrontation, had began stockpiling coal to see it through a dispute. The strike began in the new year of 1984 after the worst of the winter had passed. The police were organised on a national basis and, for all the talk of solidarity, the rest of the trade union movement failed to strike in support of the miners in order to paralyse the state.

Sympathy strikes had been illegal since 1980, but unlike the early 1970’s when the unions had openly defied the Heath Government’s Industrial Relations Act 1971, the will to take on the state was no longer there. One union did, however, try to defy the new employment laws. This was the Transport and General Workers Union, led by Moss Evans.

In November 1984 there was a pay strike at Austin Rover. The 1984 Trade Union Act demanded that for a strike to be legal, a secret ballot had to held. Alone among the Austin Rover unions, the TGWU refused, canvassing its members views by the time honoured way of a show of hands, in open defiance of the Thatcher Government.

Mostyn 'Moss' Evans, shortly before his death in 2002
Mostyn ‘Moss’ Evans, shortly before his death in 2002

Austin Rover took the TGWU to court and the strike collapsed after two and a half weeks and the loss of 86,000 cars. Unlike a decade before, the union movement decided to toe the line and obey the law of the land.

With the chaotic industrial relations scene in Britain at last calming down and ‘continuous production’, to use a euphemism of the time, becoming the norm, all Austin Rover now had to do was produce its way to prosperity. 1985 was the first year anyone could remember where there had not been a strike in the Cowley assembly plant.

On 11 March, 1985 the Rover 216 Vitesse was announced followed by the MG Montego Turbo on 3 April – a promising start.

With cars like the 216 Vitesse, Austin-Rover was putting its best foot forwards - but it wasn't enough...
With cars like the 216 Vitesse, Austin-Rover was putting its best foot forwards – but it wasn’t enough…

However, BL’s latest financial results revealed that Austin Rover was still struggling. The group’s total vehicle sales had fallen from 564,000 to 511,000. Austin Rover made an operating loss of £26 million in 1984 against a profit of £3 million in 1983.

A sign that perhaps engineering partner Honda was using Austin Rover as a Trojan horse in order to gain access to the lucrative European market was revealed on 12 April, when Honda opened its new distribution centre in Swindon. This gradually mutated into an engine plant then a full-blown car factory, as opposed to an alternative strategy of purchasing Austin Rover and turning that into its European division.

BL now came under pressure from the Government to reduce its financial demands from the state by £250 million and to co-operate more with Honda over a new engine to replace the A-Series.

Brian Fox of Austin Rover told The Times newspaper that, if the Government went ahead with plans to cut Austin Rover’s investment by £250 million, it would be “criminal in the extreme… Their attitude horrifies me. I think the Government are annoyed because Austin Rover’s recovery has embarrassed them. They wanted to sell Jaguar, and later Unipart, while Austin Rover lost more and more money until it became politically acceptable for them to close it down or sell if off to the Japanese.”

According to Mr. Fox, despite some temporary setbacks, Austin Rover had made a most remarkable recovery and was ready to “cash in” on the sacrifices of the past years. To leave it short of funds at this time would monstrous. Mr. Fox, who had responsibility for the plants at Longbridge and Cowley, said it was imperative that the company should retain the ability to design and manufacture its own engines.

“I am not against the kind of collaboration with Honda, which saw us producing the Triumph Acclaim and now the Rover 200 from Japanese designs under licence. They fill an obvious gap in the car range. But, when it appears that we shall have to buy complete engines from Japan at the expense of our own manufacturing capability and jobs, that makes me sick to the bottom of my stomach.”

Brian Fox resigned in protest.

Not long after, Austin Rover Chairman Harold Musgrove gave an interview to CAR magazine. He said: “I want the Musgrove era at Austin Rover to be remembered as the period in which the company becomes a viable, commercial concern.”

Harold Musgrove
Harold Musgrove

He added: “Many foreign companies, whose domestic markets are poor, are putting enormous effort into increasing their UK sales. And when certain other makers are increasing their volumes, yet showing worst profit positions (an obvious swipe at Vauxhall ) it is obvious what they are doing to increase sales. We can’t afford to do that. And they can’t afford to do it ad infinitum. But they do have certain advantages. They bring in most of their cars from overseas – despite being regarded as British manufacturers.

“We’ve made strong technical advances, our long-range product plan has been virtually delivered as promised, and we have improved our cost efficiency – to the point that we are one of the most efficient car makers in the world . Now we have to widen our marketing base. We want 19 per cent of the UK market and we have to concentrate more on export markets. We are already making progress in Europe and, thanks to the new XX Rover saloon, we should be making inroads soon into the USA and Japan. That car will give us a tremendous opportunity in Japan, because it will actually assembled there from CKD kits by Honda. ”

“And no serious car maker can afford to ignore the USA. In a couple of weeks I’m off to America to talk about the setting up there of our dealer network. At the moment we do have too much reliance on the UK market – and that’s bad. With a stronger export base there is more stability, because you can ride out individual market problems and particular currency fluctuations.”

The XX, or Rover 800, never quite met those Japanese or American expectations, despite being technologically advanced, and was hampered by early build quality issues.

On past mistakes in export markets, Musgrove said: “It was a mistake to try to sell British specification cars to overseas markets without adapting them properly to local conditions. We won’t do that again.”

On 18 June 1985, the Government approved BL’s corporate plan, which involved further collaboration between Austin Rover and Honda, the development of a new engine to replace the A-Series and the possibility of Honda building engines for BL at a new factory in Swindon. Norman Tebbitt, the Secretary of State for Trade and Industry, had been persuaded not to slash £250 million off BL’s latest cash injection.

However, only two months later, there was more bad news emanating from Austin Rover. Two hundred Austin Rover assembly workers were to lose their jobs and a further 740 were being transferred to enable production at the company’s Cowley and Longbridge factories to be reduced by 10 per cent.

maestro at cowley
Austin Maestros at Cowley

In a series of factory meetings on 19 August the management told union leaders that the cutback had been forced on them. At Longbridge, Metro production was cut from 4,100 a week to 3,700. At Cowley output of Maestro and Montego models was be reduced from 2,200 to 2,025 and from 2,500 to 2,200 respectively.

Having persuaded a reluctant Government to stump up £250 million to fund what became the K-Series engine, Austin Rover were now admitting they could not sell their products in an expanding market.

On 18 September, Longbridge produced its 10 millionth car. By December Ford had approached the Government about buying Austin Rover, but all that was not revealed until the following year, along with the dire overall sales performance for 1985.

For a long time the Austin Rover publicity machine had managed to convince many observers that the company’s problems in 1985 and indeed 1986 were caused by over-capacity in the industry, discounting by its American owned rivals and the obvious unsympathetic attitude of the Thatcher Government, who found it hard to disguise their contempt for a national asset or what they saw as a national liability.

All these factors may have had an effect to varying degrees in preventing an Austin Rover revival, but with the passage of time we can now see that the main cause of the company’s problems was a self-inflicted one – quality.

Senior BL executives liked to tell the media how efficient Cowley and Longbridge now were, and indeed they may well have been top of the productivity stakes, but it is now quite clear from anecdotal evidence both here on this website and elsewhere, that at plant level Austin Rover quality control was next to non-existent, particularly at Cowley, painful as it is to say so.

Cars were sent to dealerships in appalling condition to be rectified into a more saleable condition by hard-pressed mechanics. One can only surmise that cars were passed by inspectors, under pressure from above, to take advantage of the booming sales conditions then pertaining. Austin Rover appears to have been one of those organisations where managers told their immediate superiors what they wanted to hear, whether it was true or not, in order not to rock the boat. If anyone did raise concerns about Austin Rover quality control, nothing was done about it. Maybe Harold Musgrove and his boss Ray Horrocks genuinely believed Austin Rover had matured into a supplier of quality vehicles, but many of their customers found ownership of a 1985 Maestro or Montego little different from a 1975 18-22 Princess.

Many private buyers were now turning to Volkswagen. VAG UK, now fronted by Michael Heelas, a one time disciple of Filmer Paradise at Austin Morris, introduced the advertising slogan: “If only everything was as reliable as a Volkswagen.”

Whether it was true or not, it worked and VAG UK never looked back. The fleet buyers were burning their fingers with Austin Rover’s products and repeat orders dried up. The surge of optimism that occurred in 1983-4 with the launch of the Maestro and Montego dissipated in 1985 as the customer experience turned sour.

Austin Rover appeared to have learnt nothing from the Rover SD1 debacle at Solihull, where the emphasis on quantity over quality had caused enormous damage to the Rover brand.

At the newly-privatised Jaguar, Chairman John Egan was in the habit of taking a car off the production line home, in order to carry out a spot check on quality control, emulating the company’s founder Sir William Lyons, who died in early 1985.

However, Jaguar was a much smaller operation than Austin Rover, and John Egan was based at Browns Lane, the Jaguar assembly plant. Senior Austin Rover management were based in offices at the former Triumph assembly plant at Canley, so the option of driving a Longbridge or Cowley-built car home was not available to them.

When the overall UK sales figures were published in January 1986, the controversy was not how poorly Austin Rover had performed, but that the Government had the temerity to try and offload the firm to rivals Ford. Ford had a shareholding in Mazda, who were developing the MX-5, and may have had ideas about reviving the MG brand as a global player. The Thatcher Government was forced to back down, amid accusations of trying to sell off a national asset. The viewpoint that Austin Rover was a national asset was probably not shared by many of its customers at the time!

All the Government could do was to try and salvage something from the mess and Graham Day was parachuted in to take over as BL Chairman from Sir Austin Bide. In July 1986 the Rover 800 was launched. Austin Rover Chairman Harold Musgrove told Graham Day that quality was assured from day one. Somehow Graham Day got wind that early Rover 800s were less than perfect and Harold Musgrove found himself looking for a new job in September 1986.

Rover 800 production at Cowley
Rover 800 production at Cowley

Graham Day then set about tightening up the quality issues at Austin Rover, soon to be re-branded as plain old Rover. Sadly, it was at least two decades too late. BMC/Austin Morris was Rover-ised, and co-operation with an increasingly reluctant Honda stepped up. The AR6 supermini project, intended to replace both the Metro and Mini, was canned. Austin Rover had burned its bridges with the Thatcher Government, which with a large majority and having seen off the miners, were in no mood for pussyfooting.

Maybe the Maestro and Montego were stylistically challenged, as related in the development story, but had they been screwed together properly in the first place, then Austin Rover might have stood a chance. With a strike free run in 1985, Austin Rover’s poor performance could not be blamed on the workforce, it was a failure of management to exercise proper quality control.

The extra £250 million that BL had extracted from Norman Tebbitt resulted in the K-Series engine of 1989. However, on later versions of the engine, head gasket failure seemed to come as standard, thus alienating a new generation of customers. What would have happened if the Government had refused to finance a new engine and Austin Rover had bought off-the-shelf Honda units?

Ian argues that the K-Series sounded the death knell for Rover - fair comment?
Ian argues that the K-Series sounded the death knell for Rover – fair comment?

Could it be argued that the road to April 2005 began in 1985?

96 Comments

  1. To me the recovery, public support signed by Metro started to wane when the Maestro was launched. Whereas Metro had youthful appeal Maestro seemed a tad frumpy. Even Acclaim took the edge off a ‘British’ recovery. I thought Montego, however, was a move back in the right direction when launched in 1984. The sleeker front, superior interior gave it a more stylish feel – the ‘opera’ rear window didn’t really bother me unless it was a beige 1.3!

    The Michael Edwardes product led recovery not having worked, I think Graham Day performed miracles. Who could ever have dreamt of the new found image, quality and appeal of cars like the 200 Tomcat. “Above all, it’s a Rover”. Such a slogan could never have been applied to the cars of a short time previous.

    To me the saddest part is that the Graham Day era was not continued successfully to the point of an independent, profitable Rover Group.

    Incidentally, I now think a high-spec Maestro (such as the Vanden Plas being viewed by Mrs Thatcher) looks rather good – a signpost to today’s larger family hatches.

  2. I agree with most of the comments in this article. The dire quality of early Maestros and Montegos continued the old chestnut about British Leyland making unreliable cars and buyers stayed away, with the company falling behind Vauxhall in 1986. Also the Metro began to fall badly behind the competition after 1984 lacking a diesel engine and a five speed gearbox and the 800 got off to a poor start. It was clear by about 1986 that Austin Rover would never gain the same share as Ford again and when they fell behind Vauxhall, it looked as if the company was in terminal decline and a revival under Graham Day was a sad swansong.

  3. Much as I hate to admit it, K-Series head gasket failure probably was “a last nail” for Rover. After happy customers with SD3s, early R8s and Rover Metros, we had quality question marks and a case of “here we go again”.

    I remember thinking “problems with the so advanced, acclaimed K-series – it can’t be!”

  4. @ Dave, my sister had a 1996 Rover 214 which had the dreaded HGF and a colleague at work had a late model 45 that suffered the same problem. It’s a shame as otherwise the cars were quite good, but the company should have rectified a known and expensive problem that had affected most of their K series cars since the mid nineties. In the end it was the old reliability issue and a dated range of cars that killed Rover in the same way British Leyland nearly went under in the seventies.
    I really do wish Rover had stayed with Honda as the cars had come right in the early nineties and Honda engined cars were known as reliable.

  5. Re the K-series. I have heard it argued that HGF was not a problem for Rover and its customers as they they were repaired under warranty.
    That is no help if your engine starts producing Hellmans mayonaisse when you are far from home. And the warranty costs must have been an enormous financial burden for BMW between 1995 and 2000.

    • And my understanding is the problem is a small coolant capacity. Surely that would not have been hard to fix? Or is that fundamental to the engine

  6. Brian Fox was horrified that the government would cut investment by £250m. What did he expect? After a decade of pumping billions of pounds of public money into Leyland all they had to show for it was the Maestro, Montego and flash in the pan/fading Metro. It would have been criminal for the Government to continue funding Leyland on this basis. I would argue that the road to 2005 began with the formation of BLMC in 1968 and the attachment of the rotten BMC to the fundamentally sound original British Leyland. Over the next 37 years this combine burned Leyland’s cash before taking the taxpayer to the cleaners for over 20 years. After a brief profitable spell under British Aerospace helped in no small part to Honda it got back to work undermining BMW of all companies to the point that it became susceptible to hostile takeover before finally consuming BMW’s Billion pound dowry left for Pheonix. Its interesting to note that the bits of Leyland that thrive today including Jaguar and Landrover align pretty closely to the healthy British Leyland killed off by the BMC merger in 1968. Proof if needed that BMC should have been left to die. We would have ended up where we are now but without the pain, misery, wasted tax payers money and memories of the Allegro and Mastro – and possibly with “British Leyland” not owned by a foreign national!

    • Agree with most of what you say, although I think even BMC should have been salvageable – after all, VW can produce the Polo and Golf, and they aren’t doing too badly! I think the rot started as far back as 1958 with the development of the Landcrab (1800/2200), which completely failed to appeal to the market when it launched in 1964. Much too big, leaving a huge gap in the range from ADO16, and wide of the mark in terms of what a mid-size car needed to offer. Instead of fixing that error, the Maxi was developed which repeated many of the same mistakes – fine car in theory, but badly developed and lacking showroom appeal. Few companies could have survived that double whammy.

      You could even go as far as to say, as has been argued on this site previously, that the Mini started the decline – it had poor reliability and was sold too cheaply, starving BMC of investment funds, but one miss shouldn’t spell doom for a volume maker. If the Landcrab had been a success it would have generated significant funds for future models.

      • British Aerospace were just asset strippers. Bought BL for a peppercorn, sold off lots of land etc and then somehow managed to convince BMW to buy it from them for millions.

        I’m sure that this had a big impact on an already demoralised workforce so it’s hardly surprising that quality suffered and never recovered despite huge cash injections from the government.

        • No, no, no! I remember well when it was sold to BMW. I think a lot of people were delighted, including employees. It was a vindication that the company had finally come good.
          I hated the idea of BMW ownership, but even I assumed that things would continue to improve, which in some ways they did. (75 and Range Rover yes, smaller cars competing in the sectors above, no).

          • My Uncle at the time (he worked at Longbridge) hated the fact that BMW owned Rover and I remember him being very worried.

  7. Ian,

    Great article as usual.

    “Senior Austin Rover management were based in offices at the former Triumph assembly plant at Canley, so the option of driving a Longbridge or Cowley-built car home was not available to them.”

    Why not? At the end of the day, the plants were making the companys products and the management should have got out into the world and had a proper look.

    It is definitely a management issue, the problem being the management were arrogant, unimaginative and sloppy. Management arrogance seems to have been an issue for BL / Austin Rover for decades. Graham Day was the first ray of hope but as someone else pointed out and it is a view that I now share, the Rover era was a swansong. The company had lost too much and fallen too far behind by then.

    It is very unfortunate that BMW did not stay the course. It is to BMWs detriment that they ditched the Pischetsrieder and colleagues long term business strategy of BMW group using different brands for different purposes, of which Rover would have been a key part.

    With hindsight, without BMW’s continued investment, we can now look at 1985 ish as the time when the company probably was dead in the water.

    • John, Glad you liked it.
      I recall you telling me once that you had a meeting with Harold Musgrove on the day he was fired!

  8. An interesting article.However, in my view the rot set in long before 1985 , and can be laid at the door of the attitude of Stokes, who may have been a very successful bus salesman, but who knew nothing about the car industry , and was not a manager . Those were defects, but even they were not fatal. What was fatal was Stokes’s attitude to the customer , which was one of contempt ( remember “if you don’t buy one of our cars you’re potty” ? ) That attitude filtered down to the dealerships . I saw it first hand when I was Finance Director of a BLMC dealership chain in the early 1970s , and saw a Sales manager deal with a dissatisfied customer by telling him that if he didn’t like the product ( it was IIRC a Morris 1300 ) he should go elsewhere . I was appalled , but the Board collectively took the view that sacking was not to happen . Once you have that attitude to customers, in any business , the life expectancy of the business is very limited

    • ”..you are as nasty as British Leyland..” To quote Arthur Daley.

      BL dealers salesmen were infamously rude and disparaging. I remember being with a Cousin of mine who bought a new MG Metro around about 1983 and while he liked the little hot Metro there were a couple of pretty easy to repair faults at six months old.

      A broken drivers door handle and headlamp became loose. Any other manufacturer would fix this under warranty. ”..thats normal wear and tear..” he was told while the Dealer informed him the repair was going to cost him.

      Did he buy another AR, did any of his family or friends buy an AR after that?

      Seems that overall the BMC-Leyland merger should not have taken place and if the Government had dealt with BMC alone in 1968 would the whole situation have been better?
      Well who can say if an earlier nationalized BMC would have gotten the necessary rationalization and investment in machinery it needed to compete with other volume manafucturers.

      Instead of making BMC Leylands problem, its clear it should have been the Governments problem at the time of the ’68 merger and Leyland left alone.

      We will never know, if under Government control in 1968, that BMC would have been directed to develop the 1100/1300 rather than what happened with the Allegro debacle. Probably.

  9. Showroom appeal.

    Ford had it in spades back in the day, I remember the old fella loved the mk2 Escorts, Cortinas, Granadas etc. the type of vehicles that were routinely being crashed into piles of boxes (binmen strikes?) on popular hairy chested TV series.

    Even Vauxhall had a bit of appeal, the Manta was their Capri, the Cavalier was a steady seller especially when Ford brought out the Sierra.

    BL however, other than the SD1 (which had a reputation for quality issues) and TR7 (which could be misjudged as ‘hairdressery’) didn’t seem to have that same appeal. Of course, they would have their own loyal customer base who always bought from UK brands.

    The late 80s, the R8 was potential turning point. With the dissapointing mk5 Escort, frumpy mk3 Astra, ‘same again’ Golf, the middle classes especially were interested in this wood panelled midsized car.

    Then, all was lost as they found out that the 1.4 head gaskets were flimsy. The two R8 owners I knew (one an ex-Navy harbourmaster, the other an accountant) moved into the embracing arms of the Japanese and Germans, never to be seen by Rover again.

    • Or perhaps “sex appeal”? I can’t help thinking that BL held its customers in contempt. Am I right in saying that the Marina was designed to look bland, because, hey, people who can only afford a Marina can’t be too fussy about looks? Surprise, surprise, Ford and Vauxhall produced cars that looked nice (and were more reliable) and people bought them instead.

      By the ’80s, most Bl cars were built for boring people- the problem is, most boring people don’t want to be boring, which is hwy there are a lot of Merc sports cars in suburban bungalow driveways.

  10. I remember that the late 80s/early 90s looked like a new dawn for Rover at the time. Hindsight shows that it was just a case of various groups making as much as they could before passing it on to somebody else.

    Although it’s possible to blame any number of points in the BL history for its failure, I think that the departure of Michael Edwardes was the last time that anybody seriously believed in a real future for the company. And even in this case, it was a company with outdated brand new models and a marginal chance for success in terms of manufacturing volume. After Edwardes, it was at best “managed decline” and for the most part, blatant asset stripping.

    The government started this with the sales of Jaguar, Unipart and Leyland trucks. When BAe took over, their investment was minimal, while they sold everything that might be deemed inessential for producing cars. BMW looked like they were interested initially, but they soon got cold feet and sold Land Rover, keeping MINI for themselves. They dropped the remains on the Phoenix Four, who proved that there was at least enough value left in the company to provide themselves with a generous pension. Only after this was Rover so totally stripped of any real value that nobody else would buy it, despite the efforts of the Phoenix Five to play the Chinese for fools.

    Hindsight is wonderful though. As somebody else has pointed out, JLR has been successful and Austin-Morris was a disaster for well over 30 years by the time Rover shut down. If they’d known in the late 60s what the future held, they’d have called in the receivers, sold the promising bits then and let the rest go to the wall.

    • BAe (from 1988-1993) era did bring in the R8 and Discovery and developed the new RR which was launched shortly after the BMW takeover.

      BMW owned the company for 6 years (so didn’t get cold feet soon), but seemed to lose interest in 1999 when Burned Peestreaker blew his head gasket at the motor show, leaking all over the launch of the 75. BMW decided in 2000 to break up and sell, reluctantly selling LR to Ford, including fantastic new RR. During the BMW ownership, there were two new RRs, the Freelander, the R200, the 1989 Honda Domani/R400, the MGF, the 75 and new Mini. Not a bad tally.

      The Phoenix ‘four’ took £20m for pensions, yes, but kept the company going until 1995 even though many said it was doomed to fail.The alternative was Jon Moulton’s Alchemy, and given his recent exploits with a parcel firm in Coventry, perhaps Phoenix was the better option.The MGTF and the Z-cars were great achievements under the circumstances, the MGZS a particularly good demonstration that the engineers and owners actually cared about cars. However misguided, as a car enthusiast you couldn’t but be intrigued by the Qvale and 75 V8 adventures (and even without them, the result would have been the same). Remember the Rover TCV? And the company got very close to securing a long-term future with the promising but ill-fated China Brilliance deal.

      I don’t think they played the Chinese for fools, although at times it does seem some managers were out of their depth during negotiations with other car manufacturers. The Chinese were put off in part by the pension liabilities and also in 2005 it wasn’t yet established practice for Chinese firms to buy up UK companies.

      • Yep, the head gasket issues was the final nail in the coffin of BMC>MGR. Why this issue went on and on for ten years! Yet still no resolution!

        The much improved Rover Metro, nicer and more spacious than a Fiesta but, ”..they blow head gaskets..” was the reputation. Result? More Fiestas less Metros. Still Rover would deny any problem.

        Same with some of the R8 models, so more Fords sold in their place.

        Then, oh hooray! Rover has a rich partner with a good reputation. Along comes great promise with the Rover 75 (no matter what you think of the retro styling) after about two years, ”..they blow head gaskets..”

        Even German attention to detail etc could not fix the decades old problem of that damn BMC>MGR attitude problem.

  11. I have to say that I think it all happened with the merger in 1968, and the lack of market driven products brought in by Lord Stokes and his team. Ford gave the market what it wanted, BL gave it the Allegro. I think Lord Stokes comments gave the game away – Austin will be a technology driven brand with timeless design that are not driven by todays short lived style! Might have worked in the 50s and 60s but in the 70s the world was style conscious!

  12. Quote: “Graham Day then set about tightening up the quality issues at Austin Rover, soon to be re-branded as plain old Rover.”

    I hardly think the Rover marque was ‘plain’ or ‘old’ (as in passed it) in 1985! Despite the quality issues of the SD1, the Rover name was the only car brand left in Austin Rover Group’s arsenal that could adopt an onwards and upwards approach! As the R8 200/400 range and R17/18 ranges demonstrated in the early 1990s, this was certainly possible.

    Under Graham Day some encouraging progress was made in terms of industrial relations, improving the perceptions of the various brands, creating new product enhancement opportunities, often through Concept Design and latterly Rover Special Projects, and showing some of the advantages of collaborative projects (rather than just licensing agreements) with Honda. A lot of people behind the scenes put an awful lot of effort into changing and raising the perceptions of the company as a whole and its products.

    As for the K Series engine, remember it was actually during the MG Rover Group era (2002 onwards) that the issues relating to head gasket failure became well documented.

    • There are a lot of us in the industry that believe that the use of the ‘Rover’ name was a huge mistake. Many feel that a relaunch using ‘Triumph’ would have been far more useful, especially in overseas markets where ‘Rover’ was at best, considered a bad joke.

      • I agree, I remember the reason giving was that surveys showed that Triumph was associated with cheap sports cars. I recall thinking, but cheap sports cars we rather liked (despite the TR7).

  13. In the 2 1/2 weeks of the strike I believe the lost production of vehicles would be 8,600 not the 86,000 stated in the article. Cowley produced about 185,000 cars for the year so 2 1/2 weeks would not have cost them almost half of the years production.

  14. It was not my intention to argue that the rot set in during 1985, that clearly was much earlier as you all point out. My intention was to argue that it was in 1985 that the Government funded rescue plan ran aground and it was obvious that Austin Rover was dead in the water as a viable concern. With no strikes and a booming car market, there was no hiding the fact that there was something seriously wrong with the organisation for it to stutter so badly in the sales charts.
    Since 1975 state aid had rectified many deficiencies, but quality was still bad, why was this?

  15. To me the major problems culminating in 2005 began in the early ’90’s. A time when the positive impetus made by R8 was lost?

    Firstly, the launch of the irrelevant 600?

    Supposed to replace the Montego the 600 failed miserably, monty owners had already made their choice and bought R8 400’s, all the 600 did was dilute the upper end and take sales from the 800.

    The resources used to create the 600 would have been better spent on AR6 or mid-2000’s 800 replacement, and the same can be said of the late-800 coupe another white elephant.

    MGF aside, all following products missed their market slots?
    R3 200 was smaller than namesake it replaced and confused buyers?
    HHR 400 was initially only a hatchback when it’s former namesake had been a saloon, and was priced uncompetitively.
    Rover 75 whilst being beautifully engineered, only appealed to a niche buyer group who either wanted or didn’t mind a retro product. It was not a cutting edge worthy successor to the 800/SD1/P6 lineage.

    David is correct in his comments about K series HGF failures, these took time to develop- despite owning a number of K series engined vehicles we did not suffer a failure until 2008!

  16. Problem with BLARG was too many false dawns. The early eighties saw the Metro and Acclaim launched to good reviews and big sales and the company’s other models saw improvements in quality that saw market share start to rise again. Hopes were very high when the Maestro and Montego were launched and I thought these two fairly attractive and competent cars could put Austin Rover right up there with Ford again. Sadly I was wrong, the quality was terrible, reliability made an Allegro look like a Toyota, and sales started to nosedive again as buyers were scared off. Indeed had the Honda engined 200 and a refreshed Metro not arrived in 1984 then Austin Rover could have gone under by the late eighties.
    Similarly the revival in the early nineties with genuinely good cars and much improved quality proved shortlived as the company began its terminal decline from 1995 onwards.
    a

  17. From the autobiography of Lee Iacocca, Honda were looking hard for an outlet to supply a four cylinder powertrain of engine and transmission shipped and ready to bolt in. It was for the Ford “Bobcat” the 1979 MK 1 Fiesta to you and I. Iacocca was hung drawn and quartered by his boss at Ford over this, but Iaccoca said it was offered at a bargain price which Ford could not compete with in house.

    1978 saw Honda crucify the USA market with the Civic, the Civic met USA clean air federal laws for emmissions, the very ones which GM/Ford etc were unworkable, but not to Honda!
    Just imagine if Austin Rover had received such an offer, a Honda fwd package, engine and gearbox, clean and mpg efficient to bolt into the Metro and Maestro cars, at a bargain price.

    • The mk1 Fiesta was briefly sold in the US with federal bumpers.

      But it didn’t take off, the US wasn’t ready for it. Only now, with the larger modern Fiesta, are Ford trying again.

      Honda, as with other Japanese manufacturers, are experienced at building small engined small cars to meet kei regulations, a Honda Metro would’ve been very interesting!

  18. Was the Ford Festiva / Mazda 121 based on the Bobcat project?

    Lee Iacocca eventually managed to come good saving Chrysler in the early 1980s.

    I’ve mentioned before something based on the Honda Jazz would have been good for a Metro replacement.

    • The Mk 1 Fiesta sold in UK from about 1977 onwards, a milestone car for Ford as it was their first mass market FWD car F iesta had the usual cluster of Ford engines in the range, dating back to way-back-when, those engine appeared in various guises everywhere(in the world)
      What is remarkable from the Iococca book, The Fiesta being FWD was demmed expensive to manufacture copmared to RWD, yet the bargain Honda powertrain was rejected in a hysterical outburst by Ford senoir management, look up at Honda today, then look down on Ford

      • The Fiesta was not the first FWD mass market car from Ford. The 12m/15m from Cologne was FWD in the early 60s. Under the influence of Ford GB the next Taunus was based on the conventional Cortina…

    • Interestingly, a lot of Chrysler’s 80s FWD know how came courtesy of the AMC takeover, who were working with Renault at the time.

  19. Well, here is yet another man who bought a Rover 25 which then suffered the usual HGF. What I can never, ever, understand is how management could have let this running sore carry on for so long. It busted the company, basically and all for the want of allocating a reasonable budget to a group of engineers with the remit to sort out the problem.

  20. @ Fraser Mitchell, this was one long black cloud for Rover as union militancy had been beaten in the eighties, they no longer relied on state bailouts, and their cars were far more attractive to sit in than a lot of their coal cabin rivals. Yet the kind of arrogance that had dogged the company’s fortunes since the seventies seemed to persist, they just didn’t want to know about a quite serious problem with the K series and let this rumble on until the company’s demise as in the same way an executive told Car magazine in 1979 that quality issues with Rover SD1s only affected a few cars.
    Fiat used to have similar issues with rust, some of their cars would start rusting after six months, but they managed to beat this demon in the eighties by galvanising their cars and a more vigorous control on quality has seen cars like the 500 become very desirable and a regular in the top ten sellers.

    • Fiat sold their obsolete tooling to Russia, who paid , not in hard currency, but in ex naval scrapyard sea – steel, the raw steel was rusted from the start, a 1976 Fiat 127 owned by a frind was such a car, scrapped before the first MoT, the front suspension ontrol arms fell away from the body due to corrosion, it was not possible to repair by welding, there was not an square millimetre of decent weldable metal left on the hassis rails

    • But then FIAT sell nothing but small cars these days, a lot of which are made in Poland. They have had nothing top selling in the Golf class since the Tipo, Lancia is a shadow of its former self and Alfa Romeo have a very limited range until the new Giulia comes out next year…

      • Fiat are concentrating on the 500 brand as a rival to the MINI brand. They’re expanding it with people carriers and SUVs.

        The Brava was slow selling, and the ‘new’ Croma even slower as no-one knew if it was a hatchback, estate, MPV, crossover etc.

        They do sell a Golf sized saloon car in developing markets, the Viaggio. Also sold as the Dodge Dart. Based on the Guilletta hatchback.

        Lancia has been paired up with Chrysler, with the 300 as the Thema in continental Europe, and the Ypsilon/Delta as Chryslers in UK/Ireland.

        Alfa, the 159/Brera was brought offline to provide capacity for small Fiat models. The Guilia is a long time coming but they need it right to spearhead their re-entry to the US mainstream market.

        They were riddled with strikes a while back, and looked to be turning into Italian Leyland….

  21. One other problem for BL by 1980 was the disappearance, but for Jaguar and LR in limited numbers, the USA/North American market as well as many other non-UK markets. The USA market wouldn’t take the quick rusting, badly made UK based cars and increasingly stricter pollution and safety laws pretty much killed it. The Japanese were taking market share in the USA from USA based and EC made cars. Mainline Europe was dying as the market for them, the Commonwealth countries were turning to the Japanese brand cars. The UK market was relatively small for a base.
    Ford and GM used their UK/EU subs to make small cars that with variations were sold in the US/Canada and UK and Europe. The EU made Ford Fiesta was sold in NA, the 1st FWD Escort was sold and made as a ‘world car’ including making them in the USA with engines and other components made in the EU/UK, reducing costs to make the cars for all markets. Ford and GM were much more ahead of the curve by at least 10 years in meeting stricter USA/Canada pollution and safety standards, something long before the EU did and BL could. While the USA carmakers had some serious issues with Union workers in the 1970’s, they were far less hostile and militant than their UK brothers, our labor laws much less strict, unions and the carmakers worked together to improve quality, worker efficiency and safety on the grounds that it meant they kept their jobs.

    • The mk1 Fiesta was only briefly sold in the US, it didn’t catch on in the late 70s when fuel prices were coming down again.

      The mk3 Escort was intended to be a world car, but the US and EU versions ended up differing quite a lot, despite looking superficially similar. It wouldn’t be until the Mondeo that they would get a world car, and again there were differences between markets.

      Meanwhile GM sold the mk2 Astra, via Daewoo, as the Pontiac LeMans – a nameplate which had previously appeared on V8 coupes and big saloons.

      • It would be more accurate to say that the Le Mans was a Belmont…I had one while I was working in Chang Won.

        The Racer was the Mk II Astra hatchback.

  22. The road to 2005 started much closer to 1965. It was not a good idea to take the weak and fractured pieces of an auto industry and expect them to somehow be strong together when they were collapsing already. I love many of the models that were built after that, but it’s really not hard to see the futility of the mergers.

  23. Suppose the Montego and Maestro were well built and reliable and the 1984 Metro came with a five speed gearbox and a diesel supplied by PSA. I somehow think we’d be talking about British Leyland’s great escape and a company that was outselling Ford by producing everything from stylish city cars to large Rovers that are miles ahead of the Germans. It did feel in 1983 that Austin Rover was on the way back and the previous ten years could be written off as a bad dream.

    • What on earth are you talking about? “large Rovers that are miles ahead of the Germans”. If the Maestro and Montego had been built to exacting standards, you still would not have seen this.

      I am sorry to say that a comparable BMW or Mercedes from the 1990’s was leagues ahead of anything ARG were producing. When the 800’s early issues were sorted out (1990) and it had the 2.7 V6, it was a good car and arguably a lot better than a Granada, Carlton or big Frenchie.

      You simply cannot compare it to the BMW 5 E34 or even a Mercedes W124 in terms of quality, driving dynamics and overall ownership experience.

      The Germans improved, reinvested, improved, reinvested over decades. In the last 10 years I have been lucky enough to go to BMW plants Regensberg and Dingolfing and watched them building the cars. It is breathtaking. I went to Longbridge in 2003. As sad as it is for us, the success in Germany is the result of decades of engineering excellence, brand success and mainly huge LONG TERM MANAGEMENT STRATEGIES – re-investment.

      As I said earlier, the only thing that would have saved Rover was if BMW had stayed the course. They threw a lot of money at it but unfortunately, the timing was poor and they bottled it. The UK government fucked it up as usual also. It is all to BMW’s own detriment in my opinion because now they really need Rover and Land Rover. They are diluting their own brand significantly with too many different product lines which was precisely the reason Rover became part of their long term business strategy in the first place.

      What is the best quality Rover made in the last 30 years? Arguably the 75, which was built on a large amount of BMW technology and the result of a very large investment by . . . . . BMW.

      People here drone on and on about how Honda were so great, they weren’t. They used Rover and took a lot of knowledge away from Rover when it still a reasonable player and had a decent level of competence in certain areas.

      It is a crying shame but you have to try and make sense of why, not live in a dream land.

      • Quote: “It is all to BMW’s own detriment in my opinion because now they really need Rover and Land Rover. They are diluting their own brand significantly with too many different product lines which was precisely the reason Rover became part of their long term business strategy in the first place.

        What is the best quality Rover made in the last 30 years? Arguably the 75, which was built on a large amount of BMW technology and the result of a very large investment by . . . . . BMW.

        People here drone on and on about how Honda were so great, they weren’t. They used Rover and took a lot of knowledge away from Rover when it still a reasonable player and had a decent level of competence in certain areas.

        It is a crying shame but you have to try and make sense of why, not live in a dream land.”

        I am pleased you have made these points as both are absolutely spot on. There has been noticeable brand dilution for BMW in recent years with the number of product lines they now offer wearing the BMW badge (and some would argue the move into front-wheel drive for some of these models as well). It is a strategy I hope we do not see repeated to the same extent by Jaguar Land Rover with the improving Jaguar brand and expanding model range.

        Again, sound comments on the final chapter of the Honda-Rover relationship. In the end we all saw how Honda denied Rover Cars the freedom to significantly develop their own ‘version’ of Honda models such as the SK1 600 Series and HHR/Theta 400 Series beyond mere colour and trim and minor body design changes as part of the by now very restrictive licensing agreements. Some bodystyle options could not be built by Rover Cars such as estate versions of the 600 Series and HHR 400 Series, even though Rover Cars knew they were variants that would sell in reasonable numbers, because Honda refused to grant them “permission”. Rover Cars also had to pay royalty payments to continue building Honda-derived models such as the HHR 400 Series and of course using Honda supplied 1.6-litre engines for the HHR up until late 1999. This continued right up until MG Rover Group went into administration in April 2005.

        Honda certainly helped Rover Cars prosper in the 1980s and 1990s, but after the launch of the R8 200/400 Series from October 1989 the relationship would certainly no longer be to mutual benefit.

        @ Ian Nicholls:

        As you state, Honda had more than its fair chance to take a majority stake in buying the Rover Group although they would not go beyond 47.5 percent. British Aerospace had to sell the Rover Group as it had incurred massive losses from its core business and need to restructure its business interests under the newly appointment chairman, Sir Graham Day. With Honda showing no sign of wanting to buy a majority controlling stake in the Rover Group there was no contest – the 100 percent offer from BMW was the only serious offer on the table. Honda may well have bleated on about being betrayed and dishonoured by Rover Group (well, actually British Aerospace, as the owners of the Rover Group), but British Aerospace had given them ample opportunity to show a committed interest in taking over the Rover Group. Honda only had itself to blame.

        • John, David – very interesting points, arguments.

          1. Whilst the Honda relationship was once a great thing for Austin Rover, Rover I also think it had started to decline prior to the BMW acquisition. SD3, 800, R8 really saw Rover on a high. However, the 600 with non of Rover’s own derivatives was a bit too Honda despite the very successful re-style. Again further derivatives of HHR would have given the range as a whole more of a Rover feel with the rather Honda 5 door simply being a lower level model. The 4 door showed what Rover could do, as did the 45 when compared to the 400. Obviously, higher margin derivatives would have boosted sales, profits on 600 and 400 (once the R8 Tourer, Tomcat, Convertible had ceased)

          2. BMW ‘spreading its brand too wide’ is a thought I’ve had. Or, more specifically’ I think the MINI name is becoming confused. How on earth can the Maxi thing (Countryman) be called MINI !

        • Some very interesting points John, David.

          1. I too think the Honda relationship had started to decline in its later years. SD3, 800, R8 had really seen Rover on a high. However, the lack of Rover’s own derivatives with 600 and HHR 400 gave both ranges less of a Rover feel ( despite the very successful 600 styling). The 4dr HHR showed what Rover could do but just imagine other body styles too.
          Higher margin derivatives would have increased sales, profits of both 600 and 400 (once R8 Tourer, Tomcat, Convertible had ceased)

          2. I’ve often thought BMW is spreading the MINI brand too far, confusing it. I mean how can the Maxi thing (Countryman) be called a MINI !

  24. The reality was that the failure of the Allegro signalled the end of them being a volume player as the volumes collapsed relative to its competitors and along with it the international dealer network. This was ignored in the Ryder report and they pursued a strategy of maintaining the manufacturing capacity however failing to implement a product plan to reverse the decline in market share whilst starving the premium products of investment the Range Rover and XJ, its testament to the quality of these products that they survived the British Leyland years.

    It’s clear the penny had dropped at least with the Cabinet if not in the Board Room, that Austin Rover was not a volume player, if you look at the section in Margaret Thatcher’s diary where she recalls the cabinet discussions around the decision to make the investment to bring the Maestro and Montego to production. It’s clear that it was understood that the cars were mediocre and that Austin Rover did not command the market share to be able to produce the cars in sufficient quantity to be able to compete in the market on price.

    It’s important to note that the Treasury under the Chancellor Geoffrey Howe was opposed to the investment, seeing it as just throwing money down the drain to delay the inevitable. However Margaret Thatcher and Norman Tebbit pushed the investment through because they realised that time was needed to find an alternative an alternative which was to become the success of bringing Nissan, Honda and Toyota plants to the UK.

  25. You have to remember that even under state ownership BL suffered from under investment.
    The Ryder report of 1975 demanded that, for every £1m provided by the National Enterprise Board, British Leyland’s car manufacturing had to find a further £1.5m out of profits. This was not forthcoming because of strikes, which burned through government cash intended for re-investment.
    The strikers conduct really was self destructive in the long term.
    I think the British government always hoped that Honda would take over Austin Rover, but a 20% shareholding was as far as it went. I think that Norman Tebbit hoped that by forcing ARG to use Honda engines he could help engineer a sell off to the Japanese firm.
    Tebbit was brow beaten by the Labour opposition, led by their effective industry spokesman, the late John Smith, into caving in to ARG’s demands for its own engine.
    Smith was very effective in portraying the government as having an anti-British industry agenda. This also sent signals to Honda that ARG wanted to assert its independence from them.
    If Honda were to take over ARG, then this was perhaps when the window of opportunity was lost. Although the Rover 800 and R8 200 were in the pipeline, these were the last truly co-perative ventures between ARG and Honda. The 600 and HHR were adaptions of existing Honda designs and ARG/Rover were restricted in what they could change by the Japanese. Rover also had to pay Honda a licence fee for using these designs.
    In January 1994, with the BMW takeover in the offing, Rover chairman George Simpson flew to Tokyo in a last ditch effort to persuade Honda to take over Rover. He hoped to meet the president of Honda, who he had met many times before. But the president was suddenly unavailable, and Simpson met his underlings instead. Honda were not interested in taking over Rover, let me make that clear. It is fantasy to think that the relationship between the two companies could have continued. Sooner or later Honda would have refused to allow Rover to adapt one of their designs, and Rover would have had to find a new source of bought in technology. Which is why the BMW takeover made sense.
    Honda are one of the company’s who benefited from the demise of MG Rover, filling the void, and fulfilling the demand for British made cars.
    The Rover HHR 400/45 was an adaption of the mid 1990’s Honda Civic. If you bought the Rover you may well have experienced HGF on your K-series. If your previous Rover had a Honda engine, then that acted as a shop window for a Swindon built car.

    • In a funny way, Honda now need a decent European partner, as they have completely lost their way in Europe. I fear for Swindon, as Honda sales are so poor at the moment, the Civic is a complete also ran against the Golf/Focus/A3/Astra etc, and where are the Q’ashqai or Juke type vehicles, that Sunderland are churning out?

  26. I wouldn’t credit Graham Day with providing Rover with a late 80’s early 90’s swansong, the R8, the company’s best selling product for that period was signed off as the second collaboration before Day arrived, as was the change of company name to Rover following research done under the Musgrove era. Discovery was signed off prior to BAE’s arrival, an event itself helped by creative accounting and late night drinks with the Tory elite.BAE were made aware that company assets were considerable and saleable. And it was BAE’s policy of putting in as little money and effort as possible that brought about Rover’s restrictions when it came to 600 and HHR.Honda completely lost respect for Rover management on those to projects alone because of BAE’s policy. A respect that had been built up because of XX and R8, the only collaborations of joint effort and money, Japanese culture has little time for shirkers. And R3 could only be built because it has R8 underpinnings. It was BMW’s insistance to rid the company of Honda engines that caused the open deck stretch of the once reliable closed deck K series engine and the rushed job done on the KV6. MGF was underfunded, despite profits from R8 and Discovery and with plants sold off body production had to be funded and built by a partner.But the idiotic decision to push R3 upmarket and in the wrong sector, thus pushing HHR into the wrong sector and at a premium price was an enormous marketing mistake that no real car man would have made and thats down to Day and BAE, a school boy error, selling 10 cars at 10 grand will never be as good as selling 50 cars at 7 grand. Day was an idiot with his ” I’m not chasing market share” policy. 1985 was a turning point because they got rid of the car men and brought in accountants putting shackles on the remaining car men.
    As for poor quality then I whole heartedly agree but if you want to see a badly built car then look at 90’s Range Rover’s and Discovery’s, both appalling yet the company survives, or Ford’s terrible 90’s range but marketing and numbers saw them through because of their 80’s successes.
    BMW bailed to save themselves, understandably, but taking (mini) or selling (landrover) the crown jewels was always going to leave 25, 45 and 75 struggling in a global industry where partnerships reign even in successful car companies.
    Of course it was ’68 that started it, Stokes couldn’t or wouldn’t see what he had to do, post nationalisation saw funding in dribs and drabs, unions, poor management and poor products closed a decade that the press and public would never forget.

  27. Rover was sold to BAE for a song because the Thatcher government knew it was cheaper than continuing to prop up a doomed firm.
    Assett stripping was the only way to make money out of Rover. It certainly was not going to succeed by making cars. And Harold Musgrove told author Barney Sharratt that he thought the name change to Rover was a mistake.
    As can be seen in the above debate, the Thatcher government was already guilty of knowingly wasting public money propping up ARG in order to retain the support of voters who had no intention of actually buying its products. The maintenance of a facade at great public expense and a time of expenditure cutbacks.

    • I never said Musgrove agreed with the change of company name, I said the the clinic to discover the company’s most regarded brand was done under him. Days adoption of it was the beginning of cheapening the brands values into Austin-Morris car sectors territory whilst attempting to charge Rover prices, a major error.
      Micheal Edwardes states in his autobiography that had he believed for one moment that the Governments during his tenure were not serious about saving BL he would have walked away. The sea change from 83 to 88 where the Government deliberately sold the company for asset stripping knowing that meant the company could never survive is a far greater disgrace than the use of tax payers money to try to save it, especially given the approaches from Ford and GM during that period. Both Renault and Fiat have been propped up by their Governments for years in one way or another, and the use of public funds to maintain a major manufacturing base in a country should never be seen as a waste, something we are discovering to our cost over recent years.
      For all Alex Salmonds bluster about Scotland going it alone on the riches of North Sea oil, with the industry in trouble and asking for tax breaks just a few months later I’ll guarantee the Government will not give up on that no matter what the cost just as they did with the banks, both I may add at a time of horrendous expenditure cutbacks. Austin Rover was by no means dead in 1985 but I agree it was around that period that certain decisions were taken that ensured survival was almost impossible no matter what.

      • This is an absolutely brilliant comment thread with a lot of very well informed and thought out comments.

        The only chance after 1985 with hindsight was BMW. It so nearly was and as with so many British stories is a crying shame.

        As I have said, at the time I hated BMW and thought Honda were the good guys. With hindsight and seeing how everything panned out, I realise I was totally wrong. Not that it makes much difference now. 🙁

        • I believe the UK motor industry had two major missed opportunities with foreign investors.

          The first was the failure of Roots group to action Chryslers european expansion plans in the late 60’s.

          Chrysler pulled the plug when the Avenger that was so right in so many ways. However it cost so much to bring to production in the UK along with the Arrow move to Linwood with all industrial relationship issues that they could never have built enough Avengers to cover its investment.

          The second was Rover Group’s failure to take the opportunity it had with BMW ownership. BMW was too small and lean an operation to be able to put sufficient management into Rover at the start and the Rover management failure to initiate products that would complement BMW current product offer along with a failure to control their development costs.

          Looking at the cost of the Rover 75 development, it’s hard to see how they thought that they could build or sell enough to make a profit. If they could, they would have had to have stolen a large part of the market off the 3 series.

  28. I owned one of the last Austin Montegos from the nationalised era and the car was a pile of junk. A work colleague who bought a Rover era Montego estate found it to be mostly reliable and a lot better made than the Austin variety. Maybe the company realised by then that the government wouldn’t bail them out again and they had to earn their way by making reliable cars.
    Actually by 1990 it seemed like the privatised Rover was winning with a waiting list for the 200 and massively improved quality.

    • ” Actually by 1990 it seemed like the privatised Rover was winning with a waiting list for the 200 and massively improved quality.”

      – This is what really gets me. The fact that the early nineties high, which was a pretty amazing turn in fortunes, was not continued, capitalised on.

  29. Apart from my first car being a BMC Mini, I never fancied any BL/ARG cars again until the SD3 era Rover 200 onwards, then went on to buy three Rover HHR/ZS and was fortunate not to suffer any HGF’s. I might have continued with MG Rover ownership had the events of 2005 not occured.

    My former company had a 1986 Montego Estate, then a 1990 version – the latter one was a much better car. As Glenn says, build quality & features had improved by then.

  30. It seemed to be a common theme with many BL / ARG cars that the early buyers found faults that should have been sorted out before the production lines started up, & by the time things were sorted out many potential buyers had gone elsewhere.

  31. 1985 could be described as the point of no return as BMC had been in decline since the underwhelming launch of the ADO 17 and profits were falling when it was merged with Leyland. In the period 1968-85, British Leyland saw its market share more than halve, produce some lemons like the original Allegro, and its reputation for strikes and unreliability were popular material for comedians. Also until the arrival of Michael Edwardes, Leyland management were arrogant and complacent and assumed everyone would keep buying their products, no matter what, and comments by Lord Stokes about people not buying British Leyland cars as potty sums them up. I think someone who had a terrible experience with an Austin Allegro would be potty to buy another and no doubt had traded in his car for a Ford or a Datsun, where at least quality and reliability were guaranteed.
    The decline of British Leyland locally was in the reduction in the number of dealers in Copeland, Cumbria, between 1980 and 1985. In 1980 they had six dealers, by 1989 this had fallen to two, one dealer seemingly tired of selling unreliable cars. Two of the four that are still in business have switched to Kia / VW and SEAT and are so successful they have built new showrooms and the customers keep coming back. Of the last two surviving dealers in the eighties, one had a reputation for arrogance and sharp practices and lost the franchise in 1993 and the other managed to set up a Hyundai and Suzuki franchise just before Rover collapsed, their reputation for good customer care seeing them prosper without Rover.

    • Glenn, as I think I’ve said before, I was brought up in Cumbria and lived there until 1996. I can remember Cockermouth (a small market town for those that don’t know) having two Austin Morris dealers circa 1979 – JV Ellwood and J R Wilde.
      TWO in such a small town!! – Even smaller then.

  32. IIRC until 1975 the Nuffield & Austin sides of BMC & BL had seperate dealer networks, so many towns had 2 showrooms.

    The Triumph & Rover (& sometimes Jaguar) dealerships seemed to be merged before then.

  33. Dollysprint
    You seem to have the attitude that propping up lame ducks with taxpayers money is a good thing, that ARG was a national assett. Instead it was a dead duck that gradually exhausted the patience of even its most loyal customers. By offloading Rover the government saved the taxpayer a fortune. It was a case of industrial blackmail. Everybody knew it would end in tears, but nobody had the courage to put down ARG.
    A national assett is not something that makes poor quality and unreliable goods.
    Rover would still exist today if the Thatcher government had not sold it to BAE, but would anyone actually want its products, and how much would it cost the taxpayer?
    The money used to prop up such a national assett could be used to entice foreign manufacturers to set up in Britain. The demise of MG Rover in 2005 has enabled Britain to move on and banish the image of poor quality and reliability that British cars had. Back in 2005 Britains flagship car manufacturer had a reputation for HGF. Now JLR occupies that position and they have a reputation for quality.

    My moment of enlightenment came when the head gasket went on my 1999 Rover 25 1.4.
    I was told about Rover HGF, but assumed that it was all part of the anti-British culture that pervaded in automotive circles. I find it sad that such a design fault was allowed to happen, and that nothing was done to rectify it. MG Rover needed private buyers to stay afloat, and gradually stories of HGF reached the mainstream media, deterring these buyers.

    • Ian
      Propping up lame ducks with tax payers money is never a good thing, attempting to support and revitalise a major company within British manufacturing was and still is a wholly worthwhile endeavour, not just from a jobs point of view but also retaining skills, there is a major shortage of engineers in this country right now as a direct result of our insignificant manufacturing sector, coal, shipbuilding, aircraft manufacture and cars. When the Government stepped in to fund BLMC in 1974 it employed nearly quarter of a million men, all paying tax and national insurance and all spending money in their local economies.Every Japanese car firm here today was enticed with tax payers money and yet if you combine all their workforces together it does not come close to the number of people employed currently in the largely Aberdeen based UK oil industry, now asking for tax breaks. Come to south Wales today and 30 years after they closed the coal mines it has never recovered and never will. The taxpayers money spent on supporting areas rampant with unemployment where once great industries were makes the money ploughed into BL look like pocket change.There was a deliberate policy change within Austin Rover when Day took over which was no fault of the workforce. The years either side of Day swung from small profit to small loss relatively speaking, by no means a lame duck situation.I wont mention the lame duck banks of 5 years ago or the massive subsidies enjoyed by the privately owned bus and train companies.
      The quality issues of the post 1995 K series are well documented and I agree it should never have happened, you cant just stretch an engine beyond its original design parameters and not expect problems, not rectifying that was unforgivable but BMW were holding the purse strings by then, they were also designing an engine using metal that would quite literally dissolve in petrol, difference is they put it right, as did Audi when its TT’s fell off the road at every corner.Every car maker has quality problems the difference is they rectify them with their profits, BL had to do it with drib and drab funding and it was never enough. I remember 1974 to 1976 Golf’s with rear ends rotting away from the beam axle, they all had problems like run away Toyotas 2 years ago, its not just about quality all the time, and its not just about the short game either.

      • dollysprint

        I understand the point you make that surely it made more sense to save British Leyland and all its relatively high paid jobs than let it die. It was done in the UK with Rolls Royce and to some extent with salvaging of what is now BAe systems from the post war “Road Crash” of the UK aircraft industry, an industry which in the 50’s seemed just like the motor industry to be able to carry all before it, but in reality hid fundamental flaws which along with a fair measure of Government incompetence ended up being all but dead in the 70’s.

        The problem the Government faced with British Leyland was that at the time of nationalisation it was no longer a volume producer compared with its European rivals and it did not have a product capable of reversing the decline. Unfortunately this was ignored in the Ryder plan which as a result starved the XJ / Range Rover of investment to maintain capacity in the volume business while market share spiralled downwards. By the time the Metro came along, the company had all but ceased to have any presence in the volume car market outside the UK, quite simply the BL patient had died in the Ambulance before it reached the hospital.

        We have to be realistic at what the Government took into state ownership, as well as the industrial relations issues, it was taking over a company that had missed the market with the 1800, Maxi, Allegro and about to miss it with the Princess and bringing the SD1 to production was exceeding all cost forecasts. The Marina had hit the market ok-ish, but in reality its sales figures were flattered by half of its sales coming from Morris ADO16 customers which had been dropped from Morris dealers to make way for it.

        To save the day you would have had to pour billions into clean sheet range of products along with modernisation of the factories, with the Wilson / Callaghan government at the time going cap in hand to the IMF they would not have been allowed to. Not only was it contrary to the economic policies agreed with the IMF, but also the IMF as now, is an extension of American foreign policy and Chrysler, Ford and GM would have seen that the IMF would have pulled the plug on it.

        • The IMF / American connection is an interesting slant.

          At one point GM was eyeing up LR, and as we know Ford got their mitts on Jaguar in the 80s.

          Not only that, but with Chrysler at the time selling Rootes products, GM with Vauxhall/Opel and Ford Europe (all three could be seen by the public as British), it wouldn’t have hurt to have one less volume competitor…

  34. @ Dave Dawson, they had dealers almost everywhere until the eighties. Then, either British Leyland rationalised them to cut costs, or the dealers were tired of selling unreliable cars and seeing falling sales every year. I did read on Skyscraper City of someone who owned an Austin 1300 in the early seventeies which had water ingress in the boot, the dealer’s solution was to drill two small holes in the boot to drain water, which led to the boot rusting out. You can see why people moved over to Ford and the Japanese.

    • Recall a Rover salesman in one of the smaller Rover London dealers, located in a Railway arch near Waterloo station what a caricature, somewhat “plump”, blue pinstripe suit, white socks, open golf loafers, thick hair gel. Did he ever sell a single car in his life? I doubt it

  35. However, the sad thing about the British Leyland era is cars like the Princess and the Maxi, which were fundamentally good cars and more radical than their Ford rivals, came good too late. It was ironic that the often mocked Princess/ Ambassador was a much more reliable and practical car than the Montego that replaced it. Austin Rover missed a sitter as well by not having a hatchback Montego, when hatchbacks were becoming more popular than saloons.

    • Yes, the absence of a Montego hatch was a lost opportunity – I suppose Montego was initially conceived as a Cortina rival. However, a hatch launched after the saloon would have (i) maintained buyer interest in Montego (ii) have looked better than the saloon and possibly been the bigger seller.
      One was considered though wasn’t it – on this site there are shots of LC10,11 centre section with different ‘endings’. A Montego hatch is one of them.

      • Aaaaarrggghh! Just looked the Montego hatch up and what a glorious car! How could they accept so many rubbish ideas and reject that one, especially in an era when as Glenn says hatchbacks were becoming very popular? The mind boggles… what WAS it with BL management?

      • I knew this answer would come!

        A Maestro is an Escort class compact hatch with short overhang, steep tailgate. A Montego hatch would have kept that car’s long overhangs, had a shallow tailgate and been far longer than Maestro putting it in Sierra territory. One was proposed and I think its shape was compared to Talbot Alpine in facelift form.

        • I call large hatchbacks like these (eg. Citroen BX/Xantia, current Mondeo etc.) fastbacks.

          Hatchback conjures up images of upright Maestro style cars, or the current trend for almost estate-like upright bootlids with a 2 box Focus-style shape.

  36. @ Dave Dawson, the Maestro was intended to take on the Escort and the Montego the Sierra and the Cavalier, but the Montego failed by not having a hatchback like its rivals.
    It’s a shame the Ambassador went as to me this was a good car, Rolls Royce like ride comfort, a huge interior, reasonable reliability from its O series engines and a distinctive appearance. The Montego, which on paper wasn’t a bad car with engine displacements that at least matched its rivals, was let down by its terrible reliability and a smaller interior than the Ambassador. And yes, I’m not ashamed to say I am a big fan of the big Austins.

    • Glenn

      The Ambassador was a good car but not what the market wanted, the fleet market volume was in cars such as the Cortina 1.6L, you simply could not produce an Ambassador for that price point. BL instead was fighting this battle with the Ital and the reality was that your typical company representative desired an STD more than he desired having an Ital as a company car.

      However the Montego was a solution to a 60’s problem not an 80’s problem, the industry had moved on from building cars such as the Cortina and Hunter for the UK fleet market as the volumes were not sufficient, you now needed to build a car for and then sell it in volume in the European market. Even if the Maestro / Montego Have had the quality and appeal for the European market, BL / ARG didn’t have the market presence in Europe to do it.

    • The Montego saloon boot was very awkward and shallow, fit for a single suitcase and not much else, to illustrate the major shortfall of the Montego, some American friends arrived at Heathrow and were offered a Montego hirecar, there was not a hope in hell of carrying their luggage in ther Montego, in desperation they were offered a Fiat Uno, believe it or not the Uno swallowed the lot with room to spare, “packaging” was a major strength of Issigonis, perhaps it was the Ford implants who decimated this strength of the company

  37. Problem was Austin Rover had lost large parts of the European market. I was in Germany in 1988 and did not spot one British car and at the same time these were few and far between in Holland( a couple of Minis and a Jaguar were all I saw in Amsterdam). Those Ford Escorts, Taunuses and Sierra that were reasonably common in Germany would have probably been made there, but British Leyland was conspicuous by its absence. Their cars just couldn’t cut it against far more reliable products from Volkswagen Audi.

  38. It’s seemed up to the early 1970s most of the European countries without a major car industry were big markets for British manufacters, but as the decade went on the Japanese makes & the larger continental makers gained most of that market share.

    • You are quite correct, the UK cars had quite a strong following.

      Countries such as Austrian and Scandinavian markets were outside the Common Market and so UK product could compete without the import duties they faced in the Common Market.

      Other markets such as Italy, they had good product (Mini / ADO16) and a local factory.

      The hope was that this could be built on once we went into the Common Market. In fact the Ryder report included an assumption that BL would become major player in the European market.

      The trouble was the Mini lost out to the likes of the Renault 5 and Fiat 127 and the Allegro was a hard enough buy for British patriot let alone a foreigner. Customers who preferred something simpler were easy pickings for the Japanese particularly in non-Common Market countries.

      In addition in the UK market entering the Common Market meant that Renault, Fiats etc no longer had import duties.

  39. It’s a shame, but if your product isn’t very good, people won’t buy it, and no amount of government subsidies will change it. I think Austin Rover had to wake up in the late eighties and realise once the subsidies stopped, they had to make cars people wanted to buy, hence the brief revival when they became Rover in 1988.

  40. I love my k series ok so I have had to change the gasket and not for the pretend miracle mls they can be just as troublesome with leaks, anyway on comparison nobody seems to think its wrong to pay 2k for a set of VW injectors that fail if not more regular than a well maintained k and believe me I have had a lot of experience with this failure.

    I believe the problem was an issue and could have been corrected but the press over hyping the issue was more of a death nail than the actual issue itself most of the problems were garages repairing what they did not understand and not ruling out the route causes resulting in repeat failure no good for the paying customer and mgr reputation but it is what it is. I still here that people are changing gaskets now as a precaution regardless of symptoms this will often cause more problems than they had before but that’s the way of the world and Chinese wispers. Anyway for the record my Rover 25 1.4 has covered 124.000 miles one hgf failure at 80 k repaired with original elastomer and still running ok for an old banger no signs of hgf, and my bit of fun MGTF 60,000 miles and 1 gasket replacement due to the previous owner fitting an MLS that decided to start leaking coolant out of the front of the block so it was back off with the head and back to the elastomer no problems since the repair 7k ago.

    • I totally agree that the K Series HGF issue should have been nipped in the bud a lot earlier than it was. I too also see the irony that people are all too ready to berate BLARG cars for their reliability and repair costs whilst paying ridiculous money to keep their so called superior cars going. I have no idea how a DMF works or why a simple component needed fixing when it wasn’t broken, but what I have noticed is it seems to equal ridiculous clutch replacement costs. When I read about owners of cars with DMF having to spend upwards of £900 for a clutch change it makes the £325 I have just paid to have the clutch on my 94 216 Tomcat changed quite reasonable. Years ago when you went into a scrapyard, all the cars in there were time expired rotten heaps. Now they are filling up with cars which are otherwise ok but require more in replacement consumable parts that what they are worth. Who would have scrapped a car years ago because of a knackered head gasket, or worn clutch? It just shows how wasteful and blinkered we have become.

  41. @ Russ, the one surefire way to avoid HGF was to buy a diesel Rover, in particular the BMW engines used on 75s are good for 200,000 miles if serviced correctly and the engines used on 45s seem durable and trouble free.

  42. This essay and many responses bring home to me why we have no mass market car manufacturer. Why we in the UK don’t build ships, Large diesel engines, trains…..The list goes on. Very few large manufacturing complexes are British owned.
    Its all about our attitude. Nobody in BL, Rover gave a F**k from the management to the fellas who bolted them together. It was always “It will be all right” type of attitude. This attitude seems to be all through British society /industry.
    I work for a large Swedish company, the company have problems with their British arm of the company’s. No cohesion amongst the work force, British management very heavy handed and aloof.
    I work a lot with Germans, every thing must be right nothing is left to chance, everything is planned. Not all their plans work out, they do have good planning though
    The lowest worker is treated with equal respect, very much so in Sweden. It is never like this in the UK
    We seem to be very good in inventing things getting ideas off the ground, same in sport. Then the rest of the world develop the ideas and show us how to do it! We are very slow to adapt to change, if we manage at all.
    We are very good at low volume bespoke items, cars boats, furniture.
    Our banks, government are all very short term in they way they invest in things.
    Engineers in the UK of any discipline are chronically under valued. Someone with an engineering degree earns my respect immensely . They will rarely be out of work.
    However the hero’s in this country seem to be the like of builders who buy and sell houses……It used to be bankers! Look where that got us.

    • I know my reply is going off at a tangent from the main subject, but I do agree with your comments about “the hero’s in this country seem to be the like of builders who buy and sell houses……It used to be bankers!”

      Sadly all political parties are happy to ride rough-shot over any opposition in order to protect and encourage the construction industry. One day we will suddenly ask about where are the quality built new build houses? Whatever happened to public open space? Why can’t we find enough spare land for sports provision and encouraging food growth. Why is modern architecture mundane and mainstream? It is a completely short-termist approach that simply fills the cracks not look at the real underlying causes and provide along term commitment.

      I have nothing but admiration for Swedish business practises and their attention to maintaining quality. Take some of the Saabs and Volvos that were being made in the 1990s. Admittedly they weren’t all flash and brash with lashings of wood, but they were certainly well engineered and felt like they would go on forever. A shame that both the aforementioned companies allowed the Americans to seduce them with their oversized cheque books…

      • Volvo AB is alive and well and making Trucks, Construction Equipment and Buses etc (Renault truck, Mack, United Diesel, Iacher and Dong Feng brands in addition to the Volvo brand).

        They had to sell the car business because they faced the reality that whilst the cars delivered a small amount of the profit, designing and building new cars took so much investment they had to bet the whole company on a new product launch.

        They realised that one failure with a new “car” product would destroy the whole business.

        I see however Volvo Cars is on the up with its new Chinese owners although I think Tata missed an opportunity, as Volvo would sit nicely under Jaguar and Land Rover.

        • In Volvo’s earlier years they often made more money from selling trucks, it was the deman for the PV444 that managed to get the car side of Volvo ahead.

          • You’re all correct in my view. Again, this is going off at a tangent, but in this country we are obsessed with class. The management think the staff are scumbags, and the staff think the management are rich b*****ds. Also, there is the idea that to be truly sophisticated one has to behave as though one is not interested in money- an idea which is alien in the USA as it was founded on “bettering oneself”.

            Furthermore, countries like Germany and Japan were ruined by the war- they had to innovate to survive. In Britain we could stick a Union Jack on products and feel smug (the advert for the original Metro wittered on about how it was a British rival to its competitors- which is evidence of how arrogant BL were, expecting people to buy their car regardless of quality)

            This leads to unimaginative, complacent management and surly, resentful and lazy workers. The best businesses I know have bosses who engage with their staff and earn their respect- even by simple gestures- and are also hard on bad staff.

  43. @ Big H, we also had in the seventies and eighties, and it still lingers to this day, a bitter them and us culture which did the country no favours. You had aloof, arrogant management and politically motivated, militant trade unionists at British Leyland who seemed content in the first case to let the company gradually decline, or think people would go on buying British cars regardless of how bad they were, and on the other far Left union representatives who only seem concerned about destroying capitalism and stirring up the workforce. This did absolutely nothing for British Leyland and nearly brought the company down in the seventies.

  44. The people who destroyed British Leyland/ Rover- Tony Benn for creating the monstrosity in the first place, arrogant and aloof executives like Lord Stokes and Harold Musgrove, Red Robbo and his comrades for being more interested in class war on the shopfloor than creating a decent workplace, and the Phoenix Four who were more interested in making money for themselves than creating a strong MG Rover.
    Those who tried to save the company- Tony Benn’s second intervention in 1974 saved it from collapse, Sir Michael Edwardes, who took on the unions and stopped the company’s decline for a while, politicians from Harold Wilson onwards who were determined to make BL stand on its on two feet without subsidies, and Graham Day, who brought out a range of cars in the late eighties and early nineties that people wanted to buy.

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