BENN IN THE DRIVERS SEAT
By Daniel McGeachie, David Buchan
LORD STOKES flew abroad on another selling trip yesterday amid speculation about his future as head of British Leyland, the motor giant now asking for Government rescue. That rescue, involves an immediate cash loan from Industry Secretary Mr, Wedgwood Benn, and opens the back door for his nationalisation plans in key industries.
At Westminster last night it was believed that Mr Benn will demand a change of management. Sixty-year-old Lord Stokes might be offered early retirement with Mr John Barber, his No.2, moving up to chairman, though no one, doubted that Mr Benn would be the real driver, back seat or front.
As Lord Stokes,”’I have, noticing to say ‘, flew off in a bid-to clinch a £300 million deal for an assembly plant in Egypt 55 year oId Mr Barber was left to say: ‘We have no plans for large-scale redundancies or plant closures unless the position deteriorates.’
How much money does he want? Mr Barber, like Mr Benn, would not say. But it is believed that the figure in negotiations will be over £70 million, which in fact could buy out the company nearly twice over, on the stock market at the moment. That £70 million would cover just raw materials, bought-in components, and part-finished cars. It would need at least as much, again to cover outgoings on a-day-to-day basis, wages, for example run a £1 million plus a day in Britain alone. The stock market reflected this cash crisis yesterday.
Shares of British Leyland, our biggest; exporter at £424 million last, year-dropped-to a nominal-6.3p, valueing the whole group at £37 million compared with £134 million earlier this year.
And Sir Don Ryder scarcely had time, to clear his desk at Reed International before hid first task as the Government’s new Industrial Adviser, landed in his lap. ‘I have,’ he said, ‘a lot of reading to do.’ ‘
On a plate
Tory M.P’s- did not need to read beyond the figures. They were filled with gloom about British Leyland’s plight. They felt the company had been handed to Mr Benn on a plate. But in the circumstances,they could not protest, for it was generally agreed that the Government had to act.
Opposition spokesman Mr Michael Heseltine said last night: ‘The problem is that once you have the Government involved in a company it becomes regarded as a bottomless purse and there is less incentive to solve the problems.’
And Mr. Eldon Grifflths, another Tory industry spokesman, said: ‘With Leyland shares at their present stock market level the Government could become the biggest single shareholders, with Mr Benn’s nominees sitting in the board room. When you think of the record of other nationalised Industries, it’s a pretty dismal prospect.’
Mr. Griffiths added: ‘ There is something nauseating about Mr Benn riding to the rescue of a firm that his own Government
has brought to its knees. There can be no question of letting British Leyland go to the wall, but before nationalising, it wholly or partly Mr Benn should take two steps : Let him persuade the unions to call a halt to suicidal strikes, and let him persuade the Chancellor to relieve the firm and others of penal taxation imposed for doctrinal reasons.’
But whatever they say about Mr Benn and Labour’s Left wing nationalisers, many Tories believe British Leyland has not been well managed. If Mr Benn goes the whole way, how would he run it ? It could be the blue-print for future State interventionin industry as promised in Labour’s election manifesto.That would- involve ‘worker participation,’ with supervisory boards including union, representatives vetting the decisions of the ordinary directors.
‘The British Leyland crisis may have come too soon for such an untested plan to be tried. But it seems certain that the Government would in any case nominate some union representatives to the board. Mr Eddie McGarry, joint chairman of the shop stewards’ committee representing all the group’s plants, said: ‘We’ll insist on direct representation on the board,’
In Parliament Labour backbenchers cheered Mr Benn’s rescue operation,which would provide overdrafts and a cash iniection, and were really elated at this chance of massive State intervention.
‘What the Industrial Adviser and the future National Enterprise Board are all about, they pointed out, is giving a helping
hand to vital ‘ lame ducks. If Mr Benn was as pleased as his backbenchers he did not show it. He explained that in a straight exchange for investment help there would be a measure of State control. Tory anger mounted as he refused to name a price until Sir Don Ryder has reported. If public money is put into private industry, said Mr Benn, then ‘it is right that that should be reflected in the degree of public participation.’
In what some Tories regarded as a sinister note the Minister said that only when the report came in would the extent of that ‘ participation’ be apparent. And he told a complaining Opposition that it was their legislation he was using anyway,’wisely ‘ this time.