Archive : BLMC has long wait to reap full potential

From A Goodrick-Clarke
Seneffe, Belgium, June 15

It will be 1975-76 at the earliest before British Leyland’s real profit potential can be “anywhere near achieved” Mr John Barber, a group deputy managing director and director of finance and planning said here today. Not until then, will the company’s post-merger plans be “materially completed”.

But it is already clear, subject to the usual industrial relations provisos, that when Lord Stokes, the chairman, forecast a 1971-72 profit “close to” the previous year’s £32m, he was being conservative. Of this, the group’s Austin-Morris volume car business could well contribute about £15m. Sales remain buoyant and Mr Barber gave more details of the group’s five “problem areas” where remedial action has been taken and “substantial improvements” can be expected in the near future.

They are the truck and bus business, which returned only a bare profit in the first half, but is now showing signs of responding to an industry upturn; Triumph, which has been badly hit by Labour problems; and Australia, where first half losses were £1.5m greater than in the 1971 period, but where a new American-type car will be launched next year. South Africa, where major board and management changes have just gone through. and Spain. where several senior British executives are trying to rectify production and management difficulties.

Overall however the European picture for British Leyland looks extremely promising. Lord Stokes. who was here for the inauguration of a new £4m expansion at the group’s Seneffe plant, said that having completed the structural European reorganization, British Leyland was experiencing heavy demand for its vehicles. Belgian production is at 100,000 units annually and projected to rise well above 150,000.

Mini, 1100/ 1300, Maxi and Marian assembly already takes place here. Now truck and Jaguar assembly is being introduced in Belgium. British Leyland also confirmed today that it is about to repay a major slice, possibly as much as £20m, of its outstanding debt to the Government which was taken on from the former Industrial Re-organization Corporation. The Government has apparently agreed to this and a statement is expected.

Quotations from Seneffe

“Apart from the difficulties of production planning, we realise that we have a long term interest in export markets, which must be supplied… All the same, we acknowledge that our market performance is still very far from satisfactory in some major markets, and we intend to put that right.”
Lord Stokes

“The jobs in Birmingham depend on the people of Birmingham .If they get their finger out then the position of the company would be a hell of a lot better .”
Lord Stokes

“Already we are selling 250,000 cars a year in continental Europe and we are going to try to reach 500,000 cars a year by 1975 .”
Lord Stokes

“This is not a forecast, but an indication of what we think we ought to be able to achieve in a year of reasonably uninterrupted production.”
John Barber

“It is always easy to avoid a strike if you are prepared to sacrifice your long term objectives. We have decided not to do that. I think they realise by now that this surrender of autonomy is inevitable, but it is taking a long time to come through.”
Pat Lowry

“In the coming year 78 per cent of the cars we sell on the Continent will also be manufactured or assembled on the Continent.”
Allen Sheppard, manging director of BLMC’s European division.

Keith Adams

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