The Government’s industrial adviser, Sir Don Ryder, and his team of experts are due to report this week on the future of the troubled motor giant, British Leyland. In advance of that report the company’s chairman, Lord Stokes, gave Mirror City Editor Robert Head this exclusive interview.
The shadow of the sack hangs over over British Leyland’s 160,000 workers-and three or four times that number in other firms supplying it with everything from tyres to windscreens. Thousands are already on short time. So what is the outlook for the Leyland workers?
This is what Lord Stokes said.
Lord Stokes – ‘The motor industry all over the world is going through the biggest decline in its history. Fiat has 350,000 cars on hand. Vauxhalls lost £18 million last year. Renault lost £14million and Volkswagen has indicated losses of £90 million. In relative term we have done quite well-at least we made a profit last year. But I can’t guarantee that there will be no more redundancies and short time working.”
Reports say 30,000 must lose their jobs at British Leyland. True?
Lord Stokes – “These figures are plucked out of the air. We’ve never quoted a figure. We can’t tell whether the market will turn down or go up. Compared with our competitors we haven’t done so badly. There are 200,000 imported cars in stock in this country – equal to six months’ sales. We have only about two months’ supplies (100,000 cars) in stock. We reckon we can keep over 40 per cent of the market if only we can get the cars produced. We can contain imports provided their prices are fair and factual.
You have just put car prices up by a further 7 per cent. Are there more price rises coming this year?
Lord Stokes – “I support the Chancellor of the Exchequer when he said that if wages go on rising at the current rate We are just pricing ourselves out of business at home and overseas. Steel is going to go up again – and that affects all engineering. It frightens me to death what is happening in this country.”
Is if true you will need £1,000 million of capital over the next five years?
Lord Stokes – ‘That is conjecture – don’t ask me to comment on the amount. We are looking at plans longer ahead than five years. The cash finance we require from the Government all depend very much on inflation. If it goes on at this rate every company in this country will require astronomical amounts of money to keep going.”
Is British Leyland too big?
Lord Stokes – ‘Not in international terms-we are less than one-tenth the size of General Motors. If we are going to get economies of scale, we have got to be fairly big.
What of the long-term prospects?
Lord Stokes – ” They are not too bad. We see business picking up in two years time. The market for cars in Western Europe is expected to rise from 6,700,000, this year to 8,000,000 in 1978. This is one of the reasons why we see growth in Europe in which we must have a chance participating. There is a hell of a lot going for this company.”
Will you resign if the company is nationalised?
Lord Stokes – “I will stay on as long as I am wanted and there is a useful job that I can do.”