CAR – June 1985
Interview – Harold Musgrove, Chairman And Chief Executive, Austin Rover Group Ltd, story by Gavin Green
Harold Musgrove must have the least envied task in the motor industry. As chairman of Austin Rover, BL’s volume car wing, he’s in charge of turning the still ailing manufacturers into a commercially viable firm. Despite signs of promise, last year was a bitter disappointment for Musgrove with Austin Rover’s balance sheets worse than in 1983, sales down and further industrial disharmony. Negotiations with the government over the BL corporate plan have also been difficult. Nonetheless, next years executive car – the long awaited and crucially important Rover XX – and a blossoming relationship with Honda, bode well for the future. The company’s forthcoming return to the U.S. market, where they failed miserably a few years back, should also help.
Musgrove, a BL veteran with 40 years service, was given the chairmanship of Austin Rover in 1982 after working under Sir Michael Edwardes. He now heads a smaller, leaner company – which he claims is one of the most cost effective car makers in the world.
‘And if you let me down, I’ll make sure you never come anywhere near this building again’! Harold John Musgrove, Austin Rover’s straight talking chairman, is showing the schoolmasterly side of his character: leaning forward with finger wagging and voice raised almost to a shout.
His brown eyes, flashing with apparent anger, hold mine like a vice. Musgrove, who has apparently had some bad experiences with journalists in the past, is asking for a fair deal. Astonished, I mumble something about being good. Apparently satisfied, Musgrove regains his managerial decorum, reaches for his Hamlet cigar – balanced on the ashtray with far more stability than any BL financial books of recent – and leans back in his easy chair. The flash of imperious anger is over, but the domineering sock it to them side of the Musgrove psyche is not gone for good.
As chairman of Austin Rover since 1982, 55 year old Musgrove is charged with the onerous responsibility of making the biggest bit of the British motor industry survive. An acknowledged grafter rather than an intellectual, he admits that Austin Rover are still ‘not viable.’
‘I want the Musgrove era at Austin Rover to be remembered as the period in which the company becomes a viable, commercial concern.’
He’s offering no prediction as to when this might happen, though. But if he takes early retirement, there are only five years left.
Musgrove works in a large first floor area of Austin Rover’s headquarters, on the A45 in Coventry. His office, part of a complex which includes the boardroom, a video room and a large secretarial cum-reception area, offers a panoramic view of the A45, the executive car park and the Torrington factory over the road – where, among other things, steering joints and bearings are made for AR cars.
The view being what it is outside, most guests are probably more inclined to peruse the pot pourri of offerings on the office wall. They’ll find a large painting of the forge at Longbridge during World War 2 – where among other things, bits of Lancaster bombers were built – and a series of aerial shots of a more modern 1980s Longbridge. There’s a large autographed print of former French saloon car champion Rene Metge in his Rover SD1 racer (Musgrove takes a keen interest in the competition Rovers ) and two gold medals Musgrove won in the early 80s.
One of these is from the Institute of Production Engineers ; the other is the Churchill Award from the Society of Engineers. There is also a framed cartoon from THE BIRMINGHAM POST, which shows Mrs Thatcher about to get into a voice synthesiser equipped Maestro telling Maestro telling Musgrove : ‘It wouldn’t dare tell me what to do.’ (Says Musgrove ‘It’s more accurate than the artist ever realised’ ).
And in pride of place above Harold’s swivel desk chair is Austin Rover’s royal warrant. Musgrove is an hour late for our early evening interview. He has been delayed in the boardroom discussing the company’s corporate plan – currently in front of Trade and Industry Secretary Norman Tebbitt – with other management heads. The meeting has lasted 4.5 hours. His unruffled, ever smiling secretary Ann has given us coffee and biscuits as we wait. He finally emerges from the boardroom, issues some peremptory instructions to Ann (‘……..and don’t let me forget that tomorrow’ ), looks at the mound of paperwork on his desk (Ann, where did this come from ?’ ), then shakes my hand firmly.
He is a thin, fit looking man, full of pent up energy despite the advanced hour ( it’s 7 pm ), the no doubt arduous meeting and the fact that he had just arrived back from a three day trip to India.
We open up on ARG’s current condition – I aim to strike a congenial note – so Musgrove launches into reasons for Austin Rover’s poor sales and financial performance last year. Despite the optimism of the last couple of years, Austin Rover’s market share in 1984 fell ( back under the 18 per cent mark ), their tiny operating profit in 1983 receded to a £26 million loss, they missed their sales target by 50,000 cars and, in the first quarter of 1985, they have been overtaken in overall sales by Vauxhall. Even more annoying, their brief period of industrial harmony disintegrated : there were two lengthy disputes.
Musgrove puts the blame for the sales and Sterling losses firmly on those strikes.
‘The first – over the dismissal of the coloured forklift driver – came before the August sales rush and meant we were short of cars. While the rest of the industry were heavily incentivising we didn’t, because we had no cars to supply. And anyone who doesn’t have a good August sales performance in Britain has got problems with the annual figures. Then in November there was the wage negotiation dispute. That hurt our supply of cars for the start of the ’85 year.’
Harold Musgrove says 1984 was very disappointing all round. And the aggressive UK market conditions are still hurting.
‘Many foreign companies, whose domestic markets are poor, are putting enormous effort into increasing their UK sales,’ he says. ‘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.’
Musgrove says Austin Rover can compete on dealer incentives ( to aid discounting ) – but cannot offer the huge fleet discounts of some competitors. Some makers are said to offer up to 40 per cent off certain models for fleets.
Although Austin Rover may still not be a ‘viable’ company, Harold Musgrove reckons there have been many achievements in the post-Edwardes era.
‘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 ( a much lower figure than some Austin Rover directors were mentioning a couple of years ago ) 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.’
Harold Musgrove says Austin Rover won’t be making the same errors with their exports that BMC and British Leyland did.
‘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.’
Anyone who has sat through one of Harold Musgroves product launches will know that the ARG chairman likes to barrage his audience with superlatives about the cars. He seems to work on the tell-them-its-good-enough-times-and-they’ll-believe-you principle. In this 90 minute interview – during which I never ask his opinion of any ARG model – he describes the Metro as’ a most distinctive car’, the MG Metro as’ a beautiful fun car’, the 2.0 litre MG Maestro as’a beautiful fun car which is superbly balanced’, the MG Montego Turbo as’ a tremendous drivers car – I feel ashamed about the fact that I actually own one, whereas most people haven’t had the chance’ and the Montego as’a most distinctive, very stylish car – it’s a classically styled machine.’
The real eulogies are reserved for the XX.
‘Given the choice of any car to own and given unlimited money, I’d wait for the XX. It will have tremendous quality, refinement and durability – and it will be an exceptionally superb looker.’
The XX, which will replace the Rover SD1 – production of which fell sharply last year – is Austin Rover’s first major collaborative design and manufacturing project with Honda. ARG’s main role has been the overall body style, suspension and interior. Honda’s main input has been into the new V6 engine, the transmission, the air conditioning and the steering.
‘It is more difficult to design a car when you are collaborating with another company’, says Musgrove.
‘You have to take into account their views and, obviously, in some areas, you will differ. I remember that during an early stage in the development we decided on a certain suspension system – which is our responsibility. But the head of research and development at Honda at the time, who is now their president, suggested we should use a more expensive system instead. Eventually we agreed. We have also had discussions about the styling where Honda have agreed with us. It is more difficult working with someone else, but the result is better. The XX will be a better car, because of the Honda collaboration, than if we had designed it completely ourselves.’
The two main engine options on XX will be a 2.5 litre Honda V6 and a modified version of the ubiquitous 2.0 litre O-series engine. There will be two different specifications for the V6, and three for the 2.0 litre. The initial model will be a notchback, with the possibility of a coupe and hatchback to follow. The notchback is due to be launched in spring 1986, although the Honda version of the car, the HX will be shown at the Tokyo Motor Show at the end of 1985.
‘It would have been nice if we’d launched our version first, but it really doesn’t matter,’ says Musgrove.
‘The Japanese have a different way of launching cars from us – they show the first car they’ve built – with absolutely no production stock on hand. We launch a car when you can buy it from dealers.’
Not all XX models will necessarily be Rover badged, says Harold Musgrove. But contrary to some rumours that the coupe variant would wear Triumph badgework, the chairman says the Triumph name will not feature in XX’s future. He also denies a strong rumour that Porsche are involved in a £6 million development programme to improve the O-series engine for the XX, perhaps with 16 valves in the head.
Harold Musgrove says working with Honda has increased his respect for the Japanese.
‘They take longer to make a decision than we do, but once they’ve made it they move with incredible speed. The Japanese are very, very clever – but they are not unbeatable.’
Future Honda collaborative projects are certain, although Musgrove denies that any firm plans have been made. Nonetheless, most experts predict that a new collaborative deal to build a medium sized car is imminent. There is also a strong possibility of ARG assembling some Honda models at either Cowley or Longbridge.
Musgrove denies that ARG’s relationship with Honda is adulterating the British nature of his cars, or debasing Austin Rover’s corporate identity.
‘The old Triumph Acclaim and Rover 213 have a far higher local content than the cars of most so-called British manufacturers,’ says Musgrove, his voice raised, his forehead tilted forward and his eyes performing their optical lock. It’s clearly a sensitive area. Musgrove insists that, despite any future collaborative projects, Austin Rover will always keep their corporate identity. Questioned on the possibility of Honda buying a share of ARG, or even taking them over, Musgrove says: ‘I don’t know how we could retain our corporate identity if Honda did have a share.’
Along with committing himself to the retention of corporate identity, the chairman also insists that Austin Rover must retain the ability to’ build or design any area of a car. It’s imperative that we don’t rely on another maker to do something for us, and then lose the ability to make that part.’
Accordingly, Musgrove dismisses a suggestion that ARG may never again design and build a new engine by themselves. The powerplant for the forthcoming Metro replacement – believed to be about two years away – will not be Honda sourced, he adds. Nonetheless, ARG are about to start manufacture of Honda gearboxes at Longbridge. With typical hyperbole, Musgrove describes the box – rightly enough – as ‘superb.’
But the chairman retains some of his enthusiasm for Honda’s new complex at Swindon.
‘It shows how much effort Honda are putting into supporting the XX/HX programme,’ he says, adding that the site is purely for the sub-assembly of pressings peculiar to Honda versions of the HX made in Britain by ARG, for parts and distribution, and as a pre-delivery inspection centre.
‘Honda say they have no plans to expand the site. And that includes starting UK engine production.’
The chairman also dismisses the rumoured resurrection of an MG roadster – possibly on a Honda base – as ‘pure speculation.’
‘ We have no plans to build an MG roadster. It is not even in the concept stage. We would only build one again if we thought it was profitable. At the moment we don’t think it is.’
The Austin Rover chief has two MG’s at home – one of the new Montego Turbo’s and an MG Metro.
‘My chauffeur car is a Rover Vanden Plas EFI, I love driving, though, and am a real car enthusiast. I drive all our cars, and no one is allowed to get to any significant stage of development until I’ve driven the car and gone through it. I drive everyone mad. Not that I’d want a Lamborghini or a Porsche or a Ferrari. The idea of a mid-engined 12 cylinder two-seater just doesn’t appeal. I also like driving fast, but never in a built up area. People are damned fools if they speed around town with children and old people about. Yes, put your foot down on the open road, but no, not in built up areas.’
There is the raised voice and the now-you-listen-here tone, again.
What makes a good chairman?
That requires a calmer answer. There’s a pause, a puff on the Hamlet, a scratch on the chin.
‘I can motivate and lead people, and I can certainly lead by example. My strengths are the manufacturing side, the ability to assess a car, and the engineering side. I also have the ability to listen, and make decisions when necessary. And I don’t always make decisions based on the advice I get.’
As a boy brought up in the Midlands, Harold Musgrove accepted the advice of many people and went to work in the motor industry.
‘I came from a motor industry background. My father worked as a machine operator at Longbridge. My grandfather was also a factory worker. I had a very working class background, really. As a boy I had three ambitions. I wanted to be an RAF navigator – and that I did. I wanted to be a professional footballer. That I did ( he played for West Bromwich Albion. And I wanted to work in the motor industry. And that I did. I never really dreamed of being chairman or managing director of this company, although I was always competitive. In those days, too, there was a big gap between the shop floor and middle management, and between middle management and the boardroom. Nowadays the gaps just aren’t as big.’
Musgrove says he joined the Austin Motor Company 40 years ago – just as the war was ending – as an apprentice on press tool making and machine tool fitting.
‘I came from a grammar school though, which was unusual for a trades apprentice, and when I went to technical college I did a mechanical engineering course. I had the ideal apprenticeship – doing an engineering course and actually working on the shop floor. Soon after, I did my national service – in the RAF. I finished that after being commissioned at 23. I struck a dilemma then. I went back to Austin’s – where they put me in the planning department – but all the time I thought of gong back into the RAF. The thing that swayed me was that, at 23, they made me works manager at a factory in South Wales, looking after 250 people. I’ve never had any regrets about committing myself to the car industry. This company has been incredibly good to me, and my family. In return I’ve always given 100 per cent.’
But there were times when Harold Musgrove did consider leaving. During British Leyland’s nadir in the mid 70’s, he almost did it twice.
‘In 1977, for instance, I did make up my mind to leave. There were so many problems and I wanted out. But Sir Michael Edwardes and Ray Horrocks asked me to change my mind. I was impressed by them. They asked me to be manufacturing director of cars. I thought it would be a change, after a lengthy spell in the in the truck and bus division.’
Musgrove admits he learned’quite a lot’ from Edwardes. They don’t keep in touch, though.
‘I haven’t got time to keep in touch with anyone outside this industry.’
The chairman usually works a 12 hour day.
‘I normally arrive at the office, or at whatever plant I have to visit, at about 8.05 am. I leave it five minutes or so after everyone else arrives, to avoid hold-ups at the gate. Being chairman, I can allow myself the liberty. It’s unusual for me to be home in the evening before 8.30 pm. I have a lunch break if we have customers or visitors ; otherwise I simply have sandwiches in the office. I don’t want you to overplay the hard working thing, though. Some people think if I work 12 hours a day it must be some sort of drudgery, but if I didn’t enjoy it, I wouldn’t do it.’
‘I regret it from the point of view of my family, particularly when I sometimes have to be away at weekends too. But then if you don’t like the heat, you should get out. I love my work.’
The people who may not love it quite so much – the Musgrove family – include his wife Jacqueline (‘She’s fantastic’), and his four children. His eldest son, who is 21, is at college doing hotel management.
‘He decided that the pressures of the motor industry weren’t for him,’ says the chairman. ‘But my youngest son, who’s 12, might be interested in the car business. He’s not sure yet.’
Musgrove likes to spend weekends with his family, although he likes golf as well.
‘The trouble with golf is that it’s such a selfish hobby. I spend so much time away from my family during the week, I feel I should see them on weekends, and golf rather spoils that.’
Harold Musgrove needs to work such long hours, he maintains, because for Austin Rover to be successful big effort is necessary.
‘We’re paying the penalty now for British industry’s problems in the seventies. For us to be equal, we have to be better. That’s a good quote for you. And one of the reasons is, that the British public are so critical of British products. Journalists don’t help. I mean just the other day our racing Rover’s finished first, second and third at the Monza European touring car championship round, beating the BMW’s, Toyota’s and whatever. How much press coverage did this get in Britain. One lousy sentence in a few papers, if we were lucky. Yet if we blow up in the next round at Donington, you can bet we’ll get exposure.’
Again the lecturers finger.
It’s after 8.30 pm and, outside, the executive car park is almost empty. Harold Musgrove has been very generous with his time, and helpful. It’s time to go. His secretary has gone home, and the combination lock equipped filing cabinets are all shut. The corridor is deserted.
Outside Austin Rover’s headquarters, the Musgrove chauffeur driven Rover Vanden Plas awaits. Apart from the chairman’s office, only one other light in the office building is on. Some other executive will outwork Harold Musgrove tonight. The boss’s example, it seems, is being followed.