LEYLAND BUS CHIEFS BID UNDERMINES SELL OFF PLAN
By David Simpson, Paul Hoyland, and James Naughtie
The Governments growing discomfiture over its private deals to sell off BL’s commercial vehicles divisions was exacerbated yet again yesterday. Senior executives at Leyland Bus announced that they had formed a management consortium to bid for the company. The disclosure of the management buy-out plan comes hard on the heels of a decision by other top BL managers to bid for the Land Rover and Freight Rover subsiduary of the state owned company.
The two consortia appear to damage the Governments contentions over the past three weeks that the sale of the entire BL commercial vehicles operations was being conducted solely by the state controlled corporations own directors and with the full endorsement of those directors.
Now, only two main board executive directors have still not declared themselves against the acquisitions of Leyland trucks and Land Rover by the U.S giant, General Motors and Leyland Bus by Laird Group. They are the BL chairman, Sir Austin Bide, appointed by the Conservatives to oversee the anticipated BL privatisation, and the groups chief executive, Mr Ray Horrocks, who has specific responsibility for the Austin Rover car division.
Just over two weeks ago, after an outcry among both the public and Tory backbenchers, the projected sale of Austin Rover to its main rival, the other leading American motors group, Ford, was abandoned. The latest development is a plan for a management buy out of the loss making bus operation stewarded by the divisions present managing director, Mr Ian McKinnon. On Wednesday, the main board BL director with overall responsibility for all commercial vehicles operations, Mr David Andrews, revealed that he was heading a buy out team bidding for Land Rover.
The existence of management buy out teams which could keep BL in UK hands, and which would appear to further the Governments own objective of wider competition and wider share ownership can only increase the pressure to scrap their present plans to sell off BL divisions to preferred buyers.
It is also likely to add weight to the challenges made by Tory backbenchers and opposition parties that it is the government itself, rather than the BL directors, who have been conducting the negotiations with General Motors and Laird Group. There was some attempt by the Government yesterday to clarify the March 4 deadline for bids for the different BL divisions, with explanations being put forward that this date only applied to intentions of take-over offers. There has been widespread criticism over the deadline on the grounds that it was designed to block management buy-outs.
The propaganda war over the sale of Leyland trucks and Land Rover to General Motors was stepped up on all fronts yesterday. BBC radio news claimed that the U.S group was prepared to pay £230 million for the two companies, and set aside a further £40 million for redundancy costs.
General Motors promptly challenged the foundation for the BBC claims, but it is understood that they were leaked discreetly, largely with the aim of deterring management consortium bids. On the political front, anti-American feelings over the potential deal between between BL and General Motors has been fuelled by the Prime Minister herself, rather than by opponents of the deal, the SDP leader, Dr David Owen claimed yesterday. There has been no more chauvinistic Prime Minister this century than Mrs Thatcher, but her rhetoric now appeared hollow. Dr Owen said.
“You cannot be British if you don’t build British,” he added.
The “Keep Land Rover British” campaign was extended by the Labour leader Neil Kinnock, as he visited the company’s main plant at Solihull in Birmingham. If partsof BL are to be sold off, Mr Kinnock said, the Government ought to show preference for management buy outs. Over the past three days the Trade and Industry Secretary, Mr Paul Channon, and subsequently the Conservative chairman, Mr Norman Tebbit and Mrs Thatcher herself have attempted to divert criticism of the General Motors deal by ascribing it to anti-American feelings.