Back in December 1974, and the unholy trinity of unending strikes, poor product decisions and a declining international economy did its worse for British Leyland, and forced a short-term government bail-out worth £50m.
Here’s how it was reported at the time.
By Paul Connew and Robert Head
British Leyland has been a battleground from the beginning strikes have continued plague the car empire set up in 1968. The company’s share of the British car market has slumped dramatically in the face of foreign competition. British Leyland supremo Lord Stokes has fought a running battle with the money men from the City.
And confidence has drained from the army of investors who put their faith in Britain’s biggest car maker. Now the crunch has come for the stricken giant. And even as the government prepares its resue operation, one more crippling dispute drags on. This is at the sprawling Triumph factory in Coventry, where not one car has rolled off the assembly tracks since November 8.
That represents lost production worth £20 million—much of it for the crucial export market.
British Leyland exported £424 million worth of cars, lorries and buses last year—one third of its total sales. The Coventry strike demonstrates some of the attitudes which have added to British Leyland’s burden.
This is how it began
Just over two weeks ago 1,000 assemb1y workers who were laid off because of a dispute at the Coventry works walked out in protest over lay-off pay arrangements. As a result, another 8,000 workers have been sent home or are refusing to cross the picket lines.
The strikers say they will not return to work until their demands for an improved lay-off pay deal are conceded. But Triumph bosses claim that the men’s action is a breach of an agreement signed by the factory’s seven unions in July. That agreement provides the workers with lay-off pay if they are made idle because of a strike at an outside supplier. But it does not cover them if they are made idle as a result of an internal dispute. The strikers want an agreement covering ALL disputes.
Industrial unrest has helped to undermine the company’s fortunes in the City. Time, and again over the years Lord Stokes has accused the City of failing to back the company. But British Leyland WAS backed by 300,000 investors, large and small. And they have had a rough ride for their money.
When the company was founded by the merger between Lord Stokes Leyland truck and bus giant and British Motor Corporation, the shares were 60p each. At one time they reached 92p. Then the slide began. Two years ago Lord Stokes called on his Shareholders to put up an extra £50 million of new capital to back his ambitious expansion plans.
The faithful chipped in 45p for each unit, only to see them slide to 7p each. The investors have seen precious little return on their money, since the company was formed, profits have averaged only 5p a year after tax on every £1 of capital tied up in the business,
We Want A Share Say The Unions
Union men in British Leyland Leyland yesterday spelled out the workers price for Government ; seats on the board.
At the firm’s strike-hit Coventry plant, shop stewards leader Eddie McGarry said: ‘We will insist on direct representation. Otherwise you are not changing anything. British Ley1and’s difficulties over strikes pale into insignificance besides the business arrangements for running the concern.’
And in Lancashire, engineers union secretary Bob Crook called for greater public control of the company if the Government came to its rescue. ‘Worker participation in that control should be part of the deal,’ he said.
Will The Boss Bounce Back?
Lord Stokes British industry’s super-optimist was doing the job he likes best yesterday — selling. With a brisk ‘No comment’ he flew out of London’s Heathrow airport on a sales mission to Egypt. Five hours later, as his plane touched down in Cairo—where he will also have talks about setting up a new factory—speculation over his future was mounting.
But Donald Gresham Stokes, the apprentice who rose to control Britain’s biggest export firm, doesn’t give up easily. Even when he became chairman of British Leyland he was personally selling two cars a week.
He threw all his energies into making the marriage of Leyland and the British Motor Corporation work. In January, 1971, he that we can make the profits to which’ shareholders are entitled. By 1973 his optimism was paying off. he firm turned in record profits and Lord Stokes said: ”We are seeing a slow but impressive and solidly-based build-up of our fortunes.”
But British Leyland’s honeymoon was nearly over. Strikes and the three-day week drove the company into the red. As the share price dropped disastrously Lord Stokes attacked the City dealers and firmly denied that BLMC would ask for Government aid to bail them out.
Now, with his empire facing its gravest crisis, 60 year old Lord Stokes is still fighting. A deal with Egypt, plus tax concessions, would be a big boost for British Leyland and for the super-salesman.