THE ONLY WAY LEFT FOR LEYLAND
By Jeremy Gates
It has been nourished, for these four long years since the days of the Ryder “rescue,” with £1 million of taxpayers’ money for every working day. Yet today depressingly, and somehow inevitably, British Leyland, the ailing leviathan of British industry, is once again back centre-stage, begging bowl at the ready. Jobs by the thousand are scheduled to go. Plants like Canley and Abingdon will close.
And Chairman, Sir Michael Edwardes, even if he embellishes his own image in the hot seat, may surely be overwhelmed by his quest to find a real road back to recovery for BL. The cold statistics, this morning, are undeniably depressing. Half year profits: a slight pre-tax increase to £20m from £17m last year. Ford, at the beginning of the summer, reported pre-tax profits of £242m for 1978, a year which included a nine-week strike. Remarkably these hefty Ford profits come from an output, in Britain alone, which is roughly half BL’s.
Ford- made 324,000 cars here in 1978, compared with BL’s 611,000. MeanwhiIe, BL market share in Britain plummeted to an all-time low of 19-3 per cent in August, compared with 23-1 per cent this time last year.. Dare we even face the fact that in 1970, not long after Lord Stokes had emerged as the pioneer of the British Motor Holdings-Leyland link-up, BL market share was up about 40 per cent. And everybody thought we had a crisis then. But Mr Edwardes’s blunt speaking produces two key questions : How has BL staggered even deeper into trouble? And is there any real hope of salvation?Problems first. We can summarise them as the three “M’s.”
MONEY : the inflation of the seventies has pushed the economics of vehicle manufacture up towards the stratosphere and nobody can yet say the astonishing spiral is anywhere near an end. Volkswagen, for example, considered to be one of the healthiest car makers, requiresa,daily cash infusion of £1-5 million a day. Daimler-Benz, another highly successful German operation has just announced a staggering investment programme of £2,400 million on domestic production facilities up to 1983.
Alfa Romeo, meanwhile, loses hundreds of pounds on every car sold, and is now up for sale. And in the U.S., Chrysler has reported losses of 260 million dollars for the first half of 1979, and asked the Government for a billion dollars of aid. In this sort of league, poor BL is actually among the small spenders with £2-4 billions from the National Enterprise Board over the period 1975-82.
MARKETS : Britain is by now the soft touch for any car maker looking for growth. Overseas’ makers now have a 58-4 per cent share of our home market. Compared with only 24 per cent in Germany, 21 per cent in France, 20 per cent in America, and less than one per cent in Japan. Curiously, BL contributes to this wretched picture- It imported 13,000 Allegros from Belgium in the first eight months of 1979.
MEN : BL has managed to cut back its staff from around 200,000 to a current 165,000 in the 1970s. But the average Leyland employee now produces five cars per year, roughly half the Continental figure, and a tiny fraction of the Japanese level. But if these fundamental problems are so awesome, is there any point, in saving BL?
At the current rate, the foreign car makers will have the whole of the market within eight years. British Leyland is reckoned to be responsible for something like one million jobs, thanks to the massive network of component parts suppliers. The Midlands would be ravaged by complete collapse.
So if there is hope and optimism to be salvageded from yesterday’s gloom, these are the possible lifelines :
The move, now full steam ahead in Europe, towards major sub-assembly plants, producing hundreds of thousands of engines, axles, gearboxes,to carry over several models. But the BL merge with Honda, which could be producing vehicles in just over a year’s time, will have to be repeated with other models. An obvious partner could well, be Renault. The two were talking before the BL Honda link became public. A bold new initiative in the commercial vehicle field. BL does have a reputation in the trucks, buses and vans field although its worries in volume car production have hindered it here, too..
New models : If the Honda- BL vehicle does eventually replace the Dolomite, a useful first step will have been achieved. But with its current range, BL will surely be dead within a few years. So new models must come and that means more and more of the taxpayers’ millions. Finally, crucially, somebody somewhere has to wave the magic wand over the British car industry and convince therest of the world it has a future.
END OF THE TITAN
THE news that British Leyland is closing its double-decker has plant at London’s Park Royal ends 70 glorious years. It almost certainly means the fall of the Titan, the newest of the breed. Ever since August 12, 1909, when the first two-storey bus rolled out of a factory in Walthamstow, produced by a predecessor of Leyland, the double-decker has been part of the London scene. Millions of children, “have, scrambled up the stairs and competed for the front seats.
The buses were shipped across the Channel in the First World War, to take troops to the front; and the more modern versions, often decorated in garish colours, take tourists on shopping expeditions in the West End. But trouble was around the corner for Leyland’s truck,bus and tractor division. In seven years, the, division’s production went down from 55,000 vehicles to 46,280, while manning went up from 27,000 to 28,000. Leyland estimated that it should have been building six to seven Titans a week at Park Royal, but was actually achieving only nne or two. It was losing £256,000 a month and it wanted to recruit another 200 skilled workers and increase production.
A spokesman said: “We needed skilled bus builders but there is a shortage of them and the unions would not permit us to fill the vacancies from other, similar trades. We are going to see how and whether it is feasible for production to continue elsewhere,”
The spokesman said. “But there are no other suppliers who could step into the breach.”
There is little doubt that London Transport and other cities will find a way of keeping their double-deckers going and replacing them from somewhere else. But for London, it is the end of an era.