‘What does BMC stand for? Bugger my competitors,’ said Leonard Lord about the formation of the British Motor Corporation in 1952.
He wasn’t wrong. It began as a union between two of the UK’s largest carmakers, Austin and Morris, and would end up being home to two direct competitors with opposing ideologies. It could have worked, and for a while it did so brilliantly. But the cracks would soon start to appear…
BMC: A troubled partnership
In 1952 the formation of British Motor Corporation was the answer to a question few people in the motor industry had asked. But happen it did, as a merger between the Austin Motor Company and the Nuffield Group, which created the largest motor manufacturing group in the country, with a model range that spanned baby cars to luxury motors for industry plutocrats.
The idea behind BMC was a good one – to form an enormous British car company to fight the threat posed from overseas manufacturers. BMC, it was hoped, would assure the future of the British motor industry through the combination of Austin and Morris, and their associated marques.
Problems with the model range, the engine lineup, dealer groups and management soon manifested themselves. A climate of mistrust, mutual loathing, self-interest and a clash of personalities right at the top stifled any chance of success. Instead of concentrating on beating the opposition, BMC ended up fighting itself, and ultimately losing.
An uneasy relationship born out of resentment
The Nuffield Group had definitely lost out right from the beginning. Although former Morris supremo Lord Nuffield was appointed the President of BMC in 1952 – at the age of 75 – he did not have the whip hand. Austin’s chief, the forthright and opinionated Leonard Lord, had taken the reins to oversee the day-to-day running of the company.
Lord was a high-flyer at Morris, promoted to General Manager before becoming Managing Director in 1933. But it was a far from happy relationship. In 1936, he resigned from the company after a fractious three years working for Lord Nuffield. When Herbert Austin wanted to step back from operations at Longbridge and let someone else run the show as his Managing Director, Lord stepped back into the motor industry and took the job, much to the irritation of his old adversary at Morris.
The rivalry between Cowley and Longbridge intensified when more executives followed Lord from Cowley to Longbridge, most notably his right-hand men, George Harriman and Joe Edwards. When Sir Herbert Austin died in 1941, Lord stepped up and took complete control of Longbridge. The die was cast.
The unhappy union
All this, supposedly came to an end in 1952 when BMC was created from the two sparring partners, but various parties affected by the merger had their own vested interests. In this instance, it was clear that the top echelons at BMC were more interested in the welfare of Austin and Longbridge than Morris and Cowley.
Pretty much the first job Lord did was to ensure his favoured Austin men were installed in all key management positions for BMC, closing out the former Morris management. High-ups from the Nuffield Group saw the merger as nothing more than an Austin takeover and therefore became defensive of their own roles within the Corporation.
Not only was this evident high up in the company, but at all levels – employees still felt part of the ‘them and us’ culture within the company, which was being perpetrated by the management’s actions. The Dealer Principals remained trenchant in their insistence that separate networks was maintained. Unpacking this should have been straightforward, but trenchant attitudes on both sides meant that the separation of Austin and Morris remained in place for far too long.
Rationalising Austin and Morris: not for dealers
The dealers feared that cuts would need to be made in order to fully amalgamate Austin and Morris, so it was in their interest to maintain the status quo by not accepting a single loss in the range. Not only this, but they would not accept cuts in their distribution networks. They used their huge influence to brow beat Lord into not making any significant cuts.
Consequently, Lord nurtured the separate Austin and Morris model ranges instead of creating an all-encompassing BMC lineup, and he allowed two separate dealer networks to sell them. If there had been a will from the top to break this stranglehold, then the dealer groups could call on written contracts defining their positions, in some cases stretching back 50 years.
The idea of separate franchises and a wide variety of model ranges had appeal because it was a marketing model that worked well for General Motors in the USA. However, in the UK, BMC had neither the resources nor the overall production capacity to maintain a multi-brand policy like GM’s.
Platform and drivetrain sharing takes shape
Leonard Lord knew BMC’s future lay in platform and component sharing, first of which would be a rationalisation of Austin and Morris engines. But it would go further – separate model ranges would be created by the continued and expanded policy of ‘badge engineering’ first started by Nuffield before WWII.
By accident rather than design, the model range that emerged from the newly-merged company offered surprisingly little overlap. It formed the basis of a homogeneous and logical progression from small car to luxury motors:
- Morris Minor
- Austin A40
- Morris Oxford
- Austin A70
- Morris Six
- Austin A125 Sheerline
As for the cars, although the Morris Minor was an amazing and advanced car, it was isolated in the BMC range in a sea of Austin-designed models. Morris design at Cowley was slowly wound down in favour of the Austin Drawing Office at Longbridge. By the end of the 1950s, when the Farina designed cars came on stream, all subsequent cars developed by BMC would have ADO (Austin Drawing Office) development tags.
In short order, a range of mainly Austin-derived engines came on stream, named logically enough, the A-, B- and C-Series. The C-Series was the only outlier – it was designed and built by Morris engines in Coventry, using Austin design philosophy. Significantly, all would enjoy a long life, the A and B-Series especially so.
Badge engineering: a philosophy ahead of its time
Badge engineering meant a full model range could be maintained and huge economies of scale were made. The dealers were happy, and customers did not care that the engine in their Morris Minor or Oxford was an Austin unit. It’s a policy that Stellantis and the Volkswagen Group are reaping the rewards from today.
The alternative argument is that BMC could have dropped the separate Austin and Morris marques at this point. But without the ability to cut down the dealer network, this was simply impossible – otherwise the company would have ended up with competing dealer networks selling the same products often less than a mile apart. At least with badge engineering, they were selling outwardly different products that appealed to brand-loyal buyers.
During this time, BMC sales were shored up by Harold Macmillan’s ‘you’ve never had it so good’ economic miracle, so the need for rationalisation was not there – at least in the UK.
Industrial unrest: the fly in the ointment
One problem with near-unlimited demand for cars was that, in order to satisfy that demand, BMC did whatever it could to maintain production. When the Unions demanded above-inflation pay rises, no matter how inappropriate, Lord would cave in. What he couldn’t do was lose sales in a booming market.
As the burden of these Union demands became increasingly severe, Lord began to lose patience: following a particularly disruptive strike in 1956, Joe Edwards was tasked by Lord to deal with the Unions by taking on a labour relations role. He refused to do so, and a huge falling-out between both men ensued, which ultimately led to Joe Edwards resigning from BMC.
Edwards’ resignation did have lasting effects on the company not only because he was popular with the Longbridge workforce (hence Lord’s offer to deal with them), but also he was a man of great conviction – someone who would try very hard to maintain the success of BMC in the years that he was there.
Pininfarina adds style
The cars that BMC offered at the time were thoroughly conventional, uninspiring and somewhat stolid, and it was as a backlash to this thinking that Pininfarina was invited to add some much-needed flair. With great efficiency, the Italian styling house produced its proposals for the new cars, the first of which was launched in 1958 to great acclaim.
This car was the A-Series-engined A40, a rebodied A35 incorporating smart Italianate styling. It was priced at a premium over the A35, but it proved popular nonetheless, hitting the market just as the effects of the 1956/57 Suez Crisis saw the demand for small cars increase almost overnight.
Next to come were the B-Series-engined cars, the Cambridge and Oxford, launched right at the end of 1958. They were good-looking cars exclusively powered by the not-too energetic B-Series which saddled the car with less than spirited performance. But the badge-engineered models meant there was a version for everyone following on from the Wolseley 15/60, came the Austin A55 Cambridge, MG Magnette III, the Morris Oxford IV and the Riley 4/68.
The final models in the Pininfarina-styled triumvirate were the pair of large C-Series engined cars, the Austin A99 Westminster and the Wolseley 6/99. The styling of these two cars was similar to the B models, but more in keeping with the engine capacity and market aspirations of this model range.
Into the 1960s and lasting success?
By mid-1959, the range was complete. There were the A Models represented by the new A40 (The 35 and Minor were throwbacks that would remain in production to satisfy fuel-crisis demand for small cars), the B Models, represented by the Farina cars and the C Models right at the top of the range, the large Austin Westminster and Wolseley 6/99. The range was homogeneous, the cars were neat and contemporary looking and above all, they were a success.
The underlying worry was, of course, that beneath that smart styling, they were painfully conventional in their engineering and BMC was beginning to receive a certain amount of criticism over their engineering timidity. However, that would change forever on 26 August 1959, when BMC launched the Mini.
As the 1950s became the ’60s, the whole complexion of the market began to change. Competition began to become a whole lot tougher and merger mania began to take hold of the industry. Jaguar swallowed Daimler in 1960 and, in 1961, Leyland Trucks absorbed Standard-Triumph to become the Leyland Motor Corporation, the Lancashire-based heavy vehicles company being headed by the ambitious Donald Stokes.
BMC expands to meet challenges
With the health of the company looking so good, George Harriman announced a huge expansion plan for the company, aiming to build a million vehicles a year. The £49m Government-assisted programme involved opening new factories in Llanelli, South Wales, Bathgate in southern Scotland and Ravenscraig.
The output of BMC increased significantly, with a record 731,000 cars built in 1964. However, the seeds of disaster had been sown – investment had been made in manufacturing, but at the cost of a viable new model programme. The evidence of this is not hard to see: after the launch of the ADO16 in 1962 and the ADO17 in 1964, no significant new cars in the mass market appeared until well after the Leyland takeover in 1968.
The new factories meant BMC’s management was being overstretched with the task of overseeing this vast new empire. Human resources were stretched and industrial relations began to suffer. Profits began to drop on the sales of new cars as well, compounded by the double whammy of a poor pricing policy, which was defined right from the top, and high warranty costs on the troublesome Mini and 1100.
Poor pricing decisions hurt BMC
For an example of the Corporation’s slapdash pricing, one had to look no further than the new Mini. Leonard Lord’s famous quote that, ‘if you build bloody good cars, they’ll sell themselves.’ was certainly the case with the Mini and the 1100, both being excellent products, but the downside of this was that the Mini was priced too low.
The financial performances of the Mini and 1100 were demonstrated by the fact that, in 1960, BMC had made a £26m profit on total sales of £347m, but by 1967, when it was building and selling more cars, it made a loss of £3m on total sales of £467m. Turnover and sales were good for BMC during the 1960s, but as not enough profits were being made – so investment in future models was being curtailed.
By this time, Leonard Lord had stepped down as the company’s Chairman, and was replaced by George Harriman. Alec Issigonis was promoted to become the Technical Director of BMC, ensuring that these two men alone would shape future model policy.
BMC 1800: the plan begins to come undone
The ADO17 was designed as a replacement for the Farina models but, when the B-Series engine was enlarged for the MGB to 1.8-litres, Issigonis grew the ADO17 to make the best use of this new power unit. The result was that the new model was moved out of the market it was intended to compete in, and the styling was an unhappy mix.
Consequently, not only was the ADO17 not right for the market it was intended for, but it also proved to be an unsuitable replacement for the Farina saloons, leaving them to soldier on. Sales were weak, and the seeds of BMC’s downfall had been sown.
At one end of the range, the Mini and 1100 were selling in bucketloads, but not making the company enough money, and at the other the ADO17 was failing to meet (admittedly ambitious) sales targets. A lack of profitability was compounded by the continued production of the elderly and labour intensive Morris Minor and Farina saloons.
The downward spiral begins
In 1965, BMC’s output began to fall, but it wasn’t all bad news. With the purchase of Pressed Steel during 1965 (which was then merged with Fisher & Ludlow to become Pressed Steel Fisher), BMC had finally brought the manufacture of the company’s body shells in-house.
Outwardly seen as a good move, the purchase would provide a source of income from Pressed Steel’s other customers. Pressed Steel not only produced BMC’s bodyshells, but also those of the Rootes Group, Jaguar, Rover, Rolls-Royce and Leyland’s cars. And so, in one fell swoop, BMC had inside knowledge of what the opposition were planning to build in the future and, more importantly, how much it was costing them to do so.
This was a fantastic coup for BMC and yet this unfair advantage was never really capitalised upon. The purchase also heralded the return to the fold of Joe Edwards. He would end up having the unenviable task of restoring BMC’s future model direction, sorting out the company’s crippling overmanning and returning the company’s health. It would end up proving an impossible task as he was rapidly overtaken by events.
The gathering storm at BMC
Edwards first tried to address the issue of lack of future model plans. Upon viewing the upcoming 1.5-litre car (the ADO14 – Maxi), he ordered an immediate restyle of the front end styling – being far too late in the model’s development to do anything more radical. It needed more. The body pressings for the Maxi had already been signed off and Pressed Steel was gearing up to produce bodies-in-white.
He also commissioned newly-recruited ex-Ford man, Roy Haynes, to facelift the Mini (resulting in the Mini Clubman), and come up with a viable platform-sharing model plan, while Issigonis worked on the more radical 9X supermini. By the summer of 1967, Edwards felt that times were becoming very worrying for BMH.
There were so many inefficiencies to deal with. At the 1966 Labour Party conference, as Wilson recalled later, a delegation of six BMC Shop Stewards were invited to address him in his hotel room. When the delegation arrived to say their piece, it comprised of 12 people. Exasperated, Wilson said, ‘That’s what’s wrong with BMC, always needing 12 men to do what six should be doing.’
Merger-mania comes closer to home
Jaguar was now looking like rich pickings. Sir William Lyons approached George Harriman in 1966 due to his own fears for the long-term viability of his company. Lyons also had private fears that his company could quite easily fall foul of BMC’s management and their acquisitive desires, using their ability to take away his supply of bodies (Pressed Steel supplied Jaguar).
However, 66-year-old Sir William was a very canny negotiator and so, from what he may have considered was a weak bargaining position, he managed to ensure that he remained in complete control of the Browns Lane factory and also had a seat on the board of the newly-formed British Motor Holdings (BMH).
As part of the deal, changes were made to the BMH range: the Austin Princess was dropped, as was development of the new 4.0-litre Austin-Healey sports car. Unfortunately, the Austin 3-Litre saloon was too far advanced in its development to be scrapped, but it was never to enjoy a glittering career. Finally, BMH agreed not to build any saloons larger than the ADO17.
A weakened BMC is seized upon by Leyland
However, BMC itself was coming under scrutiny – and Donald Stokes of Leyland Motors, cheered on by the new Government-backed industrial Reorganisation Corporation (IRC), hoved into view.
Bolstered by booming export sales, rises in its share values and profits from a youthful and profitable Triumph and Rover model lineup, Leyland pounced on the opportunity to merge with a financially struggling BMH, becoming the unexpected senior partner in what would become the British Leyland Motor Corporation in 1968.
Were Issigonis and Harriman actually misguided?
The game was up – and, after 16 years, BMC had run its course. It wasn’t a merger at all, but a takeover. Given the successes of the Mini and the ADO16, it seems an undeserved end to this story, especially as BMC’s direction was firmly diverted as Stokes moved his Triumph men into Longbridge to bring us the Morris Marina and Austin Allegro. As for Harriman and Issigonis, they were unceremoniously sidelined.
It’s not all bad news, though – far from it. In this period, and perhaps for the only time in the history of the automobile, a British company was setting the pace in technological development. The decision to proceed with the Issigonis front-wheel-drive cars has often been blamed for the demise of BMC, but it brought us the brilliant, world-beating, Monte-winning Mini and Mini Cooper, as well as the fabulous BMC 1100/1300, Britain’s best-selling car for the best part of a decade.
It brought us the much-maligned policy of badge engineering, which is now widely adopted in the car industry, and some of the technology that came out of this wonderful, chaotic company remained with us until well into the 21st century.
So, raise a glass to the 70th Anniversary of the formation of the British Motor Corporation and all who sailed in her…