AROnline contributor Martyn Kelham has produced this series on the great motoring men. Here, in third part, he discusses the Sir Michael Edwardes, the man who could have saved British Leyland…
I was shocked to discover that Wikipedia just manage to list him right at the bottom of its ‘Michael Edwardes listing’ – after mentioning umpteen people to do with football (whatever that is) and music. Unfortunately, none of us can just ring him up and have a chat – as he sadly died towards the end of last year.
All our heroes are flawed. They must be because we are all human and we all make mistakes. No doubt every great industrialist can look back on their time and think – ‘damn, I wish I hadn’t done that’. I expect Michael could have done that too.
For us enthusiasts on this website – we all know he was a South African businessman who was with Chloride and then got offered the job of sorting out British Leyland. We are probably all familiar with the fact that Michael sacked Derek Robinson – the man who had orchestrated (with others) around 500 stoppages, and cost British Leyland about £200m in lost production. It has been argued that Robinson and his compatriots ruined the legitimate power and purpose of the unions in the UK – and they have never recovered.
Picking up the Ryder plan
He had ‘inherited’ the results of the Ryder Report – a plan that ignored the world situation and insisted that British Leyland could just go on expanding and producing ever more vehicles in a growing market – which, in reality, it wasn’t. Worse, the company had developed its own 1978 Corporate Plan based on the Ryder findings – so the rot was deeply engrained. Somehow, Michael had to ‘tone it down’ and get some realism into the picture. He’d inherited not only umpteen ‘in-house’ models competing with umpteen other ‘in-house’ models – but whole companies whose product range was not ‘doing the business’ – Triumph for a start. (Apologies to Triumph devotees – just based on the balance sheet!)
Michael drove the need for his planners to look at the bigger picture – to be critical of what was ‘the norm’ – and to think out of the box. They had to get to grips with too many factories that were not performing well enough and a public that was heartily fed up with the companies’ offerings – with some exceptions.
He was faced with a massive Rover factory in Solihull that production of the SD1 was never going to fill – and which had been a significant investment just a few years previously. Another problem, (which, to be honest a child could have worked out), was that bodies were sent all over the place for finishing or mating up with their mechanical components. Some of this was caused by the Government having insisted on new factories being built in under-developed areas that needed the investment and work. Unfortunately, some were miles from linked operations within British Leyland and would serve to give any accountant a nervous breakdown.
Evaluating the management team
Very shortly after arriving at British Leyland, Michael introduced psychological assessments and once the ‘nonsense’ about how these were conducted had been erased – these assessments significantly improved the chances of fitting the right manager into the right job – by about 40%! He also found a number of former Ford men about the place – and, with a few exceptions, most were not a good ‘fit’. Interestingly, the writer meets weekly with a man who was at British Leyland with Michael. I asked him about the integration of the Ford philosophy. He made it clear that these guys were only interested in ‘cutting back’ on everything and ‘cheapening’ everything. He is in no doubt that these Ford men did not sit well with the British Leyland operation – not because British Leyland people didn’t want to learn how to do it better, but that it was proven time and again, that the Ford way wasn’t better!
For Michael – quality was a real issue. He had to somehow get cars that looked good in the showroom to actually work well – and not fall apart or break down. In various contemporary writings he made this point very forcibly.
The saving grace within some of the management changes that Michael instigated was the commitment showed by Alex Park and others – top managers who would become on-board with the new direction – and work long hours to secure the future of the company.
Getting Gaydon off the ground
A new technology centre and test track was urgently required. British Leyland were hiring one and this in itself lead to restricted hours of road testing – and that directly affected the quality and durability of the cars.
In 1978, Michael approved a massive spending spree at Solihull to enable more Range Rovers to be built. The waiting list was seen as a positive – it meant people were queuing up to buy British. Michael had to get over to the guys that many didn’t wait – and sales were lost.
In the view of the new Board, the commercial vehicles sector was in desperate need of around £1,000 million for restructuring and, whilst talks were going on about this, strikes continued to strangle production and amplify the problems. Initiatives to improve were needed on all sides – even in the showrooms. The British Leyland nameplate was a disgrace – it had no loyalty value, no history, no image (other than, arguably – bad). Michael re-introduced Austin, Morris, Triumph and Rover – and, of course, kept Jaguar.
Sir Michael, the risk taker
What he also demonstrated on more than one occasion was a penchant for real risk-taking. He had a habit of speaking to workers and or Shop Stewards in large gatherings and then asking them to vote – then and there – for whether they were going to work with him or not. In almost all cases he won his point – in one memorable case by 715 to 5 when at the start of the meeting the consensus was the other way around. He was an outstanding speaker.
Michael will always be remembered for the ‘Speke Closure’. This plant was a controversial point from day one of Michael’s tenure. The factory went on strike on the very first day he took over the reins. It had over 2000 employees and was building the Triumph TR7 sports car. News was released (erroneously) that he had already decided to close it – news which was highly successful at gaining Michael thousands of enemies at a stroke – such was the ‘canniness’ of the ‘instigators of havoc’. In fact, he had made no such decision at that point – how could he so soon? What executive would make such a decision within hours of an appointment and without knowing anything of the individual plant or its problems?
Almost two years after his appointment, he and the Board had to make one of the hardest decisions of their industrial career. When it is necessary to cut through the romanticism, the loyalty, the job losses and the enormity of closing a plant of this size – the management has to have ‘balls’. The easiest thing in the world is to ‘fudge’ it – to talk of ‘ future development’ and ‘coming on stream next year’ – and all the other buzzword phraseology that lets ailing factories off the hook – at least for a time.
Speke’s lasting legacy
In Speke’s case – the finances could not support continuation – end of… Apart from massive over capacity across the cars operations, the industrial relations record at Speke did nothing to convince the Board that a rosy future was imminent. As most of us are aware – production of the TR7 was moved to Canley. The Board were flying in the face of a lot of public opinion, union representation, managers, stalwart members of the Board itself – and Michael Heseltine – the opposition spokesman on the environment.
In the end, the plant closed peaceably. (Relatively!)
The company at this time suffered some serious setbacks from militant union activities. Some of these were quite inexplicable. Having invested over £20m in modernising the Bathgate factory (for example), the employees saw the opportunity to demand a rise – for using the new equipment! This was not the first or last time that British Leyland would invest heavily in a plant – and then the workforce want more money for doing less.
Frustrations dealing with unions
At Pressed Steel in Swindon, the writer’s father was at one time, the Final Inspector on the Barb (Triumph 2000). He put in the ‘suggestion box’ that a guy on his line should stop drilling two holes in the Barb boot lid – because the badge that required them was no longer fitted. Further down the line, another guy welded up the two holes! Dad’s suggestion was adopted by management – which resulted in a three-week strike! Any cursory study of the times will provide enough examples of such stupidity to fill pages of this article – so I’ll refrain from doing so. As a long-time manager of people and projects, the writer can only imagine the frustration of dealing with such idiocy.
One of the most challenging periods for Michael and the Board was developing and implementing the Recovery Plan. Derek Robinson was a thorn in the side throughout this initiative. Once dismissed – a massive strike ensued (although about a thousand men broke the picket line and went to work) look. This strike was enacted a very short time after a considerable vote of confidence in the Recovery Plan – and various shows of determination by the workforce, to make the Plan work.
Michael made it known to the unions, that their members would need to come back to work quickly – or they will be considered to have dismissed themselves. The company would then re-employ whom they thought fit. It was a hell of gamble but, as so many of his gambles did – paid off. The men returned to work. In this one paragraph is hidden an untold anxiety for the Board, considerable nail-biting on behalf of the management and huge decisions for the employees. Taken in isolation, this does not seem too onerous, but Michael, his Board and his team worked through crisis after crisis – almost always to do with a loss of revenue through strikes or the lack of money to undertake the next phase to make the company viable. Although not unusual in industry and not necessarily commanding sympathy, the commitment from ‘the guys at the top’ often gets overlooked. Meetings going on well into the small hours was not unusual, family gatherings, anniversaries or weekends away, were side-lined for important meetings. The stress placed upon the team was handled as best they could – and some were good at managing it – others were not.
Introducing the Metro, courting Honda
Michael drove the ADO88 project (Metro) through to its launch – and it was a very successful car – although allowed, as so many BL cars were, to get too long in the tooth before discontinuation or upgrading – but that was after Michael’s departure.
It became clear that the company had to join forces to survive. Ford and GM were massive and were benefiting from a limited number of chassis, but an extensive range of versions in order to achieve more efficient production – especially in terms of locations was another huge benefit for them. Johnny Foreigner was hitting harder than ever before.
A partner was sought. Chrysler, Renault, Iveco, DeLorean and finally Honda were considered – all went to ‘early talks’. As we know, only the Honda option worked out. In May 1979, the Conservative Party entered Government and the company had a new Prime Minister to deal with. The dynamics changed somewhat from being part of a Government that (in part anyway) wanted to be involved – to one that absolutely did not. Despite this, by persuasive argument, Michael got £300m he was after in order to keep going.
Battling with economics
In the 10 years to 1979, wages had risen in the UK by just over 300% – but productivity was up less than 30%! These were extraordinary times. The writer purchased a house for £3000 in January (and never did a thing to it) – and sold it for £6000 in November. Imagine that today…
When Michael went to the Government for a further £990m – he had a concerned letter from Spike Milligan. He was worried that it was a lot of money but asked Michael if he could have some of it. Michael returned an explanatory and humorous letter – with a ‘fiver’. Ever after, Spike invited him to dinners at his home – and invariably sent a pound note back!
Michael and ‘Maggie’ agreed on little – other than that no Government should ideally have a large stake in a car company. He always wanted to be ‘under the Government’ for three years or less.
Edwardes – the gamechanger
I’ll lay my cards on the table. I think Michael Edwardes handled the unions and the situation within British Leyland brilliantly. But, I am an MG man (as well as a ‘Wolseley man’) and I think Abingdon should have been retained to develop and produce a lower-volume high quality sports car – but then, what do I know?
The sign of a great leader can be ‘when to quit’. Michael believed that, by 1982, his presence could be seen as detraction from the good stuff that was going on. The tabloid press were more than happy to headline ‘Edwardes pays 3%’ and so on. As so often happens in the press – the golden boy becomes the subject of ridicule – if it sells more papers. His name was synonymous with so many ‘tough line’ decisions and his face was photographed, sketched and became a cartoon image almost every day.
He had come in 1977 – fulfilled his five-year contract – and left in 1982. He left British Leyland in a much stronger place than where he found it – to argue against that would be as illogical as saying World War 2 didn’t happen. It’s a great pity therefore that less than 25 years later – the whole thing fell apart – having first been hived off to a plane maker, then the Germans and then, well…
No, don’t get me going!