History : The Austin-Morris story – Part One : 1968

Ian Nicholls, AROnline‘s historian-in-residence, tells the story of Austin-Morris, and their part in the downfall of the British motor industry.

Here, in the first part, we track the progress of the combine in the weeks following the Leyland takeover as it finds its feet within the newly-formed British Leyland Motor Corporation.


The Austin-Morris story: Goodbye BMC

On the afternoon of 17 January 1968, the employees of British Motor Holdings found out that they were to merge with the smaller but profitable Leyland Motor Corporation to form a national champion to challenge both the American-owned companies operating in Britain and overseas competitors.

The name of the new grouping was, from the outset, the British Leyland Motor Corporation (BLMC), Sir George Harriman would be Chairman and Sir Donald Stokes would be Deputy Chairman, Managing Director and Chief Executive. The news of the merger had followed months of negative speculation by the media over the future prospects of the British Motor Corporation following its loss of £3.2 million in the 1966/67 financial year.

As related in this site’s British Motor Holdings story, the root cause of this loss was the Government-imposed credit squeeze of July 1966, which resulted in a depressed car market. BMC had tried to cut back on production through drastic redundancies, but protest strikes had prevented the company from supplying even the reduced market in the autumn of 1966. The void was filled by the new Ford Cortina Mk2 which had an exceptional year in 1967, becoming Britain’s best-selling car.

Troubled supplies lead to market share drop-off

In December 1966 BMC’s inability to supply the showrooms with shiny new cars saw its UK market share slump to a mere 27 per cent. All this chaos resulted in a disastrous half-year loss of £7.5 million and led to intense media speculation as to what had gone wrong. What was not discussed nor remembered by historians was the chain of events that led to this situation. The market share decline was attributed by armchair observers, of which there were a great many, to be down to a paucity of all-new models, rather than the actual cause, a supply issue.

The media denigration of BMC’s methods mainly focused on its financial performance in comparison with Ford of Britain and its tight cost control methods. This UK-centric criticism clearly seeped through to the Labour Government of Harold Wilson and his Technology Minister Anthony Wedgewood Benn, who saw Sir Donald Stokes and his Leyland Motor Corporation as the potential saviours of the British motor industry.

Leyland’s car divisions, Rover and Triumph, had an exceptional 1967, at one stage holding an impressive 10.6 per cent of the UK car market. In the climate of January 1968, BMC’s dash for growth through the production of high technology, expensive to produce, front-wheel-drive cars seemed to have run its course. These were cars designed to take on the best Europe had to offer, a response to those in the motoring press who accused BMC of making boring mechanical stodge in comparison with more sophisticated continental offerings.

European struggles for market share

Austin 1800 wasn't quite the success in Europe that BMC had hoped.
Austin 1800 wasn’t quite the success in Europe that BMC had hoped

The problem with all the talk of taking on Europe was that BMC could not compete with the major continental manufacturers on a level playing field, and that was something beyond the company’s control. The Mini, 1100/1300 and 1800 (above) were subject to prohibitive trade tariffs when sold in the Common Market, comprising France, West Germany, Italy, the Netherlands, Belgium, and Luxembourg. This was a booming car market in which high technology added market appeal and higher volume helped to amortise production costs. It was the place to be selling cars and the British Government knew it, hence its repeated attempts to join the Common Market.

The BMC 1800 may have been voted European Car of the Year 1965, but the UK fleet buyers did not want it and the continentals who acclaimed it were not prepared to pay BMC’s asking price, which was inflated by Common Market trade tariffs. In West Germany in 1965 the sparsely-equipped Austin 1800 cost nearly as much as a BMW 1800, which was seen as a more upmarket sporting saloon.

Britain under the Conservative Prime Minster Harold Macmillan first applied to join the Common Market in the summer of 1961. It was formally vetoed by the French President Charles De Gaulle in January 1963, no doubt to Macmillan’s chagrin, as he had counted the French leader as a personal friend since 1942. Sir Patrick Hennessey, Chairman of Ford of Great Britain and President of the Society of Motor Manufacturers and Traders said in April 1967: ‘Of the Common Market I can say quite categorically that we want to join, given the power to compete on equal terms – and those are the operative words – with our rivals across the channel.’

How to build cars for the UK fleet market?

BMC suddenly found itself with no large European market to sell into with its European-focused cars. The volume required to make BMC truly sustainable in the long term was not attainable, particularly as the UK car market began to stagnate as the dreams of a post-War New Jerusalem began to evaporate. Ford of Great Britain and Vauxhall had no choice but to focus on the UK car market, for the Common Market was the preserve of Ford’s German subsidiary and Opel. The American-owned, UK-based motor manufacturers instead concentrated on the burgeoning market for company cars.

These were a unique to the UK tax break that allowed businesses to include a car as part of a salary package to its employees. The idea was to encourage the manufacture of cars in Britain. What amounted to a Government subsidy to the motor industry resulted in the cheap to manufacture fleet car such as the Ford Cortina and Vauxhall Viva (below), which in 1967 seemed to be the way forward for the British motor industry.

Fleet buyers were not interested in cars that went around corners like they were on rails, were space efficient for their size, had a refined ride, had good roadholding in slippery conditions and generally advanced the development of the automobile. They wanted a car that was cheap to buy in bulk, run, service and was reliable. For Ford and Vauxhall this meant re-using old technology because it was tried, tested and reliable. The clever part was to regularly restyle the cars to give the impression of newness, of technological development, that new look meant better.

Vauxhall Viva HB
Vauxhall Viva HB

The differences between Ford, Vauxhall and BMC

The main focus was on marketing, not engineering. The target for the Engineers was not to make a better car, but a cheaper to manufacture car. The Ford Cortina MK2 still did not drive better than a BMC 1100/1300, but it had more modern looks and, in the mindset of 1967, that was more important. It has often been commented that, had the BMC 1800 been smaller with a 1622 cc B-Series engine, it would have sold better. That is a moot point, but it is probably unlikely.

By 1968, the Ford Cortina had an iron grip on its respective market and gave the fleet buyers what they wanted. The fleet buyers by now intrinsically mistrusted front-wheel drive as unreliable and costly – a viewpoint they would not deviate from until the early 1980s. The forthcoming BMC 1500 codenamed ADO14 would test the idea that high technology could be sold to the fleet buyers to the utmost.

It was the inability of BMC to produce a car that appealed to the fleet buyers that enabled the notion that Sir George Harriman and Alec Issigonis were liabilities to the company to gain currency. They were accused of ignoring changing trends in the marketplace and not updating their cars on a regular basis. Basically, this was a euphemism for not producing a Cortina rival.

Should BMC fight Ford at all?

Former BMC Engineer Ron Nicholls defended the late and much maligned Sir George Harriman with this: ‘It was his courage that produced the Mini. You make your own judgement about Harriman. But he’s the man – albeit under the direction of Leonard Lord – who brought Issigonis on board, who recognised that he couldn’t beat Ford at its own game and that he had to do something else. He figured that he could change a car only every seven years, so he said:

‘”I’ve got to have a car that can hold Ford at bay for seven years. I believe it has to be full of technical innovation to be able to do it. We can’t compete with Ford with a Ford Popular. We’ve got to produce the technical bit. We’ve got to sell that way. This is what we’re going to do. Alec Issigonis has a damn big job to do. We don’t know whether he’s going to be able to do it, but you’re going to be able to help him. If you don’t there’s the door.” You’ve got to judge George Harriman on that. And my judgment is that he was a very brave man.’

Sir George Harriman’s policy of trying to avoid a direct confrontation with Ford in the market place made sense. No motor manufacturer did cost control like Ford and trying to compete with Dagenham in making fiscally-challenged motor cars was inviting disaster. This article tells how that disaster came about.

Vauxhall on the rise

In 1967, it was not just Ford that were hammering BMC in the sales charts. Vauxhall, General Motors’ subsidiary in the UK, was having success with the new Viva HB. With coke-bottle styling and 1.2-, 1.6- and 2.0-litre options, it was Vauxhall’s take on the rep mobile. In 1967 it achieved a 9.03 per cent share of the UK car market, making it number three in the Top Ten best sellers, a feat it repeated the following year, both times selling more than 100,000 units.

In effect, by 1968, the British car market had split into two distinct sectors: high technology cars for private buyers and mechanically simple cars for fleet buyers. In 1968, the divide was 60/40, with the private car sector slightly outselling those for the fleet market. BMC dominated the private car market with its front-wheel-drive range, while Ford had the lion’s share of the fleet market. During 1968 Alec Issigonis had calculated that an inline rear-wheel-drive 1275cc engine and gearbox cost just over £42, but the transverse equivalent cost around £54. The transverse front-wheel-drive layout was 22 per cent more expensive.

BMC could sell more front-wheel-drive cars to its mainly private customer base, but on paper they were more expensive to produce, unless the extra volume caused by the popularity of the front-wheel-drive layout offset the extra manufacturing costs. In truth, no one knew the actual profit margin of the Issigonis range, whatever their financial qualifications – any figures were just educated guesswork. The only accurate guide is the profit per vehicle figure, which is arrived at by dividing the annual pre-tax profit by the total number of vehicles produced. BMC only lost money in one year, and that was down to the extenuating circumstances of the July 1966 credit squeeze. What is no doubt is that BMC had become world leaders in the development of the family passenger car. Because other nations did not operate the company car system, the conundrum over which layout to go for did not exist. It would build cars that people wanted to buy, regardless of format.

Failing to join the Common Market… again

The Labour Government of Harold Wilson made another attempt to get Britain into the Common Market and this too was rejected in November 1967. The upshot of Britain’s second rejection, again courtesy of President de Gaulle, was that the fleet buyers requirements now effectively held sway in the specification of many of Britain’s best-selling cars. From now on there would be a sharp diversification between Britain and the continental manufacturers as to the specification of cars with mass market appeal.

In January 1968 it seemed BMC had got things catastrophically wrong and Ford of Britain had got things right. The Mini and 1100/1300 might have been Europe’s most wanted family cars, but they were too expensive in the Common Market nations due to trade tariffs to sell in large quantities and were believed to be over-engineered and too costly to produce by Ford standards to be profitable from UK sales alone.

This mindset permeated both Government and Sir Donald Stokes and his management team. The apparent solution was to rationalise BMC, bring in Ford-style cost control and product planning techniques and, with Britain barred from selling to the Common Market on even terms, to focus on the UK car market. This is the story of how it all panned out.

British Leyland Motor Corporation is go!

At the press conference announcing the merger of British Motor Holdings and the Leyland Motor Corporation, the BMH Chairman Sir George Harriman was asked if the merged group would keep all its existing range. He said: ‘As far as we can see we will not drop any of the marques. We will reduce the number of models produced under any given name. We have a car that fits every income bracket.’

To the question of about model overlap, such as the Triumph Herald 12/50 and the BMC ADO16 1300, Sir Donald Stokes said: ‘If the models continue to make money we will leave them. But if one collars the market, the other may suffer. It is no use telling me to scrap models, that isn’t going to help anybody. I’m landed with them, we’ve got to make the best of them we can. It takes three and half years to introduce a new model, I can’t stop anything that is in the pipeline. I want to get our group to do the same things as Ford and Vauxhall, to be able to come out with new cars at proper intervals.’

Stokes added: ‘Everybody is expanding like mad. You’ve got to get into the race if you are going to survive, but somebody is going to get hurt. I don’t know who it is going to be, quite honestly, but I hope it is not us. I hope we’ve enough time to put this right. Don’t let’s kid ourselves, we’ve got a pretty tough battle.’

Sir Donald was clearly stating that he wanted to abandon the Issigonis approach of designing a car to last at least a decade in production unaltered. Also that expansion was the way forward.

How the Corporation shaped up

The Industrial Reorganization Corporation (IRC), the brokers of the merger, would be making £25 million available as loan capital for future expansion. In January 1968 the BMC part of British Motor Holdings consisted of:

  • Austin, Longbridge, cars, car bodies, and engines (27,000 employees)
  • Morris, Cowley, cars (10,700)
  • Morris, Llanelli, components (3800)
  • Morris, Birmingham, components (4800)
  • Morris, Coventry, engines (5900)
  • SU Carburettors , Birmingham , carburettors (1000)
  • MG, Abingdon, sports cars (1200)
  • BMC, Bathgate, trucks and tractors (5000)
  • Fisholow, Coseley, equipment (1100)
  • Fisher-Bendix, Kirkby, domestic appliances (2200).

In addition to this was the Pressed Steel Fisher division managed by John Lutyens, which supplied components to customers outside the BMC organisation.

Pressed Steel Fisher

  • Cowley and Swindon, car bodies and other units (11,100
  • Birmingham (2 plants), car and commercial bodies (7600)
  • Coventry, bodies and trim (3300)
  • Llanelli, pressings (2,000).

BMC also had overseas factories for cars, commercial vehicles and tractors in Australia (4600 employees) and South Africa (1600 employees).

Donald Stokes starts to flex his muscles

In the first few days after the merger Sir Donald Stokes was all over the media stating how he wished to work with the existing BMH management to make a success of the newly-merged corporation. However, as related in this website’s British Motor Holdings story, things soon started to go awry. On the day the merger had been announced the market valuation of the Leyland Motor Corporation was around £217 million, and £193 million for BMH, revealing that the truck maker was in the ascendancy. The equated to Leyland having a 52.9 per cent majority share in the merged group.

Leyland Directors Lewis Whyte and Jack Plane scoffed at BMH’s profit projections and pushed for greater Leyland control of the merged group, believing that BMC senior management needed to be replaced. The main problem with the Leyland-BMH merger was not that the British Motor Corporation was in denial about its various problems, but the timing.

In June 1966, after BMC had absorbed Pressed Steel, the company had appointed Joe Edwards as its Managing Director to share the executive burden with Sir George Harriman. Edwards had quit BMC in 1956 after falling out with the then Chairman, Sir Leonard Lord, and walked into the top job at Pressed Steel. He returned a decade later and quickly identified BMC’s problem areas. Over the next 18 months Joe Edwards did much to make BMC fit for purpose, axing old models and recruiting new staff, many from Ford. He resented the distraction to his plans created by the merger. He had his own agenda for a BMC recovery plan and the Government, IRC and Leyland had theirs. It was a clash of BMC recovery plans, and only one could prevail. Joe Edwards’ rationalisation plans had so far not produced positive results on the balance sheet, the £3.2 million loss was on his watch, and Leyland had that 52.9 per cent share majority.

Meeting Roy Haynes

It was probably during this interim period that Sir Donald Stokes, at the invitation of Joe Edwards, the BMC Managing Director, visited the Pressed Steel Fisher styling studio at Cowley. This was run by Roy Haynes, who had been recruited from Ford in October 1967 as both a Product Planner and Stylist, with his own studio at PSF Cowley. His recruitment was something of a coup for BMC as Haynes had been responsible for the styling of the Ford Cortina Mk2.

Roy Haynes product plan for BMC involved facelifts of existing models such as the Mini and ADO16 1100/1300 series, thus buying time for all-new A, B and C-segment cars. The A and B-segment cars would have replaced the Mini and ADO16 1100/1300, and would have been front-wheel drive, the same width and using common components. The A-segment version would have had smaller wheels and a shorter wheelbase than the B-segment model. The C-segment car eventually became the ADO28 Morris Marina, but Haynes hoped to use the floorpan of the ADO28, stretched in length and width for other cars such as MG and Jaguar.

Austin-Morris story: ADO28 Morris Marina
The ADO28 project – that would become the Morris Marina – was kicked off in 1968 in Pressed Steel Fisher’s Cowley Design Studio

Roy Haynes later recalled the meeting with Sir Donald Stokes: ‘He was a fairly pompous sort of individual and came into the studio with all his hirelings behind him.’

Roy Haynes summed up the meeting: ‘Stokes’ didn’t really turn my plan down, he just ignored it.’

Another witness was Norman Biggs, who recalled the reaction of the Leyland men to Roy Haynes’ masterplan: ‘It was on the wall of Roy’s office at Cowley along with the plans for facelifts and replacements. I don’t believe Stokes’ knew what he was looking at. At Ford everyone would want to know the forward plans for at least that long, but I don’t believe that Austin-Morris or Standard-Triumph had ever done that before.’

Stokes lacks confidence in model plans

One of Roy Haynes’ hirelings from Ford was Harris Mann. He elaborated further on Roy Haynes future model strategy: ‘Roy’s forte was his ability to visualise all the products – Austin, Morris, Wolseley, Riley, Triumph, Jaguar and so on, and produce a comprehensive plan that encompassed a range of cars based on a number of common chassis platforms. It was totally logical. There was to be an ‘A’ type chassis/body unit, a ‘B’ type and so on with common drivetrains, parts and production processes. The base structure to each range would be identical, so it was only necessary to create new outer panels for each model. He produced small flow chart drawings to illustrate how the process worked.’

It appears that, despite being shown a proper, well thought out forward product plan created by professionals with a proven track record, the Leyland men still thought that BMC needed their direct intervention. Matters came to a head at a dummy Board Meeting held on 12 February 1968. After an orderly start it became acrimonious. One assumes that, sooner or later, the Leyland Directors’ lack of faith in BMC management became apparent.

What was said in detail is not known, but we do know that Joe Edwards was angered by the glowing publicity Sir Donald Stokes had been receiving in the press and at the meeting finally snapped. He was reported to have said: ‘Donald Stokes, you are a bloody fool. In last Sunday’s press, you had more publicity than any King or Queen in my time, but you ought to know that there are scores of executives at BMH who hate the sight of you even though they’ve never met you.’

Matters come to a head

Sir Donald Stokes - not popular at Austin-Morris at the formation of BLMC
Sir Donald Stokes – not popular at Austin-Morris during the formation of BLMC

Sir George Harriman supported the view that there was considerable animosity within BMH to Stokes (above), who some saw as a publicity seeker. Perhaps this sealed his fate? The Jaguar Chairman and BMH Deputy Chairman Sir William Lyons noted: ‘While the BMH Board has full regard for the image which Sir Donald Stokes has built up as a very successful exporter of commercial vehicles… Sir Donald has not, in the opinion of the BMH Board, the expertise to virtually go it alone.’

The description of Sir Donald Stokes as a publicity seeker had some substance. He was one of the first British businessmen to have his own spin doctor in the shape of Keith Hopkins of Standard-Triumph. The pair had first met in August 1961 when Leyland was taking an iron grip on its new car making subsidiary.

Leyland had embarked on a process of interviewing Standard-Triumph executives, a process of retaining, reassigning and firing. Donald Stokes interviewed PR man Keith Hopkins, who expecting to be fired, had gone and got himself another job. Hopkins, safe in the knowledge that he had another job lined up, spoke his mind. Instead of firing Hopkins, Stokes promoted him to the role of head of Standard-Triumph public relations based in London. At the end of 1963 Leyland rather carelessly lost the services of Stanley Markland, the man who had knocked Standard-Triumph into shape, after a boardroom disagreement, leaving Donald Stokes in pole position to succeed Sir William Black as Chairman of Leyland.

Stokes – the first beneficiary of spin?

From January 1964 Keith Hopkins successfully cultivated the image of Donald Stokes as a successful businessman and buccaneering salesman who managed to sell buses to Communist-run Cuba twice in 1964, much to the chagrin of the USA. In 1967, as merger talks gathered pace, the duo of Hopkins and Stokes emphasised the success of Leyland and its car producing subsidiaries Rover and Triumph while BMC attracted adverse publicity.

In a PR war BMC’s Raymond Baxter was no match for Leyland’s Keith Hopkins. How much influence this had on the respective share price of BMH and Leyland in January 1968 is difficult to quantify, but it was enough to push Leyland past the winning post. Thanks to the efforts of Keith Hopkins, Sir Donald Stokes now had Government ministers, city financiers and the media all believing that he was a brilliant industrialist.

After the dummy Board Meeting Leyland began to have serious second thoughts about the merger, harbouring doubts about BMC’s profit forecasts that ultimately proved groundless. The breakdown in relations between Sir Donald Stokes and Joe Edwards meant that it was highly unlikely that the Leyland Chairman’s visit to Roy Haynes PSF studio at Cowley occurred after the date of the dummy Board Meeting.

Harriman defends Austin-Morris

George Harriman
Sir George Harriman: ‘One of the main points of criticism has been that we have too many models, have been lacking in market research, and so on. That’s all bunkum.’

In the meantime, Sir George Harriman of BMH gave a press interview in which he came across as believing that somehow BMC could maintain some sort of independence from Leyland. He took the opportunity to defend his company. ‘One of the main points of criticism – misunderstanding if you like – has been that we have too many models, have been lacking in market research, and so on. That’s all bunkum. Nor has due credit been given for our export performance and what had happened before devaluation,’ he said.

Certainly rationalisation comes into our plans. We shall do as much as we can, in line with the competitiveness of the product, which is what we have been doing within BMC.’ – Sir George Harriman

He was asked about engineering and future model plans. ‘We haven’t yet got down to discussing the details on which everyone is speculating. Certainly anything on the engineering side will take two or three years to work out, but we have very close technical links and will be using all the brains available,’ he said. But, Harriman stoutly defended badge engineering. ‘One must differentiate between badge-engineering and marques. Austin, Morris, Riley, Wolseley, MG, Jaguar, and so on, are marques.

‘If you take certain markets, South Africa, for instance, they prefer the name Austin in the family car line. In Australia they prefer Morris, in the United States MG. So the marques are desirable, and in certain export markets where licences are issued, they are issued to specific names or marques. New Zealand is a good example, where the licence is for Wolseley. There’s nothing strange or illogical about this. One need only look at General Motors to see the equivalent: Buick, Cadilac, Chevrolet, Oldsmobile, Pontiac – this is exactly the same thing. The only advantage in having one name is perhaps in its repetitive impact, but you still came down to individual names for models.’

Would there be redundancies?

Sir George was asked that with BMH employing more than 120,000 people, worldwide, including 106,000 in Britain, working in 32 factories with a total manufacturing capacity of 1,100,000 vehicles a year, could the merger lead to redundancies? ‘It should not create a single one. We are hoping to get away on an expansionist programme. The whole idea of a merger of this nature is to expand. If we don’t expand, we are not going to be competitive with the Americans, the Continentals or the Japanese. It’s as simple as that, and the point where we come back to the Government’s policies as affecting the motor industry and the country in general,’ Harriman said.

Sadly, time had run out for Sir George. The hawks among the Leyland Directors were pushing for Harriman’s resignation as the BMC profit projections went from bad to worse. To make matters worse the head of the IRC, Sir Frank Kearton, also wanted Harriman out. Harriman was bluntly told that if he did not quit, the merger was off. On 18 February, Harriman agreed to resign at around Motor Show time. Later the same day Sir George was then told that he would also have to resign from the British Leyland Board. It was perhaps this move that highlighted the de-facto control exercised by Leyland over BMH.

Sir Donald Stokes later tried to distance himself from the effective expulsion of Sir George Harriman from the company he had devoted his life to, but he nevertheless acquiesced with the move. If the Chairman of BMC couldn’t hang onto his job, who within the company could?

With Harriman out, what next?

The total removal of Sir George Harriman from the scene, the man who had backed Alec Issigonis’s pipedreams, was an unnecessarily harsh move, and hardly conducive to an an atmosphere of mutual co-operation in the merged corporation. While analysts, Government ministers and Leyland Executives fretted about the £3.2 million loss declared in the 1966/67 financial year and how one bad year meant doom and gloom for BMC, they conveniently forgot that the company’s annual production had risen 68 per cent between 1959 and 1965 under Harriman’s stewardship, an impressive achievement.

The duo of Harriman and Issigonis, for all their faults, had pushed BMC to the forefront of world car design. They were competing against American-owned giants with huge resources across the Atlantic combined with meticulous cost control and the big European manufacturers who were selling into an expanding market surrounded by a not insubstantial trade barrier. The decision to embark on a new range of front-wheel-drive cars was a calculated gamble. Had BMC not embarked on such a policy, its long-term prospects may well have been bleak anyway.

The agreement which resulted in the formation of the British Leyland Motor Corporation was ratified on the next day. Despite this, the pretence that BMC could maintain its independence continued. At the same time BMC was reportedly tightening management control at Longbridge. BMC had begun a full-scale reorganisation of its biggest production unit, the Longbridge group of factories employing 23,500 men and women on making Austin cars.

Much-needed Longbridge reorganisation announced

Manufacturing had now been re-grouped into four separate units, each with its own General Manager. The new groupings were broadly based on vehicle assembly; North and South engineering works, cast works, and the new £16 million E-Series engine plant nearing completion at Cofton Hackett. Richard Perry, an ex-Austin appentice and Divisional Director responsible for all Longbridge production, said: ‘This is a real attempt to try to get more management control in the areas, which we think are correctly divided. Another improvement we have made is to strengthen the Production Control Department as distinct from material control. This enables a greater degree of control to be effected between the newly formed sub-divisions.’

It was hoped that, by shortening the chain of command, the new moves would improve labour relations. A team of job evaluation experts were being trained at Longbridge. It faced the enormous task of trying to sort out the maze of rates and gradings, which formed the root cause of Longbridge’s appalling labour relations record.

Already in 1968 the group had lost 10,000 cars, worth around £3 million, almost entirely through stoppages at this one plant. As fast as one dispute was settled another reared its ugly head.

Alec Issigonis has his say

The Times published an interview with Alec Issigonis on 25 February. He was interviewed as he drove his Austin 1800 through deep snow and ice around Longbridge, while more conventional cars slithered by the wayside. He said: ‘If we had months of this weather every year, it would kill the old design approach. Combine front-wheel drive with a good automatic and the resultant traction and stability become sensational. I am more than ever convinced that this is the future road.

‘The piston engine is still in its infancy. Economics will prolong the four-cylinder unit, but I foresee a change around the corner to more than four cylinders, even for cars of under 1.0-litres. Today, the average power for a family car engine is about 50bhp per litre. I see this being raised to around 65 within five years.

‘Simultaneously, engines will become still more compact and lighter, through greater use of aluminium and plastics for less-stressed parts. Power will be increased by improved combustion chambers, coupled with completely new thinking on induction and carburation. Experimental work now being done on exhaust emission controls to meet the United States’ regulations is already raising engine efficiency.’

Alec Issigonis
Alec Issigonis

Alec Issigonis was asked about fuel injection. He said: ‘I do not see much future for it on bread-and-butter engines, though it will have applications on out and out sports cars. The extra cost, £50 to £60, still rules against it. But the real development will come through anti-smog design. Because of time, our work on this so far has had to be done in a crowded, makeshift way, using a system of burning the hydrocarbons in the exhaust as they escape from the engine. This is not only costly, but does nothing to improve engine efficiency. The next stage is to improve the induction system so that these hydrocarbons get burnt within the engine.’

In his role as the foreteller of the future of motoring, Issigonis gave his view on electric cars. ‘I still see the first electric commuter car with a lightweight, zinc-air battery. We have made a car and it is very good, but we cannot do much with it until we get this battery. The future city runabouts will no doubt start along these lines, but once you get a range of 200 or 300 miles with a unit that can be immediately replaced, the customer wants four seats and as soon as you make it a four-seater because of economic and social requirements, it is no longer the ideal city car.’

Alec Issigonis was heavily in favour of automatic transmission, but at the time it cost an estimated 16 per cent more to manufacture an automatic car compared with a manual transmission model. ‘It is infuriating that people are so reluctant to accept the higher cost for a car that combines all the advantages of compactness with an automatic box, so dramatic and so near, yet so far from the ideal.’

Alec Issigonis concluded with: ‘Europe will always remain a limited market for big cars. I still see it as the biggest market for cars of 1.5- to 2.5-litres, while the Mini has yet to be exploited on the Continent. In all the underdeveloped countries the small and medium-sized car is the one that will be most acceptable, because of economic problems – say up to 1.5-litres. The same applies in eastern Europe. We shall sell bigger engines maybe, but not bigger cars there, while I think the time when the American buying public become sensible and accept small cars is very far away.’

Issigonis clearly saw himself as a man on a mission to create better more efficient motor cars, but was that what the British car market wanted?

Issigonis leads to a reshuffling of the pack

A high-level reshuffle of BMC Directors’ areas of responsibility was announced two days later as part of a streamlining process before completion of the BMH-Leyland merger. The moves centred on the decision by Alec Issigonis, BMC’s Technical Director, to devote himself full-time to more creative and forward-looking concepts of research and development. More of an engineer than a professional administrator, Alec Issigonis had asked to be relieved of executive responsibilities for the operational and administrative aspects of the corporation’s engineering functions.

He would continue as Technical Director, answering to Joe Edwards, Managing Director, and would advise the Board on long-term vehicle research projects. This was the moment that Alec Issigonis went off to develop the 9X Mini replacement. Alec Issigonis’s previous executive responsibilities were to be divided among three other BMC Directors. In the new post of Director of Engineering, Charles Griffin became the executive responsible to the Managing Director for all aspects of the corporation’s product engineering work concerned with vehicle mechanical units such as engines, transmission and suspensions.

As Deputy Director of Engineering, Stanley Dews would be responsible to Charles Griffin, supporting him in directing the various aspects of product engineering, with special responsibility for administration of the department and its day-to-day operations. Responsibility for body styling, structure, trim and finish would remain with Harry Barber, Assistant Managing Director of Pressed Steel Fisher, who was directly responsible for those specialised functions to Joe Edwards. Charles Griffin previously held the post of Director and Chief Engineer, BMC, under Alec Issigonis.

Stanley Dews was previously Director of Commercial Vehicle Design, and would embody this function within his new post as deputy to Charles Griffin. He had joined BMC in November 1967 from Ford of Britain, where he was Director of Commercial Vehicle Design. These moves were not a consequence of the BMH-Leyland merger, but were undertaken at the direct request of Alec Issigonis, who wanted to concentrate on the far-reaching engineering projects he had in the BMC pipeline.

Issigonis writes to Stokes

Sir Donald Stokes wrote to Alec Issigonis on 10 April. Eight days later the BMC Technical Tirector replied. Bertie Fogg was Albert Fogg, the Leyland Technical Director.

Dear Sir Donald,

I enclose a short resume of work that I am currently engaged on in my new undertaking.

Management approval or rejection of these projects is still to be determined, but at the earliest opportunity I shall discuss the matter with Bertie Fogg in greater detail, so that you can appraise the situation with more facts at your disposal.

Most of the research work outlined below presupposes that we shall continue to produce a Mini in the foreseeable future. It is very important to arrive at a decision over this matter as soon as possible, because on this depends the speed at which the development work is executed. A low priority programme is both time consuming and costly in the long run.

The greatest need in combating increased production costs over the year is the development of a new engine for a small car of this type. The present A-Series engine offered a quick way of getting the car into production in 1959, but has outlived its purpose both for weight and cost compared with European competition; although its performance is still well up to modern standards. The enlarged version (1300) is perfectly competitive for cars in the category above the Mini type of vehicle i.e. the lower medium class range.

  1. Design and development of a 750/998cc four-cylinder engine and transmission system for transverse or normal drive applications, for a new small car. In addition to this work we are doing a design study, in conjunction with Automotive Products Ltd, for a four-speed automatic transmission unit.
  2. Development of a six-cylinder version of the above engine to give capacities from 1300 to 1490cc, using as much common tooling as possible including the same transmission system.
  3. Development of a new Mini. This is being studied in two versions, one six inches shorter than the present car (120 inches) and another 10 inches longer or four inches longer than the present model. This will embody common suspension parts but, in order to keep production costs down to a minimum, Hydrolastic has had to be abandoned in favour of conventional springing. This is because a simplified version of the Hydrolastic design, which we have been working on for some time, has not yet materialised.
  4. Development of a small Hydrostatic supsension system in collaboration with N.E.L. The arrangement incorporates motors in each wheel and eliminates the use of high pressure hoses to transmit oil to these units.
  5. General work on induction systems including the use of updraft carburettors for anti-pollution work. This work is very necessary in order that we can dispense with the expensive after burning devices, which we have had to incorporate into our cars at present being sold in America.

Bizarrely, Alec Issigonis did not mention the upcoming BMC 1500 (Maxi), which was supposed to be close to production. However, Issigonis’s days at Longbridge were numbered as he was about to lose his last protector.

Austin-Morris story 1968: Issigonis 9X
Issigonis’ 9X Mini-replacement came out of the mainstream model plan in 1968

More blood on the boardroom floor

For two months the BMH Managing Director Joe Edwards had been engaged in a stand off with Sir Donald Stokes, refusing to work with the truck man. The issue that divided Stokes and Edwards has never been clarified. One assumes that Joe Edwards thought he could carry on managing BMC as before, while Sir Donald Stokes thought that the volume car side had been mismanaged and needed Leyland’s direct input. Leyland had now persuaded enough BMH Directors to go along with an ultimatum to Edwards – cooperate or resign. Edwards chose the latter.

On 18 April, Joe Edwards resigned all his appointments with the new British Leyland group. A statement from the Berkeley Square headquarters of British Leyland said: ‘By mutual agreement Mr JR Edwards, Managing Director of BMC, will relinquish his present directorships of British Leyland Motor Corporation, British Motor Holdings, BMC Ltd., and Pressed Steel Fisher Ltd., with effect from April 30. Mr Edwards has agreed to act as a consultant to the British Leyland Board and will give special attention to advising Sir Donald Stokes on various aspects of the new organisation at home and abroad.’ Joe Edwards’ consultancy fee would be £6000 a year.

Sir Donald Stokes said: ‘There has been no ill feeling between us. The whole business has been negotiated on a very friendly basis. I am very glad that someone with Joe’s tremendous knowledge of BMC and Pressed Steel – the biggest units in the new group – is going to give us the benefit of his vast experience as a consultant.’

Joe Edwards had not finished rationalising BMC. He planned to close Morris Bodies in Coventry, Morris Radiators in Oxford, parts of the MG complex at Abingdon and Fisher & Ludlow at Castle Bromwich. This would axe another 8000 jobs from BMC’s payroll. Sadly, Joe Edwards had failed to convince many of his fellow BMH Directors of the wisdom of Roy Haynes’ future product plan and his rationalisation programme and that sealed his fate.

The trouble with the Austin Maxi

With Joe Edwards finally gone Leyland pounced upon BMC. Sir Donald Stokes unofficially took control of BMC. He was clearly not impressed with Alec Issigonis’s letter of 18 April and either failed to understand Roy Haynes’ product plan or was not enamoured of it, and soon asked Harry Webster, the Technical Director of Standard-Triumph, to draw up a plan for BMC volume cars as rapidly as possible. This in turn brought Webster into conflict with Roy Haynes.

Only four days after the departure of Joe Edwards The Times revealed that the BMH-Leyland group had decided to postpone the launch of the BMC 1500 saloon until 1969 because of styling issues. Up to early February 1968, Sir George Harriman, Chairman of BMH, was setting October 1968 as the date for introducing the new front-wheel-drive model, designed to slot between the BMC 1100/1300 and the bigger BMC 1800s.

According to The Times, there had been sharp conflict on whether the BMC 1500 could be launched in the autumn of 1968 in absolute confidence of its appeal and engineering reliability. What Sir Donald Stokes and Harry Webster actually knew about the ADO14, and whether they had even seen it at this stage is not known, but with Joe Edwards out of the way, they moved quickly to postpone its launch. The ADO14 they would have seen was the Roy Haynes restyle of the Dick Burzi original (below).

The Austin-Morris story 1968: Forthcoming Austin Maxi was far from resolved, design-wise
Forthcoming Austin Maxi was far from resolved, design-wise

The trouble with the BMC factories

Stokes was appalled by what he found in the BMC factories. Speaking some two decades later, he said: ‘Cowley itself was deplorable and although Longbridge wasn’t so bad, it always seemed to be half-finished. I’ll give you an example. They had a foundry there, half of it had been modernised and the other half hadn’t and it shouldn’t have been there anyway.’

One industrialist closely concerned with the Leyland-BMH merger said: ‘When I walked into the Cowley works in 1968, I couldn’t believe my eyes. There were belt-driven lathes at a time when some firms were already using numerically controlled machine tools.’

The new Leyland Finance Director was the same John Barber who had been involved in Ford’s strip down of a Mini in 1960. He described his reaction to the Midlands car plants, presumably not all of them BMC, as ‘an incredibly shattering experience.’ He continued: ‘I think my worst shock was the quality of Midlands management. The management had been so bad since 1946 that labour had got out of control; the unions had taken control and the thing was getting chaotic.’

Alec Issigonis is said to have gone to his office in Longbridge to find it occupied by Harry Webster. He was found another office by stylist Dick Burzi, his own days at BMC numbered. Whether it was his original intention or not, Sir Donald Stokes now found himself running the volume car division of the British Leyland Motor Corporation, still officially known as the British Motor Corporation. The amicable merger had turned sour within weeks and the team at BMC that had created two of Britain’s most innovative and best-selling cars had been decapitated. Was Sir Donald up to the task at hand?

Back to: Introduction


Early 1968: Model changes, launches and deaths

In March 1968, the Austin America (below) was launched in the USA, based on the Austin 1300 two-door saloon, but with a re-worked 1275cc, 70bhp A-Series engine. Optional equipment included manual transmission. It was also sold in Canada and Switzerland. Some 58,500 were built up until September 1971.

On 8 April, the MG Magnette Mk4 ceased production after 14,320 cars were produced.

Ian Nicholls

Born in Bedfordshire but now residing in Norfolk, Ian Nicholls is an ardent BL enthusiast. Currently he owns a Jaguar and two classic Minis. A stalwart of the Norfolk Mini Owners Club for nearly a decade he is an enthusiast for all things Issigonis. A stickler for historical accuracy he has recently performed the marathon task of mining the online newspaper articles for all BMC>MG related stories. Ian is unable to help with technical queries – he pays other people to fix his cars!

19 Comments

  1. “The Mini, 1100/1300 and 1800 (above) were subject to prohibitive trade tariffs when sold in the Common Market, comprising France, West Germany, Italy, the Netherlands, Belgium, and Luxembourg. This was a booming car market in which high technology added market appeal and higher volume helped to amortise production costs. It was the place to be selling cars and the British Government knew it, hence its repeated attempts to join the Common Market.”

    Had we joined earlier, would we be trying to leave now? Was the “ever closer union” mantra in place then? As for the treacherous attitude of de Gaulle after what we did for France during WWII……….

    • History has shown Dr Gaulle concerns to be correct, he knew us well from the time he spent here in the war and knew the UK could never fully embrace its continental neighbours because of the need to maintain its alliance with the US. So he predicted was that the UK would always be a reluctant member of what became the EU and conflicted in its support whenever its objectives clashed with those of the US.

      Which is of course, exactly what happened.

  2. Would it be fair to say that had BMC benefited from the UK joining the EEC in 1963 (Maastricht could always be rejected later on with interesting results), it would have not only butterflied away the later Credit Squeeze in 1966 (or at least allowed BMC to endure it due to profits from the continent) but also potentially reduced the UK company car system into a historical footnote (that BMC need not follow after Ford or Vauxhall in developing their own fleet market challengers)?

    If so what would have been the likely consequences for both Vauxhall and Ford UK, would it have led to an earlier drive towards integration with their respective Opel and Ford Germany branches on the continent?

    BMC still had some issues that needed resolving in either case such as rationalisation of its portfolio, an early-60s sub-1600cc engine derived from the A-Series (yet with scope for short-stroke 1000-1300cc variants), FWD trio featuring hatchbacks as well as a post-Primula Fiat/Autobianchi-like differentiation between Austin and Morris (even if BMC could not directly challenge Ford or Vauxhall).

  3. As with the later Daimler Chrysler merger it is hard to see how the merger could have worked, there were few natural synergies and Leyland, itself only relatively marginally profitable, products locked into the weight restricted domestic market for HGVs, locked out of the European market by tariffs and dependent on Empire markets that had during the war been opened up to US and now on the back of it Japanese competition, simply did not have the cash to turn BMH around. It quite simply had a big enough job of bringing Rover and Triumph together and rationalising the mass of Bus and Truck brands it had acquired.

    Given that history shows us that BMH management had by 68 finally got a grip of its issues I think a better solution would have been to give BMH a cash injection to get its Mini, ADO16 reskins to market and launch the XJ6; by selling to Leyland its Truck and Tractor business and agreeing to take the the Austin Gypsy out of the market.

  4. I think the merger was not the real start of the downfall – Leyland just walked into a mess that should have been resolved long ago. BMC knew that we had no access to the European markets so why did they not properly invest in a manufacturing base in the EEC, instead of a token plant in Belgium, and some rather loose licensing agreements with non automotive businesses? If the rumours were correct they had been interested on taking Borgward on, which had gone ahead would have given them a rather large manufacturing base to take on Europe with, although this may have never been viable if the stories of BMW’s influence in Borgward’s downfall are to go by.

    I think this story does highlight how bad Leyland’s management was. It was a not invented here syndrome which is very much like most of British industry. How can Joe Edwards be seen as failing as he had only been in charge of 18 months? I don’t know if his paln would have worked, but at least it might have had a chance – instead Stokes and co lived in a pipedream world which was no better than George Harriman.

    • Would say a few of the issues BMC faced at the time could have been resolved much earlier had Morris made better decisions.

      For example Morris did acquire French Automaker Leon Bollee in 1924, however Morris basically walked in blind and virtually did no research at all since Leon Bollee was pretty much worthless (he apparently felt pity for Leon Bollee’s widow who was burdened with the factory).

      Better French options for Morris (later BMC) would have to be instead acquiring the likes of Cottin & Desgouttes, Rochet-Schneider or De Dion-Bouton to allow for an earlier successful presence on the continent as well as either potentially being to Morris what Simca became to Fiat.

      Another was Morris being parsimonious in the post-war era, rejecting Mile Thomas’s proposed modernization of Nuffield, persisting with Side-Valves, not leveraging the post-war success of MG and even attempting to sabotage the Morris Minor (which despite being a success was hampered by having to use the old SIde-Valve engine and lost out against the Beetle).

      The resolving of the above would have placed Morris on a more equal footing relative to Austin prior to the formation of BMC, on top of access to European markets via a factory in France (that could or could not be further complimented by a later acquisition of Borgward).

    • But BMC did have a strong European presence with its partner Innocenti in Italy, it was failure to update the Mini and the Allegro to win the hearts and minds of European Ado16 customers that saw Leyland lose BMCs European sales network and so kill any hope of BL ever being a major manufacturer again.

      • But Innocenti was not part of BL until the 70s – prior to this it was a licensing agreement and then a share of Innocenti. The Mini and AD016 built in Europe would have been financially more competitively priced and therefore more units would have sold, and larger profits would have been available to deliver on Sir Alec’s 9x project which would have replaced both of these models in the long term. Instead of being a big fish in a small pond, BMC would have been a big fish in a big pond. Also as per Nate’s comments, better decisions prior to the formation of BMC may have seen that foot in Europe.

        • It was a very good Licencing agreement including purchase of tooling and powertrain from BMC. Setting up their own operation would have involved considerable more risk and cash they did not have with little financial benefit to show.

        • Lack of immediate post-war Austin Seven successor let alone sub-A40 750-950cc engine aside (the closest being a shortened A40-derived A35 proposal with 1-litre version of A40 engine), Austin seem to have done many things right prior to the formation of the BMC in terms of modernization and switching to OHVs in comparison to Morris.

          In retrospect one could have argued for Austin taking over American Austin (later American Bantam) in 1932 and moving from its than existing site at Butler, Pennsylvania to say the former Locomobile Company of America factory later Durant Motors site in Bridgeport, Connecticut which is quickly expanded to increase production capacity. Thereby placing Austin in an advantageous position to build the original Jeep designed by Karl Probst on the scale needed by the United States Department of War (together or in place of Willys-Overland and Ford), powered by a 4-cylinder version of the Chevrolet/Bedford derived Austin 6-cylinder (later becoming the 4/6-cylinder “Austin D-Series”) initially used in the Austin K30 / K2 / K3 / K4 many years before the Austin Champ or Austin Gipsy.

          Another would be Austin simply adding an optional clause to its rather generous post-war licence agreement with Nissan in 1952 stipulating any improvements by the latter to the former’s licensed A/B-Series engines (including any related descendants up to the MA and CA – possibly a few more recent units) can potentially be utilized at Austin’s later BMC’s own discretion (the same also potentially applies to the licence agreement between Rootes and Isuzu).

          • Supposedly Austim considered bringing back the 7 just after the War as a minimalist form of transport but instead stuck with the 8 until the models under development could be launched.

            I did wonder if a reskinned 8 could have been kept in production into the 1950s as a stop-gap.

          • It seems pre-war Austin were thinking of a 500cc Fiat Topolino-like successor to the Seven prior to WW2, also in 1942 an OHV version of the 900cc Austin Eight engine was laid out though never built.

            Had the latter been further pursued within the context of a post-war stop-gap reskin of the Eight, it would have been interesting to see whether either it or the shortened A40-based 1-litre A35 prototype could have adequately competed against the Morris Minor (even a 918cc+ Wolseley Eight OHV powered version) until the arrival of the Austin A30.

            In light of what American Bantam, BMW, Datsun, Rosengart and reputedly some racers/tuners did with their Seven-based designs. Austin could like BMW with the 788cc BMW 3/20 have built a new small OHV engine using Austin Seven tooling, while American Bantam and Datsun (see Nissan D10 engine for latter) were pushing displacement levels for their Seven-derived engines up to 820-860cc with others allegedly managing to push the engine capacity out to as much as 948cc.

            Would have preferred Austin’s post-war Morris Minor rival to have been more like an earlier Rosengart Ariette with A40 (or other contemporary Austin) styling cues, powered either by an OHV version of the 900cc Eight unit, A40-based 1-litre A35 unit or less likely a pre-war 750-860cc+ OHV unit built using Austin Seven tooling akin to the BMW 3/20.

  5. “They wanted a car that was cheap to buy in bulk, run, service and was reliable.”

    To be fair, it wasn’t just fleet buyers who wanted these attributes! When Japanese cars started arriving in numbers in the 70s, the majority were conventional RWD saloons, like the Escort, Cortina and Viva. And a lot of BMC’s export markets wanted conventional saloons too, hence Australia developing its own P76 and P82.

    It’s not as if what Ford and Vauxhall were doing, producing conventional unsophisticated saloons and rebodying them every few years to keep them fresh was alien to BMC either, as it’s what it did itself before the FWD cars came along, hence the various generations of Oxfords and Cambridges, or the Wolseley 1500 which should have been the next generation Minor.

    • Indeed in those days Ford & Vauxhall changed their body designs quite frequently. I think the Victor FB came out in 1962, then the FC in 1965, followed by the FD in 68. Similarly Ford launched the Cortina in both MK1 and 2 versions only a few years apart.

      Nowadays there’s typically 6-7 years between completely new body designs

      • Yes that’s true though Ford never reskinned the Anglia in spite of it’s very 1959 looks.

        Oddly the Viva was HA 1963, HB 1966, HC 1970 which then lasted until 1979.

        • The Anglia was reskinned in Italy with the Michelotti styled Ford Anglia Torino 105E. It is also weird that compared to the previous Anglia-based Prefect 100E, the Anglia 105E / 123E never featured a 4-door version like the equivalent of Viva HB (though assuming the styling was the limiting factor amongst other things).

          Pietro Frua meanwhile produced a rather attractive looking Ford Anglia 105E Convertible prototype.

      • The FD came out in 1967, and was itself replaced by the FE in 1972. Whatever else you could say about the Victor/ Ventora FD, it certainly was a good looking car and the Ventora was a real Q car, looked very similar to a standard Victor but had a 3.3 litre six that could power it well past 100 mph and could cruise effortlessly on long journeys. The FE seemed spoiled by dropping the four headlight set up on Victors, but the VX 4/90 that used the four headlamp set up looked very much like a Chevy and was a gpod car to drive.
        Now suppose Vauxhall had better rust proofing and better equipment levels on its base and SL models, then the Victor could have really done well.

  6. Amazing what you learn on this site ! I had never heard of the Rosengart Ariette until Nate mentioned it . I had assumed that Rosengart faded away after the end of the Austin 7 .

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