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 sixth part, the BLMC honeymoon comes undone as industrial action starts to get out of hand. Read on for a lesson in how not to tame the unions.
The Austin-Morris story: Anarchy!
And so the sordid 1970s began. In the 1960s, young people had wanted to change the world, by the end of the 1970s, young people would be lucky to find a job. Social upheaval gave way to de-industrialisation as consumers lost confidence in British manufactured goods – and not just overseas. For the big two British motor manufacturers, the new decade posed challenges in dealing with the weak spots in their respective car ranges.
For Ford of Great Britain the priority was replacing the hopeless Zephyr/Zodiac Mk4 executive car – a mere 17,428 of which they had manufactured in 1969 – and which was being hammered in the sales charts by rivals from Rover and Triumph. In the pipeline was the Anglo-German Ford Granada. For Austin-Morris, the focus was on getting a simple rear-wheel-drive fleet car, the ADO28, onto the market to earn extra sales. Ford would succeed magnificently in all its aims, while British Leyland as a whole would squander its market leadership in every sector it led, to Ford’s benefit.
Longbridge looks to slow down
Two days into the new decade and Austin-Morris was considering the introduction of short-time working at the assembly plant in Longbridge. The company confirmed that talks were taking place with the unions at factory level, but insisted that no firm decisions had been made. A spokesman said: ‘Difficulties have arisen in the engine and gearbox sections at Longbridge. The introduction of new models in the Mini range and the 1300 GT has caused some imbalance between the number of bodies available and engine production. Production schedules have been changed to rectify this. If short-time working is introduced it will be restricted to engine production and will be a purely temporary measure.’
Mini production had been reduced in recent weeks by disputes on piecework rates after the introduction of the revised ADO20 range. BLMC’s Finance Director, John Barber, later commented: ‘We had the ludicrous situation, when we brought out the Mini Clubman in 1969 with its redesigned front, that the Shop Stewards wanted to renegotiate the piecework rates for the entire car. Any sensible person would have just negotiated on the new pieces of sheet metal and it really illustrates the inequity of the piecework system.’
Workers leaving the East Works at Longbridge, which employed about 3500 and produced most of the engines and gearboxes for Austin-Morris cars up to 1300cc, talked of large stocks of engines which had built up. British Leyland production was already suffering from unofficial strikes.
Ending the 1960s on a high
On 8 January, BLMC announced pre-tax profits of £40.4 million for its latest financial year. This was 12 per cent more than was achieved the year before, excluding the bonus from devaluation. Sales were 7 per cent up at £970 million and Lord Stokes, the Chairman and Managing Director, warned that results for the first quarter of the current year ‘compared unfavourably with the corresponding period last year, due almost entirely to labour troubles and the credit squeeze.’ BLMC produced about 1,080,000 vehicles in the financial year, compared with 1,050,000 in the previous one, a profit of £37.40 per vehicle.
However, its less profitable export quota rose from 45-50 per cent indicating that it had been redirecting production to export markets because of the 12.5 per cent slump in the UK market. Although the group was hit as hard as anyone in actual sales on the home market in 1969, BLMC’s market share rose marginally from 40.83 per cent in 1967-68 to 41.05 per cent in 1968-69. In the last three months of 1969, which Lord Stokes said compared unfavourably with 1968, the group’s market share began to fall – it was 38.07 per cent in October 1969 and 34.38 per cent in November 1969.
A week later Lord Stokes was in Auckland, New Zealand, where he announced plans for a motor assembly plant in the country, capable of producing 20,000 vehicles a year and employing 1,000 people. The plant was never built.
Production picks up
On 21 January, George Turnbull (above), the Managing Director of the Austin-Morris division, announced that, during the next three months, car output was to be raised by 1250 to 18,200 a week. George Turnbull said that the extra production would be shared by the Longbridge and Cowley assembly plants. Production of the Mini and the 1100/1300 range (ADO16) was to be stepped up, he explained. Another 350 Minis and 900 more of the ADO16 range would be produced.
Then, on 27 January, the Austin-Morris finance people met and discussed the proposed ADO21 mid-engined sports car. The finance men pointed out that the projected costs for the ADO21 now exceeded that of the MGB GT. The Austin-Morris Sales Director Filmer Paradise pointed out that, as the MGB GT sold for $2800, the ADO21 should be investigated as an MGB replacement, whilst other ideas for a $2000 Midget were looked at.
Unknown to British Leyland, in January 1970 Giorgetto Giugiaro of Ital Design, had been invited by Volkswagen to go to Wolfsburg to work on the company’s EA337 project. This project drew on engines and front-wheel-drive technology from the Audi division of Auto Union, which Volkswagen had owned since 1964. The aim was to produce a replacement for the long running and now-fading Beetle. The design brief provided by Volkswagen specified a C-segment car with a two-box body in three- and five-door versions. Volkswagen also provided Giugiaro with the basic dimensions and the powertrain options.
Giorgetto Giugiaro produced a design that reflected his signature ‘origami’ or folded-paper style, emphasising sharp corners and flat planes – in time the Volkswagen EA337 would emerge as an ADO67 rival…
Strikes begin to bite
Despite the Austin-Morris division’s attempts to ramp up production it was dogged by strikes. Lord Stokes discussed industrial relations in the Daily Mirror of 17 February 1970. Back in November 1969, Barbara Castle, the Secretary of State for Employment and Productivity, had told industrialists: ‘Power has returned to the grass roots whence it came. We have got to accept again whether we like it or not, that workpeople have a veto which they are increasingly prepared to exercise; in other words that management these days can no longer function by the arbitrary exercise of traditional prerogatives — but only by winning the consent of its workpeople.’
Lord Stokes told the Daily Mirror: ‘I think that what Barbara Castle said has a lot of truth in it. The trouble is that shop floor power at present is very often a negative power — the power to opt out of work. People these days just walk out because a place is too hot, or too cold. Sometimes it is quite irrational. Like a power to destroy.
‘Well, you might ask, what are we as management doing about it? We get a lot of trouble in the car industry because often people do not know what is going on. I am convinced that we need a better system of two-way communication between the shop floor and factory management. We don’t control our factories. The workpeople do. It’s their factory as well as the shareholders’ and the management’s. So it’s essential that there should be two-way communication. And that means that management must explain what is happening and why.
‘But at the same time workers, and unions, must accept more responsibility for their actions. They can’t have it both ways — power without responsibility.’
Dealing with the future model plans
On the agenda at that month’s meeting of the British Leyland (Austin Morris) Limited Board was Project Condor (ADO68). This was a sporting coupe devised by Roy Haynes to utilise existing Austin-Morris mechanicals. Roy Haynes had now left the company and it appears that as well as in-house designs, Michelotti had again been invited to tender for the design.
The Board was told that ‘the Michelotti-styled model has now been accepted subject to minor changes, but tooling costs would appear to be exceptionally high and consideration is being given to front-wheel drive in order to minimize the cost of tools.’
Also on the agenda was the ADO21. The ADO21 was intended as a mid-engined sports car, now using the E-Series engine from the Austin Maxi (ADO14). Early drawings of the car were badged as an MGD. The Board was told that mid-engined sports cars were too expensive to manufacture. The signs weren’t looking good for two promising ex-BMC projects.
Stokes gives his ‘anarchy’ speech
Then, on 25 February, the British Leyland Motor Corporation held its Annual General Meeting in London. What Lord Stokes said became headline news. For the first four months of the financial year, home car sales fell by £21 million and, although exports were some £10 million to the good at around £100 million, Lord Stokes said that it would not be possible to make up the home loss by increasing exports.
In the first six months of the previous year, the group had turned in a profit of £19.3 million, while annual profits were a record-breaking £40.4 million. Profits in the new year were already some £13 million short. Lord Stokes said in what became known as his ‘anarchy’ speech: ‘In the first four months of the company’s financial year, strikes and the squeeze have hit the company so hard we have made no profit. The disruptions we are suffering are now so frequent and taking up so much time that the strain on our factory management is becoming intolerable — perhaps that is the aim of the people stirring up trouble.
‘I cannot believe that this state of anarchy is what the majority of our workers really want. We have had in our own plants, and those of our suppliers, walk-outs, go-slows, work-to-rule tactics, working without enthusiasm and other associated activities, very often led by small militant minorities. It is becoming increasingly obvious that the industrial relations system of this country must be based on a framework of law, which could well include ballots impartially administered on a mutually agreed basis. I do not believe that all our stoppages of work result from genuine grievances. They are such a regular feature of our daily life that they can only be planned and deliberate disruption for its own sake.’
‘Stoppages are such a regular feature of our daily life…’
Lord Stokes described the recent spread of industrial disputes, mostly unofficial, as of ‘alarming and chaotic proportions’, and referred ‘to ‘distortion of the truth and insidious coercion’ by the troublemakers. He also reiterated his plea that a steadily expanding home market was necessary for British car makers to be able to compete in the international markets: ‘This does not seem to have been fully accepted in all responsible circles.’
He warned that, unless there was some halt to the current round of increases and inflation, Britain faced a financial crisis through pricing itself out of overseas markets, and raised the spectre of ‘massive unemployment on a scale only remembered by the older generation in this country’.
The next day, a national conference of senior Shop Stewards in British Leyland’s 70 plants was called for Tuesday, 10 March, probably in Birmingham, as part of a concerted union attempt to improve labour relations in the 185,000-employee car and truck making empire. Leaders of 15 unions promised to call the conference in talks with Lord Stokes, the BLMC Chairman.
The gulf between them and us widens
Jack Jones, Transport and General Workers’ Union General Secretary, said Lord Stokes’ speech, which bitterly attacked unofficial strikers, was ‘a matter for him and his shareholders. We recognize that there are big problems, largely caused by the size of the organization. Our members are naturally concerned about security of employment, wage rates and working conditions.’
In a radio interview, Lord Stokes refused to back down on the speech, which had angered some union leaders. The British Leyland Chairman said: ‘I think I am quite entitled to tell my shareholders, who after all own the business, the reasons why we are not making a profit. If we had been able to make all the cars we scheduled, we would have made a normal profit. One of the problems of this country is that too many people are sweeping industrial relations problems under the carpet and trying to pretend they don’t exist.
‘If we go on like this we will all go bust. Our problem is to try to get this merger going. But 70 per cent of our time is spent worrying about people who walk out of consultation without getting on with the merger. We have made quite fantastic progress in the last 12 months, but all this is going to be brought to nought if people don’t turn up to work. It’s just chaos, that’s all.’
Stokes accused of ‘blowing a gasket’
Vic Feather, General Secretary of the Trades Union Congress, in another radio interview, described Lord Stokes’s address to shareholders as ‘blowing a gasket.’ He added: ‘I must admit there are times when I would like to let fly at managements like that, but if you are seeking to get better relationships, I do not think it is a good thing to go out full blast against the people you are going to have to live with. But for all that, I would still buy his shares. He is a spectacular man, with enormous energy.’
There are plenty of workers in the motor industry who will testify to this day that some strikes were provoked by local management in order to reduce unsold stocks. This was in part caused by the Government of the day regulating hire purchase restrictions, which resulted in fluctuating demand for cars in the domestic market. In July 1966 the Wilson Government tightened hire purchase restrictions, then the following year eased them twice, before another increase. In 1968 the hire purchase restrictions were tightened again and this was probably responsible for the poor UK car sales in 1969.
The Government was exhorting the motor industry to expand and help provide for a better tomorrow, but at the same time was restricting demand. The politicians’ usual response was that the motor industry should focus on export markets instead and damn the trade tariffs. Despite the strikes, by October 1969 Austin-Morris was producing more cars than the UK market could absorb, hence the cutbacks in production at Cowley.
Piecework is becoming an issue
One of the brickbats used to beat the old BMC back in 1967 was its retention of piecework, when its American owned rivals used Measured Day Work to pay their employees. Now BLMC ran into trouble over its plans to change over to Measured Day Work at Cowley, which employed 7500. For a week, its five assembly lines had been halted and 3890 men laid off, as a direct result of the wage negotiations. One hundred and twenty six electricians were on strike for a substantial wage increase.
At a meeting on 25 February, they voted to stay out insisting that their claim should not be included in the existing plant negotiations. British Leyland wanted to replace the existing outdated and highly complex pay structure for 4000 day workers with one based on six grades. Piecework was a complicated system, which over the years had led to continuous bickering and wildcat strikes. The proposals had been rejected in their original form by the three major car unions, the Amalgamated Union of Engineering and Foundry Workers, the Transport and General Workers’ Union (TGWU) and the National Union of Vehicle Builders. Modified proposals would be put to the unions on Tuesday 10 March.
A TGWU official said: ‘It is not simply a question of how much. We turned down the company’s proposals because, quite frankly we like the present system. We are also suspicious of the company’s motives. Although the present proposals do not affect pieceworkers we see this as the first move to getting rid of piecework. British Leyland is trying to tackle the easiest part first, the day workers whose earnings are tied to those of the piece- workers.’
Tensions rise between unions and management
A British Leyland spokesman said: ‘Cowley is being re-equipped and expanded at a cost of many millions of pounds to increase capacity from 8000 cars a week to 10,000. It will then be producing about the same number as the group’s biggest car plant at Longbridge. At the same time we are trying to simplify the present highly complicated pay structure for day workers by introducing a more flexible system of working.’
George Turnbull had despatched Geoffrey Whalen to Cowley – Whalen had come to BLMC from General Motors after a stint as an industrial negotiator for the National Coal Board in Scotland. He was not impressed with the quality of union officials in the motor industry, in comparison with those of the National Union of Mineworkers. He was also shocked by what he found at Cowley in 1970.
‘The piecework system there was completely irrational and discredited. There were, for example, 80 different rates of pay for inspectors. It had all been based on giving extra bits money for different responsibility. It started in the days when management had complete control… The mixture of paternalism and autocracy had continued after the war and they carried on managing ineffectively and inadequately. Then the unions became stronger and in the 1960s the plant at Cowley had become a hotbed of dissension. It was as if the management had restrained the unions completely and then, once the floodgates were open and the militants in the union strong, the result was dissension and difficulty and strikes. When I went there, that year on average there were two and a half strikes a day-over 600 stoppages in the year.’ Meanwhile, over at Longbridge, 200 men were striking over piecework rates. Another 800 were laid off as a result.
Princess plans begin to take shape
On 27 February, Austin-Morris Sales Director Filmer Paradise set down in a memorandum for the Product Policy Committee his initial thoughts on an ADO17 1800 replacement that became the 18-22/Princess (ADO71) of 1975. As the Princess development story states: ‘Echoing the thoughts of John Barber, Paradise made it clear that the main growth in the car market would be in the upper-medium sector (referred to as the D-segment) and, as the ADO17 needed replacing, it made sense to pitch its replacement further upmarket. This plan was, in the opinion of Paradise, one that Austin-Morris urgently needed to put in place and the design should be Euro-friendly to meet the challenges of the late-1970s effectively.
‘Marketing thought the car should be rear-wheel drive, but the decision to continue with front-wheel drive was swiftly made by the Product Policy Committee, which felt the ADO17 chassis and engine/transmission pack would form the ideal base for the new car. Besides, changing to rear-wheel drive would send out the wrong messages to buyers after the company had done so much to pioneer front-wheel drive.’
In 1969 Austin-Morris sold 29,005 1800s (ADO17) in the UK. This worked out as a 22.9 per cent increase in sales over 1968 in a depressed marketplace. The BLMC PR machine boasted to the press about the model experiencing a revival. Somehow this figure of 22.9 per cent had persuaded Filmer Paradise that the ADO17 could and should be replaced in a memo he wrote in February 1970. Of course, this miracle sales increase was in paltry numbers for a model that had never come close to its projected target of being built at a rate of 4000 per week. As in the case of the later Austin Maxi, one of the reasons for the Landcrab’s failure was the total lack of interest shown in it by the fleet buyers.
It appears an ADO17 replacement was not part of Roy Haynes’ product plans. Perhaps Filmer Paradise felt his team could sell larger front-wheel-drive cars in a market where BMC had failed? The move upmarket would also mean the ADO71 overlapping with Rover and Triumph.
Striking spreads across the corporation
While Filmer Paradise was dreaming up new models, getting the existing product out of the factories was proving to be a headache. British Leyland’s troubles at Longbridge intensified because of a shortage of car heaters, normally supplied by the Smiths Industries component plant at Witney, Oxfordshire, where there was a strike. Production of the BMC 1800 stopped and 300 workers joined another 800 laid off from the 1100/1300 assembly lines, where production had stopped because of a strike by 200 workers.
Strikes continued to dog Austin-Morris throughout March and in a speech Peter Shore, the former Secretary of State for Economic Affairs and now Minister without Portfolio, stressed the importance which the Government attached to a British Leyland ‘peace treaty.’ The company, he said, ‘contributes heavily to our exports, our investment and our regional policies and – very important – it is the only remaining British-owned motor car firm. Those employers who complain about irresponsible behaviour should first consider whether their management arrangements are such as to promote responsible or irresponsible conduct.’
The latter could be construed as a jibe against Lord Stokes.
Condor, Allegro and Marina under the microscope
The British Leyland (Austin Morris) Board met. On the agenda was the ADO68 (above). The Board was told that ‘styling proposals are being investigated for a new body shape on the Maxi chassis layout, with transverse engine’. At the same meeting the interior style was approved for the ADO67. This was the work of Vic Hammond, who had come to Austin-Morris via Standard-Triumph and Saab and had been recruited by the now departed Roy Haynes.
Harry Webster reported he had recently driven a vehicle with the 1800 B-Series diesel installed and it was ‘the best diesel-engined car I have ever driven.’ There was also concern at how costs on the ADO28 programme had ballooned from a budgeted £17 million to £35 million. Clearly, the notion that the ADO28 would be a simple re-body of the Morris Minor were going out of the window. It would balloon further to £45 million – so much for cost control…
Originally it was envisaged that the ADO28 would use the A-Series engines in 1098cc and 1275cc forms plus the 1485cc E-Series engine used in the Maxi, mated to a four-speed Triumph transmission that dated back to 1953.
Engine decisions for the Marina
It was then decided not to use the E-Series engine in the ADO28 programme after the design for the transmission tunnel had been finalised, for which there is not a satisfactory explanation. In its place would go the older B-Series engine. One thesis is that it was decided to sell the ADO28 in the USA, for which the E-Series engine was not legal under federal emissions legislation. The problem with this argument is that the E-Series engine was earmarked for the ADO21 sports car and would have to be adapted for North American regulations anyway. It was not until July 1971, after the ADO28 had been launched, that any notion of selling an E-Series-engined car in the USA finally disappeared.
Another theory is that the ADO28 Design Team was told that the Cofton Hackett plant did not have sufficient capacity to supply enough E-Series engines. This has been dismissed as ludicrous because of the underwhelming sales of the E-Series-engined Austin Maxi, but what must be remembered is that the engine was also earmarked for the ADO67, which was expected to be an international chart topper. The consequence of all this was that the existing inline BMC B-Series gearbox would not fit the ADO28 transmission tunnel, Austin-Morris, or perhaps their ex-Ford financial controllers, deemed it too expensive to alter the design, so the weaker Triumph four- speed transmission had to be used. Austin-Morris would spend £1.9 million – which equates to more than £29.6 million now – re-tooling the Triumph transmission to take the torque of the B-Series engine with less than satisfactory results.
The torque of the B-Series engine also proved too much for the Minor suspension design that was carried over to the ADO28 and was in fact expensive to manufacture. The refusal to sanction the redesign of the ADO28 transmission tunnel would also affect any plans to up gun the ADO28 platform. On top of all this, the notion of Lord Stokes and Harry Webster that Austin-Morris could develop two separate mid-sized cars virtually simultaneously was spreading engineering resources thinly. Both ADO28 and ADO67 would emerge underdeveloped. Far from being an easy and cheap car to develop, the ADO28 development was taking on farcical proportions, with no definable programme leadership, and with the money men dictating to the Design Team.
Management accused of being weak
On 9 March, an explosion closed a section of the Morris factory at Llanelli, Carmarthen. No one was hurt, but some workers were treated for shock. More than 200 of the 2600 employees were sent home and told to report back the next day. The explosion occurred in the gas welding department, and specialists were brought from Cardiff and London to examine the equipment. This highlighted the issue of safety at work.
The following day, British Leyland’s Shop Stewards met with their national union chiefs in Birmingham, and said that they were willing to cooperate with the management in probing labour relations at each of the group’s 70 factories. Jack Jones, General Secretary of the Transport and General Workers’ Union, and Chairman at the meeting, said: ‘It was remarkably constructive. When the fact-finding exercise has been completed, there will be another meeting between union officials and Shop Stewards. It is now up to management to make sure that there is a response from their side.’
At the meeting, attended by about 300 Shop Stewards and 30 union officials, the Shop Stewards stressed that the peace plan could not succeed without the cooperation of the management at each individual factory. They said that the present managerial set-up was at least partly responsible for all the labour trouble that had plagued the group – they claimed that local management lacked any real authority to settle difficult disputes on the spot. The Shop Stewards from Longbridge said that in 1969 60 major disputes had to be referred outside the factory because the management ‘was unable to settle them.’ This view was challenged by British Leyland. A spokesman said that they were ‘amazed’ by the allegation.
MG’s future plans scrutinised
On 16 March, Austin-Morris held a meeting to discuss a replacement for the MG Midget. Managing Director George Turnbull suggested that, ‘the replacement Midget could be designed and assembled at Innocenti with mechanicals supplied by us. Engineering was working on a design proposal for review on 1 May. ADO21 would also be reviewed on 1 May, but as a replacement for the MGB.’
It appears that with the ADO21 now deemed too expensive to replace the MG Midget and now upgraded as an MGB replacement, Austin-Morris revisited an old idea, that of creating a sports car out of the Mini. The Austin-Morris Styling Department was tasked with designing a Mini-based sports car under the auspices of the ADO70 project (above) and within days had produced the goods.
That day’s edition of the Daily Mirror had some more positive news for Austin-Morris. Its Motoring Correspondent, Patrick Mennem, reviewed the Austin Maxi. He wrote: ‘When the Austin Maxi was announced last May, I criticised the gearbox and the noise level. I have just driven to Geneva in a Maxi… since I last tried the car the gearbox has been modified to make the change smooth – and it is much quieter. I averaged 72 mph on the Autoroute du Sud for more than 230 miles. Using the fifth gear almost constantly, the fuel consumption was above 30 miles a gallon. On the snowy mountain roads the car handled superbly, despite the very slippery conditions.’
It is possible that Patrick Mennem was driving a Maxi fitted with a rod change gearbox. The Austin-Morris Engineers had not been idle in knocking the ADO14 design into shape, and a positive review in Britain’s best-selling newspaper did the model no harm at all. But how many Daily Mirror readers could afford a brand new Austin Maxi?
Pat Lowry joins the team
On 1 April, Pat Lowry started work as British Leyland’s Director of Industrial Relations. Pat Lowry was born in Leicester in 1920 and, after leaving Wyggeston Grammar School, joined the Engineering Employers Federation as a Statistics Clerk in 1938. During the Second World War, he served in the army, rising from the rank of private to captain. He saw active service with the British Expeditionary Force, was evacuated from Dunkirk and later he served in Normandy and Burma.
The following day he, Lord Stokes and Barry Mackie, the Personnel Director, met leaders of 40,000 white-collar workers as part of their plan to improve labour relations within BLMC. National officers of the four major white-collar unions put forward a number of suggestions. A joint statement was issued said the meeting, ‘was to enable Lord Stokes to outline to the union officials the nature of the corporation’s industrial relations problems and enlist their support and cooperation The union side made a number of constructive suggestions which Lord Stokes will carefully consider.’
Despite Lord Stokes’ complaint of shop floor anarchy restricting production, British Leyland’s Austin-Morris division still had a stock of some 100,000 cars for the home market – described by the company as ‘our planned level.’ However, Minis were still in short supply, both for the home market and to meet the still rising demand from European export markets.
Expansion on the cards
That April British Leyland was reported to be planning to expand its production of Minis in Spain and to export from there to the rest of Europe. In cooperation with Nueva Montana Quijano, British Leyland was producing 85 Minis a day in Spain (above). The first Spanish-made Minis were expected to be exported later in 1970 and the production rate was to be boosted up to a possible maximum of 400 a day.
Discussing the Spanish output of Minis at the opening of the Barcelona Motor Show, Richard Bergeson of British Leyland, said: ‘Last year our European dealers were extremely short of Minis. They could easily have sold thousands more it we had been able to deliver them, but we couldn’t. Spain is not an isolated, insulated auto market. It is the site of a valuable production facility we are going to use to meet competition for car buyers in the 1970s, wherever those customers happen to be.’
A yellow, left-hand-drive Mini made history on 21 April, when it left the as assembly track at Longbridge to become the first British car to pass the millionth export mark. The one millionth export Mini was driven off the line by Gunnar Eik of BLMC Norway.
BMC 9X hits the skids
As strikes, both external and internal continued to hurt British Leyland, the British Leyland (Austin Morris) Limited Board held its April meeting. Sir Alec Issigonis was asked to prepare a second BMC 9X prototype ‘keeping the length of the vehicle to the same as the existing Mini.’ Lord Stokes requested a paper showing cost improvements, ‘with particular reference to an engine study.’
Curiously, in an interview with author Martin Adeney, Lord Stokes claimed to have never seen the 9X, stating: ‘There were all sorts of odd cars, none near the production stage.’ Sometime between the April 1970 Board meeting and December 1971 the 9X project probably petered out. Also on the agenda was the ADO70 Mini Coupe, a Mini-based sports car. Following the 16 March meeting the Austin-Morris Styling Department had rapidly got down to work, with the winning design of Paul Hughes being sketched on the day after. It was reported that Innocenti was keen to develop it and build it.
Austin-Morris had hoped to launch the ADO28 Coupe at the October 1970 Motor Show. It was decided at this meeting to delay launch until the saloon variant was ready and that would be April 1971. John Barber queried why no 1.3-litre estate was included in the planned range. On the subject of the ADO67, it was agreed to use Hydragas suspension as this was deemed to be cheaper.
Finances aren’t looking too healthy
In May 1970 British Leyland was two years old. BLMC shares, 12s 9d on the day Lord Stokes became Chief Executive, were now down to a miserable 7s 10d. Even when BMC lost £3.2 million in 1966/67, the shares never fell below 9s 9d. Rumours about the group’s state of health abounded. Many observers now had doubts about Stokes’ ability to knock the company into shape.
On the positive side, the 1100/1300 (ADO16) was the best-selling car on the British market although, adding in exports, Ford made more Cortinas and in recent months the market share of the range had been moving slightly upwards. In the first four months of 1970, exports to America were an all-time record. On the debit side the much-heralded Austin Maxi had backfired badly.
Admittedly, it now had around 2.1 per cent of the car market and costs for repairs under warranty were the lowest of any BLMC car, but output was now way down on the production targets originally set. While much of the old BMC ‘badge engineering’ had been eliminated, the British Leyland range as a whole still suffered from having too many bodyshells and engines. Complexity on this scale undermined profitability yet still there seemed a reluctance to wield the knife, again probably due to the threats emanating from the British Leyland Shop Stewards Committee. A degree of post-merger rationalisation, especially in commercial vehicles, had taken place but the group still had a plethora of plants dotted across the country.
How to pay for the future models?
Catching up with BMC’s past under-investment, and correcting much of this, would require vast amounts of cash. By its own yardsticks, BLMC didn’t seem to be earning substantial enough profits to afford this. Where sales per employee at Ford of Britain were comfortably over £8000 a year, BLMC at least on 1969’s figures, still had to break the £5000 barrier.
Nor had Lord Stokes yet solved the central problem of BLMC: its labour relations and pay structure. Real power in the company still rested with the shop floor in the Midlands. Unlike other major car manufacturers. British Leyland was still trapped in the piece rate jungle. Plans to rationalise plants, or even shut some down, were circumscribed by the threat from the shop floor. Geoffrey Whalen offered a reason why the BLMC Shop Stewards were determined to retain piecework. ‘Piecework was an engine not just for wage increases but for Shop Stewards’ control. And some were not just interested in Cowley and its work problems but wider political things.’
Behind the scenes Austin-Morris had been belatedly performing a rescue operation on the Austin Maxi, as testified by Patrick Mennem in the Daily Mirror. In a May 1970 interview, Filmer Paradise, Director of Sales for the Austin-Morris division, admitted that two mistakes were made when the Maxi was launched in April 1969. Its sales forecasts were much too optimistic for a new saloon-estate car concept in the £1000 class and ‘it had some niggling faults.’
Maxi mistakes admitted
But, he said, the car had already been delayed for an extensive facelift. It missed Easter, the best time to introduce a new model, and could have missed Spring too if held back for more modifications. He stressed that the faults were not serious, some vibration, noise and sloppiness in the gear change. Mainly because the car had the most sustained Press build-up ever to precede a new British model; it sold well in its first month, taking 3.3 per cent of the home market. Then it began to slide. In July it was 2.5 per cent, in September 2.2 per cent and by December 1969 was down to a disastrous 1.4 per cent, only 681 cars. Filmer Paradise said some motoring correspondents gave it a drubbing in their test reports. Worst of all from the company’s point of view, its distributors and dealers began to lose faith in the car.
‘And any salesman who is not enthusiastic, is nothing. Something had to be done,’ he declared. It was decided to take the unusual course of relaunching the Maxi. Work had continued non-stop on technical refinements and, by the autumn of 1969, modifications were being introduced to the assembly line at Cowley to isolate the causes of excessive vibration and make the gear change more positive. Sound deadening material was liberally applied. Beginning on 17 December, Austin distributors were called to a series of conferences at Longbridge at which, according to Filmer Paradise, ‘everybody let their hair down. We approached them with stark realism and an acceptance of their problems in selling the Maxi.’
Twenty of the newly-modified cars were handed over for trial runs and one suspects that it was one of these cars that was driven by Patrick Mennem to Turin. Great play was made by Filmer Paradise of two aspects. The first was that the warranty costs of the Maxi were the lowest of any BLMC car and it had a much better start in life than the BMC 1800.
Training the sales force
Countrywide retraining of showroom salesmen was next. Distributors and dealers were given financial incentives to put over 1500 demonstration models on the road. In an unprecedented move for the company, 1.5 million mail shots were sent out reminding would-be customers that, like the rest of the Austin-Morris front-wheel-drive models, the Austin Maxi was the brainchild of Sir Alec Issigonis. This was a rather dramatic U-turn by the Leyland-dominated BLMC. The Maxi had been seen by them to be Issigonis’ folly, now the positive aspects of the design were down to Issigonis’ genius.
But the most telling move was the decision to hold the Maxi price at £1018 during a recent round of car price increases. This put a lot of heart into distributors who had complained that the Maxi was too expensive.
In February 1970, market penetration was up to 2.2 per cent. March was 2.5 per cent. April was over 3.0 per cent.
The BL Board looks at the Mini’s future
During the May 1970 meeting of the British Leyland (Austin Morris) Limited Board, ways of taking cost out of the Mini were on the menu. Filmer Paradise was asked to assess the sales impact of reverting to dry cone suspension on the Clubman (above), which was done from June 1970. The minutes of this meeting confirm Dr Alex Moulton’s later claim that Hydrolastic was dropped on cost grounds.
The Austin Maxi base for the ADO68 was confirmed. George Turnbull believed the Condor could be ‘the next major launch from British Leyland’ but John Barber counselled caution. Three body styles (two- and four-door saloon and estate) were confirmed as was the engine range of 1100-1750cc for the ADO67. This was confirmation that the E-Series engine would be required for the upcoming ADO67.
Finance Director John Barber pushed for cost reductions and argued that there was a need to take out £15 per car, which was equivalent to £233.78 at today’s prices. Barber also wanted to know why the existing BMC 1100/1300 would be produced well into 1974, concurrent with the new ADO67. George Turnbull responded with the claim that this might just be the two-door 1100/1300. The original 1100 had been designed as the best family car in its class, yet already the BLMC management was seeking to degrade its successor as if there were no competitors, existing or potential, in the market place.
Instead of reducing manufacturing costs by contracting its bloated payroll, British Leyland was taking cost out of its product and taking its customer base for granted after a year of record exports for British cars.
Shareholders’ dividends collapse as production falls
The sense of paranoia gripping British Leyland management about cost control was revealed on 27 May when BLMC announced that it had made only £100,000 for its shareholders in the first half of the current financial year. This compared with £9.5 million in the first half of the previous year. Lord Stokes, the Chairman, blamed industrial disputes and rising costs of wages and materials for the disappointing results.
During the six months British Leyland’s sales were worth £458 million against £438 million, but the number of vehicles sold was down from 474,000 to 448,000. Lord Stokes said that production of 77,000 vehicles was lost from disputes of all kinds. ‘The cash flow which would have resulted from these extra sales is necessary for our plant expansion intended to maintain our sales in the world motor industry and thus keep jobs and opportunities open to all.’
Lord Stokes listed the firms — and the cars lost by British Leyland because of disputes at outside suppliers — as follows: George Angus (oil seals) 2750; EPS (Export Packing Services) 858; Howard Tenens (transport services) 6641; Pilkington Glass 1781; Rubery Owen (axles) 436; Sankey (subframes) 1192; and Wilmot Breeden (door locks, window winders and bumpers ) 330.
Internal and external strikes cripple BLMC
These figures did not make any allowance for the heavy extra costs caused by disruption of supplies. The glass industry and tyre disputes meant building incomplete cars which had to be finished off later at extra cost. ‘Glass has been flown in from Italy, Belgium and South Africa, and new tyres are being flown in from the Continent to try to maintain production,’ said Lord Stokes.
The group’s trading profit during the period was £5.8 million compared with £21 million. After lower investment income of £200,000, compared with £300,000, and a jump in the interest bill from £2 million to £4.9 million, the group’s profit before tax was £1.1 million, against £19.3 million. The profits for the full year in 1968-69 were £40.4m.
On the last day of the month the Industrial Reorganisation Corporation (IRC) announced it was to grant British Leyland a £10 million renewable loan facility for plant modernisation. A condition of the loan, which the IRC said was to stimulate capital investment in machine tools, was that British Leyland bought British-made equipment. The machine tool industry was already heavily subsidised by the IRC. The Industrial Reorganisation Corporation had other problems on its plate as well as British Leyland. It had head hunted John Lutyens of PSF Cowley to become the new Managing Director of the Kent Group of Luton, an industrial instruments manufacturer. He was succeeded at PSF by Harry Barber in May 1970.
Coventry engine factory closes
On 4 June BLMC announced it was to close the Austin-Morris engine manufacturing plant at Durbar Avenue, Coventry. Originally built as a Riley factory in 1919, it employed 250 workers. They were told work would be transferred to the main engine works in Courthouse Green and to the other works in Durbar Avenue. The company said wherever possible new jobs would be found. Austin-Morris was at pains to point out that nobody was being made redundant.
On 18 June, Britain went to the polls in a General Election the ruling Labour Party had been expected to win easily. Instead, the electorate delivered the Coup de grâce to Harold Wilson’s planned economy, which seemed to have been blown off course by union indiscipline, rising unemployment and bad trade figures. In his place came the Conservative Edward Heath, committed to reform of the Trade Unions and making a fresh application to join the Common Market. The incoming Conservative Government adopted a laissez-faire approach to industry, but its overtures to Europe would completely change the British motor industry.
By now, details of the forthcoming ADO28 were seeping out. It would be a conventional rear- wheel-drive car badged as a Morris. ‘Given that sort of car, we could at last begin to make the sort of headway we have been promised since the merger, but have not seen,’ said a Birmingham dealer to The Times.
Turnbull spills the beans on future models
George Turnbull said: ‘Our new model plans are pretty well finalised up to 1973 and sketched in for five years beyond that. We will be pursuing our successful emphasis on advanced engineering and also adding more conventional ‘trendy’ models. Our range will provide something for everyone and our franchises will be the most attractive in the country.’
At the June meeting of the British Leyland (Austin Morris) Limited Board there was further discussion on the subject of the ADO68 Condor. ‘A styling sketch based on ADO14 had been developed and an E-Series six installed in an ADO14 to start some initial proving tests.’ This vehicle was never produced. Austin-Morris Engineering was also directed to reduce costs by re-designing the subframes for the ADO67, following on from the discussions in the previous meeting.
Also on the agenda was the Austin 3 Litre (ADO61). ‘Barber commented on the 3 Litre and efforts being made to keep production going and enquired if it was worthwhile keeping this model in production in view of the small numbers produced each week. Mr Davis (production) said it was the intention to produce 60-70 per week until April 1971 when the new six-cylinder Wolseley (above) would follow in production – probably in June 1971. Mr Davis was probably Bill Davis, George Turnbull’s deputy and a former BMC Director with responsibility for production. His days at Austin-Morris were numbered as he would soon take over as Managing Director of Triumph. The six-cylinder Wolseley could be the ADO25, the E6-engined Landcrab that did not finally appear until 1972.
Unions reject peace plans
On 1 July, car union leaders rejected a plan put forward by the British Leyland Motor Corporation for the creation of a new Industrial Relations Council intended to ease the strike problem at the company’s 70 plants. But the unions did not close the door completely on changes to improve labour relations in British Leyland. They agreed with the management that there should be more joint meetings between senior company spokesmen and union officials, including Shop Stewards. Moreover, after the meeting in London, the unions said they were in favour of joint investigations of particular strike prone factories in the group.
However, after that meeting, Jack Jones, General Secretary of the Transport and General Workers’ Union, said that, although they were anxious to cooperate in every possible way to improve labour relations, they did not think the proposal would solve present difficulties. The proposed council would suffer from being unrepresentative.’ Jones added: ‘In any case, the problem of dealing generally with issues at 70 different factories is pretty insurmountable.’
During the first six months of 1970, BLMC had lost between £8,000,000 and £10,000,000 through strikes. Wage increases had cost £12,500,000. Throughout its 67 factories some 200,000 men were employed and they belonged to a multiplicity of trade unions. By July 1970, British Leyland was losing production due to strikes at component suppliers’ factories, mainly Pilkington, Lucas and Dunlop. By the end of July 1970 more than 16,000 incomplete vehicles had mounted up at the Austin-Morris division’s plants at Longbridge, Cowley, Abingdon and the light commercial vehicle plant at Birmingham.
Workers volunteered to clear the backlog during their two week summer shutdown, while being paid overtime rates.
On the agenda of the British Leyland (Austin Morris) Limited Board for July 1970 was Innocenti of Milan. There was concern that Innocenti were thinking of selling its car division to Alfa Romeo. They had agreements with BLMC which still had five years to run. The Board also approved the version of the 1100/1300 (ADO16) series, as well as a cheaper subframe solution for the ADO67 project, which saved 30lb on front and 36lb at rear.
The Guardian soon got wind that there was trouble in Italy. It revealed in mid-July that British Leyland was holding talks with Innocenti. IRI, the Italian State holding company, was also involved in the talks. The talks were being led on the British side by Filmer Paradise, the Austin-Morris Sales Director and former head of BMC’s European office in Milan where Innocenti was based.
The catalyst for this seem to have been started by the desire of the controlling Innocenti family to find a buyer for its shares. The family had made earlier, abortive approaches to potential Japanese buyers, including Nissan Motor. Innocenti had had a marked success with its licence-produced BMC models. It sold about half as many Minis (above) in Italy as British Leyland sold in Britain. In 1969 the company made 50,000 BLMC models, mainly Minis, worth £26 million. These were not simply Italian assembled, but largely Italian built, apart from the engine-transmission pack, which was imported from Britain.
The second main limb of the Innocenti business was a division making heavy machinery worth £20 million a year, including sophisticated presses for the motor industry. The balance of £11 million in the company’s turnover of £57 million came from the Lambretta scooter and its derivatives. The major problem for British Leyland was that a takeover at that moment in time offered a rather expensive way of protecting a significant foothold in Europe.
Imports take a greater share of UK market
In June 1970, foreign manufacturers had taken a record 15 per cent share of the British car market. George Turnbull sounded a warning as workers returned from their fortnight’s summer holiday on 3 August. ‘We must all buckle down to the job in hand of getting more production out of our factories and producing more efficiently to keep ourselves competitive,’ George Turnbull said in a message.
Output was 10 per cent down on the corresponding total of 1969 and 88,000 vehicles had been lost through strikes and breakdowns of all kinds, he disclosed. ‘We must meet our production programmes. I ask everyone in the organisation to make a special effort to achieve this, as well as achieving our CKD programmes, which keep our overseas plants going – and to make sure there are plentiful supplies of spare parts to give a first class service to our customers’. The market share of British Leyland fell to 33.5 per cent during June 1970, its lowest level since the merger of Leyland and BMH in 1968.
‘During the last couple of months we have had the blackest period ever for disputes, most of them at suppliers’ plants. When the chips are down the success or failure of the British motor industry is in the hands of management and workers on the shop floor. If cars are not made for any reason, whether strikes or plant breakdowns, they cannot be sold, and ultimately the financial resources of the industry must be drained. Our overseas competitors have already seen these signs of weakness and redoubled their efforts to increase their penetration of our home market,’ said Turnbull.
Only 24 hours later Longbridge was strikebound. One dispute arose out of the retirement of one man just before the two-week holiday. The strikers, members of the Amalgamated Union of Engineering and Foundry workers, claimed that he had to be replaced. The management said that the volume of work in this department did not justify a replacement. This demonstrated the problems of trying to reduce manning through natural wastage.
Lord Stokes pleads for sanity
The same day Lord Stokes addressed an Extraordinary General Meeting of more than 100 shareholders in London. Lord Stokes pleaded for sanity in industrial relations and warned shareholders and workers that the group’s profits were still at an ‘extremely low level.’ He said: ‘The future prosperity of the company, lies in the dedicated work it can expect from a hundred or so people who have to provide the drive, imagination and fire which is going to allow us to combat some of the almost insurmountable problems which are facing us today, both at home and overseas… When we agreed the Leyland/BMC merger, I said that we had several difficult years ahead. This has proved even truer than I thought. In spite of this, we have made very considerable progress in our rationalisation and integration and we shall be announcing further details in the next few weeks.’
Lord Stokes made yet another plea for more sympathetic and reasonable help for the industry from the Government. Referring to his ‘anarchy’ speech of earlier in the year, Lord Stokes said he had since been criticised in some quarters for being so outspoken. ‘Since then, I feel that my words have been more than fully justified. Although industrial relations in our own corporation have improved we have not been without trouble ourselves but in particular we have been plagued with the effects of strikes by outside suppliers of components. It does not require much imagination to visualise the tremendous additional cost burden imposed, and the loss of profits. We have lost valuable home and export markets and this has opened the door to a flood of foreign imports. Profits therefore instead of rising have continued at an extremely low level which affects our ability to invest the money necessary to keep us competitive in a fast moving industry. To keep our factories going, we have been building cars without tyres, without glass, without windscreen wipers, without starting motors, storing them as far as possible undercover, then fitting the missing components at a later date.’
However, he was not despondent: ‘provided we can get some sanity back into industrial relations in this country,’ he told shareholders. ‘I must emphasise again that every opportunity lost to us overseas due to difficulty at home is snapped up by a foreign competitor, and very often lost for ever. Other countries have industrial problems. Unfortunately, our inflation is not always accompanied by increased productivity and no company or country for that matter can survive indefinitely these perpetual wildcat strikes which are ruining our possibilities of becoming internationally competitive, and which, whilst giving unprecedented wage inflation, will inevitably, because of increases in cost, reduce our true standard of living.’
£80m-worth of cars lost to strikes in six months
A group spokesman also disclosed that, because of strikes within and outside the British Leyland group, nearly 100,000 cars, worth an estimated £80 million, about 10 per cent of total annual production, had been lost so far in the year. The Daily Mirror published an interview with Lord Stokes in its 10 August edition. On the Stock Exchange BLMC shares had crumbled from 1969’s 18 shillings. to 6 shillings, wiping £300,000,000 off the company’s value.
Lord Stokes was asked what went wrong? ‘We were happy running Leyland — a well-organised outfit — but one has to look to the future. The idea of a merger with the British Motor Corporation was put into our minds. With pressure and promises from the Government, we eventually agreed to a merger. We felt it was vital for this country to have a viable British-owned motor industry. I will admit two failures.
‘We thought BMC was in a better condition than in fact it was. And we thought we would have a better response from people at all levels whose jobs we were trying to save. We were trying to save an industry. But some people cannot see beyond the short term — of getting as much out of it as they can. The BMC cupboard was bare when we opened it. There were no new models. There had been a bad lack of capital investment. We have reorganised Austin-Morris and Pressed Steel into one unit. We have torn down an inadequate motor car factory at Cowley and built a brand new one. We have invested £30,000,000 in producing a new family car — a Morris. It will be out in January. We inherited the Maxi. We have now got it right — it is now a very good car. I believe we have now got BMC into the shape it should have been in.’
His Lordship’s prediction of a January 1971 launch for the ADO28 Morris Marina proved wide of the mark.
Stokes on labour relations
Stokes was asked why labour relations were so bad? ‘We are in the middle of a social revolution. People are becoming better educated. They are thinking. They discuss and query. But there is no constructive thinking. It is easy to criticise, but few people are putting up satisfactory alternatives. The day when management imposed its will on the workers is gone. In future, we will have management by consent — with participation and co-operation from everyone.
But people will have to accept discipline too — they will have to abide by the decisions in which they participated. This applies to workers, trade unions and management.’
And if they refused, posed the Mirror? ‘We would have anarchy. We can never go back to the old system except by some form of dictatorship — terrible. The motor industry is a conveyor belt — break one link in the chain and the whole thing grinds to a halt. British Leyland is the most vulnerable. Our competitors have dual sources — factories on the Continent as well as here. We are completely dependent on this country. On the good side we have made very significant improvements in our labour relations. There has been a great deal of responsibility and co-operation. New wage structures have been introduced.’
Stokes was asked if British Leyland’s 190,000 workforce was more than he needed. He gave a direct answer: ‘I am not going to answer that.’
Strikes lead BLMC to buy imported components
Because of the recent strikes in components factories, BLMC was now buying more from abroad. Stokes said: ‘We are looking everywhere in the world. But we are a British company and we’d prefer to buy in Britain, where things are near at hand and we know the suppliers. But where we used to buy all our glass from Pilkingtons, we had to go to Italy, France and South Africa during their strike. We are now buying quite a percentage of glass abroad and it is coming in cheaper than British glass. We are also bringing tyres in from abroad — it’s crazy!’
Foreign cars now accounted for one in every seven sold in Britain — while the BLMC share of the market had gone down to 33 per cent. Could British Leyland fight back? ‘The drop to 33 per cent was caused by lack of supplies. I believe that the range of cars provided by British manufacturers is more than competitive. This is proved by the fact that we sell 50 per cent overseas. You must be competitive to do that,’ Stokes said.
Did BLMC make a profit selling overseas? Lord Stokes replied: ‘On some cars we make money overseas. On others it’s very marginal. Any manufacturer makes more money on the domestic market. There is very little profit in selling a car anywhere. In a good year, the profit on a car like the Mini is only £4 to £5. You have to sell a million to make £4,000,000 or £5,000,000 profit. I do not think that imports would have gone up from 10 per cent to 15 per cent, if British cars had been available. But once they get into the market it is difficult to get them out. It is not a bad thing to have imported cars — after all, we expect to sell British cars in other countries.’
Lord Stokes was asked about his own personal 30,000 British Leyland shares. ‘I’ve bought some more since then. I now have 36,000. I am a business manager, not a business owner. But if ever I started in business again I think it would be in a one-man business.’
End of pieceworking looms on the horizon
The following day British Leyland completed the first stage in its plan to convert the Austin-Morris car plants from piecework to a more simplified pay structure. After eight months of negotiation, punctuated by strikes, 3500 hourly paid manual workers at Cowley accepted the company’s latest offer of increases varying from £2 to £5 a week. The new minimum would now be £25 for a 40-hour week. The highest grades would receive £33 a week. In return, the men agreed to a four-level system of grading and the end of group incentive payments. The latter were based on the average earnings of the higher paid piece workers who manned the assembly lines.
Cowley was being re-equipped and expanded to increase its capacity from 8000 cars a week to 10,000. The company said that the new pay agreement would enable production to be increased without recruiting additional labour.
The British Leyland (Motor Corporation Combined) Trade Union Committee (BLTUC) met in Birmingham on 12 August and criticised Lord Stokes for implying that his workers were responsible for the group’s poor performance. Two hundred and sixty Convenors from BLMC plants all over Britain were called to an emergency conference of the unofficial Shop Stewards’ body.
The unions predictably respond…
The BLTUC passed a unanimous resolution deploring Lord Stokes’ attack and insisted that the production decline stemmed from Government moves. Referring to proposed plans introducing radical changes in pay structures at Austin-Morris car plants, Dick Etheridge, the BLTUC’s Chairman, said the conference had decided to resist any attempts to separate take home pay from output or to terminate plant bargaining. However, he insisted this did not mean an all out defence of the traditional Midland piecework system.
‘We are prepared to consider anything. We have already co-operated in the introduction of a completely new system at Cofton Hackett, the new engine factory at Longbridge, which is probably the best system of pay and working in the country,’ he insisted. A month after the Lucas strike ended, Austin-Morris still had nearly 6000 stockpiled cars waiting for electrical components.
On 18 August, British Leyland announced a major re-organisation to speed up integration of the former Leyland and British Motor Holdings companies. The seven operating divisions were immediately cut to five. The most significant move was the amalgamation of Austin-Morris with the Pressed Steel Fisher body building division to form Britain’s largest car manufacturing organisation. George Turnbull became the Managing Director of Austin-Morris-Pressed Steel Fisher, which would now be known as the Austin-Morris and Manufacturing group. He would be responsible for plants employing 85,000 work people – nearly half the corporation’s total labour force in the United Kingdom. His deputy was now Harry Barber, the Managing Director of PSF.
Standard-Triumph had been renamed as the Triumph Motor Company. Bill Davis, George Turnbull’s deputy at Austin-Morris, now became Chairman and Chief Executive of Triumph. Lord Stokes commented: ‘This is the fourth phase of the plans for the corporation which were laid down when it was formed just over two years ago. The aim of the present developments is to obtain increased efficiency from larger scale operations, pooling of resources, avoidance of duplication and efficiency from central planning.’
Princess takes shape
On 21 August, the first ADO71 clay model was photographed in the Longbridge Styling Studio. This striking wedge-shaped design was the work of Senior Stylist Harris Mann. Both Harris Mann and Senior Body Engineer Tom Penny, who had come from Rootes, wanted the ADO71 to be a five-door hatchback. However, the ex-Ford Product Planners disagreed, believing that it would take sales away from the Austin Maxi and that a hatchback would add complexity, perhaps a euphemism for cost. The possibility that in time a five-door ADO71 could replace both the ADO17 1800 and Maxi, thus rationalising the Austin-Morris range, does not appear to have been considered.
Then, on 24 August, British Leyland announced it was to withdraw from motor sport, including rallying, to concentrate its efforts on its new model programme. The decision was taken because of the steadily increasing cost of participation and the time senior Executives and Engineers were having to devote. The corporation estimated that sport was costing about £250,000 a year, about £3.6 million in current terms. George Turnbull said the Special Tuning Department at Abingdon, run by Basil Wales, would continue to function.
Meanwhile, negative stories about the Austin Maxi continued to surface in the media which reported the case of Mrs Evelyn McGuigan. On 28 August, she dumped her car outside the gates of a British Leyland factory at Cowley because she said she was fed up with the car’s faults. She claimed that she had had trouble with her Austin Maxi 17 times in 12 months. The gearbox jammed after 2000 miles and she had to replace gear linkage cables three times. ‘I am usually an ordinary housewife, but I am getting nervous and neurotic because of all the trouble I have had.’ She added that she has used two British Leyland cars before and these were no trouble at all. ‘This is a rogue car and I want it sorted out.’ British Leyland agreed to look into Mrs McGuigan’s complaint. This was the kind of negative reporting that British Leyland did not need, just when the Maxi was coming good.
Sports cars reviewed by the Board
At a meeting on 8 September, the mid-engined ADO21 sports car was up for discussion. The minutes recorded: ‘It was considered that this programme is dependent on Corporate Sports Car Policy. David Andrews was asked to arrange a profitability comparison of Lynx (above), Bullet, ADO21, Triumph TR6 and MGB. A special sub-committee was to be arranged for November, to which Berkeley Square and Triumph representatives would be invited.’
Lynx and Bullet were Triumph sports car projects. David Andrews was yet another finance expert, who had come to BLMC via Pirelli and Ford. He would go higher in the British Leyland chain of command. Meanwhile, in Australia the ADO16-based Australian Morris 1500 and Nomad now became available with a five-speed manual gearbox.
September 1970 was another grim month for British Leyland with, in addition to internal disputes, a damaging strike at GKN-Sankey causing production shutdowns. Amid this trouble and strife, Austin Morris embarked on ‘Operation Survival’, a cost-cutting exercise. The controversial decision to close the Abingdon Competitions Department has to be seen in this light. The need for economies did not stop Austin-Morris from investigating new engines. On 24 September, in a planning document, Harry Webster laid out plans for a new dedicated 1.0-litre engine, the H-Series, complete with an in-sump transmission in sump.
By 6 October, the styling for the ADO68 coupe seemed to have mutated into a derivation of the style for the ADO67. An ADO68 styling buck was photographed at Longbridge on this day.
Facelifted Austin Maxi breaks cover
On Sunday 11 October the Austin-Morris division held a press event at Silverstone circuit in order to allow journalists to test drive the heavily-revised Austin Maxi which was to receive its official announcement the next day. George Turnbull said at the event: ‘We would be foolish not to concede that the original Maxi needed more refinement and a more positive gear selection mechanism. It is in these areas that we have concentrated our research and development.’
There were styling revisions, mainly to the interior, with new seating and dashboard layout. The revised car was now also available with the 1748cc E-Series engine producing 84bhp. The Maxi was now the car it should have been at launch, but as Cowley Plant Director Eric Lord later said: ‘The Maxi never really recovered from the bad name it got during those first months.’
Although never a big seller, the Maxi was both the last BMC design and the last Austin-Morris model that was not subject to the brutal cost control regime now permeating the organisation. That might explain why it earned a loyal following which generated repeat sales right up to its demise in 1981.
How do you solve a problem like a Maxi?
However, the real problem with the Maxi was that it was a concept way ahead of its time. It was a multi-purpose vehicle when no one understood the concept or appreciated its virtues and wanted to drive Ford Cortinas instead. In the 21st century, when vehicles like the Skoda Yeti double up as passenger cars, dog transports and mobility scooter carriers, the multi-function vehicle is an everyday sight but, back in the 1970s, most cars of 1.5-litres or more were bought by fleet buyers and the Maxi had no appeal whatsoever to them.
It was a brave attempt to challenge the Ford Cortina with something more advanced but, in hindsight, even a more stylish car would probably have fared poorly. It would take over a decade longer to persuade the fleet buyers to embrace front-wheel-drive technology. In the years to come media would often compare the Austin Maxi with the rival Renault 16, which won the European Car of the Year award in 1966. If the 1800 (ADO17) had been Alec Issigonis’ take on the Citroën DS, minus the style, then it could be argued that the Maxi was his version of the Renault 16. Interestingly, although these two French cars have been lauded over the decades, neither of them were big sellers by European standards and, BMC apart, they did not inspire rivals from other manufacturers.
The new 1750 E-Series engine was also slated for the ADO71 with its 2200 six-cylinder cousin intended for the more expensive variants, complete with a five-speed gearbox.
Stokes on reshaping British Leyland
The next day, on the eve of the London Motor Show, Lord Stokes said that the prodigious work put into reshaping the company since its formation over two years before would have been hailed as a miracle in any other country but Britain. He added: ‘We are trying to do in a few years what it has taken our major competitors a generation to accomplish.’ Lord Stokes said plans for improving efficiency and rationalisation of factories were nearing completion. The group was planning for a substantial increase in productive capacity in all its plants. He also hit out at critics of British cars.
‘It is particularly ironic when these detractors quote foreigners always being critical about British cars. Because nowadays all I hear is praise and admiration for our vehicles when I go abroad.’ The night before, Lord Stokes had appeared live on the BBC TV Panorama programme which had attacked Britain’s cars.
‘What gets into these producers is hard to fathom. They want to make a dramatic show, I suppose, but they should realise how destructive they are. I believe that a number of people interviewed on film who said complimentary things about our cars were cut out because it did not fit in with the overall snide theme,’ he said.
Ford changes the game
Then, on 23 October, the Ford Cortina Mk3 (above) was announced. With Ford’s UK and German operations having been merged in 1967 as Ford Europe, the now unified division could focus on developing joint models that would sell in greater volume. The Mk3 unified the German Taunus and British Cortina platforms to produce one basic model with a number of visual differences. With Britain still locked outside the Common Market, the Taunus and Cortina were still built as separate entities, but that would change in the years to come.
Although no longer than the outgoing Mk2, the new car was wider and had a longer wheelbase for greater interior space. In addition to this, the Mk3 was now also available in 2.0-litre form. Ford therefore had all the fleet market covered with its Escort and Cortina ranges and engines from 1.3-litres to 2.0-litres – having moved the goalposts with the Cortina Mk3, the Blue Oval left the opposition trailing in its wake with its rival cars aping the smaller Mk2. Also launched that October was the Vauxhall Viva HC (below), basically a restyled HB.
The notion that there were vast profits to be made by making cheap-to-manufacture cars tailored for the fleet market took a knock when one examined the fortunes of General Motors UK subsidiary, with assembly plants at Luton and Ellesmere Port. In 1964, Vauxhall manufactured 246,896 cars, but this dipped to 225,088 in 1965 before sliding below 200,000 for the next two years. There was a brief rally to 247,034 cars in 1968, but the downward slide continued into the 1970s. After making pre-tax profits of over £17 million in both 1964 and 1965, Vauxhall’s fortunes went into reverse and, from 1969, the company began to lose money, being £9.7 million in deficit in 1970 alone.
The ADO28 was being rushed into an overcrowded market where it would find itself up against the Ford Cortina Mk3, the Hillman Avenger and Vauxhall Viva HC and it could be argued that all these models were superior.
- Back to History : The Austin-Morris story – Part Five : April to December 1969
- Forward to History : The Austin-Morris story – Part Seven : September 1970 to April 1971
1970: Model changes, launches and deaths
- 23 February: Longbridge produced the last MK2 Mini Cooper 1275S
- March 1970: Austin-Morris belatedly introduced the ADO20 version of the Mini Cooper 1275S. Apart from the ventilated steel wheels, there was little to differentiate it from the bog standard Mk3 Mini 1000 of the time as the Cooper S was now only available in a monotone colour scheme. All the marketing emphasis was now on the 1275GT.
- 17 April 1970: BLMC announced that the Morris Minor saloon was to be phased out of production at the end of the year. The Minor Traveller estate car and delivery van would still be made and saloons would be available for another 12 months. A company spokesman said: ‘The car will probably go out of production towards the end of September or early October but the saloon car will be available for at least another 12 months from now.’
- May 1970: Rob Owen of the Austin-Morris Styling Department drove a Mini Clubman 1275GT all the way to Michelotti in Turin, taking with him the Paul Hughes sketches of the ADO70 sports car project (above). Michelotti had been tasked with turning the Mini into the ADO70 running prototype. Rob Owen would not return until October.
- 12 October 1970: Facelifted Austin Maxi launched, with new 1750 version added to the range alongside a raft of technical and visual changes.