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 seventh part, BLMC knuckles down to the job of working with the trade unions, while getting the Morris Marina into production.
The Austin-Morris story: Goodbye piecework
Austin-Morris’s attempt to cash in on the fleet market with the ongoing ADO28 project was encountering more problems. Two days after the announcement of the new Ford Cortina, plans to reform labour relations in the British Leyland Motor Corporation met with a rebuff when 200 Shop Stewards at the Austin-Morris car body plant at Cowley, ‘totally rejected’ proposals to replace piecework with a new payments system.
The Shop Stewards, members of the Transport and General Workers Union, were unanimous in their rejection decision. They agreed to negotiate with the management on improvements to the piecework system so that the most efficient use could be made of modern equipment. Pat Lowry, the Director of Industrial Relations, had almost completed his plans to revise the BLMC wage structure.
Pat Lowry said: ‘We must be neither too paternalistic nor too materialistic in our outlook, but must try to find new ways of involving everyone who works in the corporation in the job that has to be done.’
The unions walk out on talks
On 29 October, the three major motor unions boycotted talks with British Leyland on a new pay deal designed to phase out piece work systems at the Austin-Morris car plant at Cowley. The Amalgamated Union of Engineering and Foundry Workers, the National Union of Vehicle Builders and the Transport and General Workers Union had agreed to take part in a works conference with management, under the terms of the peace formula which had ended a recent strike of pieceworkers at Cowley.
Ian Showan, Director and General Manager at Cowley, circulated a letter to the 6000 employees pointing out that talks had been arranged for Wednesday 4 November, but the unions had refused to attend. The matter was of such importance that all employees were given a copy of the company’s proposals based on a flat rate of 18s 6d an hour. The three-page document emphasised that security of employment for thousands in the Oxford area depended on the success of the new ADO28 car and the company’s ability to establish and maintain a high volume of production at a price which customers throughout the world were willing to pay.
During the previous 12 months, production had been constantly disrupted by strikes. In the previous financial year 50,000 cars were lost at Cowley due to strikes, most of them arising from the operation of piecework. The company believed that management, unions and employees had a joint responsibility to eliminate what it regarded as the principal cause of friction and lost wages. The letter said that, during the past year, a large number of production workers had operated a new form of payment known as ‘controlled piecework’ which provided a flat rate of pay for a specified production.
The result was a dramatic reduction in the number of disputes and strikes in the sections which had operated the new system. The company believed that this justified the introduction of a similar system for the new ADO28 model and subsequently across the whole factory. The 9000 workers at the Castle Bromwich car body works were warned by Harry Roberts, the plant’s Director and General Manager, that their jobs would be in jeopardy unless they were also prepared to accept a new payments system.
The end of Competitions
On 31 October, the BLMC Competition Department at Abingdon closed down. This was a sad end to a department which had given BMC’s products an impressive sporting halo in its mid-1960’s heyday. It was fortunate that the Competition Manager, Peter Browning, managed to salvage many documents for posterity.
Then, on 1 November, workers at the Austin-Morris car body plant at Cowley, formerly PSF, also unanimously rejected new management pay proposals which would end the traditional piecework system. Two days later, car workers at Cowley were warned that production of the ADO28 new medium-range car would not go ahead until agreement was reached about a new pay system and the abolition of piecework. The warning came in a statement circulated to Shop Stewards at the plant.
It said: ‘The company cannot envisage starting work on the new model while there is a serious difference of opinion between the company and Shop Stewards.’
Pay structure talks hit the skids
There was now a concerted campaign by shop floor representatives throughout the Austin-Morris division against the proposed pay structure. A further meeting between the management and union representatives at the car body works at Cowley, where a pay structure involving the abolition of piecework had also been proposed resulted in failure to agree. Shop Stewards there had also rejected the management’s terms and their proposals for the retention of piecework had been turned down. Similar proposals for a new wages structure had been made by the British Leyland management at the Pressed Steel Fisher car body works at Castle Bromwich, Birmingham, which turned out bodies for the Austin-Morris range. These, too, were rejected by the shop floor.
On the same day, 3 November, a full-size wooden ADO21 model and the ADO70 prototype, now returned from Turin, were viewed by management. The minutes of the meeting stated: ‘The wooden model of ADO21 was viewed in the studio. The front end was unanimously admired, but there were some reservations about the rear end. However, in view of the Corporate Sports Car Policy, it was decided that no more work is to be done on this programme.’
A fact-finding trip to the United States by the Triumph Technical Director, Spen King, had convinced him and BLMC management that the corporate sports car had to be a mechanically simple vehicle with a front-engine, rear-wheel-drive layout – and that meant the ADO21 was out.
Turnbull lays it on the line
On 6 November, in a strongly worded statement, George Turnbull, the Austin-Morris and Manufacturing Managing Director, told his 83,000 workers that the group was in serious financial trouble. He said in his statement: ‘We consider it vital in view of the serious financial position of the group to let all management, and all grades of supervision, know what action is being taken to improve the company’s efficiency. This information will be supplied regularly in good times as well as bad. The figures advised to the management through the new communications network are that in the past financial year Austin-Morris has been faced with an additional £12 million in material costs and a further £9 million for wage increases.’
George Turnbull’s statement was issued after close consultation with Lord Stokes. One unnamed, London-based executive of British Leyland said:
‘Austin-Morris is certainly the sick child of the corporation at the moment.’
With its reliance on heavy volume production, the division was certainly the most vulnerable within BLMC to strike action. The Austin-Morris division now held some 34 per cent of domestic car registrations out of British Leyland’s total of around 40.2 per cent, which compared well with BMC’s market share in 1967. Clearly, UK sales were holding up well.
End of the road for the Morris Minor
But the Minor had been a profitable model and BMC had been reluctant to let it go. Whether it was still profitable by 1969 when production was down to 400 a week is open to question, but certainly, even under George Turnbull’s leadership, it had enjoyed a two-year stay of execution, possibly because its commercial derivatives were enjoying their best ever sales.
There was further trouble ahead for British Leyland. The Conservative Government of Edward Heath had decided to act and proposed The Industrial Relations Act to reform industrial relations, similar to In Place of Strife of the year before. The trade unions united in opposition to what was perceived as an attack on the working class with the ‘Kill the Bill’ campaign. The proposed bill exposed the fissures in Britain’s class-divided society and in its day was as a contentious issue as the Poll Tax and the wars in Iraq and Afghanistan all rolled into one. Protest strikes abounded, especially as most employers desired some sort of legal way of preventing the unofficial strikes crucifying British industry.
‘Kill the Bill’ begins to take hold
British Leyland was first hit on 2 November when 500 workers walked out at the SU Carburetter factory in Erdington, Birmingham. On 13 November the BLMC Board acted when it was revealed that it was sending a message to its 200,000 workers, warning of the dangers of political strikes.
The message from the British Leyland Board, headed by Lord Stokes, was being passed to the labour force through works magazines and in letters enclosed in pay packets. The unsigned letter referred to the SU Carburetter stoppage and commented: ‘This sort of strike is really nothing to do with our operations and should never happen. Our job is to make and sell cars, trucks and vans and other engineering products profitably. We, as British Leyland, are not affiliated to any political party, so our plants should not be turned into a battleground for strikes about political questions.
‘This is cutting off our noses to spite our faces. It is giving away to Continental manufacturer who import into this country, and to Americans who manufacture here, the business that should be keeping us in our jobs. Every sale lost by us is a gain to them and we do not get a second chance. British Leyland is producing far less vehicles and components than it can do because of problems of which you are all aware. Consequently even now, we are unable to meet all demands for our vehicles. As a result we are not making the profits we need to buy new plant and equipment to keep ourselves competitive. We must be competitive to survive.’
Stokes draws line in the sand
Although Lord Stokes (above) claimed to be apolitical, he sat as a cross-bencher in the House of Lords, in his ‘anarchy’ speech of 25 February 1970 he said; ‘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.’
This implied that he desired some sort of regulation of the trade unions, which in the eyes of many activists made him an enemy of working people. According to The Guardian newspaper, BLMC would not be coming to the stock market with either an equity or loan issue in the near future, nor was it looking to the Government to mount any financial support operation.
In spite of a severe liquidity strain, which was well known even before the management’s warning to Austin-Morris workers, the group had arranged with its bankers to provide extra facilities to fund a capital expenditure plan running in excess of £50 million a year. The group’s cash problems had been accentuated by changes in investment grants. In the 1969/70 year, for instance, the group expected grants of £8.3 million on expenditure of £52 million. The group was continuing its rolling four-year capital expenditure plans for £200 million. However, the group would have no grants to aid its cashflow.
British Leyland’s bankers had apparently indicated their willingness to accommodate the group until permanent finance could be arranged in a year or two hence when capital markets were expected to be stronger. Even the Austin-Morris division losses could be left behind if the company could increase its capacity working rate. At the time, the group was thought to be working at only 75 per cent capacity.
Morris Marina moves closer to production
On 16 November, the first 100 volunteers at Cowley began training on assembly lines which would produce the Morris Marina. They became the first British Leyland car workers to be paid a flat rate of 18s 6d an hour under the new and controversial pay scheme which the management had introduced. They would eventually be joined by 1300 other assembly line workers on the new model, who would get the new Measured Day Work rate of £37 for a 40-hour week.
The move followed a vote by 1200 men at the Cowley assembly works to accept the new pay plan, and the elimination of piecework, in spite of the fact that it had been turned down by the Shop Stewards. The British Leyland management had made a direct appeal to the workers concerned. However, a decision by the Shop Stewards at Cowley, on 25 November made it clear that British Leyland was still going to have a major battle on its hands in getting its new £1 an hour pay structure accepted there. The Shop Stewards, who wanted to retain the traditional piecework system, reaffirmed their opposition to any form of Measured Day Work.
John Barber, British Leyland’s Director of Finance and Planning, to his credit did spell out the firm’s failings at the time, and not just later to motoring historians. Writing in Austin Morris Express, an internal news-sheet, he stated in November 1970: ‘At the moment we are just not earning enough to ensure that we will be competitive in the future, and that would mean contraction, fewer employees and, in the end death. We are planning on the basis that world markets for vehicles will be expanding continuously over the next ten years. Our job is to maintain our position among the big boys. We are in the Top Ten of the world’s motor manufacturers. The line up judged on sales turnover is General Motors, Ford, Chrysler, Volkswagen and ourselves with Fiat, Renault and Toyota all close together jockeying for sixth place. But these three may leave us behind if we are not careful.’
It’s all about scale – BLMC gets left behind
Despite its £1bn a year turnover, British Leyland was half the size of Volkswagen and one tenth the size of General Motors. It had to increase its productivity. John Barber said that in the 1969/70 year sales per employee were £5000 compared with £8000 by its big Continental competitors. To achieve this greater productivity it needed money, ‘a great deal of it’.
And the company was in a vicious circle at the time with low profits due to stagnation of the home market and production losses through stoppages. Reminding workers that profits in the first half of the financial year were only £1 million, John Barber said the only other cash coming in was £40 million a year from depreciation charges on existing plant. But British Leyland was investing at the rate of £50 million to £60 million a year in new plant and tooling. ‘So the money coming in does not cover the capital expenditure and the corporation is having to borrow more, particularly from the banks,’ he added.
In Barber’s view the level of investment was not enough. Continental motor firms were investing between £80m-£100m a year. To improve the situation, costs designed into new vehicles were being kept to a minimum. Once production had started they had also to make sure a car was produced at the lowest cost. What John Barber did not mention was that the Continental manufacturers were selling into a larger market courtesy of being members of the European Economic Community. More sales, meant more profit, meant more re-investment. The UK car market simply wasn’t big enough for all the production capacity Britain possessed and exports were dented by overseas trade tariffs. Ford had partially solved the problem by merging their British and German operations to amortise development costs.
John Barber continued: ‘We have in the pipeline a new Morris car coming out next year and there will be others in the Austin-Morris side of the organisation. These are the ones where the cost-saving techniques have been applied and they will be good cars.’ Or so he hoped. This was a public admission that the next generation of Austin-Morris cars were being designed to a price. Whether anybody really understood John Barber’s article can’t be quantified in an era when great chunks of the population were less financially educated.
Piecework row rumbles on
On 29 November, Transport and General Workers’ Union members at the Cowley plant rejected the company’s proposals for ending the piecework system and substituting a six-grade pay structure, of fixed hourly rates, with a top grade, of £1 an hour.
That November the Austin-Morris Styling Studio completed the final ADO71 clay model. While Austin-Morris was now working on a long-term 1800 (ADO17) replacement, that same month British Leyland Australia launched its X6 derivative of the existing ADO17, the Austin Kimberley/Tasman (YDO19) (below).
On 3 December, the British Leyland management made its first move in a bid to end the traditional piecework system among the 25,000 workers at Longbridge. What were called preliminary domestic discussions took place between the management and all the Longbridge Shop Stewards. The management hoped the talks would lead to the introduction of a new wages structure, based on fixed hourly rates, to replace the existing multiplicity of different piecework rates.
Growing pains come to the fore
National union leaders were also called to a meeting with Pat Lowry, BLMC’s Director of Industrial Relations, and other top management men at the Engineering Employers’ Federation headquarters in London. They were told that 5000 car workers would lose their jobs in a large-scale reorganisation of the Austin-Morris car division that would include the shutdown of two plants.
Afterwards, BLMC insisted it could not reveal any details until after plant level meetings the next day. Reg Birch, a National Executive Council member of the Amalgamated Union of Engineering Workers, who led the union team, said: ‘We have agreed with the corporation not to give details, but we have told them their proposals, which include redundancies and some plant closures, are not acceptable to the unions at national level.’
Reg Birch said the proposals had not been presented to the unions as being ‘negotiable. They simply asked us here to tell us what they intend to do.’
Asked about BLMC’s financial position, Mr Birch said, ‘They obviously have their troubles, but no more than the rest of the car industry. We think these cuts are unnecessary and we intend to oppose them. That will be our advice to members.’
With the demise of the Morris Minor on the horizon (although the Traveller was still in production at Adderley Park), Austin-Morris finally bit the bullet and announced the redundancies the next day. George Turnbull said that the decision to close two plants and make 5000 workers redundant was not a panic measure forced upon the company by the divisions much publicised financial troubles.
He said the moves announced at each of the plants affected earlier in the day had been planned for a long time and were the fifth phase of the reorganisation programme which began with the formation of British Leyland two and a half years before. ‘At the same time there will be substantial savings, and we need substantial savings.’ The first redundancy notices would go out on 1 January 1971 with the remainder spread over several months.
The plants to be closed were Quinton Road, Coventry and Adderley Park West, Birmingham. Only 280 men were employed at Quinton Road, which had been run down during the previous three years. Over 2000 would lose their jobs at Adderley Park West, the old Morris Commercial works, which bore the brunt of the 3350 redundancies at the six Austin-Morris factories in the Birmingham area. A further 70 would be made redundant at the Coventry engine plant, 700 at the Swindon body works and 600 at the three factories in the Oxford area. Of the total of 5000, George Turnbull said an immediate reduction of 850 management, junior staff and office workers was a direct cost-saving measure.
Turnbull on the factory closures
George Turnbull said: ‘We have never disguised the fact that the most critical area, of the corporation’s activities is the Austin-Morris group which is engaged in volume car production, the most highly cost competitive sector in the world motor industry. Success depends on the capacity to produce a limited range of’ vehicles in very high volume in large plants having the most modern equipment and with minimum disruption. The future of the Austin-Morris group and its employees depends on our ability to insure continuity of production, to reduce our operating costs and return to a profit-making situation.’
He said the situation in Austin-Morris had been severely handicapped by the inheritance of a large number of models, ‘produced, in many cases, on outdated equipment in a number of small and unprofitable factories. Our objective continues to be to consolidate British Leyland’s position as one of world’s leading motor manufacturers. Success depends on the capability to produce a limited range of vehicles in very high volume large plants having the most modern equipment and with the minimum of disruption.’
George Turnbull announced that four low-volume models would go out of production in 1971. They were: the Morris Oxford, Morris Minor Traveller, the Austin-Morris 6-8cwt van and the Austin 3 Litre (ADO61) (below).
Unions oppose the closures
A meeting of more than 1000 BLMC Shop Stewards in Birmingham on 6 December passed a resolution expressing opposition to the planned redundancies and said there should be no dismissals until mutual agreement had been reached through the negotiated procedures. A spokesmen for the meeting said afterwards that senior BLMC Shop Stewards would be seeking a meeting with Lord Stokes in a bid to avert dismissal of the 5000 Austin-Morris workers.
Dick Etheridge, the Longbridge works Convener, and Co-Chairman of the British Leyland (Motor Corporation Combined) Trade Union Committee (BLTUC), said they recognised that the company should be profitable, but not at the workers’ expense. ‘We cannot accept temporary sackings to cover up management inefficiencies or for rationalisation to meet their competitors. We should be involved in the reorganisation to ensure that workers are not thrown on the scrapheap,’ he said.
Executives like John Barber could rant and rave all they liked about the degree of union control in BLMC then and later to historians, but in reality there was little even he could do at the time.
Cowley gets a new boss
On 10 December, it was announced that one of the motor industry’s most experienced production experts, 39-year-old Frank Tilston was moving to British Leyland to take charge of its redeveloped and expanded Cowley car complex near Oxford. Prior to this he was Chrysler’s Chief Executive in the Midlands.
British Leyland comfirmed that Frank Tilston would take up his appointment as Director and General Manager at Cowley from 14 December 1970. He had spent several years in Canada and the United States working for Chrysler, then became Production Manager of Ford’s Dagenham plant. In 1966, he left to join Rootes, which later became part of Chrysler.
At Chrysler’s plants in Coventry he carried through a complete reorganisation of production machinery and methods including the replacement of piecework by Measured Day Work. At Cowley, the integration of the former Pressed Steel Fisher company within the Austin-Morris group meant that, for the first time, British Leyland had body manufacture and final assembly on the same site. Large tracts of the South Works at Cowley were rebuilt to take two new parallel assembly lines.
Unions apply more pressure
By 21 December, trade union opposition to the 5000 Austin-Morris redundancies had mounted. The National Union of Vehicle Builders (NUVB) recommended action to the next meeting of the Birmingham committee of the Confederation of Shipbuilding and Engineering Unions, which represented all the manual unions in the motor industry.
George Evans. the NUVB’s senior official in Birmingham, said: ‘We believe there is room for some redeployment of the men declared redundant. We have had experience in the past of wholesale redundancies with this company which have been followed by recruitment.’ He was referring to the 10,000 redundancies made by BMC in the autumn of 1966.
Evans said his members were well aware that certain work such as urgently needed maintenance, could only be carried out by overtime working. For this reason if a ban were imposed it would be restricted to actual production. Similarly, a ban on the recruitment of new labour would not extend to specialist grades. From this we must deduce that the unions at factory level recruited new employees. He added: ‘Neither are we as a union prepared to undertake unilateral action, although our members constitute about half the total number of redundancies in the Birmingham area. That is why we are proposing joint action to the confederation. On the other hand I do not discount the possibility of individual action by union members.’
…and try to delay the closures
In an attempt to delay final implementation of redundancies as long as possible, the Clerical and Administrative Workers Union (CAWU) had invoked the industry’s long-winded disputes procedure. It hoped that by dragging the issue through months of negotiations, Austin-Morris’ trading prospects would have improved sufficiently to enable it to retain some of those due for dismissal.
Frank Leith, the CAWU’s Midland Area Secretary, said: ‘We are under pressure from our members to take militant action to prevent these redundancies. If the company decides to ignore the recognised disputes procedure and goes ahead with issuing these notices then we shall have to think again.’ An Austin-Morris spokesman would not comment on the possibility of final notices being delayed, but added: ‘Final notices will not be received until after 1 January.’
On the last day of the year the Birmingham Trades Council had called for a one-day strike in protest at the Government’s proposed Industrial Relations Bill for 1 January 1971. In preparation for this, more than 3500 night-shift workers at the Longbridge, plant failed to turn up for work. Production of four models was brought to a standstill and 900 vehicles worth £500,000 were lost.
The end of the year came with one positive note – in December 1970, senior British Leyland executives viewed a full-size clay model of the ADO71 and gave the go-ahead for production. The Marina was signed off.
Saying good riddance to an awful year
Were Lord Stokes and his colleagues right to be alarmed about the chain of events? For the record, UK car production was 1,717,000, a decline of 5.45 per cent over the previous year. The UK car market was 1,076,865 an increase of 11.5 per cent compared with 1969. While the number of aggregate days lost due to industrial disputes in British industry as a whole increased to 10,980, a horrifying increase of 60 per cent, in the motor industry it declined by 32 per cent over the previous year.
British Leyland’s UK market share dropped to 38.1 per cent, while imports rose from 10.4 per cent in 1969 to 14.3 per cent. Alarmingly, BMC 1100/1300 (above) production dropped to 199,269, despite the model remaining Britain’s favourite new car with 12.3 per cent of the market. In fact, Austin-Morris only sold 490 fewer in the UK in 1970 than in 1969. It is indeed possible that Austin-Morris focused on supplying AD016s for the domestic market at the expense of exports or it was now meeting tougher competition in European markets from the acclaimed Fiat 128. However, it was not just British Leyland that was in trouble as many of the disputes in component suppliers had affected its UK-based rivals. Ford of Britain saw its car production shrink by 12.69 per cent.
Clearly, the UK-based manufacturers prioritised the domestic market as car exports declined by 12.25 per cent to 723,000.
Indeed, despite Lord Stokes bluster about anarchy in his factories, his predictions about mass unemployment seemed unlikely to come to pass in a Britain isolated from the Common Market by politics and insulated from competition by trade tariffs. In this Britain, if a buyer could not purchase an Austin-Morris car because it was unavailable due to industrial action, they simply went to a Ford dealer, a Vauxhall dealer or a Chrysler UK dealer until they got themselves a new car. All were made in Britain, so it all balanced itself out. This particularly applied to the fleet buyers.
Welcome to 1971: time to Kill the Bill
And so began 1971, a year viewed by those who weren’t around at the time through re-runs of The Persuaders and Jason King. A year when men sported ludicrous sideburns and wore loud, garish shirts. It was the year of T.Rex, Elton John and Rod Stewart. Not so warmly remembered was the industrial situation, with 13,551,000 aggregate days lost to industrial disputes including 3,100,000 in the motor industry, the worst year yet.
It was revealed on 6 January that strikes had cost British Leyland £30m-£40m in lost profits in the 1969/70 financial year, and sent the group’s profit tumbling from £40.4m to £3.93m. Revealing this, the company added that, because of the profits fall and its hard pressed financial position, it was not paying any final dividend to its 300,000 shareholders.
Most of the labour disputes occurred on the Austin-Morris and manufacturing side of the business, and the £3.93m profit was made up of a £15.95m loss there, offsetting a £19.88m profit from the specialist car (Jaguar, Rover and Triumph), Truck and Bus, and Special Products divisions and from British Leyland International.
More than 178,000 vehicles lost to strikes in 12 months
There was not a single month in the group’s financial year to end-September 1970 when factories were in full production for any sustained period, and 178,000 vehicles were lost by the strikes, as against 100,000 in the previous financial year. Overall, the group produced slightly fewer vehicles at 827,000 cars and 193,000 commercial vehicles, but price inflation sent the year’s turn-over up from £970m to £1021m.
The reason profits slumped so dramatically in the wake of lost production of under 18 per cent, was the motor industry was notoriously highly-geared and so only started making profits when it was operating at more than 75 per cent capacity. Once fixed overhead costs had been covered, everything was pure profit after raw material and labour costs had been paid for. Without the strikes, the group would have had a turn over of £1,150 million, and on this extra £130 million of production, profits of between £30-£40 millions would have been made.
There were no fewer than 270 internal stoppages in the 1969/70 year. ‘It was an absolutely chaotic year,’ said Lord Stokes. Quite how Austin-Morris managed to lose £15.95m when it was the UK market leader is difficult to quantify. Possibly the cash injected into the division for investment, particularly at Cowley, simply exceeded revenue?
Statistics reveal that in 1970 the British Motor industry focused on supplying the domestic market with car exports declining 12.25 per cent. Those of France increased by 34 per cent, West Germany by 11.47 per cent, Italy by 1.2 per cent, Japan by 78.9 per cent and Sweden by 32.6 per cent. In terms of units exported, the British motor industry had peaked in 1969, now it was downhill all the way.
TUC’s day of action results in more inaction
On 12 January, the TUC held a ‘day of action’ in protest against the Government’s proposed Industrial Relations Bill, with a march through London. The next day Shop Stewards were detained by the management at the Cowley assembly and body plants while employees received a letter. It stated: ‘Having exhausted Procedure (i.e discussions between unions and management), we must therefore exercise our right to introduce the new payment system… The company will be making the above terms and conditions operative on the ADO28 (Marina) from 7.15 tomorrow morning.’
The next day there was confusion about the outcome of a mass meeting of 2500 assembly workers. This led to a company statement that 92 per cent of the men had accepted the company’s offer of £1 an hour based on Measured Day Work and work had begun on the ADO28. However, a later meeting of about 3000 body workers voted by a large majority to reject the offer and to return to work under existing terms of working at the temporary rate of 12s 3d an hour, which had been in force while they tried to negotiate piecework rates.
When the body workers returned from the mass meeting and refused to operate the new offer they were in fact permitted to carry out normal working. Management’s attitude was that, as the great majority of workers on the new car were prepared to operate without piecework, it was not prepared to take ‘precipitate action on the remainder at this stage.’
The importers start gaining ground
In a car market dominated by four big UK-based manufacturers and the importers effectively kept out of the mass market by trade tariffs, one firm’s misfortune was another one’s good luck. On 29 January 1971 a ten-week pay strike began at Ford’s UK plants. Ford effectively lost production of at least 91,000 vehicles of all types in comparison with the grim year of 1970. This was a window of opportunity for Ford’s rivals. A sign of the times was that Britain was also enduring a seven-week postal strike amid an inflation rate of 8.49 per cent.
On 5 February, Austin-Morris made the long-awaited breakthrough in their struggle with the unions to end piecework at their car plant at Cowley. A mass meeting of 4000 employees accepted a Measured Day Work system based on a flat rate of 21s. an hour. This decision meant the way was clear for the group to step up production of the ADO28. Production had been severely restricted by the refusal of ADO28 body workers to follow the example of the men engaged on final assembly who accepted the new pay deal three weeks before.
So far, only one of the two newly-installed assembly lines was producing the car, at the rate of a few hundred a week. The target was 4000 a week and to achieve this the Cowley management would have to switch a large number of assembly workers from other models.
George Turnbull talks to Motor
Later that month Motor magazine published an interview with George Turnbull. He described what had been going on in the Austin-Morris division since the formation of British Leyland.
‘I think the problems were rather greater than we envisaged when the merger took place and first of all we had to make sure we had a model policy and a series of new models coming in over the next four or five years,’ Turnbull said. ‘At the same time, we had to plan our factories to suit those models, and simultaneously improve and modernise our facilities to utilise the floorspace most effectively. It took a full year to outline how we would cover the market with a reasonable range of models and how we could adjust our production facilities to make us fully competitive with our contemporaries; and it took most of the second year to develop the plan to a point where we could act on it.
‘But don’t forget that we’ve also done an awful lot of work on new models and on improving existing ones during this period. Right at the beginning of the merger, within weeks of settling the details, we started in on the ADO28 because, except for the Maxi, the cupboard was bare when we took over.’
The Austin Maxi: ‘now a very successful car’
Turnbull continued: ‘We worked very hard on the Maxi and I think now it is a very successful car, but our main job then was to see how we could take some of the business from our competitors by developing a range of cars which would be more competitive with the American companies in this country. The ADO28 will, as you know, be coming out in the spring and I’m sure it will do this; but it has taken a great deal of hard work over the past two years to bring out a concept like this on time, especially as we had to reconstruct a lot of our facilities in the Oxford area at the same time.
‘Remember, too, that as well as making a lot of improvements to the Maxi and developing the completely new ADO28 in the short time of two and a half years, we have facelifted the Mini range, improved the MGBs, Midgets and Sprites, brought out the very successful 1300GT and improved the light commercial range. So really we’ve had a very busy time keeping existing models up to date and in line with safety and pollution regulations, quite apart from bringing out new models, and there’s a lot more in the pipeline.
‘All this has been done in spite of some factories being in the wrong place. We still suffer from that, because we have 16 factories whereas, ideally, we ought to have only four or five. As you know, we are closing two factories when we stop production of old models. This was really the basic weakness of the old BMC organisation in that a lot of these old models were carried round the countryside in body form, having been made in one place, painted in another and finally assembled and trimmed in yet another. We’re trying to eradicate this as we replace old models. I think it will become very obvious to the public during 1971 just what we’ve already done.’
‘I hope we have convinced the workers’
Next came the subject of piecework and the attempt to abolish that in advance of the ADO28 going on sale. ‘We’ve made it very clear to everyone in the Cowley area that this new model cannot be made on piecework. There has been a lot of direct communication with the workers and I think and hope we have convinced them. Even in plants with the best relations, it has usually taken a very long time to get piecework prices fixed and so it has taken months for production to reach levels it should have reached in weeks. We just can’t afford these interminable delays. If the market is there and the product is right, it has got to be made and sold. Otherwise your competitors take your business; and as I think has been very obvious lately, if you give your competitors half a chance they get in pretty smartly.’
George Turnbull spoke of the marque differences and said: ‘Take the ADO28 and remember that it’s replacing the Minor and the Oxford, both rear-wheel-drive cars, and it will fit into the image and help to make the whole range complimentary.’
Turnbull was asked was there any reason why British Leyland would be able to make the universal Cortina/Viva/Avenger type of car any better or cheaper? ‘One thing is quite clear: we shall have to be very competitive – and we shall be. It will fit very neatly into our general programme structure and, in particular, it will give us a range of cars which will have a greater acceptability with fleet users and companies who are buying cars for their managers and executives, something like 40 per cent of all domestic sales are to companies, the figure gets higher as you go up the scale until nearly all the very expensive cars are company owned, and we shall have a very big selection to offer in terms of specification and price and performance. There will be engine options, a wide range of trim options and, of course, the choice of two or four doors. No, I don’t think we’ll have any difficulty in competing!’
No plans for building a super-cheap economy car
The Austin-Morris boss was also asked if his division had any plans to enter the £500 market with a comfortable but simple vehicle to compete with the Fiat 500. ‘I can tell you this much. We have no plans for getting down to the Fiat 500 market. We have the Mini, we’re very happy with it, it’s got a lot of life in it and we shall continue to improve and develop it as time goes on. The Mini has such a big share of the small car market that there isn’t room for any other manufacturer to enter this particular sector. Fiat are very strong in Italy and that’s why they can afford to export a few cars at marginal prices. But you’d need to sell far more than a few thousand if you were going to tool up for a small car,’ Turnbull said.
Clearly, Motor had got wind of the Mini-mini, a cut-and-shut Mini that the Longbridge experimental department had worked on in the autumn of 1968, following a request from Innocenti. Next George Turnbull was asked about the 1100/1300 (ADO16) range, which was still a bestseller, but people believed it was now outdated, especially by the Fiat 128, which had been voted European Car of the Year. Was it Austin-Morris policy to update it, replace it, or to continue the status quo?
‘As you say, it’s the best-selling car in this country and, while it may not remain so forever, I think it is going to be for quite a few years yet. And we’ve always got contingency plans to deal with the future. But as a concept, it’s going to go on for a long time, many many years, I think, and if we feel it necessary to make changes, we shall do them as and when necessary, but we have no immediate plans for a change now,’ Turnbull said.
This was a nondescript answer. Turnbull implied that the basic concept would go on, which it was in the form of the then-under-development Austin Allegro (ADO67) (below).
Turnbull on the overseas opposition
George Turnbull was asked if the competition had caught up and technically overtaken his division’s small cars and whether Austin-Morris was planning another big step which would put it correspondingly ahead again? ‘You’re saying you think our overseas competitors have overtaken us technically? Well, I wouldn’t have thought so myself. Of course, the more you go up the price range, the easier it is to be a little daring and do something unorthodox, but even on that score, where in the world will you get a more refined car than the Jaguar?’ he said.
‘But when you come down to popularly priced cars that you are going to make in quantities of up to 400,000 a year, then I think you tend to become a bit limited in how far you can go in an innovatory sense because you’ve got to think what the customer really wants from you. While I’m not suggesting that we’re not continuing to improve such things as brakes, suspension and steering, all are capable of further refinement, we do have to make sure that we don’t put a big cost penalty on the car that will either reduce the return to us to an uneconomic point or make us raise the price to a level which reduces production. The sort of breakthroughs you have in mind were done at a time when the demand for cars was, perhaps, stronger than it is now and the climate was more appropriate.
‘Mind you, one can’t take up a set position on this because things are changing all the time. But unless there is a big expansion in the market which will enable everybody to produce in very high volume and make very high profits, which always make one think in terms of, what’s the next move, I think the kind of breakthrough you are talking about is unlikely in the next few years. And I think this applies not only here but all over the world, America, Germany, Japan, Britain, Italy, any country you like, because profitability on motor cars is not going to be of the same order in the next five or six years as in the past ten or so. This automatically make manufacturers think in terms of products that will give an immediate return on any investment they make, not exploratory products that might catch on or might not. We’ve got to be very practical and hard headed.
‘But don’t think from this that we haven’t got our think tank, because we have. I think we’ve got more engineering brains in British Leyland than all the other motor car companies put together; and in Austin-Morris, besides Harry Webster and his team, we’ve got Alec Issigonis projecting his mind ten years ahead all the time.’
…and on Alec Issigonis
Only two years before Sir Alec Issigonis had been all over the media. Now he was fading from the headlines. Motor asked about his activities. ‘He’s looking at long-term trends and developing and designing alternatives to what we have now, so that if outside circumstances forced a big change, we wouldn’t be caught napping. Whether it was steam car or a new type of engine, at least we’d have done the exercise and would know how it would affect us.’
Did George Turnbull think that the extremely popular MG Midgets and MGBs might now be getting a little dated? And if so, had Austin-Morris anything up their sleeves with an equally big potential for the 1970s? ‘I frankly don’t agree with you, because our sales of both models have been going great guns in the two years since I’ve been here. We’ve got very strong demand from the United States and it looks as though it is going to be stronger this year than last. They had some measures of recession over there last year, but our sports cars never stopped selling. If we could have made more, we could have sold more, so I don’t see any need for more than a general updating of specifications, which we’ve already done. Whether legislation in America is going to make it difficult for us with open cars I don’t know, but, apart from Triumph and ourselves, no one else is going into that market. It’s ours, I think!’
Were sports cars a fundamental part of the BLMC range and if demand for the existing range began to fall off, would they have something to take their place? George Turnbull replied: ‘Oh, certainly. We have a sporty image in so many aspects of the British Leyland business that we couldn’t conceive of opting out of the sports car side. How we play it as time goes on depends on what happens in the United States regarding safety regulations, and this is very much in a state of flux. We’ve got all sorts of schemes which might come to fruition one day, but until the safety regulations are clarified, it’s going to be difficult to make a final decision.’
What about the reliability of BLMC cars?
Next the interview turned to the question of reliability. Were the experimental and development facilities at Longbridge inadequate? ‘Yes, and we are strengthening them; but I think it wasn’t only facilities. I think there could have been rather more organisation put into making sure that development work was done before getting committed to production. For reasons I’m not aware of because I wasn’t here, I think that perhaps they sometimes had to rush things towards the end so that design features became locked through being engineered into machine tools, which cost millions of pounds. If that happened, they’d have great difficulty in making some changes and might have had to make do with second best until a way out could be found.
‘We are very conscious of all this and you can take it from me that we have done a lot of testing work on any new model that has come out of Austin-Morris since I’ve been here. Even when the first few are in production, we work on them day and night to knock up very high mileages, and I personally see all the reports. I’m sure it pays off because it doesn’t matter how much design, research and development work you do in the prototype stage, there are always things that come out in production because you’re working off tools rather than hand made parts. The key to the whole thing is to get 20 or 30 cars produced off tools as soon as you can, assemble them by fairly standard labour, not chaps from the experimental shop, and keep them running. If you hadn’t had any problems by the time they’ve done 30 or 40,000 miles, you haven’t got a bad car.’
Then came the subject of complaints and service. ‘When you’re producing around 800,000 cars a year there must be some level of complaint, just as with any other manufacturers. And I think the service we have for dealing with letters is as prompt as you can get. We can’t afford to ignore any complaint because we are dealing with customers and they don’t grow on trees. One lost customer means that you’ve got to fight very hard to win somebody else off another product to replace him.
‘As for overseas markets, I believe that when you are setting up an organisation for sales, you must get the service back-up first. Otherwise, you may sell well for the first year if you’ve got good cars, but after that there’ll be a swing back to the local product. Take Europe, for instance, where we have been criticised, and with some justification, I think. We now believe that the only way to be absolutely sure of giving good service is to have the factory out in the field. That is why we are taking over the distribution of our products through out the whole of Europe as a British Leyland exercise. It’s taking time but, when the whole operation is completed, we shall have our own people on the spot at distributor level. That will mean we can monitor our dealers directly and set our own standards on matters such as interpretation of warranty, training of mechanics, service facilities and all the rest.’
Turnbull on industrial relations
On the subject of the Industrial Relations Bill and the effect of strikes, George Turnbull had this to say: ‘In the end, it is continuity of production, which is the key. Everyone seems to be battling to get more wages and damaging the one thing that can give them. We’re such a highly capitalised industry that we’ve got to have high throughput to break even, but once you get over that point you can start making reasonable profits. The difference between 20,000 above and 20,000 cars below can be astronomical in terms of profits. I think the thing is a national problem now and that unless the motor industry gets some measure of support from the Government, it’s not going to play the part in the economy that it should. What’s good for British Leyland is good for Great Britain!’
On 3 March, as Longbridge was paralysed by strike action, senior British Leyland Shop Stewards called for more strikes against the proposed Industrial Relations Bill. The executive of the unofficial BLTUC urged 180,000 car workers to support the one-day stoppage ordered by the Amalgamated Union of Engineering Workers for 18 March 1971.
The running battle between the Heath Government and the labour movement continued with the second of two one-day strikes against the Industrial Relations Bill on 18 March. British Leyland closed 12 Austin-Morris factories in Birmingham, Coventry and Oxford, with 60,000 men idle.
Annual report makes grim reading
The following day, BLMC published its annual report. British Leyland mobilized £80 million in short-term resources in the 1969/70 financial year to the end of September 1970, when the group made a profit of only £3,932,000. Cash and other quickly realisable resources were run down by £30 million to £66.4m and the overdraft went up by £50m to £145.7m, which was 31 per cent of capital employed compared with 22 per cent a year previously.
Profits of £18,114,000 from the other vehicle operations and profits of £1,770,000 from other interests made up for a £15,952,000 loss by Austin-Morris. British Leyland would have shown a net loss if the £1.6m tax charge had not been reached after crediting £3.9m relief for the losses and another £4.8m which had been over provided in previous years. While British Leyland could have shown a small surplus after the year’s difficult operations, it made provisions of £3,350,000 against closure and redundancy costs and another £4,250,000 for rationalising overseas distribution. Thus, with no retentions, operations gave Leyland a cash flow of £42m from depreciation and £10.2m from investment grants.
The group had decided not to slow down its investment programme, which cost £66.7m during the year. The gap between spending and operational cash flow was £14.5m but there was also a jump of £45.8m in the value of year end stocks and a £17m rise in the amount of money owed to British Leyland. Thus, the group had to turn to the banks. Lord Stokes, Chairman of British Leyland, wrote in the report that the group believed the bankers’ support, ‘will continue to be sufficient until returns on our very large investment programme produce an adequate cash flow.’
At the end of September 1970, British Leyland’s further spending plans totalled another £48m on which £4.3m investment grants were receivable. The group was described by Lord Stokes, in a supplementary statement, as being, ‘at the crossroads’.
Investment in new models needed but ill-afforded
Lord Stokes said British Leyland could not possibly finish revamping its volume car range until 1975 at the earliest. Similarly, he said, rationalising production was unlikely to show its full benefits until 1975. The programme, however, was on schedule and the integrated plant at Cowley was producing the ADO28. Lord Stokes said the group would begin to return to better profits during the year, provided a satisfactory level of output could be maintained. Lord Stokes said the group needed a, ‘stable and expanding home market so that we can plan ahead with confidence but above all we need control of the inflationary trends which are rapidly making us uncompetitive in world markets. We need urgently a period of industrial peace.’
In an additional statement released on the same day, Lord Stokes disclosed that the group was anticipating world sales in all types of motor vehicle to rise by more than 40 per cent in the 1970s. Car sales alone, it was estimated, would rise by almost 50 per cent. The company was expecting to be selling more than 500,000 cars a year in Western Europe by 1975, and, assuming Britain joined the EEC/EU, the end of the 1970s could see Europe as almost as important a market for British Leyland as the UK.
In the home market, BLMC expected car sales to grow substantially after seven years of stagnation, perhaps reaching 1.75 million by 1980, which was not far off the 1.71 million that was actually sold in 1979 (and by 1980 a recession was in progress). Lord Stokes did not envisage a further round of major automobile mergers, but he did believe there would be a growing tendency to closer cooperation between some of the bigger international manufacturers. Despite Lord Stokes’s optimism British Leyland’s Australian operation was in trouble, plagued by soaring costs, falling sales and a shortage of components from Britain.
Trouble down under
British Leyland, Australia’s fourth largest car manufacturer, had been forced to cut its daily car production by a third. The position was sufficiently serious for Bob Johnson, Commercial Manager, to issue a statement in response to rumours that they were planning major redundancies or even closing the plant in Sydney. Bob Johnson said British Leyland was tightening its belt by not replacing staff wastage. Leyland’s grip on the total Australian vehicle market had slipped to 7.3 per cent for the first two months of the year, compared with 9.1 per cent for the corresponding period the previous year and 15 per cent only a few years before.
On existing sales, British Leyland faced a 25 per cent drop in the number of vehicles they planned to build. Two new models were only doing half as well as forecast. Bob Johnson blamed the shortage of components from both local and British manufacturers. BLMC’s far-off Australian subsidiary was the first to feel the heat from Japan’s surging motor industry.
On 8 April, the long-running Ford strike ended. It would take time for Ford’s production to get up to speed again, thus creating sales opportunities for its rivals.
Stokes: ‘Profit situation much better than expected’
On 19 April, Lord Stokes, Chairman of British Leyland, told shareholders at the company’s Annual General Meeting in London that the favourable profit trend he reported earlier had ‘accelerated’. While profit margins were still too small, he expected figures for the first half of the 1970/71 financial year to justify his confidence. British Leyland’s first half ran to the end of March 1970 and Lord Stokes said while the group did not have, ‘a completely free run from industrial disputes,’ the situation had been much better.
He added, ‘useful and constructive wage agreements’ had been negotiated with goodwill and understanding on both sides. He revealed that in the next week British Leyland would be launching the ADO28 Morris-badged volume car. He said it competed in a segment of the market where the group had not been properly represented. Tooling-up for the new Morris and the major reconstruction, modernisation and integration of the group’s plants at Cowley and Longbridge were costing British Leyland some £45m. When the new Morris was launched, Lord Stokes anticipated that the group would have, ‘complete coverage of what is undoubtedly the biggest growth sector of the British, and possibly the world, car market today.’
Sports car decisions
On 23 April, British Leyland held a sports car policy meeting at Jaguar Cars Browns Lane plant. Among those attending were Lord Stokes and Spen King. The cars viewed were an early Triumph Bullet, the Jaguar XJ27 that became the XJ-S, and the Austin-Morris ADO70, the Mini-based sports car. From this point the ADO70 seems to fade away as a live project. The basic problem with the ADO70 was that all the strengthening needed for a convertible bodyshell meant that it was actually heavier than its Mini 1275GT donor, thus impairing performance. The idea of using the Mini as the basis for a Midget/Spitfire replacement was quietly dropped.
On the same day British Leyland signed a deal with the Confederation of Shipbuilding and Engineering Unions. British Leyland car workers at Longbridge who were not involved in piecework, 8000 in all, were to get pay increases ranging between £5.28 and £8.55 a week in three instalments over the next 13 months. The British Leyland deal marked the successful completion of three years bitter, and at times, frustrating negotiations between management and unions at Longbridge, the group’s biggest plant and the headquarters of the Austin-Morris division.
Although it had cost British Leyland 22 per cent more on its wage bill for the 8000, it enabled it to make another vital breakthrough in the change from outdated piecework to measured day work.
So much work left to do…
However, there was still some way to go at Longbridge before piecework disappeared. The men affected by the deal were all indirect workers and not involved in piecework. But until the complex system of job grading could be sorted out there was little point in tackling the more sensitive assembly line workers. It was the priority given to the indirect workers at Cowley, which paved the way for the later replacement of piecework. Altogether, 150 grades of indirect workers at Longbridge were to he replaced by seven.
A joint statement said: ‘Under the terms of this agreement both management and unions will work together to obtain the most effective use of indirect manpower. Both have recognised for a long time that the previously high number of grades had led to a friction between employees and an almost continuous stream of pay claims.’
British Leyland was gradually withdrawing the Morris badge from its front-wheel-drive models in preparation for the launch of the ADO28, the Morris Marina – soon, the first Marinas would be shown to the press at Cannes in the south of France.
1971: Model changes, launches and deaths
January 1971: The Austin Healey Sprite is rebadged as an Austin as royalty payments to the Healey family are discontinued, while at Authi production of the ADO16 Austin 1300 begins in Spain.
April 1971 The ADO16 Morris Traveller was replaced in the Spanish market by the Austin 1300 Countryman. Also in April 1971 Adderley Park produced the last Morris Minor Traveller (below) and the last Morris Oxford emerged from Cowley.
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