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 ninth part, BLMC begins to prepare itself for the launch of the Austin Allegro, while failing to build enough cars to meet demand.
The Austin-Morris story: the battle for Longbridge
By the end of 1971 Britain had withdrawn east of Suez, the Singapore naval base had been handed over and the aircraft carrier HMS Eagle had returned home to be paid off. This was perhaps the symbolic moment which marked the end of the British Empire – Britain now had to find a new role in the world.
In January 1972, it was announced that the United Kingdom was to join the European Economic Community (EEC) on 1 January 1973. For BLMC, this meant that the prohibitive trade tariffs which had inhibited sales to the major European economies would gradually disappear – and a whole new era of success would surely follow.
In the 1960s, these trade barriers had prevented BMC from effectively exploiting the innovative qualities of the Mini and 1100/1300 series, leading to disappointing financial results and the merger with the Leyland Motor Corporation. In preparation for this great event Britain reduced its import duties to 11 per cent – foreign cars would be cheaper in 1972…
How being in the EEC will benefit BLMC
However, although EEC entry was seen as a golden opportunity for export sales, Parliament had sent a warning shot over the bows of the British motor industry. It had to either shape up or shut down. The same month UK unemployment hit the shocking total of one million, creating an almighty political furore. And this was despite the relaxation of hire purchase restrictions which boosted consumer demand.
On 9 January, the miners went on strike for the first time since 1926. The strike lasted for seven weeks. At the time three-quarters of the electricity used in the United Kingdom came from coal-burning power stations.
For Austin-Morris January 1972 meant cold weather testing the ADO67 (above) in Finland with senior Engineers Tom Penny and Ray Bates in attendance, neither of them former BMC men. Austin-Morris also began a marathon 400 hour test of its new H-series engine design on 11 January, ending exactly a month later.
Booming production in the UK
The following day, British Leyland announced that, during 1971, the Mini (above) had become the country’s most-produced car, topping the quarter-million mark for the first time. Longbridge produced 258,427 Minis in 1971 out of a worldwide production of 318,475 for the model. This went a long way to help BLMC turn out a best-ever total of vehicles, 1,062,742. This was 90,747 more than 1970.
Meanwhile, a number of the biggest Austin-Morris distributors had their sales territories reduced in the final stages of the restructuring of the old BMC sales network. The company claimed that the exercise, which had taken nearly three years, had been carried out without any of the blood letting which was forecast at the time of the Leyland-BMC merger. Nevertheless, substantial cuts had been made: of the 4500 distributors and dealers handling BMC cars in 1968 at least 1000 had lost their franchises. In some cases they were withdrawn because their holders were unable to meet sales targets set by the company. Others left voluntarily, most of them to take on foreign car franchises, often Japanese.
The man who was mainly responsible for what a Morris distributor described as, ‘the quietest but most far reaching revolution in the car trade in my lifetime,’ was Bert Lawrence, the Austin-Morris Sales Market Planning Manager. Bert Lawrence, a former Ford sales executive, joined BMC before the merger to help reorganise its European sales network.
Ambitious sales target for overseas
Under the restructuring terms, Austin-Morris distributors were allocated sales targets up to 19 per cent higher than their average performance. The acceptance of such high targets had placed their finances under considerable pressure and was leading to renewed demands for contracts to run for a longer period than the existing annual contract.
On 14 January, amid a dispute by 130 women sewing machinists hampering production at Longbridge, Lord Stokes revealed that British Leyland’s profits recovered to £32.4 million in 1970-71 from £0.9 million the previous year. Sales rose by 15 per cent to reach a record £1,177 million, of which £563m (48 per cent) was registered overseas, he added. Direct exports of £414 million were, ‘higher than ever achieved by any British company of any kind.’
Vehicles sold totalled 1,057,000, compared with 984,000 the previous year, a rise of 7.5 per cent. But BLMC was still some £8 million short of the £40 million profit reached in the first two years after the merger of British Motor Holdings with Leyland in 1968. Lord Stokes said he hoped for a return to at least this level in 1970-71, but everything depended on their ability to supply increasing home and overseas demand. The chief problem in this was gaining acceptance for, ‘a new payments system for 180,000 people.’
Cost cutting to profitability
Overall, British Leyland had produced a profit of £30.60 per vehicle, indicating that despite the cost cutting, profitability was going backwards, in comparison with 1969, where the UK car market was 25 per cent smaller and production was diverted to less profitable export markets. Lord Stokes said rationalisation measures taken since the merger could not yet be fully realised. Profits for 1971/72 would be ‘substantially higher’ than last year.
‘I should like to think it would be more than double that in the long term.’ He indicated that 1975 might be the year when return on capital employed (ROCE) reached satisfactory levels, but a ‘period of complete industrial peace’ was required to achieve this. He was ‘fairly optimistic’ about the 1971/72 year. ‘Production of vehicles is currently running at a higher rate than last year.’
However, he declined to make a profit forecast.
Missing Issigonis’ retirement
Three days later Lord Stokes wrote to Sir Alec Issigonis: ‘As you know I was away when the little ceremony took place to mark your retirement and I have, of course, already spoken to you and conveyed to you personally my appreciation of all the work you have done for British Leyland and prior to that BMC.
‘I did feel, however, I would not like to let the occasion pass without putting in writing my very sincere appreciation of the tremendous contribution you have made not only to BMC and BLMC but the motor industry as a whole. It is rare that any industry gets a man of your intellectual ability and imagination and even rarer to get one who is such a charming colleague to work with. I am delighted that you are going to stay with us in an advisory capacity.
‘I do hope that you will remain fit and well and that you will not hesitate at any time to get in touch with me if there is anything that I personally can do to help you in any way.’
Strikes are never far away
The 130 women sewing machinists at Longbridge had gone on strike on 7 January after demanding a 15 per cent rise in their piece work rates. The women had rejected an offer of pay increases ranging from £7 to £10 a week because they claimed that acceptance would mean ‘selling the men here down the line’ on a new system of payment.
An official of the women’s union, the National Union of Vehicle Builders, said: ‘The future of Standard Day Work at Longbridge is a matter for all the unions in the plant. We could not accept the offer in isolation.’
They appeared to have the full backing of the Longbridge Shop Stewards organisation. The women found themselves in the front line of the battle that was only just beginning over British Leyland’s attempts to phase out piecework from the whole of the giant Longbridge complex, as it had done at its Austin-Morris car factories at Cowley. The Shop Stewards were opposed to the plan and supported a ‘no strings’ increase in piecework rates.
Opposition to Measured Day Work
A mass meeting of 700 Longbridge Shop Stewards was held on 21 January and resulted in a surprising about turn in their attitude to British Leyland’s attempt to change the payments system from piece-work to Measured Day Work. The Shop Stewards voted by 690 to 10 to open negotiations with management. The meeting was held under conditions of strict security and those present were warned not to talk under any circumstances.
Moss Evans, national official of the Transport and General Workers Union with special responsibility for the motor industry, met British Leyland’s Shop Stewards in Birmingham on 24 January. Afterwards he publicly announced that, at the private meeting held on 21 January, the Shop Stewards had voted overwhelmingly in favour of opening negotiations with the company on its proposed changes to the system of payment.
The next day, the Longbridge Works Committee under is Chairman, Dick Etheridge, took part in informal talks with the management. This led directly to a peace formula which was accepted by the 130 women sewing machinists in the afternoon. A statement by the company said: ‘Subject to a suitable factory agreement being recommended by the existing pieceworkers at Longbridge, it is accepted that there will be a change from the piecework system of pay in the sewing room.’
Stern opposition from La Regie
While Britain was busy pressing the self-destruct button, the rest of the world had not been idle. On 28 January 1972 the Renault 5 supermini (above) was launched. This was a front-wheel-drive hatchback with its mechanicals borrowed from the older Renault 4 and styling by Michel Boué, who sadly died shortly before the car’s launch.
Originally available with 782cc and 956cc overhead valve engines, the clever part about the 5 was how it combined tried and tested components with a cutting-edge body design. The Renault 5 was an enormous hit selling as many examples in 14 years as the Mini sold in 41 years!
Did Mini cars make mini profits? Well, clearly Fiat and now Renault felt that this was not the case. The success of the Fiat 127 and Renault 5 would confound all the highly-trained Product Planners and marketing men in the American-owned motor manufacturers.
Changes at British Leyland
On 1 February, Sir Alec Issigonis started work as a consultant to British Leyland, for a fee of £5000 per year, which was £62,718 in 2020 terms. Two days later, the retirements of Sir William Lyons, founder of the Jaguar car concern and of Lewis G. Whyte, Joint Deputy Chairmen of BLMC, were announced.
Lewis Whyte, the hawkish member of the Leyland Board who had pushed hard for a takeover of British Motor Holdings by the Leyland Motor Corporation, had been noticeably quiet since the merger of the two companies had taken place four years before. Another sign of the times in the motor industry emerged…
British Leyland also divulged to the world at large a 32-page document, explaining in straightforward terms for the benefit of their employees the company’s financial state of affairs. John Barber, the Finance Director, explained: ‘This means that profit margin after tax is only just over 1.5 per cent, which is not enough even for the sweet shop around the corner. Unless we can make more vehicles and earn more money we shall not be able to replace our models and our plants sufficiently quickly and we shall, gradually, wither away.’
Profit warnings ahoy!
Then there were the warnings of Pat Lowry, the Industrial Relations Director: ‘if the total after tax profit was divided among all our employees they would each receive £25 and the Corporation would be bankrupt.’
These low profit margins were the stark reasons behind the company’s decision on 3 February to call on its 220,000 shareholders to put up an extra £51 million in capital. The new cash was needed to expand production to pay for new models to beat off foreign car makers whose sales had been soaring in Britain.
Lord Stokes was his usual optimistic self about the future. ‘Barring very serious strikes and a prolonged coal strike, I am hoping for an increase in both sales and profits this year. But there is a hell of a lot still to be done. The measures we have introduced throughout the business are now beginning to bear fruit.’
On the stock market, British Leyland shares closed at 48.5p – down 1p on news of the new cash call.
Fresh production losses
On 4 February, production of Mini and BMC 1800s (ADO17) models came to a standstill when 1000 assembly workers walked out in a fresh pay dispute. They had asked for an increased piecework payment and the management, who were discussing a change in the payment system at the factory with the unions, offered an interim flat rate payment instead.
Another British Leyland factory in Birmingham was also hit by strike action. Three hundred day shift workers at the light commercial vehicle division in Adderley Park walked out saying they were uncertain about the future production of some models there. Production of J4 and 250JU light vans was affected. Contrary to many accounts, the Adderley Park factory did not close following the completion of the last Morris Minor van in December 1971.
By 9 February, British Leyland was being made to pay dearly for its determination to replace piecework with a flat rate system of payment at Austin-Morris, Longbridge. Pay strikes over piecework rates there had now disrupted production on every working day since the beginning of 1972. Losses were running at some £900,000 worth of cars daily.
Measured Day Work causes strife
Sources claimed that the management was particularly angered by the latest strike by 1000 final assembly workers, as it came within days of the Works Committee finally agreeing to enter formal negotiations to drop piecework. George Turnbull, the Austin-Morris Managing Director, was convinced that, whatever the price in the long term, he could not afford to delay the confrontation at Longbridge any longer.
Because of the Miners’ Strike, a state of emergency was declared by the British Government on the same day. The day after Britain experienced its first power cut. By 14 February the continuing Miners’ Strike was resulting in power cuts that were affecting British industry.
Of the total of more than 40,000 idle in the car and components industries, more than 10,000 were in the 17 factories in the Austin-Morris division of the British Leyland Motor Corporation, mainly in Birmingham and Cowley. The number of lay-offs might have been higher, but about 8000 workers were already idle because of the pay strike involving assembly workers at Longbridge. The huge Longbridge assembly plant at Birmingham produced no cars at all, when it was normally scheduled to produce 12,260 cars a week.
The lights go out in Britain
Miners now into the sixth week of their strike over pay, had been picketing power stations and all other sources of fuel supply in an attempt to step up pressure on the Conservative Government of Edward Heath. The Central Electricity Generating Board announced that many homes and businesses would be without electricity for up to nine hours a day.
Electricity would be switched off on a rota basis between 07:00 and 00:00 every day. It meant consumers would face longer power cuts, up from six to nine hours. The shortage of electricity was forcing more and more factories and businesses to close. The Government had already imposed a Three-Day Week, not to be confused with the one that operated in early 1974, and it was claimed that 1.2 million workers had now been laid off.
Austin-Morris had to lay off 31,000 of its workers because of power cuts. The National Union of Mineworkers and the Government finally resolved their differences on 19 February with a full return to work on 25 February. The 1972 Miners’ Strike was one of the key events in 1970s Britain, and details of it are included here as it impacted on British Leyland.
The miners attracted widespread public support – after all, they performed a difficult and dirty job. Unfortunately, the dispute acted as a focal point for political activists who wished to dispatch Edward Heath’s Tory Government, its Industrial Relations Act 1971 and the capitalist system in general, regardless of the economic damage inflicted on the country.
The lights had gone out in Britain, literally, and this fuelled right-wing paranoia about trade union power. It was against this growing background of militancy that British Leyland had to function.
How the power cuts affected British Leyland
On 3 March, Lord Stokes said at the annual meeting of shareholders that financial results for the first half of the corporation’s 1971/72 financial year would be ‘seriously affected’ by the power crisis. The group’s £50 million rights issue closed for acceptance in the next week.
‘We, in company with other motor vehicle manufacturers, have suffered considerable disruption of production by reason of the power dislocation and the shortage of coal. This will continue to be felt for a number of weeks to come and we are not yet able to estimate the total effects on our factories and those of our suppliers and other ancillaries.’
After the meeting Lord Stokes said he hoped British Leyland would make a profit for the six months period ending on 31 March 1972. British Leyland had difficulty meeting the high level of United Kingdom demand for cars in January 1972, but everything was being done to get the factories back into production quickly. ‘Despite our domestic and national problems, I am optimistic for the future,’ Lord Stokes added.
Reassured to some extent by Lord Stokes’ comments BLMC shares were marked down slightly, to close 1p lower at 45p. Two days later, Joe Edwards, the former Managing Director of BMC – and the man once most likely to run BMC – was appointed a Non-Executive Director of the British Printing Corporation. He was also Deputy Chairman of Associated Engineering and a Director of the British Airports Authority and Joseph Lucas (Industries).
A very serious emergency
In the 10 March edition of its works newspaper British Leyland warned 65,000 employees in its Austin-Morris factories that power cuts and strikes have created ‘a very serious emergency’.
It went on to say, ‘In the first week of power cuts alone we lost between half and three-quarters of our potential production. Some plants produced virtually nothing at all. We lost 2 million man hours and almost half of the available working hours of the corporation.’
Pointing out that the troubles could restrict future pay rises, the message said the latest hold ups had come on top of a series of strikes in 1972 which had already caused serious production losses. ‘The remedy is a long period of uninterrupted production, completely free from hold ups of any kind. This is the only possible solution and the need for it is urgent,’ it added.
Landcrab improvements – too little, too late
On 21 March, Austin-Morris launched a new and revised range based on the BMC 1800 (ADO17) model. The highlight of the Mk3 ADO17 was the new variant, codenamed ADO25, featuring a 2227cc six-cylinder engine. The power unit was a larger version of the 1485cc E-Series engine then available in the Austin Maxi.
With the arrival of the 110 bhp, six-cylinder landcrab, the 1800 S versions were dropped from the Austin-Morris range. The range was now: Austin/Morris 1800; Austin/Morris 2200 and Wolseley Six. The six-cylinder engine added the qualities of smoothness and high performance to those of good road holding and ride.
Even the Mk3 1800 was improved slightly. The gearchange was made more positive with rod change operation, the interior had been cleaned up and the exterior styling made less fussy. One particular change welcomed by journalists was the placing of the handbrake between the front seats. The heater controls were changed and mounted closer to the driver and the ignition switch incorporated a steering column lock.
And so begins the Barber Boom…
The same day the Chancellor of the Exchequer, Anthony Barber, revealed his budget, which was designed to return the Conservatives to power in an election expected in 1974 or 1975. This budget led to a period known as ‘The Barber Boom’. The purpose of the budget was to ‘reinflate’ the economy to reverse the rise in unemployment figures. The measures in the budget led to high inflation and wage demands from public sector workers which further fuelled the inflationary spiral.
The 6 April edition of the Financial Times newspaper discussed the demise of piecework and the introduction of Measured Day Work at Cowley. ‘The TGWU gained such an advantageous ‘mutuality’ agreement at Cowley that the Shop Stewards have had a much larger measure of control over the speed of production than the management would have liked. In addition, without the incentive of piecework payments related to output, there has been a distinct drop in “effort” and the company has not been able to squeeze the maximum output from its tracks. As a result another track is being installed.’
It appeared that performance at Cowley fell by at least 25 per cent with the demise of piecework and the introduction of Measured Day Work. A second line had to be installed to get the required Morris Marina production of 5500 a week.
Trying to strong arm the unions
On the same day, British Leyland warned several thousand workers at its Cowley Body Plant that it was not possible to continue operations. The company said that restricted working in support of a pay claim was ‘causing complete dislocation of production.’
Unless there was an immediate resumption of normal working, it said, it would have no alternative but to take action. The warning was contained in a personal letter from David Simpson, the Plant Director, to each of the production workers on the Morris Marina and Austin Maxi body lines. David Simpson said he was gravely concerned about the effect of the restricted working on the company’s trading prospects.
The competitive situation was such that failure to deliver cars on time and in the right quantity could have most damaging results. After setting out management efforts to obtain a fair settlement of the men’s pay claim, he said their industrial action was in breach of agreement and had nullified any understanding that the pay award would be made retrospective.
An inability to ramp up Marina production
British Leyland’s efforts to increase production of the Morris Marina to meet record demand from home and overseas markets had been frustrated by a month old ban on overtime and other restrictions. The restrictions were particularly damaging because 4000 men in the adjoining Assembly Plant had recently withdrawn similar action following acceptance of a new £44.20 a week pay deal.
The traditionally more militant Body Plant workers were holding out for more money still. On 10 April the company took action. Over 2250 men on both the day and night shifts, who were taking part in the month-old go-slow campaign at the Cowley Body Plant were suspended. When they refused to leave their machines the management shut off power supplies. For a time the men staged a sit-in but later left to hold a meeting. A further 3700 workers were laid off in the adjoining Assembly Plant halting all production.
A meeting of the men in dispute rejected the company’s offer and insisted that body workers were given a different scale of payments and guarantees from assembly workers who had already accepted the company offer. The suspended men were advised by union officials to report for work the next day. The 2250 men would conduct a sit-in until 13 April.
Stoppage causes further damage
In a statement David Simpson said the restrictions being imposed in the Morris Marina and Austin Maxi body building shops were crippling production. The men were in breach of agreements and when they continued restrictions the company had no alternative but to suspend them. The company’s offer provided the highest rates of pay in the motor industry.
The main issue was the company’s determination to break once and for all the body men’s insistence on being treated separately from men in the adjoining Assembly Plant. This had been a continuing irritant with wage rates leapfrogging between one and the other. A powerful factor on the company side were the 4000 men in the Assembly Plant who had already accepted its £44.20 a week offer. Because of their colleagues’ intransigence these men had been laid off without pay until further notice. Guaranteed lay-off payments were withheld when production was disrupted by disputes within the company.
On the other hand, management had weakened its case for a single wage structure for all direct workers in the Cowley complex by continuing to conduct separate negotiations, a throwback to the days when they were separate companies, Pressed Steel Fisher and Morris Motors.
Marina and Maxi sales stall
By 18 April the ten-day old shutdown of the car plant at Cowley was now seriously affecting sales of the Morris Marina and Austin Maxi, which together accounted for more than 12 per cent of the Austin-Morris’s total United Kingdom sales. Morris dealers said they were losing customers almost daily because they were without stocks and unable to quote delivery dates.
It took until 24 April for a return to work to be agreed pending further negotiations. Austin-Morris had lost a fortnight’s car production at Cowley, worth about £10 million, because of the dispute.
Meanwhile, The Times claimed that British Leyland, anxious to rejuvenate its image, was flirting with the idea of returning to international motor sport. The corporation was reportedly investigating a high-performance version of the Morris Marina, tuned and modified by the March racing team. The newspaper claimed that a special Morris Marina, fitted with a 3.5-litre Rover V8 engine, was being studied by the March team’s Chief Designer and Engineers.
Why no go-faster Marina?
Austin-Morris, through its Special Tuning division run by Basil Wales, did indeed build at least one Morris Marina fitted with a Rover V8 engine. It is said that the Production Engineers were unwilling to sanction the modifications needed for the transmission tunnel on cost grounds.
This was exactly the same reason why the inline BMC B-Series engine transmission was not used in the Marina instead of the weaker Triumph-derived gearbox. Perhaps the unwillingness of Austin-Morris to sanction alterations to the transmission tunnel was why no sporting derivatives of the ADO28 platform ever appeared?
Longbridge sources said that British Leyland was worried that most of its sales were to middle-aged or elderly people, while companies like Ford, with its sporty versions of standard saloons, were building up customer loyalty among the younger generation.
Australia’s Morris Marina launched
April 1972 saw the launch of the Morris Marina in Australia, but with a major difference to its UK counterpart, it had an E-Series engine installed longitudinally. As related earlier, this engine had originally been slated for the Cowley-built car, but was dropped because it had not been adapted for use in the American-market Austin Marina and/or because of unfounded concerns about the ability of the Cofton Hackett engine plant to produce the required quantity.
By 1972, all cars built down under had to conform with Australian Design Rules, which were coming down hard on harmful emissions broadly in line with those operating in California. As the tooling for the Australian A and B-Series engines required a costly refit and investment to make them comply with the newer regulations, it was deemed more cost effective to utilise the cleaner overhead cam E-Series engine, initially in 1500 and 1750 forms followed by a six-cylinder 2600 version in 1973.
The irony of this is that, while the parent company in Britain had baulked at making the E-Series comply with anti-emission laws on cost grounds, their Australian subsidiary had gone ahead and done it anyway.
More jobs for Cowley
On 27 April Frank Tilston, Director and General Manager of Cowley operations, said that plans to raise the output of the Morris Marina and Austin Maxi range at the Austin-Morris plant at Cowley, Oxford, would mean a further 850 jobs by the end of 1972. He was to take over as Managing Director of the body and assembly division of Austin-Morris at the end of April 1972.
At the time the output of the Morris Marina range cars was running at 4000 a week while the Austin Maxi’s was at 1500. The recruitment would enable production to be stepped up to 7000-cars a week. It would take the total labour force at Cowley to more than 17,850.
It was in April 1972 that British Leyland decided that its corporate sports car would be badged as a Triumph with no MG variant. It was to be built at the Speke No.2 factory on Merseyside. This was a victory for Triumph’s ex-BMC boss Bill Davis, who believed that the car was vital for the company’s survival. A letter was sent to George Turnbull, Managing Director of the Austin-Morris division, informing him of the decision.
Dysfunctional British Leyland
Lord Stokes and the other Specialist Car Division Advisory Board Directors agreed that future specialist car designs and model plans should not be shared with Austin-Morris. This bizarre state of affairs illustrated how dysfunctional British Leyland had become, because there was only one man on all the Boards of the BLMC constituents who knew all about the models in the pipeline, and that person was Lord Stokes!
That same month BLMC Australia discontinued the Morris 1500 and Nomad to make way for the Morris Marina in Antipodean showrooms. Then, on 4 May, the round wheelarch MG Midget was launched. Two days later it was announced that British Leyland was to buy the Italian family-owned car company, Innocenti Autoveicoli, of Milan, for some £3 million, £38 million in 2021 terms.
Innocenti already assembled Austin and Morris cars, mainly Minis, imported in kit form. In Italy Innocenti had created a premium market for the Mini, which accounted for about 90 per cent of sales, by restyling the bodywork slightly as well as giving it a more luxurious interior.
A few minor technical points had to be resolved before the deal went through, but Lord Stokes did not expect this to raise any problems. ‘This is quite a significant deal. In this market our sales are running at a rate of 60,000 a year, which is substantial,’ he said in London.
Innocenti was running ahead of 1972’s sales target of 60,500. In March 1972 the company was second only to Fiat in the Italian car market, in front of Alfa Romeo and the major importers, Volkswagen and Renault. Geoffrey Robinson, a former Industrial Reorganisation Corporation executive and now Financial Controller of British Leyland, was to take over as Managing Director of Innocenti.
John Barber, a Deputy Managing Director of BLMC, became Chairman of the Italian concern, which was merged into British Leyland Italia, the company which marketed other BLMC cars (Jaguar, Rover and Triumph) in Italy. The purchase of Innocenti came as no great surprise. The Innocenti family had tried to find a buyer for the whole group in 1971, and BLMC was one of those approached. At the time it was said to be interested in acquiring only the vehicle side. Since then the Italian group had sold off its metal division and transferred its Lambretta scooter division to Italy.
Growth for Europe planned
Among the first to hear that the deal was going ahead were Innocenti’s 4000 employees. Geoffrey Robinson had met them three days earlier at the 90-acre plant and confirmed British Leyland’s plans. BLMC’s sales in Europe stood at around 247,000 vehicles a year. The group expected to increase this to around 500,000 by 1975. Italy was its largest single European market. Lord Stokes believed Innocenti’s assembly capacity could be stepped up to 75,000 cars a year without further capital expenditure. ‘We could achieve 100,000 for only a modest investment,’ he said.
The first thing Geoffrey Robinson did was to call all the Innocenti workers and address them in fluent Italian. ‘We gave the workers better conditions and worked for better industrial relations and got them. There is no secret about how you do it. You put in the effort, give them the right incentives and conditions and the results come automatically,’ he said in 1974.
When Geoffrey Robinson arrived in Italy in May 1972, Innocenti was building 61,000 cars a year. He decided to stop production of the I5, the Innocenti version of the ADO16 1100/1300 (below) which had never been a success, in order to increase the production of Minis which were selling extremely well and making better profits.
Stokes under the spotlight
The Daily Express newspaper interviewed Lord Stokes in his Berkeley Square, London, office that May. He opened with: ‘The company was in a mess. But although there were lots of things wrong, there were also lots of things right. We did have good people who only wanted confidence and to be given direction.
‘Mind you, it was one thing sitting at this desk and saying this must be done and that must be done. It was quite another thing getting it done. Look, our labour force is larger than the British Army, we make over one million vehicles a year, our exports are vital to Britain’s economy, and we had to restructure our worldwide outlets. We certainly didn’t appreciate the depth of the industrial relations problem.
‘The motor industry is a sitting target for any disturbance. Someone once said that what was good for General Motors was good for America. The same could be said of British Leyland and Britain. Well, our labour relations are now improving, but it has been an immense job. What we need now is a fair run of industrial peace with strikes put on one side. We could make this company the most profitable in Great Britain and then we could pay higher wages. At the moment we have a waiting list for every one of our models.’
A young and vigorous company
Lord Stokes continued: ‘This is a young and vigorous company. I am an old man in it at 58. I have just made Geoffrey Robinson (above left, with Lofty England), who is 32, the Managing Director of Innocenti in Italy, the company that makes Minis for us out there. David Abell is only 29 and he is Treasurer of British Leyland, that is a hell of a responsibility for a young man to control £1,200 million and all our investments.
‘George Turnbull is getting on a bit now. He is 45, but his Austin-Morris division is a bigger company than Vauxhall and Ford put together. He is also Joint Managing Director of British Leyland itself. We launched the Marina in record time and it has been a tremendous success, third most popular car in Britain. It is a direct challenge to the American and Japanese while our Issigonis models are being widely copied in Europe.
‘You know it’s quite a frightening thing to commit a company to £30 or £40 million for a new model that you hope the customers will like and buy in three to four years time. It takes real courage and we have had to do it four times so far. The Marina was the first and we have another three new models in the pipeline. We have got Jaguar’s up to 1000 a week. And Rover and Triumph are sorted out without being directly competitive with each other. When I think back we were pretty cheeky really to attempt to do everything we have done with very limited financial resources. But if the merger had not taken place it would have been the end for the British motor industry. BMC would have been broke in a year and Leyland would have just plodded along.’
The last sentence became part of the Leyland mantra that would be trotted out in the years to come.
Boardroom reshuffle announced
On 11 May, it was announced that Sir George Farmer of Rover and Jack Plane were the two new Deputy Chairmen of the British Leyland Motor Corporation. These appointments followed the retirement earlier in 1972 of Sir William Lyons and Lewis Whyte. It was said that Jack Plane would be a Deputy Chairman until his retirement in May 1973.
He had given up his post as one of British Leyland’s three Deputy Managing Directors, together with his managing directorship of British Leyland International. This left British Leyland with two Deputy Managing Directors: George Turnbull, who headed the Austin-Morris division, and John Barber, responsible for finance and planning. Jack Plane had been one of the more hawkish Leyland Directors who had pushed for Sir George Harriman’s departure from British Leyland altogether in 1968.
By 19 May about 350 men were on strike at the light commercial vehicle works at Adderley Park East in Birmingham. They were protesting at company plans to close the plant and move the work elsewhere. They returned to work on 23 May.
Half-year results – a bad start
On 7 June Lord Stokes discussed BLMC’s half-year results. But there had been a bad start. First half profits, affected to an unquantified degree by the Miners’ Strike and other industrial disputes, were 24.5 per cent, or £2.3 million, down at £7.2 million.
In making his forecast for the year, which required a profit of some £25 million in the second half, Lord Stokes, the Chairman, said that this depended upon ‘reasonable continuity of production.’ This was a 1970s phrase meaning no strikes.
The value of sales so far in the year was up by 8 per cent to £577 million, an increase which was achieved by substantial de-stocking both by the group and its distributors. Sales volume was 13 per cent, or 63,000 units, higher at 537,000 units. Production was affected by the Miners’ Strike, which cost the company ‘several million pounds,’ and by internal disputes.
Demand exceeds supply
In the previous 12 months, BLMC had suffered 12 major strikes and lost 5.2 million man hours. But Lord Stokes reported substantial progress towards achieving new wage structures. Almost half the group’s workforce had now changed from traditional piecework payment systems to flat day rate.
Demand for the company’s cars, particularly in the home market, ‘continues to exceed supply.’ It was now claimed that production of Marina cars would reach 5000 a week at Cowley by the autumn of 1972, something that Austin-Morris had been promising would happen in December 1971.
The picture overseas was not so good. South African profits in the first half slumped from £2 million to only £100,000, and conditions in Australia had been difficult. Increasing competition and reorganisation had affected export markets. Sales were some 10 per cent down in value in the first six months. Japan had failed to defeat the British empire militarily, now it was doing so commercially. Moreover, in common with its competitors, BLMC had underestimated the timing of a commercial vehicle recession in the UK. Liquidity, reflecting the first proceeds of the rights issue and disposals (notably of the Maudslay Motor axle business to North American Rockwell for £4.5million), was said to be ‘excellent at the moment.’
On 9 June, John Barber, the BLMC Finance Director, was appointed the Chairman of the Leyland Motor Corporation of Australia. On 15 June senior British Leyland managers were at Seneffe in Belgium (above, photographed in 1978) to inaugurate a new £4 million expansion of the plant.
Lord Stokes said that, having completed a structural European reorganisation, British Leyland was experiencing heavy demand for its vehicles. Belgian production was at 100,000 units annually and projected to rise well above 150,000. Mini, ADO16 1100/1300, Austin Maxi and Morris Marina assembly already took place there. Now truck and Jaguar assembly was being introduced in Belgium. Lord Stokes was also critical of British car workers.
He said: ‘If our workers expect us to create new jobs in England they will have to get their fingers out… The jobs in Birmingham depend on the people of Birmingham. If they get their finger out then the position of the company would be a hell of a lot better.’ He also said of the Seneffe plant: ‘the workers record is superb, in seven years only one day’s work lost through a strike.’
Exports still vital to BL
His lordship stressed the importance of export markets to British Leyland. ‘Apart from the difficulties of production planning, we realise that we have a long-term interest in export markets, which must be supplied… All the same, we acknowledge that our market performance is still very far from satisfactory in some major markets, and we intend to put that right.’
John Barber added: ‘Already we are selling 250,000 cars a year in continental Europe and we are going to try to reach 500,000 cars a year by 1975. This is not a forecast, but an indication of what we think we ought to be able to achieve in a year of reasonably uninterrupted production.’ He also said it would be 1975-76 at the earliest before British Leyland’s real profit potential could be ‘anywhere near achieved.’
Allen Sheppard, the Managing Director of BLMC’s European division said: ‘In the coming year 78 per cent of the cars we sell on the Continent will also be manufactured or assembled on the Continent.’ Not until then, would the company’s post-merger plans be ‘materially completed.’
Problem areas identified
Sales remained buoyant and John Barber gave more details of the group’s five ‘problem areas’ where remedial action had been taken and ‘substantial improvements’ could be expected in the near future. They were the truck and bus business, which returned only a bare profit in the first half of the financial year, but was now showing signs of responding to an industry upturn; Triumph, which had been badly hit by labour problems; and Australia, where first half losses were £1.5 million greater than in the 1971 period.
Hopes there were pinned on the forthcoming P76 car; South Africa, where major board and management changes had just gone through and Spain where several senior British executives were trying to rectify production and management difficulties. Also present at Seneffe was George Turnbull. He suggested that the name ‘British’ might be dropped from British Leyland plants abroad because of its ‘bad image.’
He said: ‘In some countries the word is associated with strikes. And in a number of places where we have political problems it does not help our export drive.’
Paying back the IRC
British Leyland also confirmed that it was about to repay a major slice of its outstanding debt to the Government which was taken on from the former Industrial Reorganisation Corporation (IRC). The Government had agreed to this and a statement was issued the next day. In its statement the Department of Trade and Industry that the British Leyland Motor Corporation was to make an immediate repayment to the Government of £20 million of the outstanding £35 million loans made available to the group by the Industrial Reorganisation Corporation.
In addition, the terms of the remaining commitment were being restructured. According to an official announcement from the Department of Trade and Industry the £20 million was part of the £25 million loan made by the IRC on 5 August 1968.
The agreement also provided for the terms of the remaining £5 million of this loan to be varied so that it would rank as an unsecured loan carrying an interest rate of 7.5 per cent per annum and repayable on 31 May 1977. The existing fully drawn from revolving facility which was granted to the motor manufacturer on 1 June 1970 at a current average interest rate of 5.32 per cent was to be replaced by a fixed-term unsecured loan repayable on 31 May 1982; but the interest rate would be reduced to 7.4 per cent.
George Turnbull gains Truck and Bus
On 20 June George Turnbull was appointed Chairman of the Truck and Bus division. He now had direct responsibility for some three quarters of British Leyland’s manufacturing capacity. Announcing the appointment Lord Stokes, Chairman and Managing Director, said: ‘Until now I have had direct responsibility for the Truck and Bus division myself but now that we are operating as one corporation and not a loose holding company controlling a collection of semi-independent subsidiary companies, we are pursuing a policy of delegating more and more management responsibility and additionally reducing the number of activities which report direct to the chief executive.’
It was said at the time that a possible catalyst for this move was that George Turnbull had been offered a senior post by the British Steel Corporation. It was believed that it was soon afterwards that he was approached to take on the additional responsibilities of the Truck and Bus division. Ron Ellis, the division’s Managing Director since the merger and an old colleague of Lord Stokes and George Turnbull, continued as Managing Director.
On 26 June, the Shop Stewards at Austin-Morris, Longbridge, rejected the alternative flat day rate system of working after four months’ negotiation with the management to abolish piecework. BLMC had steadfastly refused to consider any wage increases at the plant, which were tied to piecework. Both sides had maintained tight security on the progress of the talks, and this was interpreted as an indication of goodwill, so the news of the rejection came as a shock.
Reliable sources said it was carried by a majority of six on a committee of 80 members. A British Leyland spokesman said the talks had not been terminated. ‘Most of the draft proposals have not yet been discussed. Until each item has been discussed it is untrue to suggest that negotiations have been terminated,’ he said.
How to replace the Mini?
By June 1972 it was dawning on British Leyland management that they would have to replace the Mini after all, instead of letting it gradually fade away, as Fiat and Renault were now moving in on its territory. Moreover, with Britain on the verge of joining the Common Market, the Italian and French superminis would soon be on sale in British showrooms at a much more competitive price.
This led to the instigation of the ADO74 project. Unlike the Fiat 127 (above) and Renault 5 (below), the ADO74 would use an all-new powerplant, the 1.0-litre H-series engine. In total, four or five H-Series prototypes were built, and were run for between 200 and 800 hours on the test bed and 25,000 miles on the road in ADO16 mules. At the time both the Renault and Fiat were only available with sub-1.0-litre engines, it would be April 1974 before the Renault 5 received a 1289cc engine.
Despite embarking on ‘Operation Survival’ in September 1970 and pleading poverty to its workforce and the world in general, Austin-Morris, along with its sister divisions in British Leyland, were profligate in spending money on new engines instead of making do with what it had inherited in 1968. Not only was Austin-Morris developing the H-Series, but Rover-Triumph was developing a new six-cylinder engine for its SD1 saloon car.
Project ADO74 takes shape
Harry Webster put forward three proposals for the ADO74. ‘Ant’ was a direct Mini replacement. ‘Ladybird’ was a larger supermini-type vehicle. ‘Dragonfly’ was an even larger three-box Escort-sized car.
The ‘Dragonfly’ soon bit the dust. However, Project Ant and Ladybird were both more seriously investigated – full-size clay models were built for both and were styled in-house at Longbridge. Eventually it was decided to go with ‘Ladybird’ as it was believed that this was where the profit was.
On 4 July, Paint Shop workers at the Austin-Morris car plant in Cowley agreed to give up piecework. They accepted £250 each in compensation and an hourly rate, which would give them £44.20 for a 40-hour week. Now fewer than 1500 production workers at Austin-Morris factories in the Oxford area, all of them at the Cowley Body Plant, were still on piecework. The Cowley plant was the only Austin-Morris factory which had paid out compensation to workers as an inducement to accept an hourly rate.
Three days later Shop Stewards at the Longbridge car plant claimed that 10,000 production workers at the plant had rejected ‘once and for all’ company proposals to replace piecework by a flat day rate.
The statement was made after a meeting attended by 400 Shop Stewards. It was reported at the meeting that during the previous week, workers in the main Assembly Shops had voted overwhelmingly to retain their traditional piecework system. A British Leyland spokesman commented: ‘We are surprised at the outcome of the meeting as we understood that the vote was in relation to management’s latest offer, not whether negotiations should be continued. We feel that many of our employees will be equally surprised by the outcome of the meeting, as negotiations on a changed system of payment are as yet incomplete.’
John Barber makes moves
On 12 July amid a long ten-week strike at Jaguar Cars, it was announced that John Barber was to take over responsibility for British Leyland International in addition to his responsibility for finance and planning. There were also a number of new appointments that would enable George Turnbull to devote more time to corporate matters.
These new appointments were highlighted in the latest issue of the Austin-Morris Express, an internal newspaper. The most significant was the promotion of a former Ford finance expert, David Andrews, to deputise for George Turnbull when he was absent. Brian Lancaster, Director of Industrial Engineering at Austin-Morris, relieved George Turnbull of his corporate responsibilities for industrial engineering.
Longbridge grinds to a halt
On 31 July about 2000 car men at Longbridge walked out, to join a demonstration against the Industrial Relations Act 1971 only hours after returning from holiday, stopping engine and gearbox production, and the assembly of some 1100/1300 (ADO16) models. About £1 million worth of production was lost by the strike.
British Leyland’s determination to end piecework in all its factories resulted in the production of the Austin/Morris 1800/2200 being halted on 9 August. In a new dispute 300 Paint Shop workers walked out at Longbridge after the management had again refused to consider wage demands unless the men accepted a new flat-rate system of payment in place of piecework.
A further 800 men were laid off at Longbridge and 90 at the Castle Bromwich body factory. It took five days to get the men back to work pending negotiations.
Piecework talks get underway… again
On 16 August the Longbridge Shop Stewards surprisingly agreed to reopen negotiations on the introduction of piece-work, broken off nearly two months earlier. The 300 Stewards representing all sections created a stir in the plant by also refusing to call for financial support for a strike due to begin on 18 August and recommended that it should be deferred. The strike by 100 Morris Marina engine assemblers was viewed as a test case for the whole piecework issue.
The engine men’s claim for higher piece-work prices had gone through a newly-agreed disputes procedure without producing a single concession from the management. The way was clear for the men to take official strike action and they had given formal notice of their intention to do so. In the meantime, they asked the Shop Stewards’ Committee to consider a factory levy to support them financially.
Without this aid it now seemed doubtful that the strike would take place. Since the 26 June rejection by the Shop Stewards of the alternative flat day rate system of working, the management had sounded out some 8000 manual workers in the plant and insisted that the large majority wanted negotiations reopened.
Management was also making increasing use of the success of a similar new pay deal at the adjoining Cofton Hackett E-Series engine works. It pointed out that 2000 production workers there were earning more over a full year than Longbridge piece workers whose earnings were continually cut by strikes. The next day the 100 men who assembled Marina engines called off their threatened strike as predicted.
Thorneycroft transmissions sold
Back in July, British Leyland had announced it was to sell its Thorneycroft heavy transmissions plant at Basingstoke for £5 million to the Eaton Corporation of America, which had large UK interests in vehicle transmission manufacturing. The unions were told that rationalisation of production facilities by Eaton, would mean about 350 redundancies among the 1400-strong labour force at Basingstoke, but they feared complete closure of the plant would follow.
An 11-week sit-in began in mid-August by 1400 workers opposed to the move. The unofficial British Leyland (Motor Corporation Combined) Trade Union Committee (BLTUC) issued a strike call in support of the Thorneycroft workers for 28 August.
However, only 8000 of a total of 150,000 British Leyland workers in Britain answered the call. Two thousand men at Austin-Morris transmissions, Washwood Heath, Birmingham, and 3000 at Austin-Morris, Cowley, failed to report for work. The response at Washwood Heath, reputedly one of the most militant work forces in the group, was nearly 100 per cent, and all production was stopped. But at the Cowley Assembly Plant less than half the labour force failed to report. They were enough, though, to prevent the assembly lines operating and 3000 employees had to be sent home.
Meanwhile, over at Leyland Innocenti in Milan, during the summer shutdown they did what Managing Director Geoffrey Robinson later described as a ‘fairly massive’ tear up of the facilities which increased production capacity to 75,000 Minis a year, a capacity that in the event was never utilised.
BLMC share prices slide
On 1 September the British Leyland Motor Corporation’s shares slid to a new low for the year on the stock market – it became clear that the strike at the Jaguar plant, now ending its tenth week, was taking a severe toll of profit hopes for the year. Whispers that the dispute was hitting the group even harder than was feared took BLMC shares down a further 1p to just under 36p. Earlier in 1972 they were as high as 56p.
Two days later it was announced that the 24 separate United Kingdom-based British Leyland companies in the car and commercial vehicle business were to be incorporated into a single new company, British Leyland UK, from 1 October 1972. In announcing this over the weekend, the company emphasised that the move was only an ‘administrative and legal rationalisation.’
It would still be known as the British Leyland Motor Corporation and the marque names and divisional operating organisation would remain unchanged. From 1 October 1972, BLMC would consist of British Leyland UK, British Leyland International, which owned the overseas companies, and the non-car and truck companies, Aveling-Barford, Coventry Climax Engines and Prestcold. The name change would not involve setting up a new Board or changes within the individual companies. ‘Instead of having, a sort of conglomerate mess, we have now got a homogeneous company, so to speak,’ a spokesman said.
Allegro speculation ramps up
On 13 September British Leyland denied persistent reports that they were to replace the long-running ADO16 1100/1300 range with a new car to be launched in the spring of 1973. Filmer Paradise, Director of Sales for the Austin-Morris group, said: ‘I can tell you this is completely untrue. They will continue in production for a number of years from next spring whatever additional new models we may be introducing around that time.’
The media knew that Austin-Morris was in the pre-production stage at its Longbridge plant of the new model code-named the ADO67, later known as the Austin Allegro, which would be sold through the Austin dealer network. Filmer Paradise’s statement was no doubt intended to bolster ADO16 sales with the knowledge that something supposedly better was on the horizon.
The Morris Marina was now the group’s best seller, replacing the 1100/1300 (ADO16), whose sales had dropped. Austin dealers unable to share in the Marina’s success were reported to be in urgent need of a new model. Of course that was the official line. Why had ADO16 sales dropped?
The gentle decline of the ADO16
ADO16 production had ceased at Cowley in 1971, reducing annual production from 182,060 in 1971 to 133,373 in 1972, a deficit of 48,687 units or 26.7 per cent. This was 33 per cent lower than production in 1970, the last full year the ADO16 was produced at both Cowley and Longbridge. A clue can be found in the annual Longbridge production figures. In the year ending September 1972 Longbridge produced 277,579 vehicles, which was a drop of 30,090, or 9.77 per cent over the previous year.
However, in view of the disruption occurring due to the difficult transition away from piecework, that should come as no surprise. It is highly likely that Longbridge was simply unable to produce enough cars to feed the expanding car market. This was a consequence of industrial strife and running down production just as the market expanded. The ADO16’s UK sales declined by 23.27 per cent when the car market increased by 27.38 per cent. To back this up UK Mini sales also dropped 6.6 per cent.
From holding 10.4 per cent of the UK market in 1971, the ADO16 now held a 6.3 per cent share. The decline of the ADO16 in the UK market place cannot be simply blamed on the car’s age, it was also the consequence of industrial action and poor forward planning by management. Whatever the true cause of the ADO16’s sales decline, the baseline for the ADO67 had been lowered to a 6.3 per cent share. Could it do better?
On 20 September a dispute between Shop Stewards at two Austin-Morris plants in Birmingham forced the management to suspend production of JU and J4 vans until the employees agreed to work normally. Three hundred assembly workers at Adderley Park East had been working to rule for the previous two months in protest at company plans to close the factory.
They had recently stepped up this unofficial action with a series of one-day strikes. The work force of 500 had been guaranteed jobs, many of them better paid, at the adjoining Common Lane factory where the van bodies were made. Under rationalisation plans announced more than 18 months earlier, body and assembly work were to be carried out at Common Lane. The Common Lane Shop Stewards had rejected approaches from their colleagues at Adderley for joint representation when the two were amalgamated.
The next day British Leyland made its biggest breakthrough yet in its plans to eliminate piecework from its largest car plants in favour of fixed hourly rates. The 3300 workers at the former Morris Engines, Coventry plant accepted a pay agreement which replaced the piecework system with agreed fixed wages for a 40-hour week.
The end of piecework
The deal was highly significant for British Leyland since the Coventry engines plant became the first of its Midland plants to accept the end of pieceworking. The pay deal would last for two years. A British Leyland spokesman said that the new deal was ‘extremely gratifying,’ particularly in view of the protracted negotiations.
British Leyland concluded a second flat rate pay settlement with workers in its Midland plants the very next day. The new deal was at the Common Lane, Birmingham, plant which made bodies for the Austin-Morris light van range. About 350 workers in the Assembly and Paint Shops, all members of the TGWU’s automotive section, accepted a management offer giving a new fixed rate for a 40-hour week.
On 28 September British Leyland announced that van production was to be transferred by from Adderley Park, Birmingham, to its factory at Bathgate, West Lothian. About 85 new jobs would be created when assembly started. A company spokesman said: ‘Assembly facilities are being installed and production will begin towards the end of the year. The introduction of the EA van to the Red Line range will result initially in about 85 jobs.’
Stan McKeown, Convener of the Joint Shop Stewards Committee at Bathgate, said: ‘In the initial stages there was opposition to the van moving out of Adderley Park, but a deputation of Bathgate Shop Stewards met their counterparts in the south for discussions and the opposition was removed.’
On 4 October, with the British Motor Show beckoning, Lord Stokes moved into publicity mode. He told the media that the Mini was still BLMC’s European best seller, demonstrating that they were right to keep it as a basic small car. He added: ‘No one can improve on its styling. I think it is a dateless car that will go on for many years yet.’ By late 1972 Harry Webster and his team had decided that the ADO74 project was too large for the 1.0-litre H-Series engine and the design evolved into the larger K-series, which was in two forms, a 900/1100 unit and a later 1100/1300 engine.
The mighty Ford Motor company now decided that there was a profit to be had in small cars after all. In September 1972, Henry Ford II approved for development the ‘Bobcat’ project, its own supermini programme that became the Ford Fiesta. The notion that the smaller-engined Escorts could satisfy the market for cheap, economical cars now went out of the window.
Back in 1967. The Economist magazine had claimed that Ford market research was light years ahead of that of BMC, a statement that was taken on board by a great many. The decision by Ford to develop its own supermini smacked of a knee jerk reaction to the Fiat 127 and Renault 5, rather than any detailed market analysis of emerging trends. BMC, Fiat and Renault had performed the market research with metal in showrooms and now Ford decided to take the plunge.
Marina estate is launched
On 10 October Austin-Morris announced the estate version of the Morris Marina. The same day the British Leyland Motor Corporation emphasised the priority being given to improving industrial relations throughout its plants, by appointing its chief negotiator with the unions, Pat Lowry, to the group’s main Board. A week later Lord Stokes was at the Motor Show. Lord Stokes said imported cars were now taking between 20 and 25 per cent of the British market.
He added: ‘I have never said there was anything wrong with foreign cars. Many of them are jolly good but you will never get a better deal in Great Britain pound for pound than buying a British car, particularly from the point of view of parts and service.’
He said it had become fashionable to blame the motor car for almost all Britain’s modern sins but nowhere in the world before had a modern industry responded more quickly to the pressures put on it by society in general. ‘Pollution, noise and safety are being attacked by the manufacturers with a speed and dedication, which is unparalleled in industrial history. But let us not forget, that if motor cars were removed from the roads entirely in America it would not even diminish pollution by half its present level.’
Lord Stokes, also said that if he weren’t ‘an optimist and a patriot’ he would have jumped from his third floor flat or his sixth floor office long before. It was estimated that British Leyland only made £2 profit on every £100 worth of the company’s sales. Lord Stokes said: ‘Building up an industrial organisation is not an in and out operation like property speculation.’
Authi Victoria arrives
On 24 October the ADO16-based Authi Victoria was launched in Spain. Based around the South African-built Austin Apache, the frontal styling was given more attention and the car was fitted with twin headlamps.
The next day Austin-Morris built the three-millionth Mini which was then rushed to the Motor Show in London. The British Leyland Chairman Lord Stokes said: ‘Looking around the show you can see foreign manufacturers have copied our small car design. It won’t take us 13 years to build the next three million, as we fully intend to do.’ Lord Stokes posed for photographs with Transport Minister John Peyton.
On 29 October George Turnbull said that BLMC would be spending £16 million in 1973 on reorganising and developing production facilities at Austin-Morris, Longbridge, the group’s largest car plant for the new ADO67 model to be launched in the spring: ‘There will be a big recruitment drive at Longbridge during the year. We anticipate that something in the order of 2000 people will be required as we build up production.’
How healthy was Austin-Morris?
George Turnbull thought it was. He said: ‘But, overall, Austin-Morris will be employing considerably more people than now. The current developments at Longbridge mean that we shall be spending over the next year something of the order of £16 million. For the future we anticipate that, in renewing existing equipment and refurbishing generally, we shall have continuous spending of a very high order in Austin-Morris. But we believe that profitability is there to pay for it. I am hopeful that we can spend these large amounts and gradually turn over the business, renewing and replacing as we go.’
George Turnbull was asked about the health of Austin-Morris and was it capable of generating this level of investment? ‘It was always thought to be the weak link in the organisation, but everyone is now satisfied that it has been pulled round and is a very healthy part with very considerable potential,’ he replied.
He said the pressing need was to increase production not only to meet the requirements of a record home market but to supply parts to overseas assembly plants. ‘Europe is the place where the real effort of British Leyland must go. That must be our first priority.’
And new investments?
Did this mean that British Leyland had to face huge investments in complete new factories before they were capable of maximising the benefits of Common Market/EEC/EU membership?
‘We have to watch very carefully that the size of the market we have at present is going to continue. Mind you, going into Europe is going to be of tremendous benefit to us. It is going to give us a great deal, more flexibility in terms of making sure we can sell our complete output. We now have to make up our minds whether we really want to take another big piece of the European market with another big investment,’ he said. ‘What is of interest is the phrase “making sure we can sell our complete output.”‘
The notion that, when faced with a wider choice, UK buyers would join with other Europeans in rejecting Austin-Morris’s wares was not considered.
On the last day of October 1972 British Leyland announced at the Turin Motor Show that sales of its cars in Italy during the first nine months of 1972 totalled 54,460 units, more than 20 per cent higher than the total of 45,265 sold in the first nine months of 1971. These sales figures gave British Leyland a share of 4.9 per cent in the Italian car market so far in 1972. Models ranging from locally-assembled Minis to Jaguar XJ6 saloons were now marketed in Italy by Leyland Innocenti.
Commenting on the sales increase, Geoffrey Robinson, Managing Director of Leyland Innocenti said: ‘Our success in the Italian market is based on the tremendous popularity of the Innocenti Mini range and we have recently stepped up Mini production at Milan from 60,000 to 75,000 units a year to meet increased demand. This increased production together with the fact that the strong Innocenti dealer network is now also selling Rovers, Triumphs and Jaguars will ensure that we improve our market penetration still further in the coming year.’
British Leyland Deputy Chairman Jack Plane then abruptly resigned, he was not due to retire until May 1973. He was quoted as saying that the strain on Lord Stokes was simply too great for one man and, ‘this is beginning to tell in some recent decisions’. Plane argued that a separate Managing Director should be appointed. He was also said to be critical of the composition of the Board, arguing that there should be more outside Directors.
Lord Stokes responded: ‘I am sorry that Jack Plane has felt it necessary to burst into print with comments on British Leyland. Until this moment we were not aware that this was the reason for his early retirement. Mr Plane contributed much towards the development of Leyland’s overseas operations and I am very grateful to him for what he did – particularly during the formative years of the Corporation.’
Piecework ends at Longbridge
On 6 November, five weeks of negotiation at the plush Chateau Impney Hotel, Droitwich, paid off when the whole Longbridge Works Committee plus 27 Shop Stewards agreed to an acceptable package to end piecework at Austin-Morris’ Longbridge plant.
George Turnbull, the Deputy Managing Director of British Leyland, commented on the news. ‘The changeover from piecework which is still continuing in other parts of the group is absolutely vital. I do not believe that Austin-Morris could have survived without changing over to a flat-rate system. I am not saying that it will solve all our problems.
‘There are obviously still some industrial relations problems with flat-rate systems. But it does have tremendous advantages as we have seen from the greater stability we are now getting in the Cowley area where it was first introduced. We are now asking men to work at a reasonable pace without over exerting themselves, and they all get the same rate of pay. Under piecework there is no doubt there were many inequalities with some men getting good prices and some getting bad prices.’
The reasons why Measured Day Work was necessary
George Turnbull said: ‘I felt immediately that because of the vast scale of the operation at Austin-Morris and, quite frankly, to preserve the future of the company, we had to get on to day work. The frequent small disputes arising from piecework had a much more damaging effect on profitability in a high volume plant than in a low volume operation. I called all our senior people together and decided that although Measured Day Work was a dirty word to many of our employees we had to begin preaching the gospel of the inevitability of the change.
‘Despite the confrontations that followed I never had second thoughts. It was really painful at times when we had piecework disputes but we stuck to our guns and refused to meet big piecework claims. I have always remained convinced that the whole future of the company depended on the change and I told everyone here from Directors down to the shop floor that it must come, would come, and the sooner the better.’
George Turnbull said much of the first three years of the BMC-Leyland merger had been taken up with internal reconstruction and the introduction of a number of new high powered personnel.
And that was that…
Under piecework Foremen had to tread so warily that their authority on the shop floor passed to Shop Stewards. Now they had taken on greater responsibilities. As a Cowley Foreman put it: ‘We had to learn how to give orders, and if you think that’s easy try talking sharply to an assembly line worker who will yell, ‘Steward’ if you wish him good morning and he doesn’t agree.’
The battle to end piecework at Longbridge was over, but it had cost at least 30,000 cars in lost production.
On the same day ,the final MGB was produced in Australia. Then, on 12 December, Abingdon produced the first MGB GT V8. That same month British Leyland in Australia ceased production of the X6 Austin Kimberley/Tasman (YDO19) after disappointing sales of around 12,194. A large stock of around 3000 unsold cars enabled British Leyland to sell the X6 well into 1973.
But it wasn’t over yet…
On 18 December factories in London, Essex, Surrey, Sheffield, and Oxford were halted as about 100,000 engineering workers obeyed their Shop Stewards’ call to join an unofficial political strike in protest against the £55,000 fine imposed on the Amalgamated Union of Engineering Workers for contempt of the National Industrial Relations Court.
In Oxford all car production stopped at Cowley when 11,000 British Leyland day shift men stayed away from the car body and assembly plants. A further 1300 in the BLMC service division, and 800 from the Morris radiator factory also struck. Local officials of the Transport and General Workers’ Union told members not to cross the engineering union picket lines.
The National Industrial Relations Court had been created under the Industrial Relations Act 1971. It was empowered to grant injunctions as necessary to prevent injurious strikes and also to settle a variety of labour disputes. The trade unions adopted a policy of non-cooperation and ignoring its judgments. In July 1972, a dispute involving the dock workers union led to five Shop Stewards being imprisoned in Pentonville Prison for contempt of court. Unofficial strike action in support of the ‘Pentonville Five’ created a national crisis, not resolved until the Court of Appeal overturned the jail sentences.
Strike-damaged British Leyland
This was a year in which 23,909,000 aggregate days were lost because of industrial action. The Heath Government’s attempt to curtail the strikes hurting Britain seemed to be making the situation even worse, bitterly dividing the nation as it was about to embark on the great European adventure. In 1972 Edward Heath was as reviled in many quarters as much as his successor as Conservative Party leader would be a decade later.
This was the all-time record year of British car production, 1,921,000 in a year of record sales, but tellingly exports dropped further to 613,000, a decline of 14 per cent. This was the lowest figure since 1963, then a time when some very appealing British cars were only just coming on to the marketplace.
The British motor industry was now becoming more and more dependent on its domestic market in order to stay in business. In 1969 47.9 per cent of UK car production had been exported. In 1972 it was down to 31.9 per cent. The record year of 1972 in which 1,637,775 cars were sold gave the false impression that all was well with the UK motor industry, it was an illusion.
The year in reflection
The ‘Barber Boom’ had boosted demand from UK business’s for company cars, the predominant type of vehicle now emerging from Britain’s car plants. Designed to a price, with compromised engineering, for sales reps to hurtle up and down the highways of Britain, these were not robust machines suitable for the Third World. In developing countries cars like the Peugeot 504 and Toyota Corolla were now finding favour. Overall, with the UK car market expanding by 27.38 per cent, British car production only increased by 10.2 per cent.
Any illusion that the ten-week pay strike of the previous year had terminally damaged Ford of Britain were dashed in 1972. In a booming market, Ford UK managed to ramp up car production by 26.42 per cent over that in 1970, which pushed its UK market share back up to 24.5 per cent. Overall, Ford managed to increase its UK sales by an impressive 37 per cent over 1970.
In 1972 the Ford Cortina (below) emerged as Britain’s favourite new car, selling 187,159, while the smaller Escort sold 140,837. Austin-Morris sold 104,986 Marina’s. These were the type of mechanically simple cars that successive Governments had been urging the British motor industry to build since 1945, but as Britain stood poised to join the Common Market, the European motor industry was embracing the front-wheel-drive technology that Britain was rejecting as too expensive to manufacture.
However, while Ford’s performance in Britain seemed impressive to observers, its exports slumped to 107,000 cars, a decline of 56 per cent since a record 1969. Either Ford diverted production to the domestic market or its made-to-a-price repmobiles were now encountering serious opposition from Japan and the new generation of European front-wheel-drive cars. Indeed, 1972 demonstrated that the Escort and Cortina were the fleet buyers’ default choice, and that the decline in UK market share resulting from supply problems caused by the 1971 pay strike was merely temporary.
Austin-Morris, Rootes/Chrysler and Vauxhall may have briefly had some conquest sales from Dagenham, but any notions that these defections were long term were blown out of the water in 1972.
In a larger market, British Leyland saw its overall share of the British car market slump to 33.2 per cent, but car production in the September 1971 to September 1972 period slightly increased to 916,218, an increase of a mere 3.32 per cent. This, of course, included the products of the Specialist Car Division, which demonstrated a complete inability to ramp up production in the face of unprecedented demand. Rover and Triumph stood still, perhaps restricted by quality concerns and defections to the new Ford Granada, and Jaguar actually went backwards, suffering a ten-week pay strike.
Not taking advantage of the Barber Boom
Even the much-maligned Austin Maxi experienced a boost, sales increasing 26 per cent with production the year ending September 1972 increasing by 66 per cent, suggesting that maybe the car did have a future after all. Or it could just be that a shortage of ADO16s in the showrooms enabled Austin-Morris to sell more Maxis?
But if there was a shortage of around 30,000 1100/1300s in 1972, perhaps the void was filled by another source? The Datsun Cherry 100A/120A was at the forefront of the Japanese assault on the British car market. Front-wheel-drive with 988cc and 1171cc engines, it was an ADO16 rival. In 1971, 6000 Datsuns were sold in Britain but, in 1972, that increased to 30,000. The Japanese were now on their way. Volkswagen sold 66,000 cars in Britain, Renault more than 60,000.
Overall, some 450,314 imported cars were sold in Britain in 1972, mainly to private buyers, who were now being alienated by the uninspiring repmobiles they were being offered by the UK-based manufacturers. The loser in 1972 was Vauxhall. It produced 183,957 cars, a 7.6 per cent decline and made a pre-tax loss of £4.3 million, all in boom conditions. Fortunately, parent company General Motors had deep pockets.
The importers’ share of the market was now nearly as much as that of Ford.
Where did that leave Austin-Morris?
With its predominantly private customer base, Austin-Morris was the first to feel the heat from the importers. In turn the success of imported cars drove the American-owned manufacturers deeper into the arms of the fleet buyers, who were unlikely to foist on employees, who might have spent the war years in the Far East, a car made in the land of the Rising Sun.
In 1968/69 BLMC had produced 830,874 cars, the last figures available before Britain joined the Common Market are from 1971/72 when the company produced a record 916,218 cars. This was a creditable increase of 10.2 per cent, but it revealed what a restricted market British Leyland was operating in.
However, in the same period within the Common Market, car production in France had increased by 38 per cent, and that of Italy by 17 per cent. Only West Germany lagged behind with a 6.3 per cent increase, but it still comfortably produced more cars than Britain. The British Leyland marketing men must have relished the prospect that they too would soon have a large share of the European pie.
In 1972, BLMC had predicted it would be selling an additional 250,000 cars in Europe by 1975. This implied that it expected to manufacture at least 1.1 million cars by the middle of the decade. As 1972 ended, Britain’s last year outside the Common Market, nobody could imagine that British car production would crash from 1,921,000 to 924,000 in eight years. This was the last hurrah for the original British motor industry.