History : The Austin-Morris story – Part Ten : 1973

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 tenth part, BLMC rolls out its most important car to date – the Austin Allegro – and takes in a deep breath…


The Austin-Morris story: a new driving force

Austin Allegro 1100

On 1 January 1973 the United Kingdom joined the European Economic Community (the EEC). The British motor industry had looked forward to this day as an opportunity to compete on an equal footing with the big continental manufacturers, once all the trade tariffs were removed.

In reality the end of Britain’s trading isolation from mainland Europe passed relatively unnoticed as class war ravaged the country and the industrial infighting continued. Outside the Common Market between 1960 and 1973 annual British car production increased by 29 per cent. Britain would now have to compete against the car producers of France, West Germany and Italy on even terms.

In the same time period production in France had increased by 172 per cent, West Germany by 101 per cent and Italy by 206 per cent. In terms of new car registrations, France had seen a rise of 174 per cent, West Germany 109 per cent and Italy 280 per cent. For Britain the equivalent figure was 106 per cent. Only Italy produced fewer cars than Britain in 1973, but that situation soon evaporated.

British manufacturing and the EEC

If one of the reasons for the creation of the EEC had been to create a European trade bloc to strengthen the member countries’ economies, then it had certainly served its purpose. By uniting, the leaders of the original member countries had created a united front to protect their strategic industries from predatory American-owned multi-nationals which saw Europe as a market to dominate in repayment for wartime help and Marshall Aid.

Trade tariffs kept imports at bay, and the only way big American corporations could sell high volume goods to the EEC was to have subsidiaries in the member states. For the European motor industry the first sixteen years of the EEC had been a boom time and, by the late 1960s, France, West Germany and Italy began to pull ahead of a Britain beset by regular credit squeezes which turned profits into losses and reduced investment.

For example, in 1969 when the UK car market was 965,000, the total number of registrations in France was 1,366,000, West Germany 1,841,000 and Italy 1,218,000. What also must be taken into account is that around 40 per cent of the UK car market was to fleet buyers. The BMC 1100/1300 (ADO16) may have had an impressive 13.8 per cent of the UK market in 1969, but it was a big fish in a small pond.

Mini and 1100 – big fish, small pond

For all the acclaim foisted on the Mini (ADO15) and ADO16, then and now, these two pioneering vehicles never sold in the kind of numbers warranted by their plaudits, because they were on sale in a relatively restricted market. The big continental manufacturers were selling more cars in a larger overall tariff-free market, making more profit and thus able to re-invest in newer plant and machinery. This gave them a chance of being able to compete with the Japanese.

Moreover, the cars the Europeans were making were aimed at the private buyer. How many of Britain’s repmobiles would appeal to continental motorists?

Strikes, trouble and strife

January 1973 began in much the same way as 1972 had ended. Production was disrupted at dozens of factories in Wales on 5 January as engineering workers staged a one-day strike in protest against the Industrial Relations Act 1971 and a £55,000 fine on the engineering union for defying the law.

The Pressed Steel Fisher car components factory at Felinfoel, Llanelli, which employed 2000, was closed. The adjoining British Leyland components factory said 400 men stayed away. During the month Lord Stokes made it clear that British Leyland would invest about £70m in 1973, rising to around £80m in 1974.

The clear implication was that this rate would be at least maintained in subsequent years. Since British Leyland was formed in 1968, capital expenditure had averaged £53m a year.

The company’s Annual Report

On 12 February British Leyland sent their 212,000 shareholders and 190,000 workers a yearly report. Chairman Lord Stokes said: ‘We are seeing a slow but impressive and, I think, solidly based build up of our fortunes. Now we are in the Common Market it will no longer be meaningful to speak of cars by nationalities and the fashion of knocking British as opposed to foreign cars should be on the wane.’

He gave a league table of the Big Four in the new enlarged Common Market which showed Fiat leading with 15 per cent of the market followed by Ford of Europe – 12 per cent; Renault of France – slightly over ten per cent, and British Leyland close behind with nearly ten per cent.

Lord Stokes pointed out that since Europe bought eight million cars a year, an increase of only 1 per cent in the market share would be a lot of cars. ‘Imagine what we could do if we could get the cars out of the factory door,’ he said referring to labour troubles in and around the industry.

Stokes concluded: ‘Given the right economic climate and the willingness of our workforce, 1973 could be one of progress, in both output and profitability.’

British Leyland in numbers

The report revealed that Lord Stokes had taken up 3600 shares, increasing his holding to 39,600. Jim Slater, a fellow BLMC Director, bought 25,000, bringing his holding to 275,000.

In the 1971/72 financial year British Leyland manufactured 1.123m vehicles, including 916,218 cars worldwide. The company made a pre-tax profit of £31.9m, less than the year before, a lot of which could be blamed on the long Jaguar strike. This knocked profitability down to £28.40 per vehicle.

To Lord Stokes’ credit British Leyland production had increased by 6.5 per cent since 1967/68, but it was not enough for the City. At the close of business, British Leyland shares stood at 32p, which was not good news for shareholders who paid 45p for the new shares offered to them in a rights issue a year before. At the time BLMC was enduring a British Road Services lorry drivers’ pay dispute that was starving its factories of components.

A stark profit warning

John Barber

A week later, British Leyland’s 164,000 employees in the United Kingdom were told that profits in the last financial year were not sufficient for a corporation of its size. The comment came from John Barber (above), the corporation’s Deputy Managing Director and Finance Director.

In a report on company progress, which was being sent to every employee, he said: ‘After deduction of tax, profit was £21.1m which represents a profit margin on sales of not much over 11 per cent or 12p in the pound.’

During the year, shareholders had provided £50m additional money but the company could not continue to raise and borrow money indefinitely unless profitability justified it. In a wide-ranging review of problems and prospects Lord Stokes, the Chairman, said: ‘Our investment policy in the last few years has been inhibited to a degree by the uncertainty in obtaining industrial development certificates for expanding certain of our plants, particularly in the Midlands. Approval has recently been given to increase our car capacity in the Midlands and we can now make progress.’

Austin Marina launches in the USA

Austin Marina
Austin Marina sales started slowly in the USA

Then on 22 February the Austin Marina was launched in the USA. This was an Austin-badged version of the Morris Marina (ADO28), and was only available with the B-Series 1.8-litre engine.

The Austin Marina made a poor start in America. It was given the biggest and most prestigious launch ever for a British car. Some 800 dealers and scores of motoring correspondents were flown to Marco Island in the Florida Everglades and more than £600,000 was spent on advertising and promotion.

However, the launch coincided with a month-long strike by British Road Services drivers supplying its Midland plants. This reduced Marina deliveries to a trickle, and United States dealers who had enthusiastically placed large orders at Marco Island had to wait weeks before their first Austin Marina was delivered.

Drivers’ strike costs Austin £54m

It was not until 28 February that the British Road Services lorry drivers’ pay dispute was resolved. The Austin-Morris group of factories alone had lost output of some 44,000 cars and the Triumph and Jaguar plants had lost another 9000. In all, BLMC had suffered production losses of vehicles worth, at showroom prices, about £54m during a dispute over which it had no control.

On 8 March the Financial Times newspaper quoted Lord Stokes as saying: ‘I would remind shareholders that we never promised any major benefits from the formation of British Leyland for five years and I think we are now beginning, despite incredible national difficulties, to see the results of our efforts come to fruition.’

A week later the same newspaper reported that British Leyland was now building up its production of cars at continental plants. Most of the cars, which it sold on the continent, were now being assembled in Belgium, Italy or Spain from British engines and components. It was hoped that increased supplies from these plants would protect the company from industrial problems at its British plants and enable it to continue its drive for a larger share of the total European market.

How British Leyland compared…

Fiat 127

In March 1973 BLMC held an 8.6 per cent share of the European car market. Apart from the UK, its most popular market was Italy where it held 4.7 per cent of the market, but then some of its sales there were home grown via Innocenti. The biggest player in the European car market was Fiat (above) with 18 per cent of the market, including a whopping 64.3 per cent share of the Italian market. Ford, with operations in both the UK and Germany, held 12 per cent of the European market.

Although Ford held a strong 24.6 per cent of the UK car market with its focus on fleet sales, this was not reflected in West Germany, its other main manufacturing centre, where it held only 13.1 per cent of the car market. Indeed, Ford’s product planning and cost control methods held little appeal for West Germany’s predominantly private buyers, who relegated Ford to a distant third place behind leaders Volkswagen and General Motors/Opel.

British Leyland had, in fact, done remarkably well to achieve an 8.6 per cent share of the European market, considering the trade tariffs it had faced prior to 1973, outselling both Citroën and Peugeot of France, which were then still separate companies. The problem was that this 8.6 per cent share had been attained by some of the greatest British cars ever made, such as the Mini, the ADO16, Rover P6 and Jaguar XJ6, their innovation and reputation had punched through the Common Market trade barriers and found buyers. However, apart from the Jaguar, they were all ageing fast and well overdue for replacement. Would the next generation of BLMC cars build on that 8.6 per cent share or fritter it away?

Getting ready for the Allegro

During April 1973 the run down of ADO16 production began. The ADO16 Wolseley 1300, Morris 1300 Traveller and MG 1300 CKD kits all ceased production. A rod change gearbox was introduced for the front-wheel-drive A-Series-engined cars.

By early April, British Leyland’s assembly operations were increasingly threatened by a strike at Rubery Owen, one of its chief component suppliers. On 1 May it was estimated that 1,600,000 workers rallied to a TUC call for a one-day strike in protest at the Heath Government’s counter-inflation pay and prices measure.

British Leyland, which was already affected by the strike at the Rubery Owen components plant, said that about 80 per cent of its 135,000-strong labour force throughout the country did not report for work, and its normal output of 4000 vehicles a day was halted. The company was already been losing up to 2000 vehicles, a day because of component shortages.

Profits head in the right direction

The following day the Chairman of British Leyland, Lord Stokes unveiled the group’s results for the first six months of trading. Profits from BLMC topped £22m, making this the most successful first half in the company’s history. Only £7,200,000 was made in the same period in 1971/72.

A total of 561,000 vehicles rolled off the British Leyland production lines, an increase of 24,000. This represented £411m in this country, against £338m – and £348m abroad, an increase of £109m.

The company also had a windfall of £2,500,000 following currency realignments. Lord Stokes and his men turned out these figures in the face of an almost continuously running battle against strikes. The British Road Services strike, and a gas workers’ dispute, both hit British Leyland production and around 60,000 vehicles were thought to have been lost during the half year.

Strikes continue to cause worry

The main problem for the group was the dispute in the Rubery Owen components concern. Lord Stokes said he found this ‘very worrying’. While the Rubery Owen dispute was making times hard for British Leyland, no other British manufacturer was in a position to grab extra sales, for they were all taking the same punishment.

Lord Stokes claimed that, as fast as the company could get cars off the production line, they were going to customers. But there was still not enough to meet demand. It was not a question of production potential being under capacity, but more a problem of getting fully geared up. While there was some surplus stock to fall back on in the first six months, Lord Stokes admitted that in the second half sales would be limited by production.

In a strike-breaking effort British Leyland cars were now being sent abroad with parts missing. These would be added later, when production was back to normal. This was one of Lord Stokes’s schemes to stop demand from hopelessly outstripping supply. With all these problems, it was no wonder that the share price could do no better than hold steady at 35p.

When confronted with rumours of an impending board room shuffle with John Barber becoming Deputy Chairman, and George Turnbull taking over as Managing Director, Lord Stokes said: ‘There is lots of life in me yet.’

Taking the pulse of the nation

On 10 May the Daily Express newspaper asked: Are British cars really bad? For the defence, Keith Hopkins, Director of Publicity at British Leyland, said: ‘The situation is not as bleak as it would appear. Last year when we had three months of industrial peace, British Leyland gained back a share of the domestic market at the expense of the importers. But then we had the British Rail Services strike and we slipped again.’

Keith Hopkins was also optimistic about British Leyland’s prospects in Europe, now that Britain was a member of the Common Market. ‘The most popular car exported from Britain is the Mini. It is our biggest seller in Italy, Germany and Switzerland. We can sell every Mini we make. Last year we could have sold an extra 150,000 Minis in Europe if we could have produced them. But our total production of Minis was only around 300,000 for the year.’

The belief within British Leyland that there really was an insatiable demand for extra Mini production would be tested to destruction in the next two years.

Paving the way for the Allegro

Lord Stokes speaking at the launch of the Austin Allegro in May 1973

In May 1973 with the launch of the Austin Allegro (ADO67) looming, British Leyland’s new car for Europe, the company went on a public relations offensive. Selected members of the press had already seen the new car in the summer of 1972, but they did not get to drive it until the spring of 1973 in Spain.

The launch of the Allegro seems to have been timed to coincide with the fifth anniversary of the official formation of British Leyland in May 1968. Lord Stokes was everywhere in the media. He told The Guardian newspaper: ‘When we took on the job we realised that a massive task lay ahead but I don’t think any of us realised just how massive. It was not apparent just how heavily they (British Motor Holdings) were dependent on a range of models which was beginning to show its age, or what a paucity of new products there was to maintain a competitive position during the ensuing five years.’

Lord Stokes gave an interview to The Times newspaper. Looking back to 1968, Lord Stokes felt that at that time his responsibilities were, ‘absolutely all-embracing. I think I realised then, particularly when we began to expose some of the facts of the case, that I had taken on myself a terrific commitment. It was something that I had got myself and the company and my colleagues into. It’s a huge company by British standards and a huge responsibility. And on top of that we found out that things were going to be much more difficult than we had been led to believe. In all the previous mergers that we had undertaken we had never, of course, found anything quite like this.’

The differences between Leyland and British Leyland

At Leyland, Lord Stokes had found that he was able to get involved personally in almost every aspect of the company. ‘I suddenly found that I had to transform myself into a delegator, and, at the same time, be an innovator because we had to get the thing moving. Somebody had to do something. As we found the situation, it was obvious that it was desperate. For instance, I had to decide that we were going to make the Marina. It was not a case of having committees, it was just a case of making a decision and going ahead as fast as we could.’

Lord Stokes strongly believed that he was in business to create things, not destroy them. ‘I had no money involved and I got the same pay exactly as I had when I was at Leyland. The point as I saw it was that this was a challenge to have a British motor industry which would give opportunity for our children to get to the top if they could. We have reduced the number of plants. I think that is logical. We’ve actually not reduced the number of employees. In fact, we have slightly increased them.

‘I had to decide that we were going to make the Marina. It was not a case of having committees, it was just a case of making a decision and going ahead as fast as we could.’ – Lord Stokes

‘And even in 1970, I never thought that we were going to lose. It never occurred to me that we wouldn’t pull through. But there were times when it was pretty black. We got a fair basin of criticism from people who didn’t really understand the problem. The banks helped us a lot, of course. The joint stock banks, particularly, were very understanding. I went round and spoke to all the bankers individually and personally, and I think they understood the problem. On the other hand, we have never tried to lobby people. We are not great lobbyists in this company, and we never have been.

‘I think it’s right, because if you start to try and run your business by perpetually lobbying politicians or bankers or so-called City men you just don’t get on with the job of actually running the business. But I must say it’s a bit disturbing when the cash flow sums are going against you. And we had to chop things that I would have liked to have kept on…’

Surviving against the odds

Stokes continued his interview with The Times. ‘We would have liked to have expanded more quickly and modernise our factories earlier. But we just didn’t have the money. And one of the most remarkable things is the way that everybody cooperated. I don’t think the public realises this, but people running factories are terribly proud of them. They like to see new plant and equipment coming in. They like to be up to date. We had to make a lot of these people defer and cut back and prune everything. Now we have relaxed the purse strings, everyone’s smiling, of course.’

A lot of people have said that we would have disappeared long ago. My colleagues at the Industrial Reorganisation Corporation said I wouldn’t live five years. Now we can claim to have arrived. And we have got our plans for the next five years. And they are real plans which we have the money to implement.’

And he saw European collaboration in the motor industry rather than further large mergers. ‘There should be a greater sharing of facilities with manufacturers jointly developing a new gearbox, for example. But I think people will retain their own national individuality. It will be a great pity if they don’t because I’m sure of this that if we had tried to put Jaguar design, for example, under Austin-Morris it would have been a disaster,’ he concluded.

My stake in your tomorrow: Lord Stokes

The Daily Express newspaper also had an article featuring Lord Stokes, titled ‘My stake in your tomorrow’. It purported to be an interview, but it could have been a press release written by Keith Hopkins, the BLMC Publicity Manager who had first encountered Stokes in 1961, when Leyland had taken over Standard-Triumph.

Lord Stokes said: ‘I believe there is a tremendous fund of expertise in engineering, production and styling in this country that can challenge the rest of the motor producing world. That is why, despite the massive competition, from Europe and Japan, we are determined to maintain and build up a truly British motor industry. British Leyland was formed only five years ago – it should have been formed a lot earlier. We had a lot of lost time and a lot of lost investment to catch up.

‘We have exciting cars coming out right through the next five years. Now, we will have the production capacity behind us, provided we get a reasonable run on the industrial front, to challenge the world.’ – Lord Stokes

‘These years were taken up getting our house in order, getting people from all the different factories together, and moulding different ideas and philosophies into a unit. I think this has succeeded now and, as the Chinese say, we are ready for our great leap forward. We are going to be able to put the money into new projects instead of trying to weld together a hotchpotch of ideas.

‘We have exciting cars coming out right through the next five years. Now, we will have the production capacity behind us, provided we get a reasonable run on the industrial front, to challenge the world. This should enable us to go into Europe as a major force. The British home market is now the whole of Europe and Europe is expanding with ancillary arrangements with Spain, Greece, Turkey and other countries.’

Watch out for Japan: Lord Stokes

He continued in Daily Express: ‘The biggest threat to Britain is coming from the Japanese, but I believe that, with a really good home market, the facilities we are building and the designs we have either on the drawing boards or already going into production, we can meet the threat. It will take us two or three years to get some of the facilities built. But we have the designs for the cars well under way.

‘Prototypes and engineering bits and pieces are running already. New engines are being tested. The whole thing should gel in the next five years… By getting all British-owned motor manufacturers together and integrated into British Leyland, I believe we are now in a position to take advantage of our engineering expertise. Certainly, if we hadn’t got together, the British motor industry would have expired. The costs nowadays of developing anything new, particularly with problems of pollution and safety, are so great. Individual companies could not have done it.

‘People buy foreign cars for a whole variety of complicated reasons and then have to justify to themselves even if their purchase isn’t quite as exciting as they first thought. I am not decrying foreign manufacturers. Cars today are made under similar conditions on the same sort of machinery whether in England or Europe or Japan or America.’

Comparing British Leyland with overseas rivals

Seneffe

On overseas operations, Lord Stokes told the Daily Express: ‘On the organisation side I wouldn’t say we are really a multi-national company. We have facilities overseas, but compared with the modern concept of the “multinational” we are a British company with large international Interests. We must accept that we have given a lot of business to the Japanese on a plate. But because of production difficulties, industrial difficulties, and a variety of reasons I can never understand we have allowed them into markets they have no right to have.

‘The Japanese are no more clever than we are. I don’t think Japanese cars are as good as British cars. I don’t think they are well-engineered. But when you have a choice of buying a Japanese car now or waiting six months for a British car, you just aren’t going to wait. I believe our new models will help to get business back. The design is right, but we must have availability. No salesman can sell without it.

‘I have never known anything so frustrating in my life. Practically every country in the world is sending me letters, telegrams, even coming on visits demanding my products. Asking why can’t we have more cars? We want more cars in Europe, in America, Australia, New Zealand, wherever you look. This is an opportunity we cannot turn up. It would improve our standard of living fantastically if we could only meet the demand.’

Stokes on British Leyland’s future

Lord Stokes had strong views on future buying habits, which he also shared with Daily Express readers. He said, ‘I believe that the bulk of car buying in the future will be in the middle bracket. A few people will buy exotic cars and the world has shown again, and again that there is no real market for the very cheap motor car. It sounds nice, it sounds ideal, but whether you go to Asia or places with even lower standards of living, everyone wants the slightly better car.

‘Nevertheless, I believe the car of the future is going to be small, comfortable, fairly sophisticated and capable of doing a lot of miles to a gallon of petrol. There is going to be an energy shortage and this is where British Leyland are going to gain. In our lower-engined sizes we are streets ahead of other people on fuel consumption. I believe, for example, we are far better than the Wankel engine, which is very expensive on fuel.

‘Then there’s service. Today, nobody wants to give service it is expensive, so the cars themselves have to be more reliable. Also, we are spending a lot of money on research. The kind of money that only a big company could afford. We are working hard on gas turbine development, which I believe is a real possibility for the future. They will come first in lorries (below), then we can afford to scale them down for cars.

Leyland 350/400hp Gas Turbine Truck
Leyland 350/400hp Gas Turbine Truck was first shown in 1968, and Lord Stokes claimed it still had a future in 1973

‘People sometimes ask me why British Leyland never put in a bid for Rolls-Royce. The answer’s simple. I don’t think the terms would have matched up with commercial prudence. And when the new Jaguars come along Rolls are going to have to run a lot faster to stay where they are now. Some very exciting cars are coming from Jaguar that will give a lot of heartburn to a lot of specialist manufacturers all over the world. I am confident. The last five years have been a pretty hard slog, and even now it’s not going to be down hill. But I think the grade is going to be a little less steep.’

Stokes on five years of British Leyland

On 15 May, Lord Stokes gave a speech at a lunch at the Savoy Hotel, London, to mark the fifth anniversary of British Leyland.  Among the things he said relating to Austin-Morris were: ‘We have taken drastic steps to rationalise both our range of products and our production facilities, we have reduced the number of plants we have in the UK from 74 to 59, while the number of car models has been rationalised gradually and sensibly, for example, the number of models produced by Austin-Morris has been reduced from 24 to 12.’

‘On the car side of necessity we had hitherto to concentrate the majority of our investment at Austin-Morris to modernise production facilities and introduce new models.’

‘For some time, our Engineers and Product Planners have been working on a new range of advanced engines, four new car power units will be emerging from British Leyland over the next few years, and as the tooling for new engines is always very expensive a great deal of our investment will be devoted to this work. I cannot give details of the engines or indeed the models which they will power, but they will all be of an exciting specification and will incorporate increased amounts of aluminium alloy which is a very valuable aid in meeting exhaust pollution laws.’

Lord Stokes also stated that it was the intention is to increase the group’s annual output of cars and trucks from 1,100,000 to 1,500,000. That, Lord Stokes said, ‘would have a dramatic impact on our international standing and competitiveness and of course provide additional employment.’

Lord Stokes refused to be drawn on the location of the projected new car plant beyond saying that it would, ‘be located separately from our traditional areas of manufacture.’ Sources close to the company said that five sites were being investigated.

Stokes not going anywhere soon

He also disclosed that, although he would continue for the time being as Chairman and Chief Executive, John Barber, then a Joint Deputy Managing Director, had been appointed Executive Deputy Chairman and Deputy Chief Executive. George Turnbull, also a Deputy Managing Director, became Managing Director responsible to John Barber.

Lord Stokes continued: ‘With the consent of the Board, I hope it will become possible for me gradually to relinquish the responsibilities of Chief Executive and assume the full-time role of Chairman.’ He also disclosed that the corporation would soon be moving to a new headquarters building, the 14-story Castrol House in Marylebone Road, London. It would be renamed the Leyland Building and corporate staff would begin leaving the existing cramped office block in Berkeley Square in the autumn of 1973. Lord Stokes declined to give detailed investments: ‘This would be unwise in view of the competitive nature of our industry.’

However, he threw out several gems, including the news that plans were being laid for, ‘what may be the biggest overseas manufacturing project of them all in Spain, where we are considering a major volume expansion with fully-integrated facilities, including power-train manufacture.’

Expansion in Spain

Authi production in Pamplona
Authi production in Pamplona

Spain was the fastest growing car market in Europe, and there had been increasing speculation about plans to expand British Leyland Authi, the group’s existing Spanish plant. Summing up, Lord Stokes said: ‘We believe that these steps over the next five years will serve to improve our penetration of the United Kingdom market, the EEC and other major overseas markets, as well as our profitability.

‘We are also quite confident that for two years at least we shall be able to generate the cash we need from our own resources. This is the beginning of a very exciting era for British Leyland and I think that our Designers, Engineers, Production men, Planners and Marketeers are going to provide you with a British motor industry of which you will be very proud.’

The speech symbolised the ‘jam tomorrow’ approach of BLMC’s senior management that would be ridiculed only six years later by one of Lord Stokes’ successors. Lord Stokes’ speech prompted a Government response. Christopher Chataway, Minister for Industrial Development, said at Teesside that the Government intended pressing British Leyland to establish its new car plant in one of the development areas.

Where would the new factory be?

Following Lord Stokes announcement that British Leyland was to build a new integrated car plant, costing between £100m and £150m, the media naturally speculated on where it would be located.

The Times said it would almost certainly be built in one of three traditional steel-making centres, South Wales, Shotton, in Flintshire, or on Teesside. Motor industry and steel sources said that under European Coal and Steel Community pricing regulations, which would come into effect on 30 April 1973, motor companies would have to pay substantial freight costs for steel deliveries from railhead basing points near steel producing centres. This introduced a new cost factor. Before 30 April, the cost of steel was the same wherever it was delivered.

The Times reckoned the capacity of the new car plant would be at least 250,000 cars a year, the generally accepted minimum for the economical operation of a fully-integrated complex. A labour force of between 8000 and 12,000 was thought to be necessary to produce 250,000 cars a year, dependent on the extent to which the new plant would be automated. The British Steel Corporation planned to run down its Shotton steelworks during the next few years, reducing the existing 12,000 labour force by 6500.

The Shotton works adjoined large tracts of land owned by BSC, and it was thought that this could he made available as the site of the car plant. It was only an hour away from port facilities at Liverpool. An equally strong case was made out for a site within the South Wales triangle of Port Talbot, Ebbw Vale and Cardiff. But there were also strong advantages at Teesside where BSC was to expand a steel-making complex to equal Japanese plants in size and concentration.

The Austin Allegro arrives!

Austin Allegro 1973

The BLMC publicity offensive culminated on 17 May 1973 in the launch of an all new model to replace the ageing BMC 1100/1300 series.

Maybe the likes of Fiat, Renault and Volkswagen were quaking in their boots at the prospects of a new, improved successor to the class-defining BMC 1100/1300, but they needn’t have worried. The pundits and industry analysts had screamed back in 1966 and 1967 that BMC’s declining market share was due to its lack of all new models. This mindset came to fruition with the launch of British Leyland’s car for Europe, the front-wheel-drive Austin Allegro (ADO67).

The Austin Allegro came with a choice of four engine sizes, 1100, 1300, 1500 and 1750, and would compete in 60 per cent of the British car market. A new suspension system, called Hydragas, based on compressed nitrogen, was introduced to improve ride and handling and another novelty was the infamous squared or Quartic steering wheel.

British Leyland emphasised the areas where they felt the Allegro was an improvement on the ADO16. Compared with the BMC 1100/1300, the Allegro had 40 per cent more boot capacity, more space round the engine, a better driving position and a higher standard of interior trim.

Austin Allegro 1973

Twelve models were announced at prices ranging from £974 for the two-door 1100 to £1367 for the 1750 Sport Special. The 1100 and 1300 retained the A-Series powertrain of the ADO16, but the 1500 and 1750 used the E-Series engine and five-speed gearbox first seen in the Austin Maxi. This upward expansion of Austin-Morris’ front-wheel-drive medium car contender was seen as a surefire way of increasing sales over the ADO16.

A five-year contract to transport body components for the Allegro had been won by British Rail’s Western Region in competition with road hauliers. It was British Rail’s first contract to haul car parts in bulk over short distances. Parts from the Austin-Morris body works at Swindon, Wiltshire, would be carried to the assembly plant at Longbridge.

In May 1973, British Leyland claimed the Morris Marina was creeping up to eight per cent market penetration. In fact it averaged 6.9 per cent for the year. Side by side with the Marina, the Austin Allegro was planned to capture some eight to ten per cent of the United Kingdom car market. In 1972 terms, this represented annual sales of between 131,022 and 163,777, another target that was not achieved.

Austin Allegro 1973

The departed Roy Haynes had categorised the ADO16 as a B-class vehicle. Now Austin-Morris bracketed the new Allegro in the C-class along with the Marina. The two cars would in theory account for 16 to 18 per cent and firmly bracket the key C or medium car sector which formed a solid 60 per cent of all cars sold in Europe. To some extent the Allegro provided competition for the Morris Marina in pricing if not specification but, either way, ‘it keeps the trade in the family,’ as Filmer Paradise, the Austin-Morris Director of Sales, put it.

The production build up at Longbridge had gone smoothly and was now running at some 1100 to 1200 cars a week. This had enabled Austin-Morris to accumulate a stockpile of around 10,000 cars to give the Allegro the best launch of any British Leyland new car to date. One of the two ADO16 1100/1300 assembly tracks at Longbridge had been converted to Allegro production. When this reached 2500 a week the second line would be changed over, or so it was hoped. By early 1974 the company hoped to be producing in excess of 4000 Allegros a week.

The importance of being Allegro

It was impossible to over-emphasise the importance of the Austin Allegro to the fortunes of British Leyland. The C-class sector accounted for something like one million sales a year in Britain in 1973. Two years earlier Austin-Morris was taking up to 30 per cent of this class. By March 1972, it was down to 23 per cent and in the first three months of 1973 had fallen to only 18 per cent. This decline was due, it was claimed, largely to falling demand for the BMC 1100/1300, although an inability to produce sufficient cars in boom conditions was a considerable contributing factor, not forgetting Austin-Morris’ own cutback of ADO16 production at Cowley in 1971 to make way for the Morris Marina.

Since the early 1960s the ADO16 had been the backbone of Austin-Morris. It had been United Kingdom market leader for seven of the ten years since it was launched and for eight consecutive years held more than 10 per cent penetration. However, British Leyland claimed that, during the previous two years, demand had become more concentrated on the top end of the C-class sector with motorists insisting on 1500cc engines and above. At the same time they wanted higher standards of trim, increased passenger and luggage space, improved driving position and reduced noise levels.

BLMC claimed that, despite numerous facelifts the ten-year-old 1100/1300 was unable to meet these changing fashions. The Allegro had been designed to cover all these requirements and more. With engines from 1100cc to 1750cc, and even more powerful ones hinted at, the 12 versions enabled British Leyland to span more of the market with a single basic model than any of its home and overseas competitors. The addition of a five-door estate car variant was also on the cards.

George Turnbull with the Austin Allegro - the car he helped launch in 1973.
George Turnbull with the Austin Allegro – the car he helped launch in 1973

George Turnbull, Managing Director of British Leyland, said: ‘We have tried with the Allegro to be all things to all men. That is a tremendous brief for our Engineers but we believe we have succeeded. The C-sector is expanding all the time and with this approach we are spanning the widest area of that sector with the minimum investment.’

The Allegro represented an investment of £25m, of which £16m had been spent at Longbridge on extending and modernising production facilities. Austin-Morris planned to recruit 2000 more workers by the end of 1973. Like the Morris Marina, the Allegro was being produced by the flat rate system of payment and the sharp reduction in the number of strikes at Cowley had shown how imperative was the need for such a change at Longbridge.

George Turnbull insisted the new Allegro had been kept on its financial targets at every stage of its development thanks to the work of a department created in 1969 following the arrival of Desmond North, a former Ford and Chrysler cost control specialist. This in itself was an admission that the new model had been designed to a price.

According to Austin-Morris the Allegro had been conceived as a truly European car, which was not strictly true. When it was announced Britain was joining the Common Market, the Allegro was undergoing cold weather testing in Finland.

Was the Allegro too British?

The bulk of the ADO67’s development had taken place when Britain was still isolated from the Common Market, and that may have influenced its costing process, although the election of the Heath Government in 1970 must have served notice that another attempt to join was in the offing. Austin-Morris hoped to assemble the Allegro as soon as possible at Seneffe in Belgium, British Leyland’s major European plant. Clearly, Seneffe had a major part to play in the future of Austin-Morris, supplementing production at Longbridge and as the division’s gateway into the European car market.

Filmer Paradise, Director of Sales at the Austin-Morris Division expressed his confidence in selling the all-new Austin Allegro. ‘It is going to be a piece of cake — of all the cars I’ve sold this is going to be the easiest. It is the size the Europeans want, it has front-wheel drive, which they want, it’s got the right shape and styling, it’s got the right spares and parts back-up and it’s the right price,’ he said.

So the Austin Allegro was launched onto the British market, overseas buyers would have to wait for now, and British Leyland waited for the stampede for the car showrooms. In May 1973 British Leyland had net capital employed of £450m and a stock market value of only £200m. And while Lord Stokes had talked of investing £70m in 1973, a motor industry economist said, ‘a company that size needs to spend £60m a year just to stand still.’

Still not investing enough

Fiat and Renault spent about £140m a year while Volkswagen, British Leyland’s other main European competitor, had reluctantly had to cut back its programme from £400m to £250m. Volkswagen were suffering from declining sales of its iconic Beetle, but had an Austin Allegro rival in the pipeline, the Golf.

The Japanese manufacturers expected to invest more than £600m between them in 1973 and even Ford of Britain, much smaller than British Leyland, was spending £65m in 1973 and £67m in 1974. To make matters worse, British Leyland had a lot of ground to make up before it could start competing on equal terms. ‘We inherited an awful lot of old scattered plants,’ said John Barber.

The harsh reality was that British Leyland did not have enough money to spend. In the previous three years, pre-tax profits had averaged a meagre £22m on sales of around £1200m. The upshot was that each British Leyland worker was backed by only £2179 of capital, compared with £6766 at Fiat and £7412 at Volkswagen. The figure for Ford of Britain was about £8100. The figure for Volkswagen was inflated by the company’s policy of investing in as much automation as possible due to the high cost of labour in West Germany.

Hampered by poor productivity

The under-investment in new factories and machinery showed up most clearly in British Leyland’s productivity record, which by international standards was pathetic. Its employees produced fewer than six vehicles a year each compared with 59 at Toyota. John Barber argued reasonably, that the picture was not quite as grim as its looked because Toyota bought in more components and concentrated on high volume cars, while British Leyland also built many luxury cars, like Jaguar, Rover and Triumph, with a disproportionately high labour content. And British Leyland did not aim to mechanise to the same extent as Volkswagen for example.

‘I think we shall probably end up with a little more labour and a little less equipment than some of the others. But I agree that we haven’t got the right ratio yet by any means. As far as we can foresee we’ve got enough cash for quite a few years,’ said John Barber.

British Leyland was in no shape to raise fresh funds on the capital market. 1972’s £50m rights issue flopped badly and the shares now languished near their all-time low at 34p. The stock market was deeply disillusioned about the company, partly because of the rights issue and partly because profits declined slightly to £32m pre-tax in the previous financial year, £8m less than in 1968-69, despite booming demand.

Industrial relations further the rot

Strikes in the group and among its suppliers, including British Road Services, had cost British Leyland 60,000 vehicles, or ten per cent of its planned production. This was seen as good news at the time. In recent years the ratio of losses had usually been nearer 15 per cent.

Pat Lowry, the BLMC Industrial Relations Director, had masterminded the switch from piece rates to the far less contentious fixed daily wage rate system, which was seen as a contribution to this improvement. This now covered 66 per cent of all British Leyland workers and 85 per cent of those in car plants. ‘We are closer than ever before to an acceptable form of industrial peace. Most of our current problems result from disputes which are beyond the control of British Leyland,’ said Lord Stokes.

External disputes, such as the recent strike at Rubery Owen, were still costing British Leyland dearly. John Barber blamed supply problems for the group’s sagging market share, it accounted for only 32 per cent of UK registrations in the first four months of 1973, compared with 37 per cent in the same period of 1972. ‘Where feasible and not unduly uneconomic, we have introduced double sourcing, When ever the supply improves, our penetration goes up,’ said Barber.

The export story is no better

Fiat 128

Exports were also suffering, as they did in 1972. John Barber again: ‘We’re starving everybody to some extent, it’s better than letting some die and others live well. People criticise us for not making enough effort abroad. The trouble is that if we started being aggressive, we’d only embarrass ourselves because we couldn’t supply the damn thing.’

The prime target was now Europe, which was expected to become a 12 million car-a-year market as big as North America within few years. The new Austin Allegro would spearhead British Leyland’s attack, taking on cars like the Fiat 128 (above) and Renault 12. British Leyland’s penetration in Europe was so low in May 1973 that it was expected to increase its sales there.

However, John Barber was confident that the Austin Allegro would increase British Leyland’s overall share significantly. ‘I hope we can sustain a 35 per cent market share, but I expect imports to increase their share from 25 per cent to 30 per cent quite quickly. I’ve always said I don’t think we can reach anything like our profit potential until about 1976. By then we will have a fully rationalised product range,’ he said.

Overseas struggles

The Times newspaper then reported that British Leyland was preparing to reduce its holding in its South African subsidiary, the Leyland Motor Corporation of South Africa, from about 80 per cent to 51 per cent. Shares worth around £6m in the South African business would apparently be placed with a syndicate of South African institutions to effect this.

British Leyland increased its holding in the company, from about 57 per cent to the May 1973 level in 1971-72. This involved buying out the family holdings of Jack Plane, the former BLMC Deputy Chairman, and followed serious losses in South Africa. Emergency measures were taken by British Leyland to correct the position. The South African Board was drastically reconstructed and a new Chief Executive appointed.

John Barber took over special responsibilities for ensuring recovery in South Africa. Even at that stage BLMC said it intended, ‘once a sound profit record had been established to reduce its holding in the South African subsidiary. And this recovery had clearly happened earlier than expected.’

Allegro sales start briskly

Austin Allegro: The Austin-Morris story 1973

On 22 May a British Leyland spokesman said that they had already sold the first two years’ production of the new Austin Allegro. This was a statement that beggars belief and smacked of news management by British Leyland’s Publicity Department, headed by Keith Hopkins, whom we would now call a spin doctor. Back in early 1966, Standard-Triumph had made a similar proclamation about its new 1300 saloon. The common denominator was Keith Hopkins.

The next day John Barber warned the corporation’s 180,000 employees that much bigger profits would have to be made to sustain the huge investment programme planned for the next five years. This had been variously estimated at between £330m and £500m.

In the works newspaper, John Barber said the first half-year profit of £22.8m before tax was a vast improvement on the £7.2m profit in the same period the previous year. But, ‘this fine performance is only a step towards the sort of profits we have to achieve if we are to carry on competing in the top league of world motor manufacturers. We plan to close the gap substantially, so you can see that the need for sustained profit improvement is vital to the corporation’s and our own personal prosperity.’

Chasing down the opposition

Since British Leyland had been formed five years earlier capital expenditure had averaged £53m a year, appreciably less than their major overseas competitors had been spending. With an eye obviously on the group’s poor strike record, he continued: ‘We plan to close the gap substantially, so you can see that the need for sustained profit improvement is vital to the corporation’s and our own personal prosperity.’

‘I got rid of 30,000 people and I did it quietly too, without hitting the headlines.’ – John Barber

John Barber later claimed that one of his first actions upon becoming the British Leyland Managing Director was to introduce a complete ban on recruitment. He said later, ‘we just insisted on saying “No hiring” with one or two exceptions like specialist people. I got rid of 30,000 people and I did it quietly too, without hitting the headlines.’ This was a claim that did not stand up to close scrutiny.

Getting panned in Europe

While the Austin Allegro was well received in Britain, some Continental writers were non-committal, some actively hostile. Switzerland’s Automobil Revue said tactfully: ‘The cars tested were among the first produced, so probably by the time they are imported into Switzerland they will have attained the level of quality expected by buyers this and other export markets.’

In France’s Auto Journal, Bernard Carat complained of lack of power and performance and condemned the 1750 as dangerous with suspension ‘completely overtaken by events.’ Jean Bernardet of L’Equipe found the engines under-powered. He also criticised the suspension and said: ‘British Engineers will have to correct their aim if they want to satisfy Continental users and particularly those in France.’

Gordon Wilkins of The Observer newspaper had tested the Austin Allegro for the BBC’s Wheelbase television programme, a precursor of Top Gear. He wrote: ‘The cars sent to Spain for test by the world’s Press had been held back by strikes and late deliveries. Many arrived with the ride height set wrongly and most seemed to have had an early and feeble batch of damper valves. If I had not, before and since, had the chance to drive cars properly set up, I too would have been tempted to write off the Allegro as a misfire.

‘I still think that if the 1500/1750 is given the performance Continental buyers expect, it will need stronger damping. Fortunately, with Hydragas it is easy to vary fluid flow front to rear or up and down to control the ride. Some writers have described Hydragas as one of the “expensive” features of the Allegro, but Alex Moulton, its originator, maintains that it will prove to be the cheapest suspension system fitted to any mass produced car.’

The press were encountering the consequences of the British Leyland (Austin-Morris) Limited Board’s demand for cheaper subframes back in 1970. But the foreign press were discovering, before the Allegro was launched on the continent, that it was not the expected quantum leap over the ADO16, that could take on the Fiat 128 on equal terms.

What’s really wrong with the Allegro?

Much of the criticism hurled at the Allegro over the decades has tended to focus on its dumpy styling, but the root of its problems was the paranoia within British Leyland about cost control. Instead of responding to the threat of the award-winning Fiat 128, manufactured by Europe’s leading car maker, BLMC had developed a compromised, made-to-a-price car, that took the ADO16’s customer base for granted and, apart from the option of bigger engines, offered little tangible improvement over the older car.

Whereas strict cost control was important in a car like the Marina, which was mainly bought by people who did not actually have to drive one on a daily basis, and were only interested in its running costs, in a car like the Allegro, the driving experience actually mattered. Even the much maligned styling, as related earlier, had been compromised by the desire on the part of the money men to share components with other Austin-Morris cars.

The ex-Ford Cost Controllers employed by British Leyland might have been right for a car like the Marina, but they had no understanding of the needs of the private buyer, who expected something better – and no idea that something better would emerge from Wolfsburg the following year…

George Harriman dies

George Harriman
George Harriman

Then on 29 May, the former BMC/BMH/BLMC Chairman, and now the President of British Leyland, Sir George Harriman died. He was 65 years old.

In his final days, Sir George had had to listen to negative comments about the state of BMC in 1968 from his successors, but he gave no public display of any feelings of rancour. Because Sir George Harriman died at the relatively early age of 65, and before the financial crash of British Leyland, he was never able to defend his part in the history of the British motor industry. Instead, the narrative has been shaped by the Leyland Directors who outlived him, to the detriment of his reputation.

Strikes, lay-offs, woes and misery

At the end of May 1973 650 Press Operators at the Swindon body plant walked out in protest at higher production targets being set for Austin Allegro body panels. The higher targets were set in order to ramp up Allegro production to 2500 a week. The Daily Express claimed that export orders were ‘pouring in for the new model.’ But the Swindon strike was just one of British Leyland’s problems.

More than 14,000 car workers were laid off at Longbridge plant because of a series of labour disputes. Production of the new Austin Allegro, the Mini, BMC 1100/1300 and BMC 1800 was at a standstill. A company spokesman described the shutdown as ‘a tragedy’. It came at a time when there was a long waiting list for all BLMC cars. ‘As usual, the only people to benefit will be the foreign car dealers,’ he said.

Plans to commission a second Allegro assembly line had to be postponed. This was due partly to the Swindon strike and partly to a ban on overtime by 2000 maintenance men, tool-room workers and electricians who were demanding separate pay talks from other indirect workers at Longbridge. A one-day strike by 1500 foremen and supervisors at Longbridge led to a further 12,000 assembly workers being laid off.

Spanish reorganisation

It was reported in June that the British Leyland Motor Corporation had completed the negotiations for a complex reorganisation of its manufacturing facilities in Spain and was now awaiting Spanish Government approval to put them into operation. The Spanish Government in 1973 was still led by the Facist Dictator General Franco.

The deal involved British Leyland’s sale of its 25.1 per cent holding in the ENASA commercial vehicle company and its acquisition of 97.2 per cent ownership of the Authi car production unit at Pamplona. An offer from a group of private banks for British Leyland’s holding in ENASA, the Spanish Government-controlled commercial vehicle building company, had been accepted. The company used British Leyland licences for the production of a number of heavy duty engines, and this arrangement would continue when BLMC severed its direct connections.

The second part of the deal concerned British Leyland’s 50 per cent holding in Authi, which produced Minis, ADO16 1100/1300s and the Austin Victoria. The remaining 50 per cent of the company was held by the North Spanish Bank. British Leyland ended up paying about £4m (now about £47.5m) to Spanish investors for an extra 47.2 per cent of Authi.

Once British Leyland had complete control it planned to start an expansion project, to double the existing annual production capacity of 50,000 vehicles a year within three years. It was understood that this could cost over £10m. Although British Leyland had management control of the car- making operation, it had not been a profitable venture. However, with considerable investment, British Leyland saw the operation as one of its three chief production units on the continent. The plant, which was a complete manufacturing unit rather than an assembly plant, already supplied Minis to Switzerland. What prompted BLMC to take complete control of Authi may have be the decision by Ford of Europe during 1973 to build its ‘bobcat’ supermini project in Spain with planned volumes of 500,000 per year.

This figure in itself reveals the paranoia within Ford about what it would take to get a return on their investment in front-wheel-drive technology.

Strikes in Spain

Shortly after the end of crippling three week-long strike by 80 men at the Austin-Morris car plant at Cowley, which caused the lay-off of 12,000 other workers and production losses of around £20m, BLMC found itself in dispute at Authi. British Leyland had locked out about 1700 workers in the strike-ridden city of Pamplona, Spain. The Motor Iberica factory, which was partially owned by Massey-Ferguson, had dismissed 17 Shop Stewards and protest strikes had broken out.

During an uneasy truce between Government officials, the managements of a number of factories and workers, the total of strikers fell from 20,000 to about 7000 by 24 June. But British Leyland’s Authi plant locked out all but about 100 of its 1800 employees who refused to resume work.

The workers who went back were promised by provincial authorities and the managements of several companies, that they would find work for dismissed 17 Shop Stewards.

Leyland P76 arrives in Australia

Leyland P76

On 26 June the Leyland P76 was announced in Australia. It was the first car to bear the Leyland name since the Straight Eight of the 1920s. The P76 was a large, five to six seat saloon and was claimed to provide American-style comfort with European-style handling.

It was powered by a 2.6-litre inline six-cylinder engine developed from the Austin Maxi’s E-Series power unit, or an enlarged version of the Rover V8 of 4.4-litre capacity. Design was conventional, with a front-mounted engine driving non-independently suspended rear wheels. British Leyland hoped the P76 would give it a share in the large car sector of the Australian market dominated by Chrysler, Ford and Holden.

In London, Lord Stokes, British Leyland’s Chairman and Chief Executive, said the P76 was the company’s most exciting overseas project. He hoped it would revitalise the firm’s Australian company and improve the financial situation there. The name Leyland had been chosen because of the fine reputation Leyland trucks enjoyed in Australia. Production was projected to reach 30,000 units a year. BLMC also claimed the P76 would become available in the UK in 1974, priced between £3500 and £4000. At about the same time, the Australian-built Marina was rebranded from a Morris to a Leyland.

Expansion needed in Birmingham

It was reported on 17 July that British Leyland was seeking planning permission to build an engine factory costing an estimated £15m at Longbridge. The Department of Trade and Industry had already granted an industrial development certificate for the project. To make way for the 750ft-long building it would be necessary to demolish part of the existing 300,000sq ft North Works which produced the B-Series engines fitted in the BMC 1800 models and the more powerful versions of the Morris Marina.

North Works, one of the oldest in the group, was Herbert Austin’s original engine factory. This was the first news of the site chosen by British Leyland to produce one of the four advanced car engines foreshadowed by Lord Stokes, the BLMC Chairman, two months earlier in his Savoy Hotel speech. The fact that British Leyland did not consider utilising the existing Cofton Hackett plant suggested that it expected it to be working flat out to produce E-Series engines for the Allegro.

The absence of new engines, particularly one suitable for small cars such as the Mini, was believed to have handicapped British Leyland’s attempts to build up its European sales. The Morris Marina and the more recently-announced Austin Allegro, the two models which carried the group’s hopes in the popular saloon market, were mainly powered by the vintage A- and B-Series engines. Some versions of the Allegro used the four-year-old E-Series engine, but the output of this unit had been disappointing and its development painfully slow.

Since then there had been notable advances in engine design by French, German, Italian and Japanese competitors. The introduction of a completely new family of engines was an extremely costly business and one that has been plagued by the stringent United States anti-pollution targets set for 1976. The vast sums spent by the world’s motor industry on researching this problem had cut deep into investment budgets. However, the situation had now been considerably eased by the American Environmental Protection Agency’s belated admission that, so far as nitrous oxide pollution was concerned, it had set its sights too high.

Austin Apache

On 19 July, Leykor launched in South Africa the Austin Apache TC (above). It was fitted with a twin-carburettor 75bhp A-Series engine. It also had a vinyl roof, chrome side trims and was fitted with the three-dial dashboard.

US demand for Marinas drives exports

Then, on 6 August, British Leyland announced they were stepping up exports of Austin Marinas to the United States to take advantage of a marked swing to smaller cars following fears of a petrol shortage there. A spokesman said that since the Marina was introduced to the United States in February 1973, there had been ‘an overwhelming demand which they were unable to meet. We could sell twice as many Marinas if we could only produce them.’

He said shipments were now approaching 750 Marinas a month and these would be increased as production at Cowley improved. Another 2000 employees were being recruited there. Building and expansion work was being rushed through to push weekly Marina output above the existing 5000 a week.

British Leyland was conscious of the need for improved spares and servicing facilities in the United States and a huge New Jersey spares centre was now supplying 12 sub-centres giving coast-to-coast coverage.

Italy and Spain also accelerate

Meanwhile, over at Leyland Innocenti, in the words of Managing Director Geoffrey Robinson speaking in April 1974: ‘against all the advice we received from the experts in the UK we tore apart the paint shop and put it back together again to increase its capacity to 110,000 units a year. We also lengthened all the production lines. In addition the total re-equipping of the press shop is underway so that Innocenti will be a completely integrated assembly plant from pressings right through to the final assembly operation. Doubling the capacity has meant an enormous workload on the Innocenti people. They have responded magnificently and all the programmes are on time.’

At the same time British Leyland was given permission by the Spanish Government to buy up more shares in the Authi car building plants in Spain. The deal would give the group nearly full control. A British Leyland spokesman confirmed that the purchase price was over £4m, and added that, ‘we have not heard of authorisation being given by the Spanish Government, but, if it has been, then that would give us virtually the whole of the shareholding.’

The aim was to produce 140,000 cars a year by 1977, of which 50,000 would be for export. British Leyland now had complete control of its European subsidiaries, all producers of Austin-Morris designs. Seneffe in Belgium and Innocenti in Italy could supply cars to the Common Market nations. Authi in Spain could supply cars to its own domestic market, which many analysts thought was on the up and those European nations still outside the Common Market. Spain itself would not join the European Economic Community until 1986. But what cars were all these plants going to manufacture in the future?

It is unlikely that British Leyland thought that they could continue to assemble Mini and ADO16 derivatives forever. Presumably the plan was to assemble UK-sourced CKD kits of the Allegro and ADO74 supermini…

MGB GT V8 - launched amid a fuel crisis

On 15 August the MGB GT V8 (above) was announced. This 137bhp sports car was the last real major attempt to upgrade the MGB design. Sadly, a case of poor timing rendered it as a less than successful venture.

Then, on 30 August, came the first of two bombshells. British Leyland surprised the motor industry with the announcement that Filmer Paradise was leaving the company. No official explanation was given for his departure, other than that his contract expired in October 1973.

A close colleague at the Longbridge headquarters of Austin-Morris said: ‘Filmer has made no secret of his ambitions at British Leyland. A number of senior appointments have been made in recent months, particularly at international level, which did not go down well with him.’

A British Leyland statement said: ‘In accordance with previously agreed arrangements, Mr Paradise will be leaving the company on the expiration of his contract on 31 October. The Chairman and Directors of British Leyland regret the departure of Filmer Paradise, and wish him well in the future he has chosen.’

Austin-Morris already had a replacement. His successor was Bernard Bates, his deputy and Operations Director – Sales. Bernard Bates had 24 years’ service with BMC and British Leyland. He in turn was succeeded by A. E. ‘Bert’ Lawrence, a former Ford man who was recruited by Filmer Paradise.

George Turnbull leaves British Leyland

The second bombshell came on 6 September when George Turnbull quit as well. British Leyland announced that George Turnbull had resigned as Managing Director of British Leyland and its Austin-Morris Division ‘by mutual consent’, prompting a major reorganisation of top positions within the corporation.

This left John Barber, the Deputy Chairman, as the undisputed number two to Lord Stokes, the Chairman. Barber had now took on the Managing Director role in addition to his other responsibilities.

The press propagated the view that Turnbull left because his alleged rival, John Barber, had been promoted to become Lord Stokes successor. But after nearly four months on sale, both Filmer Paradise and George Turnbull would have known from the weekly production schedules at Longbridge whether the all-important Austin Allegro had clicked with the buying public.

Turnbull’s reflections

George Turnbull - 1972

George Turnbull later said: ‘It was five years of extremely hard work. I will never work as hard again, nor wish to. To run the operation while planning the reorganisation and all the time having to handle all the labour problems involved in an organisation of 80,000 was a superhuman task. It was only through having very good people around me that I was able to cope.’

George Turnbull had in fact done a brilliant job, the only major remaining task was to simplify the wage bargaining structure throughout British Leyland to give all employees pay parity, and that was not completed until the Michael Edwardes era, a decade after the formation of British Leyland.

John Barber later said of George Turnbull: ‘We had a complete difference in philosophy. He was more of a ‘doer’ and I was more of a planner. Coming from Ford it was inevitable. I was pushing Stokes towards moving upmarket – George wanted to be a high volume producer.’

Financial woes start to build

The announcement of the reshuffle came too late to have any effect on British Leyland’s share price which, at 24p, was close to its year’s low after falling heavily throughout the summer against a background of persistent labour unrest.

With the departure of George Turnbull, Bill Davis was appointed to the main Board in the newly-created position of Director of Manufacturing. Formerly Managing Director of the Rover-Triumph Division, he would be responsible for worldwide manufacturing activities and for the volume manufacturing divisions, which took in the power and transmission division and the body and assembly division. New emphasis was also placed on corporate purchasing activities.

Bert Walling, who had been in charge of purchasing at Austin-Morris since 1967, was given responsibility for all the corporation’s buying. Gerry Minch, Director of Service for the Austin-Morris Division was appointed Director of Product Quality for the corporation, a new post.

Why did Turnbull leave?

The reason given by British Leyland for George Turnbull’s departure was that he has disagreed with the principle of some of the changes which the Board considered essential for the future development of the corporation. Commenting on the changes, Lord Stokes said: ‘The biggest single problem we have at British Leyland today is to make sufficiently large quantities of our attractive range of products to supply unprecedented demand at home and overseas.

‘The Board is confident that the changes we are implementing will put us in a better position to tackle these problems by raising the status of the manufacturing activity and concentrating top level attention on it. By reducing the size and complexity of units within the corporation and at the same time reducing the numbers of levels of management and staffs we shall also improve communications and speed up management processes.

‘I am sorry that George Turnbull, who has made a considerable contribution to the build up of British Leyland, will not be with us in this new and exciting stage of our development.’ – Lord Stokes

‘We shall also be able to achieve more of the economies of scale, which were a major objective of the formation of British Leyland. Naturally, I am sorry that George Turnbull, who has made a considerable contribution to the build up of British Leyland, will not be with us in this new and exciting stage of our development.’

George Turnbull was replaced at Austin-Morris as Managing Director by Richard Perry, formerly the Managing Director of the Power and Transmission Division. Richard Perry was an ex-Austin apprentice.

Management changes

Austin-Morris now became a product division, responsible for planning, designing and marketing its own products. David Andrews, formerly the Finance Director of Austin-Morris, replaced Richard Perry as Managing Director of the Power and Transmission Division.

Geoffrey Robinson was brought back from managing Leyland Innocenti in Milan to become Managing Director and Chief Executive of Jaguar.

On 9 September, John Barber, the newly-appointed Managing Director and Deputy Chairman of British Leyland dispelled talk of a board room split and stressed: ‘We are one people with a Board, that could not be more united than it is now.’

John Barber was speaking after a ‘summit’ conference of the corporation’s 150 top executives from all over the world. The conference, held at a hotel just outside Coventry, was scheduled several weeks before Barber took over the responsibilities of the now departed George Turnbull.

One unnamed British Leyland executive said: ‘George was a lone voice in the wilderness.’

John Barber on future challenges

John Barber, in his first interview since the British Leyland reshuffle, would not comment on George Turnbull’s departure. ‘I am not interested in the past, only in the future,’ he said. Later John Barber spoke of the challenge to increase production targets and cut down on waiting time for new cars.

‘We have a tremendous programme of expansion involving vast capital expenditure and a lot of new models coming along to meet competition, one of the biggest challenges which never ceases to face us,’ he added.

Just how seriously British Leyland took the opposition was lined up both inside and outside the hotel, 30 foreign-made cars and trucks exhibited alongside its own latest production models from at home and abroad. ‘Enthusiasm for the product is what I like to see in our top management. These foreign products are on show here so that our men can see the size of the competition we face.’

‘We are now entering a completely new phase of continued expansion with more production being the number one target’ – John Barber

He looked back over the previous five years which had seen British Leyland integrate eight separate companies into one giant corporation of 200,000 employees. He added: ‘we have seen that phase successfully completed. We may have lost some ground. But we are now entering a completely new phase of continued expansion with more production being the number one target.’

He admitted that industrial relations remained a thorny question, a factor which had heaped vast-production losses on the company in the past. But Barber added: ‘We think our industrial relations record is better now. We have changed most of our payment systems. We have improved our communications with the shop floor. We are now suffering from fewer internal strikes than ever before.’

Addressing the quality issue

On 13 September at the Frankfurt Motor Show, more details emerged about the remit given to new BLMC Director of Product Quality, Gerry Minch. Gerry Minch had the authority to halt the production flow any time at any plant, if it was considered necessary. Minch’s new authority superseded the power of all the British Leyland group’s Quality Managers,

Lord Stokes said: ‘We are updating our model range at a speed which has scarcely ever been equalled. During 1974 you will see even more developments in our range, to make it, I believe, one of the most attractive in the world.’

Referring to British Leyland’s recent boardroom reshuffle, which had seen George Turnbull resign, Lord Stokes explained: ‘I know you must all be aware that we made some important new appointments last week. We are now set fair to make a dramatic improvement in our total performance as the second phase of our policy to make British Leyland a fully integrated corporation.’

Lord Stokes admitted that British Leyland had been disappointed by its failure to make enough cars to satisfy their export potential. ‘We could have sold a lot more if only we could have produced them.’ Lord Stokes forecast that British Leyland would export 285,000 cars and commercial vehicles to Western Europe in 1973 —53,000 more than 1972.

More appointments

There were more changes to senior British Leyland management on 18 September. Frank Tilston, Managing Director of the Body and Assembly Division of Austin-Morris, was appointed Director of Manufacturing Plans. Derek Whittaker, the British Leyland Finance Controller, took charge of the body and assembly operations.

George King, Director of Manufacturing for the Truck and Bus Division of British Leyland, became Director of Manufacturing Controls and, like Frank Tilston, would work under Bill Davis, British Leyland’s newly-appointed Director of Manufacturing.

First signs of ADO74 supermini

ADO74 project

On 20 September The Times reported that British Leyland planned to introduce the first of its advanced new family of aluminium car engines much earlier than expected.

The newspaper claimed that aluminium foundry companies were being asked to tender for cylinder head castings for a new engine due out in 1974. Orders worth £2.5m had been placed with Renault’s machine tool division for automated plant capable of machining these castings in large numbers. In addition to having outside suppliers, British Leyland planned to build its own aluminium foundry.

The Times went on to claim that the successor to the Mini, which was believed to be due out in 1975, was being built around an entirely new lightweight engine. This was presumably a reference to the ADO74 supermini project and the H and K-series engines developed for it.

Pondering Japan and lost production

Later that month Lord Stokes was quoted by a Canadian newspaper as saying that import controls were needed on Japanese cars coming into Britain ‘until we can get our house in order.’ He said: ‘We are sitting back like a fat goose being plucked.’

At the launch of the Rover 2200 (P6) on 1 October John Barber claimed that British Leyland could have boosted their car sales by 25 per cent during 1973. The only snag was that the company couldn’t make enough cars. Explaining this, John Barber said that industrial trouble within the company had lost some sales, but sales had been hardest hit by troubles from outside. And even with a clean production run, the company would not have been able to meet the unprecedented demand for their cars at home and overseas.

Barber added: ‘We intend to increase production next year, but we will still be unable to meet demand if it is maintained at the current level.’

Building for the future

By now, British Leyland was placing substantial orders for the machine tools, power presses and assembly line equipment necessary for the first phase of the £400m to £500m expansion programme outlined by Lord Stokes, the Chairman, in May 1973. Wilkins and Mitchell, the Darlaston, Staffordshire, manufacturers of heavy power presses, confirmed it had received orders from British Leyland for more than £2m worth of body presses.

These orders were for delivery to a number of the group’s plants the summer of 1974. They included some large 600 and 800 ton presses of the type used to produce big body panels. The first of the 23 presses were destined for the Swindon plant which supplied panels for the Morris Marina assembled at Cowley, the Austin Allegro at Longbridge, and MG sports cars at Abingdon. It was thought that the new Swindon presses were to be employed on the forthcoming Austin-Morris ADO71 saloon.

Orders worth £65,000 had been placed with Paterson Hughes Engineering for a body assembly line and storage system, for Triumph’s plant at Speke, Liverpool. The same company was already installing its Stor-Trak overhead conveyor system at Austin-Morris Cowley. It would be used to store body panels before assembly.

Trouble in the Middle East

Until October 1973, things looked rosy for Austin-Morris and British Leyland. It was all about to change. It was on 6 October that Egypt and Syria attacked Israel on Yom Kippur, starting the fourth Arab-Israeli War.

Two days later the Prime Minister, Edward Heath, announced Government proposals for Phase Three of its counter-inflationary policy, including limiting pay rises to 7 per cent, and paying £10 to pensioners before Christmas, at a cost of £80m. This was to be paid for by a 9p increase in employers’ National Insurance contributions. This again put the Government on a collision course with the Trade Unions.

Lord Stokes was back in the media spotlight on 9 October. He was speaking at a conference in London on the European motor industry. He said that the public would want the industry’s products for a long time to come. ‘But the products will become increasingly less what the industry would like to produce, and increasingly more what the ever growing numbers of bureaucrats, Eurocrats and United Nations-crats want.’

Frustration at government legislators

Lord Stokes warned: ‘It is my strong belief that we are hurtling towards a situation where we, as individuals, companies, even nations, have no say at all in the forming of our future.’

The British Leyland chief said he still believed that Britain’s future lay with Europe. But he had not envisaged that membership of the Common Market would result in loss of identity, initiative and enterprise and ‘an ever -increasing mass of harmonisation legislation.’

People wanted to be individuals. Lord Stokes went on: ‘why are we hellbent on forcing a man to be like everyone else, to lose his individuality and to make sure that if he drives a car, the headlights must be 16 centimetres from the ground – or whatever the latest whim of the Eurocrats dictates.’

‘Please let us have a little bit of excitement left in our lives, in the shape of a car which suits our personal needs and whims.’ – Lord Stokes

Then, on 16 October in a speech on the eve of the Earls Court Motor Show, Lord Stokes said: ‘There is little doubt that we are the most democratic nation on earth and I would not for the world live anywhere else. Self-criticism and awareness of our deficiencies can be both salutary and constructive, but I believe we have now reached a point where all we are succeeding in doing is steadily beating ourselves to death and destroying the morale of the people who have to build and sell our products.’

If one small police force sold a few of its British cars to try out a few foreign cars this was the cause of breast-beating and gnashing of teeth entirely out of proportion to the worldwide use of British Leyland cars by police forces. Why could Britain not exult in her achievements such as the 32 French municipalities who bought British Leyland buses? ‘Think what a “hoo-hah” there would be if Wigan, Leeds and Exeter bought French buses,’ he said.

How to improve productivity

Worker participation and boredom at work had been hogging the headlines. British Leyland had given a lot of thought to this and had improved the shop floor’s say in the running of the corporation’s affairs. ‘But, I should say right away that I do not believe that the appointment of a shop floor representative to the company Board will achieve anything whatsoever,’ said Lord Stokes.

Certainly the prospect of someone like Dick Etheridge or Eddie McGarry of the British Leyland (Motor Corporation Combined) Trade Union Committee (BLTUC) on the Board did not appeal to him.

That same day Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait and Qatar unilaterally raised posted oil prices by 17 per cent to $3.65 per barrel and announced production cuts. The next day the OPEC oil ministers agreed to use oil as a weapon to punish the West for its support of Israel in the Arab-Israeli war. They recommended an embargo against unfriendly states and mandated a cut in exports. This was the start of the First Oil or Energy Crisis, as the western world’s easy economic ride on the back of cheap oil ended.

Filmer Paradise re-emerges

On 18 October Filmer Paradise was appointed a Director of Giltspur, a £15m public group which ran one of the biggest Toyota distributorships in the country, Raynesway of Derby. But Giltspur also held extensive British Leyland commercial vehicle and car franchises. In the past the British Leyland had taken a strong stand with franchise holders selling imports.

Filmer Paradise said: ‘I do not see any clash of interests and, of course, I am not going over to the other side. The Toyota business is quite separate from the British Leyland business. I talked to Lord Stokes this morning and he was delighted with my appointment. Of course, in the sense that I am now moving from selling cars to dealers to buying them from manufacturers.’

‘I am now on the other side, a fact that was not lost on Lord Stokes who said, I shall have to be nice to you now that you are one of my customers.’ – Filmer Paradise

He added: ‘This will be the biggest challenge yet. It is great to he back in harness. Of course, it is not a multi-national giant but it is an excellent medium-sized company with aggressive young management open to new ideas and wanting to go places. We can take decisions and act on them with great speed because we are a compact board. We intend to expand at home and abroad by acquisitions and other means.’

Alan Fowler, Giltspur’s Managing Director, said: ‘We are delighted to have Filmer join us. He has the sort of international business connections and marketing expertise that we need for the next stage of our reorganisation and expansion.’

In hindsight, like many sales people, Filmer Paradise was prone to exaggerating targets, that in turn influenced policy. He had told the BMC/Austin-Morris Board that the Maxi was ready for sale when it wasn’t, that the Marina could sell 5000 cars a week, which it only attained briefly and that the Allegro could maintain and exceed the sales performance of the 1100/1300.

Focus on the big-selling Mini

Mini Clubman

By October 1973 the news on the Allegro front had gone quiet as the much-delayed increase to 2500 cars a week production either never happened or never made the press, which was unlikely given British Leyland’s ability to blow its own trumpet.

After 14 years the humble Mini was still British Leyland’s top export model but, according to John Barber, BLMC’s Deputy Chairman and Managing Director, it was still being sold at a loss. He said on 22 October: ‘The Mini is a wonderful car though I think insufficient attention was paid during the design stage to the inherent problems of production costs. Even though we have increased the price it is still not a profitable model.’

This appears to be the first public admission by a senior British Leyland executive that the Mini was believed to be a loss maker. John Barber added that, because of the profitable replacement parts business generated by Mini sales, it was, ‘more in the nature of a break-even operation.’

It was believed at the time that a number of design changes to simplify suspension and transmission – together with substantial price increases – had given the Mini a small profit margin. The problem with this statement is that having in real terms increased the price of the basic Mini in 1968, Austin-Morris, despite all the minute dissection of costs being carried out by its various financial minions, had let the price of the basic Mini drift down again. In 1973, the basic Mini 850 cost £738.84, which was £370.71 in 1959 prices, in real terms its lowest ever retail price. If the Mini really was sold at a loss, the nadir was not on Sir George Harriman’s watch, but during that of the management that was supposed to be more financially savvy.

Barber on British Leyland’s problems

In an interview published by the trade journal Motor Industry, John Barber said: ‘We inherited an awful lot of overlapping models. We still have too many models, including a whole range of sports cars, but you cannot chop these off overnight. You have to have a rational replacement plan.’

John Barber also made it clear that the corporation were still a long way from making a decision on whether or not to go ahead with the construction of the much publicised new integrated car plant to be sited outside their traditional manufacturing areas. He said: ‘This would be a very exciting project but no final decisions have yet been taken. We are still looking at all possibilities. This is several years hence. We have been looking at the whole country for possible sites.’

Commenting on the threat posed by the current 30 per cent foreign penetration of the British car market, he said it would be wrong to blame labour disputes entirely for BLMC’s failure to supply.

‘There has for one thing been a history of under-investment in our constituent companies in the past. This was one of the reasons for the merger. The eight companies merged into British Leyland were individually unable to afford high investment so naturally they fell behind and when the corporation was formed five years ago we had a tremendous backlog of capital expansion to catch up. We have had to spend most of our money modernising rather than increasing capacity.’

Crisis gains momentum

The Arab oil producers announced a 25 per cent output cut on 5 November. A further 5 per cent cut was threatened.

On 8 November, the Daily Express newspaper published an interview with the former Austin-Morris Sales Director Filmer Melbourne Paradise. He said of his departure from Austin-Morris: ‘I really finished the job a year and a half ago. When my five year contract came up for renewal I decided to go.

‘I wanted to move away from sales but they didn’t offer me anything else. I can take yes or no for an answer, I am fairly bright that way. But if Lord Stokes had offered me a toilet to manage I would have stayed. I have a tremendous regard for that man and I’d have made a damned good job of being a toilet manager.’

Leykor expands its factory base

On 12 November it was revealed that Leykor was taking over a Chrysler truck factory in South Africa as part of a long-term plan to increase car and light commercial vehicle production in that country.

The first phase of a 15m rand expansion programme involved the takeover on a long lease of the Chrysler plant at Elsies River, then producing about 60 vehicles a day. Leyland South Africa planned to modernise the plant and, although the plans were not finalized, it was thought that they would probably turn the factory over to light commercial vehicle production.

This would free the plant at Blackheath near Cape Town for an expansion of its car production capacity. The expansion would ultimately increase the company’s local output of from 100 to 150 vehicles a day, and would also involve a substantial increase in engine manufacturing capacity.

Energy Crisis starts to take hold

Back in the UK the Energy Crisis had pushed up the price of coal. The National Union of Mineworkers began an overtime ban in pursuit of a pay claim on 12 November. The Government proclaimed a State of Emergency following the ban on overtime by electricity as well as coal workers.

There were further appointment at British Leyland on 15 November. The company named its new Finance Director to replace Derek Whittaker. He was Alex Park, a 47-year-old Group Director, Planning, Information and Control at Rank Xerox. To Park, a Cost and Works Accountant who worked for two American companies, Monsanto and Cummins, before joining Rank Xerox in 1968, fell the task of taking much of the financial burden off John Barber’s shoulders at BLMC.

Another interesting appointment was that of Sir Dennis Greenhill, a recently retired Permanent Under-Secretary of State, Foreign and Commonwealth Office and Head of the Diplomatic Service, to BL’s Board. Sir Dennis, in addition to normal board responsibilities at BL, would advise and assist on international and export affairs, an area on which Lord Stokes was concentrating his energies at the time.

With Sir Dennis’s appointment there were now five non-executive Directors on a Board of 12. These included Jim Slater and Sir David Barran. Sir Dennis had also recently become a Director of SG Warburg, joint merchant bank advisers to BLMC.

Fuel supplies start to falter

December 1973 - London

By 29 November the Energy Crisis was biting. In the UK petrol coupons were issued followed, on 7 December, by a 50mph speed limit on all roads, lighting was curtailed in shops, offices and streets and heating was restricted in commercial premises.

This was followed on 13 December when the Heath Government announced that, because of the ongoing dispute with the National Union of Mineworkers, stringent measures to conserve electricity were to be introduced – from 17 December industrial and commercial users were to be limited to a total of five days’ consumption during the fortnight ending 30 December.

From 31 December they would be limited to three specified consecutive days each week and prohibited from working longer hours on those days. Workers on a three-day week would be entitled to one day’s unemployment benefit in the second week and two days’ benefit in subsequent weeks. Essential services (restaurants, food shops and newspapers) were exempt. The Longbridge factory closed down for Christmas on 21 December and because of the Three-Day Week, which began in the New Year, the plant did not produce any cars again until 7 January 1974.

1973 therefore ended on a bleak note with the Three-Day Week on the horizon.

The effects of the 1973 Energy Crisis

The world had gone into a panic over the Energy Crisis and searched in vain for a viable alternative to fossil fuels before finally realising that there was no realistic alternative but to pay the price the OPEC nations demanded.

Despite the UK car market increasing slightly to 1,661,639, the slump in British car production now began, shrinking by some 9 per cent. Exports were down 1.3 per cent, while imports went from 23.5 per cent in 1972 to 27.4 per cent in 1973. Some 2,082,000 aggregate days were lost in the British motor industry due to industrial action, an increase of 53 per cent over 1972.

Despite the threat of a British invasion of Europe in 1973, the share of imports in the major European car producing nations remained fairly static. The only nation that saw imports on the rise was Britain itself. Ford of Britain saw its annual car production slump by 12.81 per cent, Vauxhall by 24 per cent and British Leyland by per cent. Meanwhile, car production in the other EEC nations increased again.

And how was British Leyland doing?

The harsh reality was that the rest of the world, for whatever reasons, was beginning to fall out of love with British motor vehicles and this trend would accelerate over the next decade. For Austin-Morris the main crumb of comfort was the elevation of the Morris Marina to the position of Britain’s second-best-selling car behind the Ford Cortina. Production in the 1972/73 year was 201,724, up 29.46 per cent.

The Austin Maxi continued its surge, with production rising a further 4.23 per cent to 70,846. For Austin-Morris, the disaster area was the very sector where it had been dominant for so long. Because the Austin Allegro was not due to be launched in Europe until March 1974, the ADO16 was retained in production alongside the newer car at Longbridge. In 1973, combined UK sales of both these models amounted to 87,911 cars, a mere 5.3 per cent of the market and a full 14,538 less than the previous year, when the older car was on its own.

Combined production in the 1972/73 period was 9.2 per cent less than the previous year, suggesting that the hoped for orders for the Allegro that would enable Austin-Morris to ramp up production had failed to materialise. Indeed, production at Longbridge, home to the Mini, ADO16 and Allegro slumped a further 8.6 per cent in 1972/73, never to rise above the 300,000 mark again until 1990.

The failure of the Allegro begins here

Austin Allegro

Despite the media blitz, BLMC had invested £25m and failed to arrest the decline of its front-wheel-drive C-class range. The Allegro was only ever available in two marques, Austin and Vanden Plas, compared with its ADO16 precursor which used virtually every BMC brand in the cupboard. British Leyland frowned on badge engineering, but in effect they were reducing customer choice.

Britain’s entry into the Common Market increased customer choice. As well as BLMC, Chrysler, Ford and Vauxhall, the British car buyer could now buy a Citroën, Fiat, Renault, Peugeot, Volkswagen or one of many other marques, and now all at the right price. And with at least 1000 British Leyland dealers having lost their franchises since 1968 thanks to Filmer Paradise and Bert Lawrence’s rationalisation programme, there were many garages ready and willing to take on a dealership for a continental car manufacturer.

With foreign imports now cheaper, Britons would now go on a continental spending spree. The problem with the UK joining the Common Market in 1973 was that it passed many Britons by. Strikes continued to blight industry, with employees oblivious to the new threat from the continent, and pretending it was still business as usual. While Britain’s relationship with Europe would eventually turn sour, with resentment of diktats emerging from Brussels, there is no doubt that British consumers embraced the wider choice of cheaper goods now available from the continent. Whole industries, from footwear to heavy industry, that had supplied an empire for generations, would wilt in the face of new European competition.

The rot was now well underway…

Back to History : The Austin-Morris story – Part Nine : 1972

26 Comments

  1. I’ve never actually seen an Apache/Victoria in the metal but, looking at the photos, it appears to be little more than a cut-and-shut job, which at best could only ever be a stop-gap model. That it was on the South African market for eight years from 1971-78, sold a total of 21,655 units and sales peaked in 1974 (5,256), declining thereafter for an average annual sales figure of just 2,706, indicates that the market was not enamoured with this blatant example of corporate cynicism. It was a loss-maker from the outset.

    With regard to the Leyland P76, the corporate expectation of selling it in the UK at the GBP 3,500-4,000 price level is sheer fantasy; for a start, it was physically too large for UK roads, as it could seat three abreast in comfort, back and front. I was working at Rover Solihull when one arrived for evaluation and the general consensus was that we’d never sell them in the UK. Pricewise too, in Australia they retailed for that much in AUD and the exchange rate was roughly 2:1 against the pound, so it didn’t stack up financially, even before shipping costs were factored in. The car was under-developed on release (a BL speciality, that!), the 2.6lt version was under-powered, though the 4.4lt V-8 performed very well. If Leyland Australia had been given sufficient funding for product development and for the planned introduction of the Force-7 hardtop and the station-wagon versions, I think it would have been a success, despite the oil-crisis.

    The P76 was essentially a very good car and I still regret exchanging my Deluxe V-8 (bought new in Melbourne, three-on-the-tree manual, radio but no tacho, no air-con, no carpets) for a new Ford XC 4.1lt six-cylinder Falcon sedan, which was an inferior car in a number of ways (no radio, poor handing, dodgy brakes, high fuel consumption, etc.) but, at around the same price-point, at least came with carpets and air-con as standard.

    However, as it obvious within the article, British Leyland, despite corporate rose-coloured utterances, was already deeply and inextricably in the mire.

  2. Appointing retired civil servants to the board ( who in my book were by definition utterly useless or they wouldn’t have been civl servants in the first place ) was the equivalent of hoisting the white flag . It was both a disaster and a tragedy

    • But probably came in handy when lining up for government assistance through the old boy’s network.

  3. “each British Leyland worker was backed by only £2179 of capital, compared with £6766 at Fiat and £7412 at Volkswagen”
    In the early 1970s the British worker was the poor man of modern Europe, my job working for the local council paid 50 p / hour for a 40 hour week, after tax, i think it was 38p in the £, I was left with about £17 a week, a basic Mini was £1000 new, the British worker could not afford the buy the products manufactured by other workers, that is why the cars did not sell.

    • Absolutely that’s why new car sales in Britain were so low by head of population compared to most of Western Europe.
      In the thirties it was the exact opposite, and we had the highest level of car ownership in Europe, only France and the Netherlsnds came close. But we did go through something of an economic miracle between 1932/39 until a little man with a moustache put paid to it.

    • @ cyclist, high inflation was another factor that depressed wages in the seventies and wages struggled to keep pace with prices. At one time inflation was running at 27% and in the second half of the seventies rarely fell below 10%. It all led to a sour atmosphere that would lead to the Winter of Discontent as workers struck in huge numbers to try and get a large real terms pay rise.

      • The investment per worker is important because what gets lost in the union bashing narrative is the part inept management and short termist ownership had on British industry.

        Even if the unions had been as good as gold, you can’t make good cars using clapped out machine tools and worn out factories. Neither can you compete when your competitors are using the latest working methods and equipment to be far more productive than you.

        Alas the British have never accepted the idea you have to invest for the future. Look at the mass hysteria and whining that accompanies any engineering project. Till the project is inevitably canceled. Yet the same people than whined about the costs then complain about slow trains, worn out roads, slow broadband and the fact we don’t make anything anymore. Unable to make the connection between that and their blanked opposition to any investment.

        • I would agree with the comment about clapped-out capital equipment in the industry. In 1970, at Triumph’s Gearbox Shop in Radford, the Herbert 3A and Ward 7 machine tools of the 1940’s were still churning out the same components for Heralds and Spitfires as went into the 1948 Standard 8’s and 10’s. A new NC milling machine was eventually bought from Germany, the engineers played with it for three weeks, after which it was pushed into a corner and a dust sheet put over it, never to move again.

          On the other hand, I cannot agree with the comment that the British aircraft industry had a history of backing white elephants. It invented the jet airliner (de Havilland Comet, first flown in 1949) and ALL jet airliners have stemmed from that aircraft. Concorde was already developed by 1970 – and remember that it takes years of sometimes unsuccessful development to produce the end product; just ask Boeing about their three failed attempts to develop their own SST. Having failed to do so, they then put pressure on the US government to have Concorde banned from the US. Counter- pressure from Britain and France finally obtained permission for it to fly into Washington, which was never a primary route. That they were banned from flying to the primary US destination, New York, coupled with the increased cost of aviation fuel caused by the oil crisis, ensured that Concorde would never be a commercial success in terms of sales.

          I’m sure that the hoary old chestnut of TSR-2 would be cited as an example of white elephants, but it should be kept in mind that this extremely advanced – and therefore costly in terms of finance and development – aircraft was sunk largely by the 1957 Sandys White Paper, which propounded that manned aircraft were obsolete. Having forced amalgamations and closures on the industry with the spurious promise of improved orders, the UK government then cancelled TSR-2 in 1965 and contracted to buy 50 of the General Dynamics F-111K. This aircraft was known in the US as ‘McNamara’s Folly’ due to its massive cost over-runs and inability to meet performance targets. In 1968 this order too was in turn cancelled, with commensurate cost penalties, leaving the UK without an advanced strike aircraft and having expended a vast amount of capital in order to achieve absolutely nothing. The UK government also cancelled the AW (HS) 681, a high-wing 4-engined military transport aircraft with S/VTOL capability, which was already at full-scale mock-up stage, i.e. just one stage away from production. Not only that, but they compounded the issue by ordering the destruction of the jigs and then placing an order for the Lockheed C130 Hercules from the US. The wanton destruction of the British aircraft industry by the UK government was virtually complete.

          On a lighter note, for those of us who grew up with the electrical vagaries’ of Joseph (Prince of Darkness) Lucas, it’s sobering to realise that all Rolls-Royce/Bristol Siddeley jet engines have, from day one, been fed by Lucas Gas Turbine (later Lucas Aerospace) fuel pumps. This includes the Olympus 593 for Concorde and the RB211 for Jumbos and TriStars. The RB211 was itself the progenitor of today’s Rolls-Royce Trent-series engines, as fitted to many of the world’s aircraft. The fuel pumps were tested in the facility at Honiley, Warwickshire, where I worked, doing the experimental test-and-development work thereon.

      • On the other side of the fence, there was money and high tech engineering skills to develop Concorde,unfortunately 10 times over budget, the British aircraft industry had a track record for backing White Elephants. Yet nothing for modernising the car industry, later we had the prospects of revenue from North Sea Oil, revenue simply wasted by the Govts of the 1980s

        • Though don’t overlook the raw fact that successive British governments directed a great deal of public money to British Leyland. Starting with an initial loan back in 1968 – followed by the huge raft of subsidy associated with the 1975 Ryder plan – which was then added to by substantial funding provided (with much hand-wringing) by the Thatcher government – including £297 million for 1980 and £990 million for 1981. Overall – and in today’s money – something like £15 billion was ploughed into BL by the British government over the years. And though much of that money went to simply cover day to day losses and pay wages – it also funded modernization (as was the intention). The West Works at Longbridge which built the Metro body being an example: A new factory for a new car – both essentially paid for by the government.

          • A fraction compared to the support that the French government gave to Renault

        • The APT train is still faster than the latest record. We tend to give up on project or company, poorly invest and ultimately flog off. Just look at medical ultrasound.

          • The APT always seemed to have too many problems that should have been sorted out on the drawing board or at least before letting the press have a ride in it.

            The power cars in the middle of the formation without any easy through access seemed to have been something that shouldn’t have been signed off.

    • in the interests of clarity – those figures (£2179 etc.) don’t refer to wages – but to the capital assets of the company divided by the number of employees.

      • Aware the figures are not wages. Two thoughts,1) high figure for capital per worker often means high productivty / worker, ie bigger wages. 2) low figure, the comp[any is over -manned, which applies to BL,, probably a bit of both.
        If VW has £7400 / worker, 350% of BL, what was the equivalent figure for the USA “Big Three”, Toyota, and Honda of Japan?

  4. Another fascinating and highly detailed chapter.
    Five door Allegro estate – anyone seen a prototype photo?
    Another example of BL/Rover not knowing which segment a new model fitted in – in this case C or D.
    How more successful/profitable would they have been if supply was not constrained by internal and external strikes?

  5. In Washington USA in 1978 I saw an Austin Marina saloon. Up till then I never knew the Marina was sold there. It looked out of place compared to all the other US & Japanese built cars… Not a successful potential market place for such a British car?

    • I think think they were sold for too long in the USA, I presume they were trying to cash in on the energy crisis when Americans started to downsize to smaller & more fuel efficient cars.

    • 23,000 Marinas were sold in the USA during three model years (73-75) which was a useful boost to production volumes (and thus scale economies) for a couple of years. Which was a major reason for doing it. Canada (where it was available twice as long – until 78) accounted for another 15,000 (estimated) or so.
      They had to try really – all the major European companies were still attempting to “make it in the States” with small sedans, with varying degrees of success. If the Japanese hadn’t revolutionized the market, Marina might have done better, up against Vega & Pinto.
      It got hit by the Nixon administration imposing an “import surcharge” on car imports intended to limit Japanese imports, which being non-discriminatory also hit imports from Europe like Marina and the ill-fated (and similar) Plymouth Cricket (Avenger). And in 1975 Marina was the subject of an “anti-dumping” case in which the US government accused British Leyland of selling cars below cost. British Leyland won that, but gave up in the USA after 1975 with this kind of car, preferring to concentrate on the sports and speciality cars.

  6. The Downton upgrades would have certainly more than met the performance expectations of continental buyers and answered criticisms of the 1500/1750 models lack of power, despite the Allegro being equipped with the Maxi’s 5-speed gearbox on the 1500/17500 its performance was basically a general behind the opposition.

      • I think 1973 is the year when the decline of British Leyland really began to bite as the Allegro had a lukewarm reception and market share started a painful decline, down to 33% in 1973, from 40% in 1971. Had the Allegro been introduced as a hatchback, sales could have been good across Europe as the market for fwd hatchbacks was taking off and the Allegro was a far more advanced car than the Escort. Then two years later Leyland would score another massive own goal with the Princess, a car that should have been a hatchback, but ended up as a saloon, and was also denied a five speed transmission that was standard on the Maxi that could have aided refinement and economy.

  7. I think this story continues to show that the companies slippery slide started in the 60s. For the company to invest millions in plants in the UK when EEC membership had failed shows the narrow mindness of the average British manager. Its not with hindsight I say they should have built a proper European plant, it was just common sense and an insurance policy that would have grown the business. Having worked from local, national and Multi nationals, a charity and in government you see British management are short sighted, pig headed (its not invented here/by me syndrome), arrogant and slow to react. There was criticism of BL employing ex-civil servants but having worked across the board, there is not exactly much difference in private and public managers.

    BL directors were constantly blaming their predecessors, but they didn’t do any different. The Marina was a bad hotchpotch which cost more to produce due using antiquated designs that had to invested in to keep them in production. Where was the cost planning there? The Allegro, so far, looks to have been a one design competition – what company does that? Why did Stokes think a design that would stand out sell cars, when Ford and Fiat had shown design sells cars? And then they build it to a price without thinking who bought this car – the private buyer, who the opposition had shown wanted more sophistication due to their increasing money in their pockets.

    • I’m no photographer but the picture looks as though it was taken using a filter. An attempt to make a daytime shot look “moody” and atmospheric. Hence the dim looking headlights.

  8. The Allegro seemed to hit on all sides, Ford launched the Mark 2 Escort in 1975 that was an attractive and fairly reliable small car with conventional mechanicals and the Chevette was a mixture of the old and new, a rwd car with Viva underpinnings, but in an attractive three door body. Then there was the steady rise of the Volkswagen Golf, the best car in this class and a fwd hatchback that other manufacturers copied, and, of course, the Japanese whose conservative products while not the best cars to drive offered buyers guaranteed reliability and long lists of standard equipment at a low price.

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