History : British Leyland, The Grand Illusion – Part Three

Ian Nicholls, AROnline’s historian-in-residence, follows up his excellent rundown of the British Motor Holdings story with a five-part account of the British Leyland years from 1974 to 1977.

Here, in the third part, we learn all about just how serious British Leyland’s financial situation was and the differing views on how the problem could be solved.


John BarberBy August 1975, the concept that the Ryder Report was gospel was called into question. Now the All-Party Commons Trade and Industry Sub-Committee called into question the financial and organisational foundations of the new state-owned British Leyland Limited.

Members of the committee said the Ryder plan, on which the company was based, contained fundamental weaknesses and was inherently dangerous. The report, which came after seven months of inquiry into the motor industry by the Trade and Industry Sub-Committee of the Commons Expenditure Committee, accused the Government of committing cash on a huge scale to British Leyland without a close enough look at the aims, mechanics and desirability of such a step.

At a press conference to launch the report, members of the committee spoke of the Ryder plan as ‘inherently dangerous’ and ‘hazardous’ and Patrick Duffy, Labour MP for Sheffield, Attercliffe, the Chairman, said: ‘We were left with the feeling that Ryder and his team have thought of money rather as confetti.’

The report expressed strong reservations about the amount of money to be spent (£1.4bn in the next eight years plus a similar sum to be generated internally) and the effectiveness of the way it would be spent. A Department of Industry assertion that, once the company had been put on a sound footing after the initial injection of equity, part of the funds required from external sources could be raised commercially, the report said, was ‘only a hope.’

‘The call upon public funds will clearly be enormous. There is the strongest possible case for ensuring that the taxpayer gets a fair return on his involuntary investment.’ The committee said it was clear that Lord Ryder of Eaton Hastings’ team relied to a considerable extent on the old British Leyland’s own view of the future and accepted too readily a company study as part of a detailed plan of action.

One of the assumptions in the study was ‘a fairly free availability of cash and as a result it was unlikely to have rigid economy as its central theme; and it is rigid economy and high cost effectiveness which should be two of the criteria for the expenditure of public money, not to mention commercial survival.’

Barber’s plan for British Leyland unravelled

Members of the Sub-Committee spoke of their sympathy for John Barber (above), the deposed British Leyland Managing Director, who disagreed with the Ryder Report on the fundamental issue of forming a decentralised structure as opposed to Barber’s preference for a strongly centralised organization. The report saw no organisational way in which potential conflict between the Chief Executive of the holding company and the Managing Director of the powerful new car division would be resolved and found Lord Ryder’s reliance on ensuring ‘that the chemistry is right’ was not good enough.

‘We are of the opinion that Ryder has put too much of the onus on the compatibility of personalities rather than on the correctness of the structure. This is inherently dangerous’, the report said. A battle for power between the two executives might cause untold damage, the report said. It added later that the decision not to retain Barber came after the Ryder structure,’to the shortcomings of which we draw attention’, had been adopted.

Lord Ryder talked again in terms of chemistry and morale when giving evidence about the company’s international division. These might be laudable sentiments, the report said, but with the new structure inter-divisional conflicts might arise, which would weaken the whole corporation.

Other criticisms from the MPs were that the number of basic models envisaged by the Ryder Report would not allow the company to compete effectively and that the report’s predictions and hypotheses were based on assumptions subject to huge margins of error. The MPs said it was not practical to withhold the next tranche of money for British Leyland as a means of Government pressure. To carry out such a threat could well ensure the squandering of the sums already spent. The report also said: ‘Unless the corporation achieves a very much higher level of output and related sales than Ryder forecasts it must shed labour.’

The MPs believed that the decision to pump millions into British Leyland had been taken by the Government before Lord Ryder’s team had started work. The report added: ‘It must have been clear to them that their recommendations would not have been implemented if they had not matched the known views of the Government.’

Duffy told the press conference: ‘We were struck by evidence from the Department of Industry which suggested they were not unprepared for the Ryder Report and its recommendations.’

‘The Ryder team rushed their fences. They were dealing in marked cards; they indulged in questionable assumptions, and we do not accept their conclusions. They put forward recommendations on the basis of assumptions that just could not stand serious scrutiny. There have been too many fundamental mistakes. We cannot accept their conclusions. How can we?’

The MPs said they would be exerting pressure for the earliest possible Commons debate. ‘We believe that, in the light of our findings, the public must be told it is a bad bet.’

The report also vindicated John Barber, the Deputy Chairman and Managing Director of British Leyland, saying: ‘The motor industry cannot afford to lose a man of Barber’s stature. We do not think the British motor industry can afford to lose the able managers it possesses.’

The pessimists and critics were proven right as British Leyland stumbled through 1975. A messy withdrawal from Authi in Spain and Innocenti in Italy took place while UK production was hit by strike after strike. Alex Park and Derek Whittaker became the hapless front men for the company. The firm was simply called Leyland by the media, effectively completing the domination of the British motor industry by the Lancashire truck and bus manufacturer.

Company spending effectively frozen

In December 1975 Derek Whittaker, the Managing Director of Leyland Cars, shocked 650 management and union representatives at a meeting by announcing that the company’s financial position was so serious that he had practically stopped all capital expenditure.

This meant that, within six months of its formation, the largest company in the state-controlled British Leyland concern was being forced to break its commitment to the Government not to use money earmarked for capital investment to meet day-to-day running costs. Whittaker said he had no alternative. If he had not halted capital spending he would have been forced to go to the National Enterprise Board for more money before the end of March 1976. The next tranche of Government cash was due in May 1976.

The sense of urgency at that meeting was underlined by the revelation that sales were now so poor that they were not sufficient to cover the weekly payroll. In its first six months, losses through unofficial strikes were as bad as in any six-month period since the old British Leyland Motor Corporation was formed in 1968. More than 40,000 cars with a showroom value of £90m were lost and about 25,000 cars could not be released to dealers because they were being held at the factory by poor rectification performance and parts shortages.

Starved of sales, Leyland Cars share of the home market had collapsed from a record 40 per cent in September 1975 to an average 24 per cent for October and November 1975. This had caused a cash flow crisis which was being overcome only by heavy drawings from the £200m already injected by the Government.

In 1975, British Leyland had lost 12 per cent of production because of strikes and, in the closing months, this rose to 15 per cent. Eric Varley, as Trade and Industry Minister, did his utmost to impress on his colleagues in the labour movement that British Leyland was not just another part of the public sector, dependent on a bottomless pit of state resources, a state-owned monopoly with no other alternative source of supply.

British Leyland’s loss is its rivals’ gains

Ford Cortina
The Ford Cortina was now firmly ensconced as the UK’s best seller, at the time Uncle Henry overtook British Leyland in the  sales charts

During this period the Japanese and Ford made hay, as British Leyland went from bad to worse. The disputes seemed to spiral out of control. Even the Development Engineers were in dispute over attempts to merge the various Design Teams from the British Leyland constituent companies. In March 1976 Managing Director Alex Park said: ‘We are in the embarrassing position of having people screaming for cars which we just have not got… You cannot have too many disputes before you begin to lose dealers and customers who are not prepared to wait forever.’

On 5 April 1976 James Callaghan succeeded Harold Wilson as Prime Minister. A leading opponent of Barbara Castle’s In Place of Strife, in 1969, James Callaghan believed in strong links between the Labour Party and the trade unions. He believed he could control inflation through pay restraint agreements with the TUC.

Only two days later it was revealed that British Leyland’s inability to cope with the demand for new cars on the home market in March 1976 had meant that the state-owned company had lost its leading position in the car sales league table. In March 1976, Ford took the top position with sales of 32,250 and captured 26.9 per cent of the market, 1 per cent ahead of Leyland Cars.

The importers’ grip on the United Kingdom market continued to strengthen. Sales of foreign cars in March 1976 totalled 41,217, a penetration of 34.4 per cent against 32.3 per cent in March 1975.

Michael Heseltine, the shadow Secretary of State for Industry, demanded that the Government stopped further financial aid to British Leyland, which would shortly seek a further injection of £100m unless there were firm guarantees from workers to maintain output and drop claims over differentials. He said: ‘Giving further aid is pouring money into a bottomless pit. Every day it becomes clearer that the rescue of the company was carried out in the wrong way by the wrong people and at the greatest cost.’

Heseltine had made his fortune as co-founder of the Haymarket publishing group, whose increasing portfolio was to feature many motoring titles. Publishing was a competitive arena where giving the customer what they wanted was paramount, so it was not as if Heseltine was unqualified to give a viewpoint on British Leyland.

On 28 April 1976 Sir Richard Dobson, the Non-Executive Chairman of British Leyland since 1 April, told a Commons sub-committee that ‘a situation could easily arise where neither I nor the board could recommend that the Government put more money into British Leyland. That is not too remote a possibility.’

Later, in evidence to the Sub-Committee examining the rescue of Chrysler UK, Sir Richard replied: ‘If you are asking me if there is a real possibility of the Government finding it unwise to give more money to British Leyland, I must say I think there is. The more people who understand that the better.’

He went on to say that only the Government could ‘decide overnight’ whether British Leyland’s ‘self-destructiveness’ could be made a fait accompli but that would be a drastic decision. ‘It is not just a question of punishment to make us better boys. It has almost been a way of life in the motor industry to strike for more money when they saw the opportunity was right.’

Strikes cripple British Leyland’s output

Derek Whittaker revealed that the group lost 17 per cent of its planned car output in the first six months of the financial year, which began in October 1975. He said 10 per cent was due to disputes, 1.5 per cent to shortages, a further 1.5 per cent was attributed to absenteeism and the final 4 per cent was lost in ‘facility breakdowns’. The 10 per cent lost due to disputes was ‘much higher than we could afford’, Whittaker said. It represented some 60,000 vehicles worth £120m.

Only two days later Derek Whittaker spelt out the dire situation to the Leyland Cars workforce in a letter. ‘Lost production also means lost cash, and lost cash means less capital investment, which also means lost jobs. The situation today is even more serious, and measures must be taken now to put it right. We must immediately achieve not only the increased production programmes we had planned but also make up all of the production we have lost before the July holidays.

‘Productivity is still far too low. Many employees acknowledge the precariousness of Leyland Cars’ position, but fail to reflect this in their every day action. Our collective action up to the summer shutdown and beyond will determine the future for every employee in Leyland.’

LC10 concept under way, designed to fight in the mid-market.
LC10 concept under way, designed to fight in the mid-market

The next month the Leyland Cars Product Planning Committee submitted to the British Leyland board its recommendations for a new medium range car, codenamed LC10, incorporating the following features:

  • Front-wheel drive.
  • The first of the LC10 family was to be a hatchback, followed by a notchback.
  • A good performance fully competitive with the opposition cars.
  • An excellent package to maintain Leyland Cars lead in this area.
  • A very airy package with a lot of glass area.
  • To be conceived from the start as a family of cars to obtain the maximum commonality in both body structure and manufacturing facilities, leading to a series of derivatives covering the whole medium sector.
  • Outstanding economy.
  • A good aerodynamic style, but combined with good stability on the road, especially in high cross winds.
  • Low weight.
  • A high specification level with many features as standard. It had to be engineered from the start to meet world market requirements.

This was the start of the project that resulted in the Austin Maestro of 1983 and the Montego of 1984.

The union view: a National Motor Company needed

The same month the Technical, Administrative and Supervisory Section of the Amalgamated Union of Engineering Workers published a report that advocated the nationalization of Ford, Vauxhall and Chrysler and their integration with British Leyland as an answer to the motor industry’s problems.

In a foreword to the report, Ken Gill, TASS General Secretary, said: ‘Here, however, is a document that is different, because it has been written by men and women who actually work in the industry.’

TASS believed 2.5 million cars a year could be produced and sold, although there should be only half as many models as at present. ‘There is no prospect, however, of maintaining an industry with a capacity of 2.5 million cars a year without a massive export capability and effort. Yet more than half of the industry is United States owned, with car exports severely restricted and Leyland, in spite of massive capital injections, will still be, in world terms, a small company incapable of such a programme.

‘If, on the other hand, the whole United Kingdom capacity were in one company, the whole perspective would change drastically. The combined company would be large enough to build and maintain a comprehensive worldwide marketing network and to respond to the growing demand for cars in developing countries, both through direct exports and collaborative arrangements.’

The union did not believe that Ford or General Motors would refuse to cooperate with a new National Motor Corporation: ‘In a negative sense, there is an added reason why Ford and Vauxhall must be brought into the National Motor Corporation. Ford and General Motors are increasingly likely to pull out of the United Kingdom of their own accord, because they will not want to have to compete, un-subsidized, against the subsidized, publicly owned Leyland and the subsidized Chrysler UK.’

The document said a deal could be made if there was sufficient determination to use all the available sticks as well as the obvious carrots: ‘The National Motor Corporation would succeed because it would have the good will of its employees. That good will would, however, have to be developed through a greater level of workers’ control than has ever before been tried in Britain.’

Ken Gill was a Communist who had refused officer training during the Second World War because he politically despised the officer class.

Longbridge: Mini-centric production


During June 1976 it was revealed that Leyland Cars was considering turning Longbridge into a one model plant to produce the ADO88 (above). This had become British Leyland’s wonder car in the eyes of the media, the product that would propel the ailing giant back to the forefront of world motor manufacturing.

In 2001 the world was introduced to the new BMW-financed MINI but, back in 1976, ADO88 was going to be the new Mini. Leyland Cars visualised producing 6000-7000 ADO88s a week, or 350,000 a year – a figure far in excess of the peak production of the Mini in 1971 of 318,475 – and that was from plants scattered all over the world, some now closed. In June 1976 Longbridge produced a mixture of Minis and Austin Allegros.

It was rumoured that, when the new Mini/ADO88 came on stream, production of the Austin Allegro would be switched to Seneffe in Belgium. It would be accompanied by a restyling operation designed to give it an upmarket appeal. The figure of 350,000 ADO88s a year illustrated the kind of fantasy world British Leyland was existing in.

Ray of hope: Rover SD1

Alex Park and the Rover SD1
Alex Park and the Rover SD1

On 30 June 1976, the Rover SD1 was launched as the new Rover 3500 (above). Unquestionably the best British Leyland car (developed and planned following the 1968 merger), the SD1 had superb David Bache styling combining Ferrari Daytona looks with a five-door body.

The Rover SD1 was the car that demonstrated that British Leyland was a doomed enterprise. Its basic design was brilliant, but build quality was lamentable and niggling faults, often with bought in components, soon tarnished the car’s reputation.

However, that was still to come…

Rover marginalised

Behind the scenes, Rover had been marginalized by the Ryder Report. Rover was the best-managed of all the constituent companies which had made up British Leyland – in the space of 40 years, men like Spencer and Maurice Wilks, William Martin-Hurst, George Farmer, A.B. Smith and Bernard Jackman had dragged the company from insolvency to prosperity.

The backbone of the company’s fortunes had been the Land Rover along with the advanced P6. The Design Team fronted by the likes of Maurice and Peter Wilks, Gordon Bashford, Spen King and David Bache had created vehicles that consumers wanted to buy in large numbers. One example was the Range Rover – the late Peter Wilks was credited as not only being a great Engineer, but a man who knew instinctively what the public wanted.

The Ryder Report, at a stroke, destroyed Rover’s autonomy, the company was stripped of its Board and Managing Director and responsibility for production of the new Rover SD1 lay at the door of the Solihull plant director, who in turn was answerable to the more remote Leyland Cars management team. All the plum jobs in the Leyland Cars organisation had been taken by ex-BMC/Austin Morris men and there was no place in it for Bernard Jackman and Rover Triumph Sales Director John Carpenter.

Leyland Cars’ new £31m Rover car plant at Solihull had managed to produce barely half the planned number of units for the official launch of the Rover SD1. The company had intended to have 2700 units available in the showrooms by launch day, but less than 1000 cars were still at the factory awaiting final completion.

The plant, one of the most advanced in Europe, was now producing only 100 cars a day and using just one of the three production lines. The target for the SD1 3500 model was 2000 units a week, but this was thought unlikely to be reached before the spring of 1977.

The reception for the Rover SD1 seemed to offer some hope for the future and soon after Eric Varley approved yet another tranche of taxpayers, money for injection into British Leyland Limited. The media reported every strike at the new Solihull plant producing the Rover wonder car.

Callaghan’s disapproval of the strikes

Prime Minister James Callaghan voiced his opinion on the spate of strikes that continued to hit British Leyland on 3 September 1976. Speaking in Liverpool, Callaghan said: ‘We cannot afford this kind of sudden stoppage which interferes with production flow. I am totally opposed to it.’

Soon after in a statement Derek Whittaker said: ‘We are, of course, worried and disappointed about the rash of strikes which is currently affecting our production so badly. It is obvious that the warnings which have been given so often in the last year about the need for us to improve our industrial relations as a condition of continued Government support have not been properly understood by a large number of our people.

‘It is true, of course, that there are a few extremists who are always trying to ferment trouble but, by and large, they are unsuccessful. The sober truth is that most of the people taking part in our current disputes are neither extremists nor are they led by extremists. They simply fail to see that their own particular grievance, important though it may be to them, is immeasurably less in importance than the good of the whole of Leyland Cars and the 120,000 people we employ.

‘We will continue to work with the trade unions and to persuade our people that only by cooperation and putting the need for quality, improved productivity and continuity of production before any other consideration can we make progress.’

‘I urge all Leyland Cars employees who are currently in dispute to return to work at once for their own good and for the good of their fellow employees.’ – Derek Whittaker

By 5 October 1976 it was reported that workers were not impressed by a management memorandum circulating at Longbridge and said to originate from Derek Whittaker. ‘There has to be significant improvement in performance immediately for any commitment to be credible and acceptable to Lord Ryder or the NEB.’

Unless he got a ‘total commitment’ from them to improve productivity, accept mobility of labour and end unofficial strikes, the £120m project to build a new Mini/ADO88 would not go ahead. In meetings with Shop Stewards Whittaker had given a warning that, in the absence of such a commitment, Lord Ryder, the Chairman of the National Enterprise Board (NEB), would not give approval for such a huge capital investment programme. The board said that that the ‘necessary commitments’ on productivity had been accepted by all but one section of Leyland Cars.

In spite of pressure from the management, the Shop Stewards were adamant that they would work only within the framework of existing agreements or modified agreements, which might be negotiated in the future. They were clearly determined to preserve their cherished ‘mutuality’ i.e. acceptance by management that any changes in working methods or pay would not be implemented until both sides had reached agreement.

Product plans under scrutiny

The management memorandum also said that the loss of the Mini/ADO88 replacement could cost the company and its component suppliers more than 100,000 jobs and could lead to the closure of the Longbridge and Cowley plants. The threat was apparently based on the loss of some 250,000 front-wheel drive units and other components for a new Mini/ADO88 and the effect that would have in pushing up the price of the much smaller number of similar units required for the Austin Allegro, Princess, and Austin Maxi models.

The memorandum pointed out that, when the British Leyland Board had recently met the NEB, it was able to report an outright commitment to the new Mini/ADO88 only from the staff unions at Longbridge. Lord Ryder’s answer was reported to have been ‘No commitment, no ADO 88.’

The media blew up Derek Whittaker’s memorandum into an ultimatum to the Longbridge workforce. Leyland Cars said in a statement: ‘Derek Whittaker has made it clear to all Plant Participation Committees in his recent visits that neither he nor his Directors will be submitting any major capital expenditure for final approval to either the British Leyland Board or the National Enterprise Board unless he has commitments to the necessary improvements in productivity from employee representatives of all sections and of management involved in the respective project.

‘All the new capital expenditure requests must have productivity improvements at least comparable with those of European competition if we are to sell our products successfully here and overseas.’

The NEB said: ‘It is true that the investment project for the new small car is provisionally scheduled to go before the NEB on Friday, but as stressed in the NEB report on the performance and plans of British Leyland laid before Parliament at the end of July, the investment in new projects and facilities must be accompanied by improvements in productivity which will ensure that British Leyland is competitive internationally.

‘One of the conditions of NEB approval will be that the necessary improvements in productivity associated with each programme have been discussed and accepted by the representatives of the work force. To date, the necessary commitments on productivity have been accepted by all but one section of Leyland Cars, but in the remaining section the matter is still under discussion. It is not a question of a deadline, but clearly the project cannot be considered by the board on Friday unless commitments have been made by all the managements and workforces concerned in the new project. It is understood by everyone concerned that in order to meet the launch programme it is essential that the decision to go ahead is reached as soon as possible.’

At the time it was believed that Longbridge productivity per man was an astonishing 40 per cent below that of their major European and Japanese rivals. The unions disputed this figure, insisting that it had been calculated using dissimilar yardsticks. However, even they accepted that Longbridge was behind the competition in both productivity and, perhaps even more importantly, in the stability of output.

British Leyland needs to ‘buckle down’

An unnamed senior colleague of Derek Whittaker said: ‘Without some considerable improvement in the way our people buckle down to making not only the new Mini but all the other new models in the pipeline, we are never going to be anything but a state-subsidized, second best always struggling to keep up with the Fords of this world. And yet if our labour force would get down to consistent work we now have the financial means to become international pace setters.’

Derek Whittaker’s overtures soon got results when the Longbridge workforce voted 10,828 to 2934 with 328 abstentions, to accept most of the productivity improvements and changes in working practices demanded by the management as a condition for making the ADO88.

A PR disaster on television

Purdy's TR7

By October 1976 it was reported that so great was demand for the Rover SD1 that dealers were quoting six months’ delay in delivery. On 22 October, ITV transmitted the first episode of the New Avengers television series. Produced by Brian Clemens and Albert Fennell, this was an update of the classic 1960s series The Avengers and starred once again Patrick Macnee as John Steed with Joanna Lumley as Purdey and Gareth Hunt as Mike Gambit.

The cars for the series were provided by Leyland Cars: a Rover SD1, Jaguar XJ-S, Jaguar XJ12C and an MGB Roadster. It was not a happy experience. Producer Brian Clemens later elaborated: ‘The Rover was still under wraps at that time, literally; it was transported from place to place under disguising covers. It was not reliable – and BL were slow in making repairs, or providing an alternative car.

‘Amazingly, when the Jag went wrong, we actually had to go elsewhere and hire one, BL being unable to fill the gap. The Jag saloon that Pat occasionally drove was a special suspension model intended for circuit racing. Everyone hated it because it was such a handful to drive under normal conditions. The stuntmen particularly, because it was difficult to skid or do handbrake turns. The Jag sports on the other hand was excellent for stunt work.

‘BL sent us an MGB. I borrowed it one evening and sat in the car park for nearly an hour trying to engage reverse. Eventually I had to have it pushed out – and drove home knowing I could not select reverse. Later I found out that the gear knob – on which the gear patterns was etched – was actually from an Austin Princess on which the reverse is in exactly the opposite direction to the MG! I never thought to question the gear knob and spent all that time trying to get a gear where there was none.

‘Later, on The Professionals, we involved Ford – a US company – and received excellent and professional treatment. I have never bought a British car since and I doubt anyone associated with the New Avengers drove a BL car for a long time after that.’

A Mini reason to celebrate

Four millionth Mini

On 22 November 1976, British Leyland produced the four millionth Mini. The commercial and industrial climate had changed somewhat since the cars 1960s heyday, with 203,575 being produced in 1976, but the loss of the Authi and Innocenti factories had drastically reduced output and sales now reflected its status as an economy car rather than a fashionable mode of transportation.

To its critics the Mini was now an outdated antique, a crude, unrefined buzz box that was well past its sell by date and only survived in production because its manufacturer had continually fudged the issue of its replacement. In the Britain of 1976 the optimism of the Sixties when mini-skirts and Mini cars were all the rage had been replaced by strikes, industrial decline, 26 per cent inflation and the reality that Britain needed an IMF loan to stay afloat.

Why, though, were the strikes in British Leyland still occurring? Surely the worker participation schemes implemented during 1976 were meant to stamp out disputes?

Bill Roche, a senior figure in the TGWU, was chosen as Secretary of the British Leyland Cars Council, said: ‘I welcomed the Ryder Report. One felt here was an opportunity but it all went disastrously wrong. We failed initially because we didn’t start with the membership. If we had had time and it had been practicable we could have had shop floor elections for people to go forward. Then not only would we have had different people, but they would have had a stake in it. At the end of the day the committee was trade unionists looking after their own – and their own Trade Unions.’

In other words workers with no direct representatives on the various union-management committees had no way of airing their grievances other than the time-old method of walking off the job. There was nothing wrong with the idea of some sort of employee input in the running of British Leyland, but the execution of it was bodged from the outset.

Another problem was that workers often paid lip service to their union – because of the closed shop operating in industry, workers had to be in a union to retain their job, but their loyalty was first to their colleagues. Full-time union officials had very little influence on them and some found their presence was resented by their rank and file, often because they were men skilled in the art of negotiation, diplomacy and compromise, for it was part of their job to help solve disputes and get men laid off back to work.

Back to History : British Leyland, The Grand Illusion – Part Two : Owned by the people on behalf of the people

Forward to History : British Leyland, The Grand Illusion – Part Four : Meltdown

Ian Nicholls
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  1. the turbulent 1970s must go down in the records as the lowest point of British industrial history. Junk cars, loss making industries, incompetent management, and stupid follies such as Concorde.

    The only decent legacy of the 1970s, the Intercity 125 HST trains, still giving first class service as they approach their fourth decade of service.

  2. “The Ryder Report, at a stroke, destroyed Rover’s autonomy, the company was stripped of its board and managing director and responsibility for production of the new Rover SD1 lay at the door of the Solihull plant director, who in turn was answerable to the more remote Leyland Cars management team. All the plum jobs in the Leyland Cars organisation had been taken by ex-BMC/Austin Morris men and there was no place in it for Bernard Jackman and Rover Triumph sales director John Carpenter.”

    Ian, given that the Rover company was the best-managed within British Leyland, can you shed any light on why Ryder recommended that ex-BMC men landed the controlling positions at Leyland Cars?

    This decision was surely disasterous. Had the Rover Cars team been left in charge of production, the SD1 could have been built to P6 standards of quality and the loss of customer confidence that saw the bottom drop out of SD1 sales by 1979 might have been prevented. This would have altered the course of BL history…

    In addition, ruling the Rover team out of the management positions at Leyland Cars surely resulted in best practice across the company being binned and worst practice being adopted.

    Unlike the Rover managers, the ex-BMC team had a make-do-and-mend mentality, a cavalier attitude to quality control, no sense of the aspirations of the car-buying public, and such a scandalously poor grasp of costs that, during the 1960s, the Mini and MGB retailed below the cost to BMC of manufacturing them. The more they sold, the more money the company lost…

    On the face of it, then, it made absolutely no sense for the Rover team to be dispensed with in this way.

  3. Another great read. I agree in the early/mid 70’s, the cars produced by BL were more primitive and older looking designs compared to the likes of the Ford Cortina MKIII & IV and the newish Datsun’s etc.

    The arrival of the Rover SD1 was a fightback, but as it was aimed at the premium market, it needed support from smaller models like Marina’s & Allegro’s (which were not up to the task). Had BL’s opposition only been Ford & Vauxhall, they might have coped, but the Japanese & German choices overwhelmed them.

  4. Craig
    I suspect Lord Ryder had nothing to do with the individual appointments within Leyland Cars, that was probably down to Derek Whittaker. IIRC Derek Whittaker was at one time the Cowley plant director. His deputy was Richard Perry, former BMC apprentice and a possible future chairman of BMC, had that company remained independent.

  5. Spen King alluded to the BMC takeover of Rover in his 2002 interview with Keith.
    “What happened was that they decided that it was going to have big volume, so built the ruddy great factory at Solihull and then there was a lot of stuff going on about how many hours it should take to build a motorcar, and the Austin-Morris people came up with the figure that we should build SD1 in 23 hours. So I think largely on the basis of that, there was this invasion of Rover, in the way the Normans invaded England, or how Triumph invaded BMC at one time. So, the car wasn’t made by the Rover people at all, but by the Austin Morris invasion team.”

  6. Just a small point – at launch the Maestro seemed a disappointment, a loss of momentum after Metro. Somehow though, you can imagine the above LC10 (steel bumpers included) following quite logically from Metro if hitting the streets in say August 1981.

  7. If LC10 had hit the streets in ’81 it would have looked up to date and probably led it’s class but given the woeful quality of the first Maestros I shudder to think how badly made it would have been with two less years development.

  8. “the number of basic models envisaged by the Ryder report would not allow the company to compete effectively”

    This comment could also be levelled at the 3 M’s plan.

    “Leyland Cars share of the home market had collapsed from a record 40% in September 1975 to an average 24% for October and November 1975”

    Good God! Was the fall this sharp?

    I’ll continue my read tomorrow………..

  9. What a great (if depressing) read – thank you for pulling all the strands together. With so many factions (management and workforce) pulling in so many different directions, it’s a wonder BL lasted as long as it did, or ever got around to producing any (occasionally) self-propelled vehicles.

  10. The comments about the strike-prone BL of the mid 70’s reminds me of an interesting snippet which suggests that some strikes were not always what they seemed.
    A friend of mine at University in 1975 was sponsored by BL and had worked at Cowley, and told me the tale, and I see no reason to doubt it.
    Every May, or when ever the weather turned fine, a really intractible “dispute” would appear and everybody walked out. The next week, or until the weather broke, was spent painting the exterior of houses (before uPVC glazing). After about a week, the unshiftable dispute was miraculously “resolved” and everybody went back to work.
    Apparantly, this was so well known in the area that hardware shops (pre- B&Q, remember them?)used to stock up on extra white paint in anticipation!
    Sounds wacky? If you didn’t live through the 70’s you wouldn’t believe it!
    Cheers, David

  11. Ian

    An excellent article again

    I think the only I could say is that you do not emphasize enough (how could you) just how much (tax payers) cash they were burning through, losing money on everything that was going out the door including previous cash generators like the Marina, Range Rover and XJ6. People who want to know more I would recommend you read British Leyland Chronicle of a Car Crash 1968-78.

  12. @7 Dave I think the LC10 was doomed to failure at its birth by the political white was that the Ryder Report was. The Labour Government reluctant to take on the Unions guided the report to focus the future of the business on the volume sector at expense of the Premium brands.

    This was fundamentally wrong, it may have been possible for BMC to have been saved as a volume manufacturer in 68, the Allegro probably being the last missed opportunity. By 74, the export market networks were lost and they were in full retreat in the domestic market with no Fleet products or anything to take on the new generations of imports.

    Faced with this, they simply could not sell enough ADO88 and LC10/11 to achieve volumes to compete on price and profitability with the other European manufacturers.

    One thing that does strike me as strange, is given the failure of the Allegro and Princess to gain traction in the market, the BMC management back in charge did not call on Pinnfarina. Rather than the dull domestic styling of the Metro and LC10 one should note that the Peugeot 205 was launched between the two which would have suggested that had they been styled by Pimmfarina it would have looked something more like Peugeot 206 / 306.

  13. For the Maestro to make an impact it would have needed a mid 70s launch. As noted here the design was effectively frozen in 1975 yet it took 8 long years before it finally limped off the production line. By 1983 it was already an old car with various bits of 80s bling nailed on. In that respect it wasnt that different to an Ital or Ambassador.

  14. Apart from the New Avengers and The Professionals, Simon Templar drove a Jaguar XJS in Return of the Saint. Apparently this was so troublesome the air conditioning caused the dashboard to freeze on one occasion and a standby car had to be on duty most of the time. However, as the show was only made for one series, a replacement wasn’t needed. Maybe if it had continued, and knowing the previous Saint’s liking for Swedish cars, perhaps they’d have used a Saab 99 Turbo.

  15. I’ve heard that the XJS in Return of the Saint would drip ice cold water from the heating vents every time it was driven round a corner at any speed.

    Supposedly Ian Ogilvy was not pleased by this, & had a stunt driver do most of the chase sequences apart from the close ups.

  16. A workforce striking to this extent and scoring such low productivity must have been oblivious to the notion of market forces, competition. Assuming state aid would be limitless and thanks to a once 40 per cent market share expecting the home market to always buy their product.

    Back to the same old point – how could the almost incredible turnaround of the late eighties, early nineties be lost?!

  17. Richard @ 16, I heard a more extreme version of this with the aircon, but either way it didn’t engender much confidence in what was supposed to be British Leyland’s most exclusive car. Also losing The Professionals contract to Ford must have been another slap in the face.
    Indeed in the late seventies, British Leyland products on the television seemed to be more associated with misfits like Basil Fawlty and Terry and June than shows like The Professionals, where big Fords reigned and were highly desirable to car buyers because of this.

  18. Here’s a thought I’ve had before –

    The Acclaim hit the road in 1981 and talks with Honda must have started circa 1979. How on earth did Honda agree to have one of their cars built by BL given recent strikes, poor quality, low productivity at BL plants.

    How was the transformation which allowed the production of reliable, quality Acclaims achieved?

  19. Ian @ 5, 6: Yes, it does make sense that Lord Ryder would not have been involved in appointing the senior managers beneath Derek Whittaker who ended up running Leyland Cars. However, I still think Ryder bears the ultimate responsibility for the Austin Morris ‘invasion’ of Rover because it was he who made the crucial appointment of Derek Whittaker as Managing Director in the first place.

    Surely Ryder could have foreseen that whichever person he appointed would, in all probability, put together a management team of colleagues with whom he had worked previously. It has always been thus…

    Appointing Whittaker meant not just appointing Whittaker but all of his cronies as well. That would have been a smart move if any of the Austin Morris lot had had anything approaching the expertise of the Rover people.

    My sense is that this mistake was a huge one, made at precisely the wrong time. It dealt a crippling blow both to Rover and to Leyland Cars from which neither recovered.

  20. 20: I think it’s mentioned in the Acclaim development story that Honda had done a job with the production design, so that all the parts would fit together with no bodging required.

  21. Apologies Craig. You seem to be a Rover enthusiast and I know Craig Cheetham has a very nice maroon P6.
    Changing the subject.
    Apparently all those hedonistic hippies in the late 1960’s depised James Callaghan. He was the Police Federations man in parliament from 1955 to 1960, and once he became Home Secretary in late 1967 the celebrity drug busts began. In July 1967 64 prominent celebs signed an open letter in the TIMES calling for cannabis to be legalised, including the Beatles. Most of them were probably users, and the intelligentsia thought legalisation was just one step away. Instead they got a Home Secretary who decided to enforce the rule of law.

  22. Ian @24, maybe Callaghan was more of a realist than many of the sixties hippies who probably supported Benn in the seventies and were probably angry when their old enemy became PM. Callaghan, despite his many faults, at least knew British Leyland wasn’t a bottomless pit, Benn’s industrial democracy idea was a disaster and the company had to pay its way or die.

  23. I did think Tony Benn was anti-pirate radio, which might have lost him kudos in the music & counter culture worlds.

    It explains why Kenny Everett was pro-tory during the 1983 election.

  24. @24, 25, 26: Thanks for reminding me of the political and cultural machinations of the time which, of course, had such a bearing on what transpired at British Leyland.

    In my fury – and, yes, it’s still burning 38 years on from the launch of the SD1 – I had become somewhat fixated with pinning all of the blame on Lord Ryder, Derek Whittaker, and the Austin Morris ‘invasion’ of the Rover company. While I still believe that these individuals were responsible in their own ways, I appreciate that political differences and expectations did exert their own pressures.

    But to what extent were Ryder’s recommendations a consequence of his poor judgement and to what extent was he influenced by the government that had appointed him?

    One huge flaw of the Ryder Report was that it based British Leyland’s recovery on the achieving of hugely optimistic production targets. These would have been extremely difficult to meet even if the workforce had actually turned up to manufacture the cars on a consistent basis.

    High production volumes, then, were going to save the day; meaningful quality standards and, with them, the nurturing of the brands in order to grow a customer base didn’t get a look in.

    It’s just so stupendously unrealistic and short-termist that I wonder if Lord Ryder and ‘Mad Wedge’ had been smoking the same pipe of peace.

    What is for sure is that neither of them were ‘car people’. As an industrialist, Lord Ryder could not see beyond costs and volumes. That might have worked if British Leyland had been manufacturing tubes of toothpaste but car-making, and the emotions of buying and driving cars, are far too complex for such a one-sided approach.

    In the Rover management team, there was a group of people that had all of the skills (cost-control, production, quality, marketing, engineering) and long, specific, experience of operating successfully within the car industry but Lord Ryder chose to dispense with their expertise.

    Such is the short-termism of accruing votes and winning general elections, maybe the Government put pressure on Ryder to produce a ‘quick-fix’. Or maybe it didn’t and he was simply the wrong man for the job. I don’t know.

  25. @20 & @23. I remember the first Acclaims coming through the workshops for PDIs and then for routine servicing once out with their owners.

    They were pretty much faultless with the exception of two components – heated rear window failures and radiator leaks.

    These two items were (apparently) the only components sourced from manufacturers in the UK.

  26. Craig
    You are putting forward some very articulate points of view.
    I am tempted to write the Rover Triumph story from the purchase of Rover by Leyland in 1967 to the demise of the SD1 in 1986.
    Never mind the quality – its British Leyland!

  27. 20,23 &28

    The Acclaim quality was don to several factors, to clarify I would say the following.

    1: Honda knew how to production engineer a car to a level at that time was unknown in BL.

    2: Leyland did not mess with it, it was effectively a CKD car even retaining some odd Japanese features like the flip car digital clock and the production process and tools were taken unchanged from Honda.

    3: The industrial landscape of 1981 was very different in BL, High unemployment and the fact that the Unions could no longer twist the minority Labour government through left leaning MP’s to put pressure on Edwards to back down had broken the Unions hold over the business once and for all.

    Honda I do not think were too concerned with quality issues anyway, the car was not planned to be sold in Europe so giving it to BL to sell under the Triumph brand was a windfall deal for them.

    They clearly though did not feel totally secure in BL quality, as that when they started building Honda branded product, Honda set up its own quality control rectification site to process all BL product prior to dispatch to dealers.

  28. If the product isn’t good enough, people won’t buy it and a bad repuation is very hard to beat. A similar thing happened with what used to be Britain’s most popular television station, ITV, in the noughties.
    Prior to the noughties ITV had a very popular regional set up( a bit like BMC and Triumph with their separate brands), where the regions specialied in different types of programming. Granada majored on more high brow shows, LWT provided light entertainment, Central on drama, etc. However, the regions were largely abolished in 2002 and faced with increasing competition from the BBC and satellite channels, ITV decided to move downmarket and produce cheap, disposable reality shows and braindead entertainment. As a result ratings halved by the end of the decade, the station’s image became extremely tarnished and ITV nearly went bankrupt.
    Sounds familiar? The story of ITV is very similar to that of British Leyland, where a once huge brand was nearly destroyed in the space of ten years, and even now with some improvements to programming, rather like the revival of Rover in the early nineties, many viewers will never return.

  29. 23 & 31

    Yeah, and I guess if many Acclaims had proved unreliable the buying public would have associated this with BL assembly as opposed to Honda quality. Still a bold move by Honda though even with the income benefits the deal offered them.

  30. 33 At that time Honda car foot print in Europe was minimal, few customers knew Honda made anything other than Motorbikes, so the Acclaim was seen my most of its customers who were mature and already Leyland customers as a Triumph and a car for them to trade their Toledo and Dolly in for.

  31. I will add another point. It is fashionable to accuse politicians of being short termist, but how can you plan long term when the people who vote for them are only interested in the contents of their wage packet at the end of the week, which was the situation in the 1970’s?

  32. Honda’s first import was some horrid little hatchback called the N600 that Which magazine said was the worst car they’d ever driven. Of course, in 1967 with memories of the war and when almost every car was British, there could have been a bit of bias even if the car was an awful piece of tin, but ten years later the Japanese were making ultra reliable, economical cars that people wanted to buy.

  33. Actually, I think Honda’s first car on sale in the UK was the S800 which was a quite stunning little sporty car ( and I hate Honda and its products ) – a kind of Japanese Sprite with a roller bearing in line 4 cylinder engine which would rev easily to 8500 rpm . The N600 was a twin cylinder affair which actually drove rather well even if the lightweight bodywork was rather flimsy

  34. Ian @ 36: You’re right that it was difficult for the politicians of the 1970s not to be short-termist, such were the expectations of a disgruntled 1970s workforce which constituted a significant part of the electorate.

    However, I expect better of politicians. Yes, it was difficult for them not to be short-termist but what if they had shown some courage and tried a little bit harder?

    Maybe they could have communicated to the electorate that a longer-term approach, which emphasised engineering integrity and the building-up of brand equity, of which there was an abundance in the Rover, Triumph and Jaguar marques, was the only real way to save British Leyland.

    By focusing so narrowly on corporate reorganisation and the increasing of production volumes, the Government, through Ryder, talked down to the electorate.

    Without wishing to draw inappropriate parallels with other events in history, the Ryder Report reminds me of Chamberlain’s return from Munich in 1938 with his piece of paper which promised the ‘quick fix’ that there would be no war.

    The problem with quick fixes is that they play well to the electorate because they owe more to pink-and-fluffy fantasy than sometimes-uncomfortable reality. Both Chamberlain’s signed declaration and Ryder’s report were quickly rendered redundant when the reality of invasion and strikes, respectively, became apparent.

    My sense is that the Government and Ryder could have ‘sold’ a longer-term fix of British Leyland to the electorate in the way that Churchill did in his war-time address to Parliament when he emphasised that there would be no easy solution to the crisis of war and that all he could offer was ‘blood, toil, tears and sweat’.

    Reality is for adults; fantasy is for children.

  35. Thanks Ian – another superb instalment. I heartily agree with so many comments about the difficulty of putting the Ryder Report into action, of controlling the unions and getting cars out of the doors. I guess if you boil it all down to simple bullet points, the management had a very simple choice.
    1) make half the workforce redundant, close half the plants and concentrate on producing good cars that the finances could support.
    2) run with the Ryder Report, keep everything the same, (except a lot of the strengths – like Rover), keep giving promising signals to the press and try putting elastoplasts on everything dodgy.
    No doubt Ian you will introduce the hero of the hour very soon! Fat lot of use it was of course cos’ it all got b*gg*rd up later anyway.
    Whoever it was who the made the unkind and negative comment about Concord (too far back for me to bother checking), I cordially invite you to Brooklands on my next visit. Say goodbye to your family though, you won’t leave alive! (Just joking of course – but really what a thing to say!)

    • Change had to come, British Leyland was no longer the big success it was in its first couple of years and talk of constant expansion was impossible when the company was losing money all the time, market share was tumbling and strikes were constantly holding up production.
      For a start, Austin Morris and its incompetent range of cars should have been axed and resources devoted to Mini, Triumph, MG, Rover and Jaguar, which had a better chance of survival. I know this would have meant big job losses at Cowley and Longbridge, also the two most strike ridden plants, but a slimmed down company concentrating on products that still had some kind of halo effect was better than trying to keep cars like the Maxi going past their sell by date.

      • Austin Morris was certainly the killer – although, as you say, Mini could’ve been salvaged as a standalone brand from the mess. I’ve always thought Triumph was the brand that had a future as the more aspirational mainstream brand for BL, with MG as a more overtly sporting brand, Rover as a Volvo/Audi/Lancia rival and Jaguar taking on Mercedes/BMW.

  36. There was a program on TV last night about the decline of the Glasgow shipyards in the 1970s. Some very close parallels to the BL problems of the same time – striking workers, weak management, idealistic Labour government, lack of investment, worn out tools from the previous century, etc, etc.

    But it had one significant difference to BL – when confronted with closure the workers pulled out their secret weapon:- a work-in !

    There was Jimmy Reid the union leader instructing them to work hard and produce quality ships that people wanted to buy – now that’s what I call a worker’s revolution !

    Joking aside, I didn’t know whether to laugh or cry when he was exhorting them to go to work and commit “no vandalism, no skiving, no thieving”.

    Couldn’t see Red Robbo making the same speech somehow.
    Unfortunately too little too late.

  37. Cliff @41: Thanks for that. Yes, the ship-builders of the Clyde were better-served by the charismatic Jimmy Reid than were their British Leyland equivalents.

    But there seemed to be a better spirit among the ship-builders; a sense among them that their positive input could change a bad situation for the better. Jimmy Reid recognised that and harnessed it.

    In contrast, the British Leyland workers conveyed a sense of hopelessness at being unable to effect any change in the company.

    The pub scene from the 1978 BBC documentary about the Speke Plant No 2 closure in which TR7-assembly workers voice their frustration, anger and sense of being trapped in a situation that they cannot control is difficult to watch for its utter despondency:

    http://www.youtube.com/watch?v=IBokyZ0wOmc (fast-forward to 05 min 10 secs)

  38. With regard cars provided to TV companies. The early ‘Professionals’ originally used BL cars or more specifically a white Triumph Dolomite Sprint with a black vinyl roof.

    Unfortunately, BL just didn’t understand continuity, They would take the cars back at the end of the day, only to turn up the next day with different colored cars. They would even bring back a green Dolomite Sprint in place of the white one.

    I guess that’s why Ci5 turned to Ford and thank goodness they did for all our sakes.

    Bodie out!

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