Ian Nicholls, AROnline’s historian-in-residence, recounts the history of BL under the leadership of Michael Edwardes. He follows up his excellent rundown of the British Motor Holdings and British Leyland stories with a seventeen-part study of the firm from 1977 to 1982.
Here, in the first part, we look back at 1977 – the year after the Rover SD1’s launch – and the arrival of the man from Chloride. It was a turbulent time…
PART ONE : NO FUTURE
The history of British Leyland in the period 1977 to 1982 is shaped by the 1983 memoirs, Back From The Brink, penned by its Chairman, Sir Michael Edwardes. But is this the true story, and what was omitted from his account?
The Rover Triumph Story is covered in depth elsewhere on AROnline, so the focus of the articles in this series will primarily be on the re-constituted Austin Morris and Leyland Vehicles divisions.
The article includes testimony from various Trade Union leaders as an alternative viewpoint to the Edwardes narrative. The most notable of these was David Buckle, the Transport and General Workers Union District Secretary for the Oxford area, which included British Leyland’s Cowley complex.
Setting the scene
The year 1977 was another grim one for British Leyland as the company drifted aimlessly from crisis to crisis. The Leyland Cars division was the problem child of the group.
In February, the Castle Bromwich body-making plant went on strike and, when they returned, the Leyland Cars toolmakers walked out, causing chaos. The company tried to recover from this but was hit in August by a long strike by the Lucas toolmakers.
Then, in the autumn, the part-time Chairman of the parent company, British Leyland Limited, Sir Richard Dobson, was recorded making some inappropriate remarks at a private function. When these were revealed in the media he promptly resigned. What the media did not realise was that Dobson’s days were already numbered.
Edwardes hoves into view
The Chairman of the National Enterprise Board (NEB), Leslie Murphy, had resolved to secure the services of a full-time Chairman in an effort to turn around an organisation that was rapidly becoming a symbol of all that was wrong with Britain in the Queen’s Silver Jubilee year.
It was also the year of Punk Rock, when the Sex Pistols vied with British Leyland for the headlines. Johnny Rotten and co. sang in the coda of their hit God Save The Queen, ‘no future, no future, no future for you.’ And for many young people, this nihilistic prediction was to have a firm basis in reality as Britain economically struggled to keep its head above water in a post-imperial world.
Not universally loved
News of this meeting brought angry private reactions from senior management at British Leyland, who apparently resented another ‘master’ being added to the already complicated chain of command stretching from their Marylebone headquarters to the NEB, the Department of Industry, and even the Cabinet Office.
Whatever was discussed is not known in detail, but Turnbull, after advising the UK Government to persuade the Japanese to manufacture in Britain, soon accepted another job in Iran. This still left Leslie Murphy with the problem of finding a more capable Chairman for British Leyland, and business executives were hardly falling over themselves to take up the post.
Hugh Scanlon, then the leader of the Amalgamated Engineering Union was on the National Enterprise Board. He told author Martin Adeney: ‘There were constant political interruptions in the role of management. Before they could really answer yes or no in national negotiations, they had to see father.
‘I hope that doesn’t imply that I am against Government overseeing any nationalised industry, but the day-to-day running of any company must remain in the hands of the managers. There were a number of good Trade Unionists on the NEB who would bend over backwards to do anything to assist the establishment of a publicly-owned British motor industry, yet we collectively reached the stage where the NEB could not keep offering money because it was only going to finance strikes rather than get involved in production.’
The toolmakers walk out
During the unofficial Leyland Cars toolmakers strike, a decision by industrial relations chief Pat Lowry to fire the strikers had to be referred upwards to Derek Whittaker, the Managing Director of Leyland Cars, he then passed this on to Alex Park, the Managing Director of British Leyland who then contacted Lord Ryder the Chairman of the NEB. Lord Ryder in turn contacted the Secretary of State for Industry, Eric Varley, who then asked to be briefed by a team from Leyland Cars. Once this occurred the matter was then discussed by the Cabinet for approval.
Hugh Scanlon’s own personal attempt to persuade the toolmakers to return to work at a meeting in Birmingham had been given short shrift by the strikers.
Eric Varley later said: ‘It had started with a market share of 33 per cent and it was shrinking all the time. By any standards it was awful: in terms of productivity; in terms of model range. There was only one thing you could do which was to get the best possible management available and back it to the hilt.’
Edwardes comes on board
The timetable was as follows. On 27 September 1977 Sir Richard Dobson, the British Leyland Chairman, was invited by the Twenty Club to give a talk at the Dorchester Hotel in London. The Twenty Club was a group of retail businessmen who met regularly on a private basis. Unfortunately for Dobson, his speech, which included some racist slurs and less than complimentary comments about Trade Unions, was secretly recorded by the son of one of the members.
By early October Leslie Murphy had formulated a plan. He would appoint a non-executive British Leyland Board member, the Scots-American Ian MacGregor, to the role of Chairman, and would ask a member of the National Enterprise Board since March 1975, to become its new Chief Executive. That man was the Chief Executive of the Chloride Group, the 47-year-old South African-born Michael Edwardes.
Edwardes had doubts that splitting responsibility for managing British Leyland with Ian MacGregor, who due to his other business commitments, could only perform the role as Chairman on a part-time basis, would work. This was the type of management structure already in operation at British Leyland, with Sir Richard Dobson as part-time Chairman and Alex Park as Managing Director.
Michael Edwardes managed to meet Ian MacGregor at JFK airport, where they agreed that it was unwise to split the company’s top management functions, and that MacGregor would become Deputy Chairman of British Leyland instead, with Edwardes taking on the role of Chairman. Next Edwardes had to agree the terms of his contract with the NEB. His terms were that he would brook no intervention by the NEB, the civil service or politicians – this had also to be squared with the Chloride Board.
Meeting the Prime Minister
As Michael Edwardes pondered over whether to take the hot seat as British Leyland Chairman, there was a division of opinion in the labour movement over what the true purpose of the UK Government’s involvement in British Leyland actually was. Ostensibly it was to invest taxpayers’ money in a company that had earlier in the decade produced over a million vehicles a year, to safeguard jobs and to export vehicles in order to help Britain pay its way in a post-imperial world.
That was certainly the aim of Industry Secretary Eric Varley and Prime Minister James Callaghan (above), and it was now even more important that British Leyland succeeded as Ford and General Motors began to cut back on UK production and imported vehicles from continental factories to feed UK demand.
In 1976, imported cars had made up 37.9 per cent of the UK market, the following year this increased further to 45.4 per cent – for senior members of the Government, the management of British Leyland in a competent and business-like way was highly desirable.
However, others in the Labour movement felt the Government was straitjacketed by the forces of capitalism, something that should be combatted rather than abided by, and their leader was Eric Varley’s predecessor as Secretary of State for Industry, Tony Benn. The roots of all this lay in the dying days of the Heath-led Conservative Government of 1970-74.
Trying to limit the Trade Unions
The Industrial Relations Act 1971, which limited the Trade Unions’ power, had united the labour movement in irrevocable opposition. The act was seen as an attack on the working class and the Labour Party pledged to repeal the law. The Heath Government also had two run-ins with the National Union of Mineworkers.
Having caved in to the NUM in 1972 with the lights going out literally, in 1973-74 the Government resolved to stand firm and instigated a three-day working week at the start of 1974 to save on coal stocks. With oil prices having risen after the October 1973 Yom Kippur War and industry operating at only 60 per cent capacity, for millions of people times were tight.
The Government called a snap General Election at the end of February 1974 over who ran the country, the Government or the Trade Unions, which was narrowly won by the Labour Party with a manifesto co-written by Tony Benn, calling for nationalisation of vast tracts of industry and commerce and the greater involvement of the Trade Unions in society. Tony Benn saw the Trade Unions as representatives of ordinary people who needed a greater say in how Britain was governed. To many supporters the Trade Unions had seen off a hostile Government through people power and its more sympathetic replacement now had to listen to their viewpoint.
A mini revolution
In their eyes a mini revolution had occurred which would enable the new Government to transform British society. After all, Edward Heath (above) had asked the electorate, who ruled Britain, and the verdict was apparently the Trade Unions.
Tony Benn became the new Secretary of State for Trade and Industry and, in December 1974, British Leyland fell into his hands when it ran out of money. There is a lot of evidence that Tony Benn was planning greater Trade Union involvement in the management of British Leyland, and he spoke to at least one meeting of the British Leyland (Motor Corporation Combined) Trade Union Committee (BLTUC), more of which later, in early 1975.
Michael Edwardes recalled Tony Benn as saying: ‘Our job in Government is to look after all our people from the cradle to the grave.’
Things don’t pan out
At the inaugural NEB dinner Tony Benn told those who cared to listen that the funds the Treasury was making available to his Department were wholly inadequate. A target of £10 billion was more desirable, certainly that kind of figure would be needed to buy out the various industries listed as prime candidates for nationalisation in the February 1974 Labour Party manifesto.
However, this fantasy of a socialist utopia in the plants of British Leyland was abruptly terminated by a June 1975 cabinet reshuffle in which Benn swapped places with Energy Minister Eric Varley, as the Government led by Harold Wilson and then James Callaghan began to deal with economic reality, rather than socialist theory.
All those who believed the fantasy that British Leyland’s future was cast in stone, that state investment to upgrade manufacturing facilities was guaranteed and reform of outdated working practices was not, lost their champion, but those beliefs still permeated the company as Michael Edwardes pondered over whether to accept the top job.
Resignation for Dobson
While this was going on, the transcript of the speech Sir Richard Dobson made to the Twenty Club surfaced on 19 October in a magazine called Socialist Challenge, edited by Tariq Ali. The almighty furore that resulted led to Sir Richard Dobson’s resignation two days later.
It was not just the racist slurs that caused offence. Dobson’s speech was also perceived as being anti-Trade Union at a time when many clever people thought Britain was heading inexorably in a socialist direction.
A resignation statement was issued jointly on 21 October 1977 by the National Enterprise Board, British Leyland and Sir Richard Dobson which said:
‘Arrangements have today been made for Sir Richard to relinquish his appointment as Non-Executive Chairman of British Leyland and a Director of British Leyland. In enabling such arrangements to be made, the National Enterprise Board recognizes and greatly appreciates that Sir Richard Dobson is exclusively moved by and concerned with the good relationship between management and employees.
‘Sir Richard Dobson states that the recent unauthorized disclosure of extracts from a light-hearted and unscripted speech made to a private club after dinner has been used to convey a totally false impression of his personal and social attitudes and business ethics. Such an impression would be known to be false to those acquainted to him and his career, particularly in regard to labour and race relations.
‘It is a matter of special satisfaction to Sir Richard that, during the course of his chairmanship, British Leyland has received a very high degree of cooperation from all union leaders, a fact to which he has made grateful allusion both in public and private. However, his principal concern is to avoid any damage to the delicate labour situation now prevailing and on that account he accepts that a change of chairmanship at this moment might have benefits.’
The reaction of some prominent left-wingers reflected some of the attitudes prevailing at the time. Left-wing Labour MP Tom Litterick, member for Birmingham Selly Oak, said managers in nationalized industries who were hostile to the principles of public ownership were saboteurs.
‘What I want to see is ideological discrimination in picking managers for the public sector. After all, it exists in the private sector’.
Dennis Skinner, Labour MP for Bolsover, said: ‘Sir Richard’s appointment was a form of patronage; the lesson is that the next man must be appointed after long and exhaustive consultations with all the Trade Unions at Leyland.’
Sir Richard Dobson said before leaving Heathrow for Canada on the same day: ‘I joined British Leyland in the hope that I could do more good for them than harm, but it now appears that I am doing more harm than good. I regret that the statement was not published in full. I stand by what I said in full, but only an isolated paragraph was printed.’
Edwardes accepts the job
Also occurring that day, about 600 Vehicle Inspectors at Leyland Cars’ Longbridge plant went on strike in support of an upgrading claim. The next day, 22 October, Michael Edwardes telephoned the Chairman of the NEB, Leslie Murphy, to accept the role of British Leyland Chairman. With the Dobson reign having imploded, the NEB boss was at least spared the task of firing the British Leyland Chairman.
While the media rooted out the man who tape recorded Sir Richard Dobson, one Peter Cooper, and allowed him to bask in his 15 minutes of fame, life at a leaderless British Leyland went on.
On 24 October Leyland Cars’ 100,000 manual workers started voting in a secret ballot on proposed pay and industrial relations reforms which were meant to produce a unified pay structure across the company. The Leyland Cars offer was designed to reduce the existing chaotic system of bargaining from 58 units to one from 1 November 1979.
Separate plant bargaining was a leftover from the now abandoned piecework system, and demands for pay parity between plants had been the cause of much industrial strife. This was a consequence of creating one large vehicle manufacturer through a process of mergers of smaller companies, each with individual agreements with its respective workforces.
Was it already too late?
In hindsight perhaps one can see that British Leyland was doomed from the outset, regardless of the quality of its products. The task of unifying disparate plants into one cohesive unit meant untangling myriad local agreements and starting with a clean sheet, and that was perhaps unobtainable in the time window required.
The first ballot papers were handed out. As workers clocked in they were told to report to their normal ‘wage stations’. They had to sign official receipts for individually addressed and sealed envelopes prepared by the Electoral Reform Society which was conducting the ballot.
Each envelope contained a joint statement from management and the Confederation of Shipbuilding and Engineering Unions recommending acceptance, and a ballot paper requiring a simple ‘Yes’ or ‘No’ response to the question: ‘Do you support the recommendation of the Executive Council of the Confederation that the company’s proposals be accepted?’
Replies had to be posted not later than Thursday, 27 October. Any arriving at the society’s headquarters after Monday, 31 October, would be declared invalid.
The future of British Leyland’s in their hands
In a statement Leyland Cars said: ‘The package is essential to the future of Leyland Cars on the following grounds:
- We believe that it provides the only way to put right the pay anomalies existing between plants. This, in turn, would remove the major cause of conflict.
- We believe acceptance of the package will greatly reduce the chance of strikes occurring.
- The package offers better conditions for all hourly paid employees by improving lay-off and sick pay arrangements giving security of earnings.’
The statement concluded: ‘The package incorporates an incentive scheme to encourage high productivity and high wages. We want to be a high-productivity/high wages company not a low-productivity low wages company.’
Cars in the pipeline
As well as sorting out the wage bargaining process, there was the new model programme.
Priority was being given to a Mini replacement, given the codename ADO88 (above). With the European car market flooded with superminis of all shapes and sizes, the notion that the Issigonis Mini could soldier on come what may was out of the window. British Leyland needed a new small car and fast before a market the Mini had once dominated was lost.
The problem was that the ADO88 design had fared badly in styling clinics where it was shown alongside competing designs.
With the poor feedback for the ADO88 design from the styling clinics having been digested, Leyland Cars was faced with a dilemma. Many of the panels had been signed off for production and money had been spent on jigs and tools to produce them. Now Leyland Cars had the choice of redesigning the car at extra cost and delaying its launch or pressing ahead with the existing design with the intention of launching it in October 1979.
Changes to the plan
The same day as the ballot began, the Leyland Cars Marketing Research Department drew up a document, which listed the company’s options.
Route 0 – This was to be tackled within 10 days and was a cosmetic alteration to the ADO88’s appearance without changing any body panels.
Route 1 – This task was to be tackled within four weeks and was to investigate changes to the body side panels, the screen and the waistline, but to exclude modifications to the rear or to the hatchback. If this option was chosen then the ADO88 launch would be delayed until March 1980.
Route 2 – Five weeks was allowed for this task and would include the Route 1 alterations plus modifications to the rear end and hatchback. This work would delay launch until the autumn of 1980.
Edwardes makes it public
On 25 October Michael Edwardes attended the annual luncheon of the British Institute of Management. He sat next to Sir Austin Bide, the Chairman of Glaxo, who he promptly invited to join his new management team at British Leyland.
At 2.30pm that afternoon it was announced that Mr Michael Edwardes, the 47-year-old Chairman of the Chloride battery and electric vehicle group, was to be the new full-time Chairman of British Leyland from 1 November.
Michael Edwardes became the first full-time British Leyland Chairman since Lord Stokes, and took over as Chief Executive from Alex Park, who was appointed an Executive Vice-Chairman and was effectively demoted to second in command. Alex Park decided to stay with the company in his new role of an Executive Vice-Chairman after a night’s consideration.
Michael Edwardes was seconded by the group for at least three years. In a statement on this day, Michael Edwardes said his decision to join British Leyland had the support of the Chloride Board, which had been consulted over the previous fortnight. British Leyland’s future was uncertain, he said, and it continued to constitute an unrelenting drain on public funds. Apart from being one of the country’s biggest employers and the largest exporter it was also a prime customer of many component suppliers.
‘If British Leyland fails it will have the most dire effect on job and investment prospects, not to mention the reputation of Britain and British goods overseas,’ he said. His task was enormous, some might say impossible, ‘but I am going to try because I believe that British Leyland does have a future.
‘It is a company that has talent at all levels, talent that can and must be fully used. Given the right support from all in the company and Government, and that might mean facing some tough decisions in the future, it is still possible to restore its growth and realise its full potential.’
Positive reaction from the House
The appointment was welcomed by Michael Grylls MP, Vice-Chairman of the Conservatives’ Industry Committee and an arch critic of British Leyland.
‘I believe this is a step in the right direction and will strengthen the Leyland management structure. I hope Mr Edwardes can come to grips with the real problems of Leyland, and he has the experience and calibre to do that,’ he said. Mr Grylls was the father of the broadcaster, Bear Grylls.
Michael Edwardes moved quickly to reduce the size of the British Leyland Limited board, asking some 10 people to resign. The new Board consisted of existing Directors Ian MacGregor, Sir Robert Clark and Alex Park plus newcomers Sir Austin Bide, Albert Frost and Edwardes himself.
Industrial action looms on the horizon
In this interregnum between the announcement and his official takeover, events at British Leyland did not stand still. On the day of the announcement, 4000 Rover workers defied an order from management by holding a mass meeting at Solihull, at which they rejected Leyland Cars pay reform package.
In some British Leyland plants, Shop Stewards were actively opposing the company’s proposed pay and bargaining reforms. In some plants Shop Stewards had held meetings urging workers to hand back the individually addressed envelopes without opening them.
However, their efforts appeared to have had little success so far. At Rover some 300 toolmakers had handed back the sealed envelopes containing the ballot paper and a recommendation for acceptance issued jointly by the company and the Confederation of Shipbuilding and Engineering Unions.
Toolmakers remain defiant
The toolmakers leaders told local management that they would not be bound by the result of the voting. Some Rover Shop Stewards held a meeting attended by about 2000. A majority of those present voted against the ballot by a show of hands. Although the ballot had received the approval of the official Trade Union movement, there was evidence that many Shop Stewards feared that this form of confidential, direct approach to the labour force might be used in the future to undermine their traditional power base, the mass meeting.
Derek Robinson, the Joint Shop Stewards Convener at Longbridge, and probably the most powerful Shop Steward in the whole of Leyland Cars, had gone on record as being bitterly opposed to balloting.
‘We want to stick to our traditional way of voting out in the open,’ he told a press conference. But Ron Hill, a Longbridge Paint Shop worker who led a much publicized shop-floor revolt against Derek Robinson, insisted that the traditional mass meeting was open to intimidation.
Red Robbo enters the fray
Derek Robinson was the Chairman of the British Leyland (Motor Corporation Combined) Trade Union Committee (BLTUC). This organisation had its origins in the British Motor Corporation Joint Shop Stewards’ Committee, which came into being in the mid-1960s when the veteran Communist Convener at Longbridge, Dick Etheridge, began to call meetings of Conveners from other plants.
The intention was to swap details of piecework rates, wage drift and possible moves to change the use of factories. It met not more than half-a-dozen times a year and preferred to operate quietly. When British Leyland was formed in 1968, the organisation expanded to incorporate the plants formerly operated by the Leyland Motor Corporation. In 1975 Dick Etheridge retired to be replace by Joint Chairmen, Eddie McGarry of Triumph, Canley and Derek Robinson of Longbridge. McGarry was eventually eased out leaving Derek Robinson in sole command.
When pundits and politicians elaborated on how Britain could have a world-class motor industry, they did not take into account the attitude of the members of the BLTUC. This was the organisation that management had to deal with. When British Leyland had sought to phase out piecework, the BLTUC had initially steadfastly opposed the change, but then made the company pay dearly for the changeover.
Piecework no longer the issue
At Cowley in 1971 the switch over to Measured Day Work added 22 per cent to the wages bill and reduced productivity by 25 per cent, as the workforce now no longer had an incentive to work hard. Instead of striking over piecework rates, employees walked out over grading issues. Such a dispute led to the cessation of production at Longbridge in late October 1977.
In some plants piecework was replaced by a quota system where employees completed their allotted tasks and then went home, early, instead of working to the bell. This was clearly unacceptable, but whether senior management knew it was happening and turned a blind eye because in the post-Ryder era, trying to keep the BLTUC on board, was seen as vital, is not known.
There was good news on 31 October. In their first shopfloor ballot on a company-wide management offer, Leyland Cars employees voted 59,029 to 31,304 to accept the reform offer. There was an 87 per cent turn-out of the manual labour force, 90,333 valid papers being returned to the Electoral Reform Society out of 103,605 issued. The vote was something of a snub to many Shop Stewards of the Transport and General Workers’ Union (TGWU) who opposed endorsement of the scheme in spite of the approval of most other unions.
The five-point plan for success
The £50 million five-point programme now had to be approved by the Government and the TUC. Derek Whittaker, Managing Director of Leyland Cars, said that the ballot outcome was very encouraging. He added: ‘It is a tremendous boost to morale for everybody in Leyland Cars and in our supplier and dealer networks. It would be unrealistic to suppose that all our problems will disappear overnight, but with good will and cooperation I believe we can now look forward to restoring confidence in the company.’
The TGWU Shop Stewards, whose opposition produced the substantial minority ‘No’ vote, now had to reconsider their attitude to the reforms. Reg Parsons, a TGWU Shop Steward at Cowley, Oxford, said: ‘It is a question of two evils. I am opposed a corporate bargaining but I would be the first to agree that considerable reforms are necessary. If Leyland itself is at stake, and there is no other way than this package, then I am almost compelled to agree with it.’
However, Parsons also gave a warning that the shift away from plant bargaining contained many pitfalls that would be exploited by ‘aggro boys and troublemakers’. It was on 1 November 1977 that Michael Edwardes officially became Chairman of British Leyland.
Edwardes arrives at British Leyland
It was 9.25 am when the new Chairman arrived in a chauffeur-driven car outside his new office at Nuffield House, 41 Piccadilly, Mayfair in London. Edwardes would be using the office of British Leyland’s Honorary President Lord Stokes, which was above a Leyland Cars showroom. Edwardes had decided against using the corporate headquarters, Leyland House, in Marylebone Road, London.
He had been expected to clock in at the 8.30 am. Waiting reporters asked him what he thought about being head of the State-owned car firm, and he said: ‘It will be a formidable task. I hope to enjoy it.’
He said that the vote by British Leyland car workers in favour of a new pay bargaining system was encouraging. ‘I think it’s good news. It shows a lot of people want to get things sorted out. If a few more people buy British and Leyland it would help.’
Michael Edwardes was also asked if he could bring about the recovery of British Leyland. He replied: ‘Yes, if I have to stand on my head to do it.’
Edwardes brought three staff members from Chloride: John McKay, Communications Director; Sheila Witts, Personal Assistant and Margaret Evans, his Secretary. By 2013 Michael Edwardes’ original British Leyland office was a Pret A Manger restaurant.
A sign of the times was that, upon accepting his new job, Michael Edwardes had to hurriedly replace his Chloride company car, a Ford, presumably a German-built Granada, with a Triumph Estate, a model that had just gone out of production.
Only a few years earlier a Rover P6 or Triumph 2000/2500 would have been the default choice for an executive of Edwardes’ standing. Dealing with the faltering progress of their successors would be on his agenda. Indeed, Triumph was his first problem…
Triumph problems arise
The same day as the new Chairman officially took up his post some 1500 workers at Triumph, Speke No.2, Liverpool, walked out only a few hours after they had resumed work. They had been laid off for over three weeks by a strike since settled at Triumph, Coventry.
The trouble centred on management plans based on studies by industrial engineers to introduce new manning scales and work levels to improve productivity. Shop Stewards claimed that the company had broken a local agreement by taking a unilateral decision to implement these new arrangements. However, the company maintained that the decision to go ahead with the plans was taken only after national negotiating procedures had been followed when it became clear that no progress towards agreement could be made at plant level.
The good news was that a strike by 600 Vehicle Inspectors at Longbridge had ended the previous day.
Trouble in Liverpool
The Speke plant built the Triumph TR7 sports car, with a 16-valve TR7, V8-engined TR8 and Lynx coupe also earmarked for the plant. The TR7 was meant to be British Leyland’s corporate sports car, and represented an investment of £11 million at the Triumph factory at Speke, near Liverpool. The eventual production target was between 60,000 and 70,000 cars a year. This target was clearly arrived at by adding annual TR6 production to that of the MGB.
The problem with that was the MGB continued beyond 1976 when the TR6 ceased production, in part because the expected ban on convertible cars in the USA failed to materialise. British Leyland also needed to sell the MGB roadster in the North American market, as it had no TR7 convertible. In effect, the TR7 was only the British Leyland corporate sports car for one year and that year was 1981.
The cumulative effect of retaining the older sports cars in production resulted in reduced sales for the TR7 and impacted on its entire financial viability. In addition to this the TR7, like all British Leyland cars announced since 1971, had been designed to a price courtesy of the many Ford cost-control experts recruited by erstwhile BLMC Finance Director, John Barber. The consequence of this was unreliability and fragility on an epic scale.
Buyers turned off by Leyland
The new generation of Leyland Cars may have been designed within budget constraints, but the price was being paid by the customer and, by November 1977, the customer had had enough. In 1970, before the first of these made-to-a-price cars, the Morris Marina, came on stream, British Leyland had a 38.1 per cent UK market share.
By 1977, with most of the older allegedly unprofitable models, according to the finance experts, gone, the market share was down to 24.3 per cent. In the 1969/70 Financial Year, BLMC had produced 788,737 cars, by 1976/77 this was down to 651,069. Indeed, the whole of British Leyland was now producing less cars than the old British Motor Corporation had in 1965/66 when 703,576 had been churned out, and that was not the peak figure.
In May 1973, British Leyland had announced a major expansion plan based on the fantasy that, now Britain was a fully paid up member of the Common Market, it could now sell an extra 250,000 cars in Europe without facing prohibitive trade tariffs, and its new Leyland-financed models developed in conjunction with finance and marketing experts recruited from outside, would penetrate markets like never before.
One model plants at Triumph, Speke and Rover, Solihull were constructed to feed this imagined demand, built on the illusion that British Leyland could easily sell more than the 1,050,000 vehicles it built in 1968 with a bit more investment.
The product dilemma
The problem with all this was that the new generation of British Leyland vehicles were unreliable and badly built because they were designed to a price. Poor design was not accidental, it was company policy, because quality cost money to implement.
Here’s an example:
- The 1962 BMC ADO16 1100/1300 was designed to be the best in its class.
- The 1969 Fiat 128 was designed to be better than the BMC ADO16 1100/1300.
- The 1973 Austin Allegro was designed to be cheaper to manufacture than the BMC ADO16 1100/1300.
- The 1974 Volkswagen Golf was designed to be better than the Fiat 128.
The market decided that it wanted the Volkswagen Golf, which by 1975 was being produced at a rate of 10,000 a week, while Allegro production was down to 2000 a week.
The Allegro was clearly not the vehicle Charles Griffin, the Head of Longbridge Design from 1974 to 1978, and who had a significant part in the ADO16, would have designed, but edicts from above about component sharing and the need to cut costs compromised the design.
The results of cost-cutting
By designing vehicles to a price British Leyland alienated its existing customer base to the extent that the hoped for invasion of Europe spectacularly backfired, and the UK market was invaded by a new breed of sophisticated Continental cars that were inspired by the Issigonis-era cars that were deemed by all the clever people in the UK motor industry to be unprofitable and not worthy of development.
British Leyland’s model policy from the start had been run by accountants, in a fantasy world where more investment automatically meant more marketable cars. However, by 1977, it was obvious that this strategy had failed and the public image of the British motor industry had gone from exciting innovation to one of terminal decline in a decade.
There were, in fact, two collapses of British Leyland, the first being economic due to the Three-Day Week in early 1974 and the recourse to the Government in December, and once the finances were stabilised, a sales collapse as the models conceived by the Stokes era alienated customers in the late 1970s.
It is important to differentiate between the two. Without the Three-Day Week, British Leyland could have survived as an independent company a little longer, but sooner or later the designed-in cost-cutting measures inflicted on its cars would have caught up with it, as indeed was the case.
So, while Michael Edwardes had to deal with the BLTUC, he also had to deal with the bankrupt design philosophy that permeated the company and which had contributed to its market share meltdown.
In his memoirs, Michael Edwardes wrote: ‘My plan was to devolve authority, drastically cut back headquarters staff and put much greater responsibility back where it belonged, at the operational level.’
Life at BL… not all milk and honey
He was soon confronted with the reality of life at British Leyland, when Personnel Director Pat Lowry showed him four typed pages of industrial disputes then ongoing in the companies plants.
The most immediate problem confronting Michael Edwardes was that British Leyland was once again running out of money. Instead of central Government simply coughing up as no doubt many Shop Stewards probably thought it should, he had to negotiate with the private banks, with assurances from the Government that everything would be okay.
Eventually the new Chairman prevailed, eventually securing £80 million in crisis loans. All this was kept from the public domain at the time. However, the company did apply to the National Enterprise Board to use half the current £100 million of state loan capital earmarked for investment, to ease its cash flow problems. This does not appear to be mentioned in Edwardes memoirs.
Meeting with the Unions
On 3 November 1977 British Leyland management met national unions officials in London and announced later that a meeting of the Joint Negotiating Committee on Pay Bargaining was to take place in the next week.
But the Speke Triumph strike had now halted production of the TR7 there and that of the Dolomite saloon at Canley in Coventry. Also about 2000 workers were laid off at British Leyland’s Cowley factories because of a parts shortage caused by a strike at Smiths Industries at Cricklewood.
By the following day production of the Austin Maxi and ADO71 Princess at Cowley had ground to a halt because of the Smiths Industries strike.
Sales on the slide
There was further bad news for the new British Leyland Chairman. That same day figures for the October 1977 car sales were released by the Society of Motor Manufacturers and Traders. These figures showed that Leyland Cars sold only 21,706 vehicles to give a market share of 20.56 per cent. For the first ten months, the company’s sales totalled 287,189 (24.5 per cent).
The company stressed the adverse affect on its operations of a continuous series of component shortages. The protracted strike at Lucas, which supplied electrical components, and 13 other supplier disputes, had held up production. The joint effect of component hold ups was the main reason for the company’s application to use half of the current £100 million of state loan capital earmarked for investment, to ease its cash flow problems.
The firm said it was 40,000 cars short ‘across the entire range’. Dealer stock cover had been adequate for only five weeks so far in 1977, in July when Leyland Cars market penetration rose to 29.1 per cent. Leyland Cars’ luxury models, like the Jaguar and Range Rover, traditionally had been in short supply; but it was now clear that output disruptions had progressively starved showrooms of the cheaper models that Leyland Cars needed to sell in high volume if it was to fight off foreign competition and to raise market share. Leyland Cars’ concern over its poor performance was heightened by the fact that total United Kingdom car sales in October 1977 were ten per cent greater than a year earlier at 105,581.
Assessing the staff
During his first week in the job, Michael Edwardes persuaded Eric Jones, a Johannesburg-based Psychologist to come to the UK to begin a process assessing four or five managers a day. He was later joined by Dr Ken Miller. According to Edwardes, by 1981 they had processed some 2000 managers.
Compulsory written psychological tests were imposed on senior management. If this was meant to get rid of people like the chain-smoking bachelor Bob Knight of Jaguar then they had another thing coming.
Former Jaguar boss Geoffrey Robinson, by now a Labour Member of Parliament for a Coventry constituency, told author Graham Robson: ‘Bob was a terrific guy, but a notoriously slow decisionmaker and very reclusive – however, he’d obviously studied the requirements of this ‘shrink test’ before he took it, and came out of it as a quick decision maker and on the personal side as a very caring husband! He came to see me afterwards and told me how he was very pleased to have beaten the system.’
Whether these psychological tests actually achieved anything is open to debate.
Storm clouds gather
Then, on 8 November, the same day as the last Jaguar XJ coupes were manufactured, it was revealed that the Transport and General Workers Union’s biggest branch, Oxford 5/60 which represented 7000 employees in Leyland Cars’ Cowley Body Plant, wanted to end the company’s three-tier participation machinery.
The Cowley men alleged that the participation bodies were beginning to meddle in pay matters. As a result of this, this branch had voted to withdraw and seek an early meeting of Shop Stewards from the company’s 34 plants to recommend similar action.
A fortnight into his tenure the new British Leyland Chairman spoke to the workforce through the medium of the in house newspaper, the British Leyland Mirror. Michael Edwardes said ‘we have to establish far more local say.’
Devolution not evolution
But Michael Edwardes said there would be no revolution in British Leyland. ‘That is not my management style. I prefer a gradual evolution.’ Expanding his philosophy, Michael Edwardes added: ‘The Leyland Cars group is less decentralised but that is something to be looked at… I believe people enjoy their jobs more if they have specific authority… I believe in deploying people into the areas where profits are made and goods are produced.’
On 16 November British Leyland announced that it was to close its headquarters in Marylebone Road, London, and move many of the staff to the offices of Leyland Cars and British Leyland International in the Midlands. Leyland House in Marylebone Road, NW1 was taken over in May 1973 on a 21-year lease. Originally built between 1957 to 1960, its first name name was Castrol House, after it original occupants.
The plan was to shut it down by June 1978 and 300 of the 550 headquarters staff who worked for the international business would be redeployed to the Midlands. In London, Michael Edwardes would run the corporation from the much smaller Nuffield House in Piccadilly. He had taken over the office until recently occupied by Lord Stokes, the group’s President and former Chairman.
A management shake-up
Michael Edwardes also unveiled his plan for a drastic shake-up of British Leyland’s top management, aimed at the devolution of power to four newly-created subsidiary companies and a streamlining of decision-making. In a scheme devised rapidly by Edwardes during his first two weeks in the top British Leyland seat, the holding company’s Board of Directors became largely a non-executive body.
A new Advisory Board was created, comprising executives from the operating companies and headquarters. Its role was be to ‘provide a forum at which all overall problems and opportunities of British Leyland can be debated and action programmes put forward.’
The Advisory Board consisted of:
- Alex Park
- Derek Whittaker
- David Andrews
- Pat Lowry
- Gerry Wright
- Des Pitcher
- John Gardiner
- Lord Greenhill
- Michael Edwardes
The plan, endorsed by the National Enterprise Board, meant the closure of the company’s headquarters in Leyland House, Marylebone, London.
Michael Edwardes said his plan was a further step in the process of decentralisation begun in 1975 – after the Ryder Report on British Leyland. The possibility of further ‘evolution’ over the next 12 months was being studied.
The main elements of the new structure of British Leyland’s corporate management would be a Board of Directors, the Advisory Board, a Strategy Panel, a Management Resources Panel and an Investment Panel.
Changes at the top
Alex Park (above), formerly Chief Executive and now an Executive Vice-Chairman, remained on the main Board and became Chairman of the Investment Panel whose role would be to review and recommend overall capital expenditure plans and budgets. The policy of creating more manageable units was based on the reorganisation ‘as quickly as possible’ of four subsidiary companies. Leyland Cars, Truck and Bus, Special Products and Leyland International would become limited companies, each with its own Board of Directors and a Non-Executive Chairman.
The only one of the four subsidiary company’s with a Managing Director confirmed as being in place was Leyland Special Products, the mini conglomerate of 11 companies manufacturing anything from construction equipment to refrigeration machinery, which was headed by 34-year-old David Abell.
David Abell had joined British Leyland in 1968. He became Managing Director and Chief Executive of Leyland Australia in July 1974 to oversee the closure of the Waterloo manufacturing plant and the end of production of the Leyland P76 and Marina cars. He returned to the UK in mid-1975 to become Managing Director of British Leyland’s Special Products Division.
Alex Park was appointed the Non-Executive Chairman here. Michael Edwardes was Non-Executive Chairman of all three motor subsidiaries. Two other corporate executives sat on all four subsidiary Boards – Pat Lowry and Gerry Wright. The Investment Panel comprised the heads of the four subsidiaries together with Edwardes, Park (alternating with Wright) and Percy Plant, the Company Secretary. Gerry Wright also alternated with Alex Park on the Advisory Board. Pat Lowry, the former Personnel Director was now Director of Personnel and Administration.
Edwardes firmly in control
Michael Edwardes, the Chairman and Chief Executive, was named Non-Executive Chairman pro tem of three of three of the four new operating companies, Leyland Cars, Truck and Bus and, lastly, International.
Alex Park, Chief Executive until Edwardes came in, would combine the role of Non-Executive Chairman of the fourth, Special Products, with that of being Executive Vice-Chairman of the holding company.
British Leyland Limited’s Deputy Chairman was Ian MacGregor, a Scot who was formerly Chairman and Chief Executive of the big American mining group, Amax, as well as of other big United States concerns, such as Singer and Bendix. Ian MacGregor would become a controversial figure when he later took the helm of the nationalised British Steel Corporation and National Coal Board.
Newcomers on the Board
Sir Robert Clark, the Chairman of Hill Samuel, also remained on the main Board. Two newcomers who were named as Non-Executive Directors of the holding company, British Leyland Limited. Austin Bide and Albert Frost were newcomers both to British Leyland and to the motor industry and both had successful careers in their chosen industry, chemicals. Bide, was the Chairman of the chemical manufacturers Glaxo, a big but quietly effective company.
Albert Frost was a sometime barrister and taxman who retired as Finance Director of ICI in the spring of 1976, only to turn up as a part-time Executive Director of Marks and Spencer with special responsibility for overseas operations. Lord Stokes continued as life President of British Leyland.
There were two departures from the British Leyland Board, those of John Gardiner and of Lord Greenhill. Gardiner, Chief Executive of the Laird shipbuilding group joined the National Enterprise Board.
Lord Greenhill had a background in the City. He was a director of Warburg’s and was a Government-appointed Director of BP in which the state had a 51 percent stake. Although he left the BL Board, he remained as an adviser and served as a Non-Executive Director of Leyland International.
Following Ryder’s recommendations
The reorganisation of British Leyland which resulted from the Ryder Report’s recommendations of 1975 was largely aimed at breaking up the monolithic central control exercised by the then Chairman Lord Stokes and his Deputy, John Barber. It was claimed that management in the operating companies had become so frustrated by the near impossibility of obtaining decisions without months of delay that they were in a state of open revolt when the Government mounted its rescue operation.
The Ryder Report called for a much reduced corporate staff in London and the creation of four largely autonomous business groups – Leyland Cars, Leyland Truck and Bus, Leyland Special Products and Leyland International – each with its own Managing Director and operating committees. In theory, this was a big step forward in the better utilisation of the management and specialist talents which had long stagnated in British Leyland’s scattered plants and offices.
In practice, it proved to be almost as frustrating as the old set up. Instead of the dead hand of one corporate control, the managements of the new groups found themselves answerable to three masters, the main Board under Chief Executive Alex Park, the National Enterprise Board as the controlling shareholder, and Eric Varley’s Department of Industry.
A poor work/life balance
Managing Directors like Derek Whittaker, the head of Leyland Cars, spent so much time travelling to London followed by wearisome hours justifying every move to three sets of officials that they simply did not have time or energy remaining to develop the structure of their own divisions. Add to that the fact that every time there was a major confrontation with the workforce – and there were many at Leyland Cars – their masters insisted on blow-by-blow personal accounts sometimes ending in demands for yet another review of company structure and plans.
Now Michael Edwardes had come up with yet another reorganisation plan which he claimed would carry decentralization farther down the road.
Meanwhile, as rumours of de-centralisation circulated, the existing Leyland Cars organisation still functioned. Derek Whittaker, the Managing Director of Leyland Cars, was reported to have lost patience with the Shop Stewards at Rover and Triumph who were refusing to cooperate in a £250 million project to double output of the Land Rover and Range Rover. With European and Japanese competitors threatening British Leyland’s world leadership in four-wheel-drive vehicles, he was considering replacing the existing proposals for expansion at existing plants in Coventry and Solihull with a new factory on a greenfield site. The possible choice of site was not disclosed.
Land Rover wobbles
Derek Whittaker’s tough line was intended to bring the Rover-Triumph Shop Stewards into line and also to ward off mounting opposition to British Leyland’s participation machinery. Shop Stewards at Canley and Solihull refused to join participation in the first place. Until they did, Derek Whittaker had said that he would not seek the approval of the National Enterprise Board or the Department of Industry for a huge capital investment project.
One of the important benefits brought by participation had been step-by-step bargaining and agreement on manning and productivity levels for capital projects. Without shop floor commitments in those two key areas, he believed he would be wasting taxpayers’ money.
On 25 November Leyland Cars announced that it was spending £16 million to expand production of the new six-cylinder engine which powered the recently launched Rover SD1 2300 and 2600. The announcement followed agreement with Shop Stewards at Rover Solihull to raise weekly output of the range from 1100 to 1800.
That same day production of the Mini was halted by a strike at Longbridge, when 4500 men were laid off because a Vehicle Tester was dismissed for allegedly assaulting another worker. Derek Miles, the Vehicle Tester, believed someone was being ‘friendly’ with his wife.
He walked a quarter of a mile across the Longbridge factory and then hit the wrong man, a case of mistaken identity. Later, management and union agreed to discuss the incident in the normal grievances procedure. The incident went to court with the outcome on 28 June 1978.
By the end of November 1977 Leyland Cars, which lost £15.7 million in the first half of the year, was facing another cash flow crisis as a result of mounting losses from internal and external strikes.
On the edge of a precipice
So far the bad news had been given to the top two tiers – Leyland Cars’ Joint Management Council and the divisional committees. Shop Stewards had been told that the company was ‘poised on the edge of a precipice.’
The Shop Stewards were warned that Leyland Cars could run out of money by the middle of December 1977 unless there was a substantial improvement. Their backing was being sought for urgent steps by management to postpone further capital expenditure projects, reduce overmanning by switching workers to areas where they could be more effective, ending restrictive practices and introducing stricter control of stocks. These stocks include several thousand cars still waiting for components held up by strikes at suppliers.
In a statement, Leyland Cars said: ‘The purpose of the briefings, which are confidential, is to ensure that through the existing participation and communications channels all employees are informed of what we want to do to improve our performance in 1978.’
The company refused to disclose details of the crisis as revealed to the Shop Stewards. Whether the Shop Stewards actually believed the management’s stories of impending fiscal armageddon, or thought it was just a negotiating ploy to force through much needed changes to working practices is another matter. After all, a Labour Government would never allow British Leyland to go under…
Front page news… again
Meanwhile, over at Cowley, Alan Thornett, the man known as ‘the Mole’, was re-elected as a senior TGWU Shop Steward on 7 December. AROnline readers will recall that Alan Thornett was at the centre of a dispute at Cowley in 1974 that resulted in a protest march by the wives of laid off car workers that made front page news.
Only two days later Alan Thornett, a leading member of the Workers’ Socialist League, was one of 11 members of the TGWU at the Leyland Cars assembly plant at Cowley summoned to appear before a union inquiry in Oxford to answer an allegation of bringing the union into disrepute.
Leyland Cars had renewed their opposition to accepting him as a senior Steward, and David Buckle, the TGWU District Secretary, said: ‘This poses a very serious problem for us. I think we are running into a very difficult period at the Cowley assembly plant.’ By his own admission, David Buckle never bonded with Alan Thornett.
Bobby Fryer, who was elected as Senior Shop Steward, did appear before the inquiry.
Bobby Fryer’s part in the piece
Bobby Fryer, is one of the more interesting characters in this story. He was, in fact, Austrian by birth, his Jewish parents having emigrated to England in 1938 when he was 12-years old in the aftermath of the annexation of Austria by Nazi Germany. He subsequently served in a Scottish Regiment and anglicised his surname from Freizinger to Fryer.
On 13 December, Derek Whittaker, the Leyland Cars Managing Director, gave a warning that he would have to reduce the labour force early in 1978 unless productivity improved considerably.
In an article in Leyland Cars Mirror, he said: ‘There is no way that our current market share, which was 21.7 per cent last month, can be accepted. The first six months of 1978 will be absolutely crucial. If we do nothing during that short space of time to improve production and increase productivity, then the company will reduce in size and jobs will be lost. That is no threat. In fact, we are almost past the point of no return already. However, I sense a changing attitude among employees. The majority, I believe, now realize the gravity of our situation.’
Out of control disputes
Hardly a day had passed when Leyland Cars had not been faced by up to 20 different supplier disputes. The result was that it was being forced to produce large numbers of incomplete cars because of component shortages. This would have been worse but for alternative supplies.
British Leyland hoped its urgently needed new range of cars would be speeded up by the most advanced computer-controlled design centre in Europe, which had just been installed at a cost of £250,000. It would produce detailed design drawings six times faster and increase accuracy. The first news of the new installation at Leyland Cars Cowley plant was given on this day by Dr Bill Emmerson, the Executive Engineer in charge of engineering computer series.
He said: ‘We are sick and tired of all the anti-Leyland stories; it is time we told the world that in some areas we are second to none. Leyland was the first company outside the United States to have computer-aided design. That was in the middle 1960s. With this new centre we are really beginning to reap the dividends of all our early computer design work. In virtually any engineering design process using the right computer techniques is rather like having seven league boats.’
The new centre, which produced drawings in minutes instead of hours, came too late to help ADO88, Leyland Cars £250 million new Mini due for launching in late 1979. However, it was already working on LC10 (above), 11 and 12, the new medium saloon range which would follow in 1980, or so it was hoped.
Alex Park leaves BL
Only two days later, on 15 December, it was announced that Alex Park, the Chief Executive of British Leyland until Michael Edwardes was appointed full-time Chairman was to leave the group early in 1978.
In statements both men acknowledged that the new relationship was unlikely to prove successful. However, they insisted that they were parting on friendly terms. Michael Edwardes said: ‘Alex Park and I have agreed that he will leave British Leyland in the first quarter of the New Year. Over the past few years, Alex has been committed to the company and has made great efforts to achieve the objectives, which were set. In the event there have been management changes, including my own appointment of full-time Chairman.
‘In all the circumstances we have come to the conclusion that the role he has recently taken up is unlikely to work out in the long term and so he will now pursue his career outside the company. On behalf of the Board and all his many friends and colleagues in British Leyland, I wish him every success in the future.’
‘Sad to be leaving’
Alex Park was not himself available but a statement issued on his behalf by the company quoted him as saying: ‘I am sad to be leaving British Leyland but I believe that my departure is in the best interests of the company and my own career. I remain on the best of terms with Michael Edwardes and I would like to take this opportunity of wishing him and everyone else at British Leyland all the best for the future.’
An unnamed colleague of Alex Park said: ‘I think it has been obvious to everyone here that Alex was placed in an impossible position.’
The vacant post of Executive Vice-Chairman would be filled by David Andrews, the Managing Director of Leyland International. Peter McGrath, Finance Director of Leyland Truck and Bus, would act as Managing Director of Leyland International. David Andrews was born in March 1933 in Canada and educated at Abingdon School and Pembroke College, Oxford. After stints at Pirelli and Ford as a financial specialist, he joined Austin Morris in 1970 as a Director. In 1973 he became Managing Director Power and Transmission Division BLMC Limited and in 1975 he became the Managing Director of Leyland International.
Expansion at Leyland
On the same day the British Leyland Truck and Bus division announced plans to build a £33.7 million technical centre and test track at its headquarters in Leyland, Lancashire. Together with projects announced earlier in the year, the state-owned commercial vehicle maker had now committed more than £100 million of capital investment under Des Pitcher, its Managing Director since 1976. Born in March 1935, following a stint in the Merchant Navy, Des Pitcher joined the Sperry Rand Corporation in 1961, leaving 15 years later as International Vice-President of Marketing.
Since the formation of British Leyland in 1968 the profitable truck side had been starved of capital to bolster up the ailing cars operation. One of the areas in which it had fallen behind was the development of new models. It has been handicapped in this work by the lack of advanced test facilities and laboratories. The existing Leyland test track was laid down during the Second World War for tank testing.
Des Pitcher said: ‘By spending more than £65 million in the North West, we are proving our determination to modernize Leyland to a standard equalled by few of the major world commercial vehicle makers. This will ensure that our profitable truck and bus business becomes even more profitable in the future.
‘Our plans in Lancashire complement the extensive facility expansion programme worth more than £30 million which we have already announced in our Scottish operations based on Bathgate and Scotstoun, affecting our lighter truck models and agricultural tractors. The technical centre is itself vital if we are to introduce rapidly new models, as extensively tested and proved before being introduced.’
The centre would be on 150 acres at Moss Side, owned by the Central Lancashire Development Corporation. The test track was already out to tender. Work at Moss Side, which was 11 miles from Leyland’s headquarters, would start shortly with the £19 million first phase due for completion in 1980.
In comes Ray Horrocks
Alex Park may have been on the way out but Michael Edwardes had head-hunted Ray Horrocks, a former head of Eaton’s materials handling operations in Europe and the Middle East. This was revealed on 20 December.
Born in January 1930 in Lancashire, Ray Horrocks had started work at 14 in the textile industry, then became a merchandiser for Marks and Spencer. Before he joined the American-owned axles to forklift truck group, Horrocks was with Ford UK for 9 years. At one time he ran Ford’s advanced vehicles plant (AVO), which produced the Escort Mexico competition model.
Ray Horrocks recounted to author Jonathan Wood how he came to join British Leyland; ‘They (Eaton Corporation) wanted me to go and work in the States but I didn’t want a permanent assignment and the notion of becoming an American didn’t appeal. Berry Wilson of British Leyland’s recruitment knew I was available and I found myself, in November 1977, working with Michael Edwardes.’
However, a mystery surrounded his new post at British Leyland. Inquiries at the group’s London headquarters elicited only that he was directly answerable to Edwardes and, ‘clearly destined for a senior appointment to be spelt out at a later stage.’
Sometime in the middle of December 1977 Michael Edwardes attended a meeting of the National Enterprise Board. Edwardes stated in his memoirs: ‘I remember making the point to the NEB that the long held view within British Leyland that the continuous loss of market share was merely due to lack of production output would now be put to the test. Harry Urwin, of the TGWU and an NEB member, had always countered the company’s criticism of the unions by asserting that, while models were not up to date, sales would suffer so that ‘better behaviour’ by employees would not of itself solve the problem.
‘Even at sharply reduced levels of production there was to be a build up of stocks over the coming months, and Harry Urwin’s point of view began to be borne out.’
The market toughens up
As seen earlier, management had always claimed they could sell more cars than they could manufacture, but in the event of a domestic credit squeeze, with few exceptions, had cut back on production and laid off workers to reduce excess stock. The mythical customers demanding their products suddenly vanished into thin air.
It has been claimed that sometimes management provoked strikes in order to halt production and empty the factory compounds of excess stock.
Moreover, it was convenient for management to believe that stock shortages caused by industrial action reduced market share rather than poor design, dire build quality and chronic unreliability, which senior executives were often reluctant to accept – and some of these flaws were down to cost constraints inflicted by the self-same management.
Michael Edwardes told the NEB that fixed costs would have to be reduced by £100 million a year and over-manning would have to be dealt with. In December 1977 it was calculated that Leyland Cars would have to shed 15,000 jobs while another 2000 would have to go in the Truck and Bus division. More efficient management of its 5000 Engineers would deal with the perceived shortage of 1500.
Overmanning is rife
In 1977 British Leyland employed about 195,000 people, some 4000 more than in 1975! Overall UK market share for the year had dropped to 24.3 per cent in a market of 1.32 million. The car market was steadily expanding and there were rich pickings for those car firms with the right product.
Unfortunately, British Leyland did not have the right products as the conservatively engineered and often imported cars of Ford assumed UK market leadership, while the likes of Fiat, Renault and Volkswagen sold front-wheel-drive cars by the bucket load to customers who had once embraced Alec Issigonis’ Mini and ADO16 designs.
In December the ADO88 Mini replacement had fared badly in styling clinics. The Leyland Cars Board met on 20 December and decided to opt for the Route 2 alteration to the ADO88 design first mooted on 24 October. This would become the LC8 Austin Metro of October 1980.
Austin Metro had its fan club
Another review panel had been set up to study the various organisational options open to Leyland Cars, and to recommend a product line which was competitive and economic. The panel, seven strong and led by Pat Lowry, the Director of Personnel and Administration, had begun work just over a week earlier. It had been asked to report to Michael Edwardes, the new Chairman, in two months.
There had been rumours that the new Mini/ADO88 project had already been mothballed pending receipt of Pat Lowry’s recommendations. Leyland Cars denied this. A spokesman said: ‘No policy decision has been made to stop work on the new Mini. It is going ahead.’
David Andrews, newly promoted to succeed the departing Alex Park as Executive Vice-Chairman, was known to be a strong advocate of LC10, 11 and 12 (the new medium saloon replacements) as a counter to Ford’s best-selling Cortina. This was also the choice of many Leyland Cars dealers.
They were gloomy about prospects during the next two years when they would be fighting a rearguard action with an ageing product line. Welcome as the new Mini/ADO88 would be in late 1979, they preferred a larger car to appeal to fleet, company and professional people who accounted for nearly two thirds of the market.
The end of ADO77
Presumably by now Leyland Cars had let slip that the Morris Marina replacement programme, the ADO77 had been cancelled and all they could offer dealers was an upgraded Marina.
Back in 1971, the Marina had introduced British Leyland dealers to the fleet market, and it had to some extent compensated for the loss of sales resulting from the botched ADO16 1100/1300 replacement, the Austin Allegro.
However, the Marina had been designed to combat the Ford Cortina Mk2, but the ‘Dagenham dustbin’ was now on its fourth iteration, and stretching its sales lead – as for the Austin Allegro, it achieved a meagre 4.3 per cent share of the UK market in 1977 with 56,175 sales.
Sales in terminal decline?
In contrast, back in 1967, BMC’s last full year, a time when industry pundits thought it was heading for the rocks and needed a good management shake up, the ADO16 achieved what was considered a disappointing 11.8 per cent market share with 131,382 sales, and that was when it was five years old. The moral of this tale is be careful what you wish for.
On 21 December, the British Leyland Advisory Board met at the Post House Hotel in Beaconsfield. On the agenda was the new Mini/ADO88 project, the expansion of Land Rover production at Solihull and the Triumph TR7 factory at Speke.
British Leyland had decided to ask the Government for £450 million. Thus ended 1977 and Michael Edwardes’ first two months in charge. The Triumph Speke dispute rumbled on and, to many observers, it seemed like business as usual at British Leyland.