For those that remember it, 1982 was the year of the Falklands War, when Britons proudly flew the flag in support of their armed forces engaged in combat in the South Atlantic. The conflict was the big news story of the year, over shadowing everything else. Patriotism or jingoism, depending on one’s point of view, was everywhere as Britons embraced the flag to a soundtrack of naff 1980s synth pop that many people are now too embarrassed to admit buying.
Beneath the facade was a tale of economic gloom as, in January 1982, UK unemployment had hit the terrifying figure of three million, something that brought back memories of the pre-war depression. Britain seemed to be de-industrialising rapidly. Predictably the politicians took widely opposing views.
De-industrialisation – the political viewpoints
The Conservative Government of Margaret Thatcher was accused of being uncaring, of instigating brutal cutbacks in public expenditure, thereby reducing the money supply and consumer demand. Indeed, if the polls were to be believed, Margaret Thatcher was the most unpopular Prime Minister in British history.
The opposition Labour Party, led by Michael Foot, advocated propping up British industry, presumably after it had been nationalised, with taxpayers’ money. Indeed, it would go into the 1983 General Election with a manifesto broadly similar to that of February 1974. The notion that nationalised industries would act as import blockers was supported by Tony Benn, one time industry minister.
The Conservatives argued that British industry had to stand on its own two feet without the support of the tax payer, that it had to make products the consumer wanted to buy. In a nutshell, they were the sterile, cliched arguments prevalent in a deeply divided society, desperate for a solution to the nationwide blight of unemployment.
Car production in the UK dips below a million
But what are the facts about 1982. The reason why I am focusing on this year is that it was the nadir of post-war British car production, dipping to 887,679 units. Statistically there had been lower figures prior to 1958, but there had been a major expansion of UK motor manufacturing capacity in the early 1960s with new plants at Halewood, Ellesmere Port, and expansion at Longbridge, among others.
All this had enabled Britain to produce a record 1,921,311 cars in 1972, a record that still stands. In the space of a decade UK car production crashed by 53.79%. Yet the statistics, which were available to the Government, reveal that the UK car market for 1982 was 1,555,027 units, which was in fact a very healthy figure and showed the market was recovering well from the depths of the recession. UK car sales in 1982 exceeded any year in the 1960s and those in 1970, 1971, 1974, 1975, 1976 and 1977. In 1982, there was plenty of money in the economy to alleviate the threat of the dole queue, it just was not spent on British-manufactured cars as imports now soared to nearly 58% of the market.
In 1971/72 British Leyland produced 916,218 cars, by 1981/82 that had slumped to 383,074, a collapse of 58.18%. While one can understand why British consumers did not want to buy a product from the state-owned manufacturer, they had had enough of the eternal soap opera that was British Leyland, with more to come, there was another reason why UK car manufacturing had slumped since 1972, Britain’s membership since 1973 of the Common Market AKA the European Economic Community.
British Leyland production was on the ropes
Excluding BL’s contribution in 1982, that left another 500,000 cars manufactured in Britain by the likes of Ford, Vauxhall and Peugeot-Talbot. In 1982 Ford grabbed a 30.9% share of the UK car market, which was around 480,500 cars, while Vauxhall sold 272,260 cars in Britain. This was the year the Ford Escort Mk3 (above) topped the charts for the first time and the Cortina bowed out.
However, of the Ford cars sold in Britain that year, only 51.49%, around 247,409 were made at Halewood and Dagenham.
By number crunching we can deduce that the US-owned manufacturers imported at least 250,000 cars into Britain that year, or 16% of the domestic market. These calculations do not account for production at the Peugeot Talbot plant at Ryton, which may well have been at least 100,000 cars, and that would make the quantity of imported Ford and Vauxhalls even greater.
The seeds were sown in the early 1970s
Britain had joined the Common Market in 1973 to sell its wares to an expanding market, after repeated failed attempts. BMC had gambled its future on early entry, producing a whole range of front wheel drive cars with particular appeal to European buyers. The motor manufacturers were particularly enthusiastic about joining the Common Market.
Sir Patrick Hennessey, Chairman of Ford of Great Britain and President of the Society of Motor Manufacturers and Traders, said in April 1967: ‘Of the Common Market I can say quite categorically that we want to join, given the power to compete on equal terms – and those are the operative words – with our rivals across the channel.’
In 1972, Britain’s last year outside the Common Market, Ford produced 632,140 cars in its British plants, clearly demonstrating that it had the capacity to supply the UK market from Halewood and Dagenham alone, with plenty of spare capacity, yet by 1982 it was taking advantage of the absence of trade tariffs, in operation since 1973, to import cars from its European factories instead of producing them in Britain. Ford’s dissatisfaction with its UK plants can be traced at least as far back as 1968 when a senior executive publicly expressed disquiet about the rash of strikes afflicting the British motor industry when it should have been exploiting the export opportunities resulting from the devaluation of Sterling in November 1967.
Importing from Europe maintained Ford’s advance
Then, in 1971, a three-month strike shut down Ford’s British factories and caused a whopping £17 million loss. When the workforce went on strike again in 1978 in the opening round of the ‘Winter of Discontent’, Ford had made contingency plans. Although the strike lasted two months, imports from the continent kept the Ford dealerships supplied with shiny new models, and the blue oval comfortably retained its UK market leadership.
By the late 1970s productivity at Ford in Britain was only 13 vehicles per employee compared with 31 in West Germany. While management blamed the unions in Britain for this dire performance, their equivalents in Germany received praise for their cooperation.
Then, in 1981, Ford of Great Britain’s Chairman, Sam Toy, claimed that Ford Escort Mk3 production at Halewood was only 65% of target and that efficiency and productivity were twice as good at the company’s German plant. Industrial disputes at the factory slowed production, and Toy threatened that unless matters improved the Escort could be the last all-new car to be launched at the site.
Ford of Great Britain – the sun starts to set
In contrast to the confrontational industrial relations strategy adopted by Sir Michael Edwardes and his lieutenants over at BL, Ford seemed to play its UK plants off against their counterparts on the continent. Those that co-operated received investment, overtime opportunities and extra shifts, equating to more jobs. Sadly, those that benefited from this approach seemed to be across the water.
By 1982 Ford of Great Britain had already lost the Capri and Granada models to Cologne in Germany and, quite clearly, the resulting spare capacity was not filled by ramping up production of the remaining models. Ford’s UK operation was now very much the junior partner in its Europe-wide organisation.
Ford’s British subsidiary had bred some brilliant executives who had contributed greatly to its UK success in ousting British Leyland from the top of the sales chart, but the sun was already setting on Ford of Great Britain and the long drawn out exit strategy was well underway.
Vauxhall – by now, the British Opel
As for General Motors UK subsidiary Vauxhall, by 1982 it was mutating into badge-engineered Opels. The Astra, the UK name for the Opel Kadett, was assembled at Ellesmere Port, whilst the Vauxhall version of the Opel Ascona, the Cavalier Mk2, was assembled at Luton. Assembled is the operative word, as these new Opel-developed Vauxhalls were put together with components imported from GM’s global network of factories. In the case of the Cavalier Mk2 the engine came from Australia, the automatic transmission was from the USA, the manual equivalent was Japanese, the distributor and much of the pressings were German and the carburettor was French. Some glass, the wheels and not much more was British.
GM claimed the car was 60% British, but that included the labour costs. All the plant and machinery that had manufactured components for the Luton-designed Vauxhalls had nearly all been swept away, along with the livelihoods of those who worked on them.
Only the Chevette remained and that would be gone by January 1984. At the same time the Transport and General Workers Union was in dispute with General Motors over its attempt to introduce the new Opel Corsa supermini into Britain as the badge-engineered Vauxhall Nova. The Nova/Corsa, built in Spain, which was a long way from Luton, was the final straw for the TGWU.
How the griffin had fallen…
As Britain’s largest trade union, the TGWU threatened to stop the Nova from entering Britain. It appears that GM eventually bought the TGWU off by offering to ramp up its UK car production as compensation.
That Vauxhall had now become a mere assembly operation for Opel was a sad reflection of how things had gone downhill since the mid-1960s. In 1964, Vauxhall had produced 246,896 cars followed by 225,088 in 1965, topping this with a record 247,034 in 1968. In both 1964 and 1965 pre-tax profits comfortably exceeded £17 million, but by 1969 these had turned into losses.
One can surmise that Vauxhall, thinking that there was money to be made from fleet sales, produced the Viva HB as a Ford Cortina rival and found it was entering into an internecine cut throat market where conquest sales were thin on the ground and profit margins were slim – in the process, it alienated private buyers with its made-to-a-price cars.
How Vauxhall became a UK-only brand
Back then, in those pre-Common Market days, Britain had been a member of the smaller European Free Trade Association, along with Austria, Denmark, Portugal, Sweden, Norway and Switzerland. Vauxhall had successfully exported to these member states, but on joining the Common Market in 1973, along with Denmark, Britain left EFTA, and these former markets were lost, and it was not helped by the fact that GM decided to supply the Danish market with cars made in its Opel plants. At a stroke Vauxhall’s viability as an independent member of General Motors was undermined.
During the 1970s, Britain had been labelled the sick man of Europe, gaining a reputation for strikes and dire manufacturing quality. It was a decade in which the Government of the day had been held to ransom by industrial action no less than three times. While to some political activists it may have been the time of their lives, to consumers it was the period that destroyed their faith in British-manufactured goods and, in the end, it was their buying power that really counted. This was reflected in the success of imported cars in 1982’s UK car market, led by Volkswagen with a 5.94% share. But the largest importer was in fact Ford with 14.9% of the pie.
Many Ford and Vauxhall buyers may have genuinely thought they were buying British-manufactured cars in 1982, but the fleet buyers by now were probably only interested in getting a good deal, regardless of country of manufacture.
The British no longer wanted British Leyland
One can see why the Thatcher Government thought the service industry offered economic salvation. If the highly trained executives from Ford and GM could not make manufacturing viable, who could? The problem for the Thatcher Government’s motor industry policy was twofold.
It had inherited British Leyland, Tony Benn’s problem child, which despite the taxpayers’ investment, was hemorrhaging sales instead of gaining them and was about to cause more heartache with its bungled Austin Maestro and Montego models.
The British-made cars the public did want to buy, apart from the Austin Metro, were the products of Ford and Vauxhall, except Ford and General Motors did not want to make them in Britain if they could help it. Therefore with this conundrum, one can see why the Japanese manufacturers were invited to set up in Britain. In 1982, BL seemed doomed while Ford and GM were looking for the exit.
1982 – a year of contrasts
The early 1980s was a period of contrasts, with mass unemployment co-existing with affluence. But those who were lucky enough to have a job, were now increasingly reluctant to spend their precious cash on British-manufactured goods, thus exacerbating the unemployment crisis confronting the country. Although 1982 was the low point of UK car production, it improved little in the record breaking sales years that followed, indicating that again, while there was plenty of money circulating in the British economy, the importers were the main beneficiaries.
This then is the hidden history of the decline of the British motor industry, a time when everybody was proud to be British, but reluctant to buy… British.