Essay : What if Tony Benn had been right?

AFTER declaring Tony Benn as the architect of BL’s doom in the late-Sixties, Ian Nicholls plays devil’s advocate and wonders whether the socialist plan for BL was right all along…

Call it an exercise in ‘what if’ thinking…

IN MY article Did government kill BMC> Rover, I examined how successive British governments handled the company and ultimately named my chief villain as Trade and Industry minister from 1974 to 1978, Tony Benn.

To recap I wrote…..

TONY Benn imposed on BL something called “industrial democracy” to disastrous effect. This was operated in BL’s factories, presumably to reduce the number of stoppages and produce an atmosphere of industrial harmony. In reality, the workers representatives, the shop stewards, who indoctrinated into the workforce the concept that all symbols of management from foreman to chairman were their natural enemy and not rival car firms, controlled the factories.

“Industrial democracy” may have worked in theory, but in reality some individuals are naturally lazy and Tony Benn’s naive concept that the workforce would pull together to rescue BL without the whip hand of management was undermined by the shoddy workmanship of many individuals who couldn’t be bothered to do their jobs properly.

And these individuals knew the shop stewards would protect them if management did try to remedy matters. During this period the build quality of BL cars was truly appalling. One car badly affected was the Princess, which had the potential to be a great success. It must be remembered that BLMC had asked the government for aid because of cash flow problems, it had a series of exciting new cars in the pipeline and with state aid there was no reason why the company should not have been a great success. “Industrial democracy” put paid to this and a look at the sales charts reveals a continuing of the decline in BL’s market share since 1973.

But in 1973 BLMC still had many ageing models, by 1976/77 it had some new and exciting cars such as the Princess, Rover SD1 and Triumph TR7 and still the sales decline continued. This has to be put down to the shoddy workmanship in the factories and the lack of will in the Ministry of Trade to remedy the problem. This period probably in reality marked the end of any dreams that BL could be saved in its current form and remain a world player. Too many stories of BL cars’ appalling build quality and unreliability abounded for it to survive without major surgery.

Investment, not contraction

OF course, there are two sides to every story. Criticism of Benn and other players are based on the constraints of a capitalist society – the need for efficiency, proper pricing, and selling cars with enough profit to generate funding for the next generation of cars.

My criticism of Tony Benn was that he did not want to play by capitalist world rules, believing companies should provide employment rather than profit. Ultimately he was not able to convince his cabinet colleagues, and Eric Varley replaced him. Much of the sometimes-strained debate in the Labour movement in the Seventies and Eighties was over what the government should do regarding industry.

Should it merely intervene to help industry when operating within the capitalist system, or prop up ailing companies, injecting huge amounts of money – never mind build quality, sales or profit margins, as long as plenty of people were employed. Tony Benn and many other left-wingers advocated the latter course, and it is interesting to speculate what would have happened to British Leyland under this ideology.

British Leyland was always under-capitalised, but imagine it received huge state payouts. If some of you think BL received too much as it was, remember that after the launch of the O-series engine in 1978, the company was so short of cash, it had to adapt what it had for new models. Some examples of this are the A-series transmission-in-sump powertrain in the Metro, and the way the E-series engine mutated into the R- and S-series.

This was at a time when rival companies were investing in new powertrains. BL had to buy in Volkswagen, Honda and Peugeot transmissions for its cars because it did not have the funds to develop its own – the company was always playing catch up. The Michael Edwardes “recovery programme” closed factories, which reduced economies of scale, which then made the Longbridge/Cowley volume cars operation uncompetitive in the mid-Eighties. Did the solutions merely create others? To those made redundant by the Edwardes plan, their sacrifice seemed to be futile at a time when unemployment was soaring above three million and the economy was depressed.

Let’s not pull any punches about this, to many Sir Michael Edwardes is a villain, whose so called “recovery plan” was nothing of the sort; it was a counter attack in a long retreat. Government departments were trying to encourage investors to create employment by offering incentives. Would it have been cheaper for the taxpayer to prop up factories like Abingdon, Canley, and Speke than pay unemployed car workers?

These were points raised at the time by the left and I don’t think they should be dismissed out of hand.

Had British Leyland received all the funding it really needed then we can speculate on what could have been done.

Model malaise?

Issigonis’ baby received no major updating from the launch of the Mk3 in late 1969 until the BMW funded Mk7 in 1997. The Mk7 had a front mounted radiator and electric fan for refinement – but that could have been fitted to the Clubman. We know BL built and OHC A-series engine prototype in 1975, but put up a smokescreen about the excellence of the existing A-series engine at the launch of the Metro in 1980. A stiffer block with revised manifolding similar to proprietary equipment offered by Mini tuning specialists for years was the cheap option.

In 1978 BL tested a Jack Knight five-speed gearbox mated to a Mini Cooper. The terms Jack Knight wanted and the engineers’ assessment of the gearbox led to the idea being dropped. However subsequently proprietary Mini/Metro gearboxes appeared on the market and showed the BL babies could have been made more competitive. The engineers continued to claim small cars did not need five-speed gearboxes; just plenty of torque.

much of what is written about the Mini can be applied to the Metro. The car would have been so much better had it been launched with an OHC A-series engine and a five-speed gearbox. It was difficult for BL to defend this when it had pioneered the front wheel drive, hatchback, five-speed gearbox family car with the Austin Maxi back in 1969. When the Fiat Uno appeared on the scene in 1983, the Metro’s compromised development was exposed, and sales began to decline.

The flaws with the Allegro were the appalling gearchange and dumpy unattractive styling – things that could have been cured with some state aid. A dramatically re-styled Allegro would have had more sales appeal surely?

The same things apply to the Maxi as the Allegro; a re-skin would have worked wonders. Because of the lack of funds available to BL, cars like the Mini, Allegro and Maxi were neglected by the engineers, driving buyers into the arms of rivals and it proved difficult if not impossible to regain their custom.

Because these cars were designed before BL’s financial woes began to hit hard, there is little to criticise. But BL should have moved quicker to develop a hatchback version.

The only mistake with the Marina was that it lingered on to long. A benevolent DTI could have funded the ADO77 replacement.

The Rover SD1 demonstrated what BL could really do when the funds were made available. Because there were few penny pinching or design compromises, the resulting car was superb. The real niggles with the car were the endless electrical problems, which with perhaps some more engineers on the case should have been remedied.

The marque died because of the lack of funds, and yet it could have had a bright future. The Triumph SD2 could have been developed to production and been sold at a premium price in the sub two-litre sector like the Nineties Rovers were. Had BL persevered with the Speke factory then the TR7, TR8 and Lynx coupe could have carved up a healthy slice of a niche market. If Speke really had to go, then surely Canley or Abingdon could have built these cars? Was the axing of the Triumph brand a serious lost opportunity? Was the neglect of the Triumph marque caused by inadequate funds to build both a coherent Austin/Morris and Triumph range?

The future of the MG marque rested with badge engineered Triumphs such as the TR7, TR8 and Lynx Coupe. Is the poor reputation of these later Triumph’s due to the poor build quality of the Speke cars or the very public axing of the car by the British government and the BL chairman?

A planned future of prosperity?

All BL factories built more than one car. The opportunity could have been taken to move the production of some lower volume cars to the factories that were later closed. Mini and Metro production could have been moved to Canley or Abingdon, enabling Longbridge and Cowley to ramp up the production of the medium sized cars such as the ADO77, and later, Maestro and Montego.

Of course, in the short term, there would have been an enormous annual financial loss to bear because of a combination of a depressed market in the 1979 to 1983 period and BL’s overcapacity in relation to it. However, when the world recession ended around 1983, BL would then have had the capacity and economies of scale to compete with both Ford and GM.

In reality, there was little to choose between the contemporary Fords, Vauxhalls and Austins in terms of product. Where BL lost out, post-Edwardes plan, was its ability to bargain with fleet buyers. Somehow, the world’s fourth largest carmaker had shrunk so much, it could no longer compete with Ford’s and GM’s European operations.

This reduced production capacity and consequent loss of economies of scale was critical in the eyes of many financial analysts to the ultimate demise of MG Rover. With reduced capacity, the remnants of what had been British Leyland had to survive as a producer of niche cars, which was probably only a short-term solution. The only way to long-term health for the Rover Group, was to produce a car or cars so sensational, buyers would flock to buy it. The Rover R8 was almost that type of car, but the opposition soon cottoned on to its innovations, such as 16-valve technology.

A car as sensational as the Mini and the ADO16 were at launch, with a decent profit margin, was exactly what the Rover Group needed to survive. An excellent car like the Rover 75 simply was not enough.

Had the government kept its nerve and preserved BL in its 1978 state, things could have worked out differently.

As someone who lived through the industrial abyss that was the Seventies, I can now see that due to the left/right divisive schism that polarized opinion in that grim decade that I and many others were only too willing to dismiss constructive suggestions from the trade unions regarding the future of British Leyland. Back in July 1978 the AUEW and TASS trade unions published a 28-page booklet “Collapse, Growth – An Alternative To Edwardes”. In the booklet, the unions argued for an expansion, not contraction, of BL’s output. The unions argued perhaps prophetically that the Edwardes plan was…

“Far from being a blueprint for survival… it is a strategy for British Leyland’s slow death”

The slow death predicted took 26 years and 9 months.

TASS and the AUEW advocated raising car output from 1978’s target of 820,000 vehicles to 1.5 million per annum to compete with BL’s western European rivals. The unions also pressed for increased investment to facelift existing models and speed new models into production. To achieve this they demanded the investment be increased to match continental rivals. The booklet claimed (in 1978) between 1978 and 1981, BL had been allocated £850 million, while Volkswagen had spent £1350 million over the previous four years, and Renault planned to invest £2470 million in four years. If these figures are to be believed, then BL was being drip-fed investment and state ownership was merely a holding operation.

TASS/AUEW came out against closing the Speke factory, arguing it could have been used for expanding car production. Canley could have then been used for increasing Land Rover production. The booklet went on about the need for better pay and conditions, and more employee involvement in the running of BL. However, by the mid-Eighties, there seemed to be a meeting of minds between the trade unions and business analysts, as BL proved too small to compete on a world stage.

So was Tony Benn wrong? It depends on your point of view. If you believe that industry should stand on its own feet, then he was mistaken. If, however, you believe that the state should try and maintain high employment to prevent social disintegration, then maybe he has a point. Do you save an industry by closing factories or investing heavily in it?

Over to you.

1 Comment

  1. A parallel: The 1955 Modernization Plan put billions of pounds into our railways. But because there were some job losses, the drivers and firemen staged a highly damaging strike. Seven years later, along came Doctor Beeching, and massive job losses took place. Thirty years later, the system had somehow survived massive neglect. Privatization had many flaws, but the sytem survived, and is now thriving.

    I fear that huge investment in BLMC would have led to even more strikes and careless assembly; which would inevitably lead to huge cutbacks and possibly even earlier bankruptcy.

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