Ian Nicholls on the ramifications of the Margaret Thatcher-led Conservative Government’s decision not to go ahead with Austin Rover’s sell off to Ford…
As much as she was famous for not doing U-turns, in this case, the Iron Lady was very much for turning.
Margaret Thatcher: Should she have listened more?
On 3 February 1986 the Conservative Government of Margaret Thatcher admitted it was in talks about an American takeover of a large chunk of what remained of the British-owned vehicle industry. The talks were described as being at ‘an advanced stage’.
General Motors was interested in acquiring the loss-making Leyland Vehicles division. Ford wanted to buy Austin Rover, Britain’s last home-owned volume car manufacturer. Labour Front Bench spokesman John Smith asked: ‘Is there nothing not for sale?’
Workington MP Dale Campbell Savours accused the Government of ‘dropping the Union Jack and raising the Stars and Stripes over British industry once again.’ This was at the time of the Westland crisis when two cabinet ministers resigned and the Government was accused of selling out the national interest to American big business. On 6 February 1986, the Government discontinued the Ford/Austin Rover talks.
Ford and General Motors given the cold shoulder
Not long after this the General Motors/Leyland dialogue also ceased as the Government climbed down and all British car fans breathed a sigh of relief as the Government backed down from performing a despicable act.
Of course, at the time opinion was polarised – many UK residents, particularly in Scotland, Wales and North West England, despised Margaret Thatcher and her politics.
The Government climbdown was seen as a victory for common sense. Or was it? This opinion piece concerns the abortive attempt by Ford to purchase Austin Rover. The Government tried to offload Austin Rover after a dire 1985 in which the company performed badly in the sales charts.
In 1986, we were buying…
The Ford Escort (below) was most popular car of the year. Ford also remained in front overall with 26 per cent total sales, followed by Austin Rover with 17 per cent and Vauxhall with 16 per cent. The ten top selling cars in 1985 were:
- Ford Escort
- Vauxhall Cavalier
- Ford Fiesta
- Austin Metro
- Ford Sierra
- Vauxhall Astra
- Austin Montego
- Ford Orion
- Vauxhall Nova
- Austin Maestro
This was the full first year that the Metro, Maestro and Montego were on sale. The Maestro was even outsold by the Orion, the booted version of the Escort.
Although there was fierce discounting, another factor that hurt Austin Rover sales was something that could not be mentioned in the media at the time, the poor quality and unreliability of the early Maestros and Montegos.
Fleet buyers had burnt their fingers in 1984/85, and repeat sales evaporated. This suggested that something was seriously wrong with Austin Rover itself – whoever ran the organisation from BMC to Leyland to the state could not get a grip on the quality issue.
In 1986 no one wanted Ford to buy Austin Rover, but you had to be insane to buy an Austin Rover car! So that was the background to the sale. But was the breaking off of the talks with Ford the right move?
Why did Ford want Austin Rover?
In the 7 February 1986 edition of the Glasgow Herald, Hugh Hunston wrote: ‘The only solid reasons for Ford wanting Austin Rover within its global empire could have been the use of the state-owned firm’s market share to help fight off General Motors British sales threat, or the exploitation of names like Triumph and MG to create a marketing niche for Ford.’
At the time Ford had a 25 per cent stake in Mazda. Only a few days earlier, on 18 January 1986, Mazda had approved for production a project codenamed V705, which became the Mazda MX-5 of February 1989.
If Mazda felt there was a market for a traditional sports car, then no doubt Ford agreed with it, especially as it had designs on the market, as its 1983 Ghia Barchetta concept (below) proved. And two of the best known sports car brands were MG and Triumph, owned by Austin Rover.
For the sports cars?
Sir Michael Edwardes had discarded these brands because adverse exchange rates had made their export to the American market unviable – and yet they were the one type of car that Ford and General Motors had no comparable rival for.
I argue that the decision not to sell Austin Rover to Ford was in the long term calamitous. Spurned by the Government, Ford went on to buy Jaguar and brought in its top notch Production Engineers to bring the Coventry firm’s manufacturing facilities up to scratch and improve quality.
Austin Rover soldiered on, renamed Rover. In the autumn of 1989 Rover took the decision to develop a new generation sports car, the same year as Mazda launched the MX-5 (below). By the time the MGF was launched, BMW owned Rover and saw the new sports car as a threat to its Z-Series roadster – as a consequence of this, the MGF was not marketed in the United States and a whole market went begging.
What actually happened?
The rest of the story is well known. BMW pulled out in 2000 and MG Rover ceased trading in 2005. The Chinese moved in and now the MG brand seems to be going the same way as Rover, Austin and Morris, with poor sales for the new generation MG saloons.
MG was a great brand just like Mini, but it has been appallingly neglected and underexploited.
History may judge that Ford was the right suitor for Austin Rover, but it was partnered disastrously with British Aerospace, BMW and the Chinese.