People : Tony Benn

AROnline’s historian-in-residence, Ian Nicholls, dusts off his archive once again and plays devil’s advocate to discuss whether the late Tony Benn’s socialist plan for BL was right all along…

Call it an exercise in ‘what if’ thinking…


Tony Benn: What if he had been right all along?

In my article Did Government kill MG Rover?, I examined how successive British Governments handled the company and ultimately named my chief villain as the Secretary of State for Trade and Industry from 1974 to 1978, the late 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 factories were controlled by 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.

‘”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 whiphand 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 they would be protected by the Shop Stewards 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 ADO71 18-22/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.

‘However, in 1973 BLMC still had many ageing models, by 1976/77 they 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 DTI 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

There are, of course two sides to every story. Criticisms 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 1970s and ’80s 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.

Suffering from under-investment

Austin Metro 1980

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?

Mini

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.

Austin Metro

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.

Austin Allegro

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?

Austin Maxi

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.

Austin-Morris Princess

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.

Morris Marina and ADO77

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

Rover SD1

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.

Triumph

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-2.0-litre sector like the 1990s 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?

MG

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 Triumphs 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.

Losing out to Ford and GM

1989 Rover 200

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 200/400 (R8) (above) 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 polarised opinion in that grim decade, 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 nine months…

Keeping one’s nerves, not contracting

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 and the 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. However, if 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…

Morris Ital development story

23 Comments

  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.

  2. The whole premise of this article is that BL should have received more state aid to reskin models and update power trains. Trouble is just where do you stop propping up a failing concern? BL/ARG received huge investment to develop the LC Maestro/Montego – and ended up with badly made poorly conceived cars that had no market appeal and didnt sell, public money down the drain. Where does all that public money come from? A fair slug will have come from corporate tax paid by the likes of Ford and GM’s operations in the UK. You could understand them wondering why they where expected to effectively bank roll the ongoing operations of one of their key competitors.

  3. Look what happened with Tony Benn and Norton Villiers Triumph motorcycles – it just struggled on. Triumph are what they are today due to management with resources, vision and effectively a clean sheet of paper so they can use World standard practices.

    Keeping inefficient old factories scattered around the UK would never work – better at the time to let BL go bust and encourage an overseas manufacturer with deep pockets (possibly German or Japanese) to pick up and develop the useful pieces?

    FWIW a very young Tony Benn recently appeared in a 1946 docudrama about postwar redevelopment on the Talking Pictures channel.

    BTW anyone else seen that 73 year old Bernd Pichetsreider (ex BMW ex VAG) is now chairman of Daimler Benz – he gets around….

  4. I would agree that the Edwards cutbacks made “BL” too small to compete in the volume car market

    It does feel back to front though to massively increase production to build economies of scale, as the UK isn’t and wasn’t a command economy where the government can decide to make 350,000 Allegro replacements and 300,000 Marina replacements and then restrict the market to stop people buying rival cars. Especially as many of them were made in the UK also or came from within the EEC. I have visions of fields of unsold BL cars or endless strikes from a workforce knowing that the government is treating BL: as a means of employment, rather than a commercial business.

    If you wanted to expand AND sell into Europe, it would make more sense to expand Seneffe (and turn it into a proper factory rather than just a screwdriver job) and keep Innocenti, but that would have gone against maintaining UK employment. After all the European rivals didn’t just make cars in their home countries.

    The article paints a rather rosy picture of the cars that WERE developed in the 70s, the Princess, SD1 and TR7 all of which have flaws, even if you ignore the awful build quality. SD2 was desperately needed, but the SD2 prototypes looked awful, when what was needed was a boring saloon like the 3 series.

  5. It was completely unrealistic to continue to plan to double output at British Leyland in the late 1970s when its market share was slumping alarmingly. The rot had already set in in the mid 1970s when the Allegro flopped by comparison with the 1100/1300 and Leyland’s European buyers went elsewhere. By 1979 it was obvious that relatively recently launch models such as the Princess, TR7 and SD1 were not selling in anything like the numbers needed. There were endless arguments about economic policy in the Callaghan Government of 1976 to 1979 but as Denis Healy put it: Tony Benn wanted to make Marks and Spencer as competitive as the Coop. Short of Benn creating a siege economy, he couldn’t persuade customers to buy unreliable Leyland cars when they could buy European or Japanese models instead.

    That said, the Metro gave BL a temporary lease of life with sales (in the UK at least) as good at Ford and there was just a chance it could lead to the survival of the company as a volume manufacturer. What did for BL was the lack of development of the Metro until it was too late and then the short sighted decision to keep the existing body when the car was completely revamped. And of course the disastrous Maestro/Montego platform which should have been stopped and re-styled years earlier. With hindsight there were good reasons at the time for all of these decisions, but the writing was on the wall.

  6. My argument is by 1984. overlapping car ranges, wasteful badge engineering and the weird beard mixture of engines and transmissions that didn’t fit other cars had gone and Austin Rover had a model range similar to that of Ford and Vauxhall, and the Montego was pitched right at the heart of the fleet market. However, the shoddy build quality and terrible reliability on early cars saw buyers desert the Montego and Maestro in droves, a royal shame as these were otherwise competitive cars that looked OK and were good to drive, the Montego being better than the Ford Sierra.

    • Yes the Montego and Maestro had the potential to do well but for the first few years of production the product development needed to be done by the customers.

      By the time things were improved too many potential buyers had been scared off.

    • Even if the Montego had been successful in the UK as the Sierra and Cavalier, its rivals were world cars sold and produced across Europe and in the case of the Cavalier, in the US, Australia and Japan as well, and thus with economies of scale ARG could never compete with.

      And the ranges weren’t comparable either. The Astra and Escort were available in 3 door and estate form, the Cavalier and Sierra available in hatchback form

      • @maestrowoof, the Montego was hobbled by not having a hatchback and not having a diesel option until 1989. It was odd the Maxi had been a pioneer in the family car market in 1969 when it was launched as a hatch, but the Montego came out as a saloon with no hatchback option and one was never considered when development of the car started in the late seventies.
        Yet I think had the Montego been built better, it could have done quite well, considering many buyers still considered the Sierra too weird, and the 1.6 version was using the ageing and thirsty Pinto engine, and was rwd. The S series in the Montego was quite a refined and powerful engine and quite economical on long journeys, but was bedevilled by oil leaks, water pump failure and hot starting problems.

        • While model ranges might share many parts under the skin, none of the Montego’s main rivals were paired with a smaller hatchback

          The Escort/Sierra, Astra/Cavalier, Golf/Passat, 309/405, Renault 11/18 etc were all completely separate models

          Yes there were saloon versions of the smaller hatchbacks (Orion, Jetta, Renault 9 etc) but these were a class below the Montego.

          • The Cavalier was available as a saloon & hatchback, & eventually the Sierra had the Sapphire saloon.

  7. Keen on seeing those figures concerning the money spent / invested by Volkswagen and Renault verfied.

  8. The French government invested far more in Renault than the UK in BL. Renault is still with us.
    The UK needs to think big and build big successful companies, not underinvest or flog off. That is done via investment, education and quality products. Sadly we have decided that the service industry is the way forward and company ownership is not important. Losing control of companies means loss of IP, tax and future wealth. Concentrating just on employment is not enough.
    Tony Benn was right in some ways but the investment in models, plant and staff was never fully there and the 70s were bad internationally for union vs management unrest.

  9. When British Leyland was created in 1968, it was one of the biggest motor manufacturers in the world and was seen as a British General Motors. At the time, it could sell everything it made, exports were healthy and the truck and bus business was the biggest in Europe. Had things not gone so disastrously wrong in the seventies, British Leyland possibly could still be around making everything from city cars to double decker buses.

  10. Just curious, not being British: how was the situation within other British automakers like Ford and Vauxhall at the same time period? Were they so strike prone? Were wages and working environment comparable?
    On quality, British cars were perceived here in Spain during the 80s as shoddily built; in fact I have an old motor magazine from the early 80s were the Rover SD1 was compared to other high end cars available in the market at the time…. and the test unit’s boot wasn’t properly sealed against rainwater. Plus, due to the taxing environment it was very expensive while the interior plastics looked cheap so it wasn’t recomendable at all. The Montego was quite popular and easy to see well into the 90s while the Maestro was generally considered as hideous and rather uncommon. Later, the various generations of the Rover 200/400 were also quite common but considered overpriced. In my neighborhood we had a 2002 Rover 75 until last year or so and I can still see a few Rover 25s and their MG incarnation, all from the early 2000s and with very faded paintworks

    • We do like a reply to a nice easy question!

      Simply put… the rivals of Ford, Vauxhall, Talbot et al were not really much better in terms of quality, though it would be fair to say they all had a more coherent range in their brochures.

      BUT… and its a big but, all of the above mentioned were owned by the Americans or the French which meant all of us UK taxpayers weren’t paying for their blunders, strikes and lack of long term future investment like we all were with BL, Austin Rover and then Rover Group until 1994 when they were privatised.

      • To add to Mike’s comment – simply the opposition had European factories that could supply the same cars, especially Ford. In fact Dagenham went on a quality drive in the late 80s which by the early 90s they were as good in quality as the best Ford factory, Cologne.

        • Of the British badged cars in the eighties, I’d consider Vauxhalll to be the best made and most reliable, although they really were Opels assembled in Britain Vauxhall were the first of the old Big Four to iimrove the rustproofing and quality of their cars, something like the original Lutpn built Carlton was a better made car than its predecessors. and by the time the Mark 3 Cavalier was launched, Luton was known for making dependable and well made cars.

        • As far as increased European presence goes with BMC later BL, have seen others float the idea of them managing to acquire either or both Borgward and DAF Cars in addition to expanding Seneffe and integrating Innocenti (not sure if acquiring Authi, Santana or BMC Turkey was feasible).

          Also read that Morris could have chosen better options in France instead of Leon Bollée after WW1, however would be interesting to know if Austin prior to forming BMC like Morris also had plans at one point to expand their presence into Europe beyond allowing Rosengart and BMW to make licence built versions of the Austin 7?

          • The Borgward connection has some good traction, with BMC managers said to have contacted the flown in management team that closed Borgward down. Never heard of the DAF link.

            It is with hindsight we can see BMCmade the wrong plays, by not investing in plant within the EEC in the 60s and opening plants all over the shop (under government rules) in the UK, they missed the chance to become a real player in the euopeanen market.

          • Think the DAF link was likely premised on an earlier UK entry into the EEC (depending of course how early Volvo acquired a stake in DAF), unsure whether it was specific to BMC, Leyland or later BL or to DAF’s car or truck divisions though what the latter managed to achieve with the continued development and evolution of the Leyland O.680 engine is something to think about.

      • Quote: “BUT… and its a big but, all of the above mentioned were owned by the Americans or the French which meant all of us UK taxpayers weren’t paying for their blunders, strikes and lack of long term future investment like we all were with BL, Austin Rover and then Rover Group until 1994 when they were privatised.”

        I think you mean 1988 rather than 1994, which was when the Rover Group was sold to British Aerospace for £150 million.

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