Motor Show Special 1969
The head of British Leyland talks exclusively to Doug Blain, Leonard Setright and Ronald Barker
CAR – After nearly two years it seems reasonable to expect that British Leyland might have settled down – that you yourself might now have time to think a little less about the business as it stands and more about the future. We gather that action in the twin spheres of service and distribution was the number one priority. It would be nice to think that the product range was next.
Lord Stokes – A pretty gruelling question.
CAR – It’s a theme, really, not a question. Naturally we are interested above all in design, in specific aspects of engineering, styling, development and the rest. But we believe there is a strong interest also in the kind of product the public can expect from each of your divisions, and the kind of volume in which you plan to make it. You are, in the public mind, virtually the sole representative of the British motor industry as opposed to the American owned motor industry. Is there any way in which you can capitalise on this Britishness?
Lord Stokes – Well I don’t really like to – at least not to much. I’m very patriotic, and personally I rather like this country; I think it’s about the best place to live and I think it’s got terrific potential. But I don’t really want to trade on the fact that we are British. I want people to buy our cars because they’re the best motor cars, with the fact that they’re British as a bonus on top of this. Do you follow what I mean? On the other hand being British is already an important hidden asset. We have a tremendously dedicated group of people working for us simply because there is such a kick in working for a company which is not dominated by the Americans.
In this sense I am already emphasising the British part. People are feeling the challenge;we’ve got to beat Fiat, we’ve got to beat Ford, we’ve got to beat Chrysler. They like this. At the same time I’m consciously stressing this that Rover or Jaguar, if you like, still need to be Rover and Jaguar – British cars in the best sense. In this 18 months we have broken down the barriers and all become part of a tremendous flow of engineering and production information, yet we have managed to retain within our organisation a sort of competitive sense that Jaguar and Rover and Triumph and BMC are going to compete, not just with one another but with the whole world.
It’s true we have an engineering committee now, apart from the design committee of which I take the chair, but the engineers themselves follow their own individual lines. This is where we had a difference with one chap who wanted to have too much standardisation, to reorganise along American lines; one bodyshell for the whole of British Leyland and make it into an Austin, a Morris, a Jaguar or a Rover. To my mind this would completely ruin things. Our way is a bit more expensive because we have to tool up for more bodyshells, more components, but they needn’t be so many. The position will eventually come when you have one bodyshell for Jaguar with all the various options, I’m not talking about open top sports cars, and one for Rover.
In effect it will be two each, because you’ll have the old model running down and a new one coming in, but you’re only committed to tooling one at a time. The same with Triumph, and then the Austin division will have two basic models if you like, and the Morris two more. These last two, Austin and Morris, are to be split up. Each is already the size of Vauxhall and therefore we can afford to pursue an advanced engineering policy on the one hand and cater for certain export territories and for the commercial travellers on the other.
And then you have engine options. Here again there is less incentive than you might think to overdo the standardisation. At present we have four engine plants, all brand new, all making very good engines. One is a brand new plant for diesel engines which doesn’t worry you very much, but we’ve got a brand new plant at Longbridge for making the BMC E-type engine, we’ve got a brand new plant at Rover for making the Rover V8 and we’ve got a brand new plant at Standard Triumph for making the slant four and variants of that.
We’ve got them, they’ve been paid for, they’ve got to earn their keep. As and when we introduce our new engines, which obviously will be quite a period ahead, then there will be a greater degree of rationalisation. We still want to keep separate engines for Jaguar, but Rover and Triumph may one day share engines, if you like, because they are specialist cars and you can have variants of the same engine for them. This is where some of our competitors are in difficulties. I know they look at their problems from a difficult point of view, but if we are going to get 45 per cent of the market we cannot just produce a cheap basic model and then doll it up with all sorts of options.
That way, it’s still a cheap motor car and it’s cheap in the eyes of the purchaser.
We’ve got to provide a Rover which is conceived by a Rover engineer, and so on. Meanwhile there is quite a lot of commonising going on in other spheres; for instance Rover and Jaguar steering.
Not long ago in one of our big sheds we laid out every unit that we made, every engine, every gearbox, every clutch and every rear axle. It was absolutely frightening to see, and there was obviously a lot of scope for cutting down without harming the product.
CAR – A hell of a lot of those components, no doubt, were made in distant corners of the country for use in a variety of models. Can you see any hope of rationalising your plant capacity to bring costs down?
For example wouldn’t it be a good idea to turn Cowley over to making in large volume a single type of car which could be sold as various things, and Longbridge over to making a single type in a different range? Is that a possibility?
Lord Stokes – We are going to reduce in due course the number of models we make, which is a first step. Things will become clarified; that’s probably a better word. A lot more complete cars will be made at Cowley. Cowley will become one big complex, Swindon will have to be looked at and Longbridge will then have to concentrate on one particular model. Cowley will make another model, or perhaps two models, plus the variants. At the moment we’re actually carting bodies from Oxford to the Birmingham area and from the Birmingham area or Coventry down to Oxford.
This is ridiculous. The things we are prepared to cart about are engines or gearboxes because they are in bulk and the transportation cost is insignificant, but the body is a very expensive part to move and it is also very susceptible to damage. So, in future, where the body is made we will try to see that the car is finished.
CAR – Talking about rationalisation, do you have strong ideas about co-ordinating group engineering policy?
Lord Stokes – Yes. Harry Webster is chairman of the chief engineers committee on the car side and Doctor Fogg does the same thing for the commercial vehicles. Doctor Fogg also looks after materials research. We’re doing a lot of work in new materials. We’re taking on some scientists from Harwell and various places just to play around with new ideas – you know, the carbon fibres and all that sort of thing. Then we’ve got a combined research and development centre for trucks at Leyland, which covers all the trucks including the Bathgate products. The idea is that broad development will be done in this research and development centre and then passed to the other people for them to engineer into their own spheres.
The Austin-Morris styling side has been moved from Pressed Steel Fisher up to Longbridge so it’s all under one central control. Alec Issigonis has his own research and development centre at Longbridge for long term research in car design, and we have authorised a lot more money for that. Harry Webster had terrible facilities when he went there; some quite good work had been done there but it was very badly scattered. We’ve set up a whole new shop now to get all this engineering work together. Men like Issigonis have got to work together with the production people and this is why we’ve tried to stress the human side of it – to get these chaps working as a team, prodding one another on, rather than shut up in water-tight compartments.
Issigonis is working on forward development. Obviously I’m not able to go into great detail, but he’s concerned with new types of power units, and of course there’s this thing with the people up in Kilbride on hydrostatic transmissions. We are interested in steam, too. And then there’s the gas turbine. All these sort of things are being taken away from the production clearing offices where they take so much time. People have got to have time to think, so that they aren’t being pestered to get a new model out in time for the October motor show or whatever it happens to be.
Meanwhile at Coventry we’re setting up a central pollution centre. The building has just been completed and Wally Hassan of Jaguar and his boys are going to be particularly concerned with it. All the other people will contribute and the research will cover everybody. The individual companies will adapt it to their own particular production because you must never – and I’ve learnt this by experience – take design away from a factory. You can do research and development in a central place and get tremendous advantage out of it, particularly if you’ve got a team which is well co-ordinated, but the final product engineering must be with the factory because it’s so tied up with your methods of production. At the same time you must have this cross fertilisation.
If you have one vertical organisation with one chief engineer at the top I think your headed for trouble, because chief engineers can be bloody good and they can be bloody awful. They get bees in their bonnets and our system is an insurance policy against that.
CAR – Are there potential benefits to be had from the merger when it comes to after sales service?
Lord Stokes – We’ve simply got to provide, in Great Britain and throughout the world, absolutely first class service. I think this is vital. We are always up against the problem of the multiplicity of models and we are also up against the problem that our cars last a hell of a long time. We get demands and sometimes complaints from people who just can’t get a part for a car which was imported to the States in 1939. Nevertheless we are putting tremendous emphasis on the parts business, and we will be making another announcement later this year which I think will show that we are going into it in a very scientific and rather exciting way.
We’ve simply got to make reliable motor cars and we’ve got to spend a lot more money in basic production engineering to make sure that the cars that we build are proven and are right. The first step in this was getting the guarantee organisation really scientifically controlled. Perhaps it’s my commercial vehicle upbringing but I’m used to someone, when he buys a truck, coming and telling me that it’s a bloody awful truck and where precisely I can put it just because it isn’t working. In the same way I feel a car has got to be on the road all the time, and therefore one of the first exercises we did was to examine our facilities for ensuring that our cars stayed on the road. I must say I take my hats off to BMC.
They had the stuff there. I don’t think they used it, but they had tremendous statistical data on guarantees plus a supporting method which was computer controlled. Now we have tied this up with engineering, with an organised feedback system, and already we have halved the guarantee claims in Austin-Morris in 12 months. The secret is quick, energetic engineering action as we see problems developing. In other words if we see from the computer we are getting trouble from a spiral bevel, instead of just handing out parts – that isn’t service, though you’ve got to do it as well – we find out why.
For example, is there something wrong with the tolerances? This does happen in this company, you know; tolerances get a bit slack, or somebody at a certain plant can be going wrong, you don’t even notice it. The next minute you’re getting noisy gears and it costs you a fortune in parts and goodwill.
CAR – You once said you rather approved of a lot of the American legislation about pollution. Have you any idea how much your programmes have been set back by the need to catch up on pollution and safety laws.
Lord Stokes – They’re taking a lot of engineering time, but we’re meeting the problems. On pollution, we’re developing along two lines. One is with fuel injection, which as you know we’re very interested in. The other is with improved versions of existing carburettors. Personally I believe that that the carburettor may well win the day. But you ask is it stopping development. Well, what we’re trying to do first of all is to restrict the number of models we sell in the States, which is where these regulations apply at the moment. We’ve got the Austin America, which complies with the regulations.
We’ve got our sports car business, which is very valuable so that any necessary changes are well worth making. And then there are bigger cars, which we’re slowly pruning down. To sell in real volume in the States a car has got to be cheap to buy and it’s got to be reliable. I think somebody made a ghastly mistake years ago when they didn’t push the Morris 1000, or Morris Minor as it was. This could have been another Volkswagen. It’s probably the most reliable car in Great Britain today. Not that I want to understress the more expensive cars. They all take time and money to get through, but I think this is a little exaggerated. We sell enough to make it worthwhile.
And there’s the question of distribution in the States. We would like to have two distribution chains, not one. We’ve got to face up to it; we deal with a lot of small people, if you know what I mean, who sell perhaps 30, 40 or 50 cars a year. I’m not going to commit myself on how we will divide the range between them, but this is the line I’d like to go on. Two ranges and that’s it, with one of each kind in each. But which particular models? That’s the next problem.
One big decision we have had to make was whether we should market the Rover 3500 in the States or not. We decided on a narrow balance to do it. We’ve withdrawn the Triumph 2000, though. That was my fault: I thought it would sell. I still think it should sell, actually, but we didn’t market it properly. We couldn’t afford to. By contrast, the Rover 2000 had a brilliant advertising campaign but it was the wrong car. with the V8 under the bonnet it’s much more of an American car, although you may then ask why we have the XJ6 competing with the 3500. The answer is that they’re different, and I know we’ll get more money for the XJ6. In any case we have plans in that direction.
CAR – Can you see any change in the proportions in which you will be building specialist cars as against volume cars?
Lord Stokes – Of course all cars are gradually becoming specialist cars because they’re always being upgraded. This is a matter of specification, not of price. We are getting better production techniques which we can apply to the specialist cars, and at the same time we’re introducing ideas that started on Jaguar, or started on Rover or Triumph and that are gradually filtering down into the volume car division.
Even so, I think the percentage of specialist cars in the present sense will increase. We have a very complicated, very specific five year plan. The divisions have all had to agree to it. I don’t always agree with their figures; I sometimes chop them down or increase them as the case may be. Then the plan is integrated so that we make sure what money we’ve got is put where we think it will get the best return, and that what we think we’ll get the best return from is the thing that is going to sell best.
In the beginning, with Standard Triumph, we were trying to exist without volume cars. That is why we did this BMC merger. There was no immediate need to do it; we could have gone on our own. We had Rover and Triumph and we could have built them up to compete with Jaguar. But ultimately you’ve got to have a base – a big volume car business. This is the foundation on which to establish your marketing at home and throughout the world, particularly the latter.
Now that we’ve got BLMC moving, building 1100 and 1300’s and their successors must be our number one priority. We’ve been left behind by the Cortina in another sector of the same market. We’ve got to catch up. We’ve got to produce in big quantities in both of these sectors to sell economically and to satisfy the demand from the marketing organisation.. By comparison with this sort of volume we cannot make a lot of Triumph’s. We’re short of sports cars at present, but I don’t think it will take an enormous number of sports cars to make us not short of sports cars, if you see what I mean.
As for the little Triumph Herald, the 1300, the 2000, we’re pushing like mad to increase production of these. One of the big bottlenecks has been the supply of cylinder heads and blocks for the 2000. We can make the bodies, and we’ve just installed a complete new foundry for the engines. But the numbers will never be vast. What I have in mind ultimately is a progression. Our typical British Leyland customer starts off with a Mini, if you like, as a young man, then works his way up to a 1300, then a 1500 or one of the other variants which will come along in the Austin Morris range.
Then when he becomes respectable he can transfer to a Triumph – a 2000 or one of the others that we have in that range. Finally he can move on to Rover or straight to the Jaguar. All told I believe we have more positive advantages in our structural set up from the point of view of marketing than any other motor manufacturer in this country. The other major British manufacturers would give their eye teeth to have our range of products and the goodwill and prestige that is attached to them.
It shatters me to think of the money that some people spend on racing, when all the time the one thing that everybody wants to own in this country – well not everybody, but 90 per cent of them – is a Jaguar XJ6. The other 10 percent want the same thing with a Daimler badge on.
CAR – It sounds as though you haven’t changed your attitude about competition?
Lord Stokes – I’m all for competition if I can win. But by and large I’m not sure. I wish I did know the answer to this. I’m not sure about Grand Prix racing, in particular. I know it’s an advertising feature, but I’ve got serious doubts whether it actually sells motor cars. The last person to talk to about this is one of the racing fraternity. They’re hypnotised by the whole thing. I also think that industry itself has ruined much of the sport.
Take the London to Sydney Marathon, which in some ways was quite an exciting event and got a lot of publicity. You got people hovering over cars with helicopters, dropping spare cylinder blocks or heads or whatever it was; this made a farce out of it. In the same way the Monte Carlo rally, I think, is ruined by the fact that you’re allowed to have mechanics at every stage. But we’re going to support this Mexico rally. I think this could be quite fun as long as it doesn’t become a battle of money, which I think a lot of them are developing into.
If it does, the organisers are going to defeat their own ends. But, turning to racing proper, as you probably know we’ve got quite an exciting Jaguar car which could do great things for us at Le Mans and elsewhere. Whether it’s opportune to go in at this moment I just don’t know. Mercedes-Benz are probably in the same sort of position as we are. The trouble is that this end of the sport, too, has become too commercialised. It’s monetary pressurisation, and that can work against you just as strongly as it can work in your favour. The worst of it is that it means total committal, and I have tried to point out that the tremendous strength of British Leyland lies in the fact that we are diversified.
We’ve got a variety of cars, of commercial vehicles, of facilities and resources, so if we do have a flop it isn’t the end of the world