By Peter Deeley
Sir Donald Stokes, head of Leyland Motors,’very nearly’ made a takeover bid for British Motor Holdings instead of last week’s £320 million merger – and believes that it would have succeeded.
He told me: ‘We could have put in a takeover bid and I think we could have got over 50 per cent of the shares. It was one of the few things I have worried about in my life and it was an agonising decision. But had we tried a takeover, we would have lost the good will of the BMC management and there would have been bitterness and trouble. With this compromise we have probably got the best of both worlds. After all the only reason you do a forced takeover is to get control of the management.’
A drawback to this merger, in the eyes of the car industry, has always been the difficulty of getting Stokes and Sir George Harriman, head of British Motor Holdings, to sit down together. In the new company, British Leyland Motor Corporation, Harriman is chairman, but Stokes – as vice-chairman, managing director and chief executive – is clearly the Tsar. Stokes denies any friction between the two men.
‘We have been friendly acquaintances for some years. But we are not bosom friends, for the simple fact that our lives have not impinged lo that extent. ‘
If Stokes has his way, Leyland will be as synonymous in five years time with mass automobile production as Detroit or Turin – though no cars will be built in the town. The night of the merger somebody asked Stokes if any thought had been given to dropping the name ‘ Leyland ‘ from the new title. Irritably, he snapped back at the assembled Press:
‘Certainly not. Don’t let’s have any of your bloodyminded Southern attitudes here.’
Stokes regards the South as soft and stand-offish. He prefers the North and Northerners – despite being born at Bexley in Kent, brought up in Plymouth, where his father was transport manager of the local tramways, and educated at Blundell’s.
In 1961 Leyland looked at the British passenger car market, saw that Standard-Triumph of Coventry was the most vulnerable, the most in need and became partners in a joint overseas marketing venture. It was only when Leyland had got into Standard that they realised how unsatisfactory was the Coventry set-up.
‘To be honest it was ghastly,’ Stokes recalls. ‘The place was badly run and top management was not good.’
He believes that Leyland’s bid saved the car firm from bankruptcy. Three hundred Coventry executives were fired in a matter of weeks and compensation totalled £110,000 – though this trimmed expenditure by £1 million a year. The Rover take-over in 1966 was different, he says.
‘They had first class people and a first-class product. It was simply that Rover had got to the end ot the road and they had to get bigger.’
For the biggest prize of all – British Motors – the haggling went on over an 18-month period,starting at the time when BMH was reeling from the economic freeze of July 1966. Now Stokes is top of the pile.
Sir George Harriman quotes: ‘We have a car that fits every income bracket’
Sir Donald Stokes quotes: ‘We have got to put something in to match the Ford Transit’
‘It is no use telling me to scrap models, that isn’t going to help anybody. I’m landed with them, we’ve got to make the best of them we can. It takes three and half years to introduce a new model, I can’t stop anything that is in the pipeline.’
‘I want to get our group to do the same things as Ford and Vauxhall,to be able to come out with new cars at proper intervals.’
‘I feel daunted sometimes by the number of factories in this group. I’d like to have them all together in a nice compact group.’
‘Everybody is expanding like mad. You’ve got to get into the race if you are going to survive, but somebody is going to get hurt. I don’t know who it is going to be, quite honestly, but I hope it is not us. I hope we’ve enough time to put this right. Don’t let’s kid ourselves, we’ve got a pretty tough battle.’