By Roy Mackie
In his long career from apprentice to chairman at British Leyland, Lord Stokes has certainly learned one art to perfection , how to beat strikes. His success in this field was summed up in hard cash yesterday, when the motoring peer unveiled the group’s results for the first six months trading.
Profits from the Austin, Morris, Rover, Triumph, and Jaguar giant topped £22 million, making this the most successful first half in the company’s history. Only £7,200,000 was made in the same period last time. A total of 561,000 vehicles rolled off the Leyland production lines, an increase of 24,000. This represented £411 million in this country , against £338 million – and £348 million abroad, an increase of £109 million.
The company also had a windfall of £2,500,000 following the currency realignments. Lord Stokes and his men turned out these figures in the face of an almost continuously running battle against strikes. While the industrial scene in Leyland’s own back yard was relatively calm, storms raging elsewhere put strong pressure on the company. The British Road Services strike, and the gas workers dispute, both hit Leyland production and around 60,000 vehicles are thought to have been lost during the half year. The main problem for the group now, like the rest of the motor industry, is the dispute in the Rubery Owen components concern.
Lord Stokes said he found this “very worrying” and he was extremely disappointed that the dispute had not been settled earlier this week as had been hoped. The four-week deadlock has meant that’around 8,500 men have been laid off and production at the Jaguar, Rover and Mini plants has been savaged. The strike has also dealt a blow to the commercial vehicle division which Lord Stokes said, was “bucking up.”
Judging by other companies in the sector this is certainly over modest .While the Rubery row is still making times hard for Leyland,no other British manufacturer is in a position to grab extra sales, for they are all taking the same punishment. Added to this Leyland also faces troubles of its own with around 2,000 men on strike. These combined blows have led to a situation which Lord Stokes, the group’s one-time super-salesman, must find extremely frustrating. As fast, or as slow, as the case may be that the company can get cars off the production line they are going to customers.
But there are still not enough to meet demand. It isn’t a question of production potential being under capacity, but more a problem of getting fully geared up.While there was some surplus stock to fall back on in the first six months. Lord Stokes admitted that in the second half sales will be limited by production. In a strike-breaking effort Leyland cars are now beingsent abroad with parts missing. These will be added later, when production is back to normal. This is one of wily Lord Stokes’s schemes to stop demand from hopelessly outstripping supply.
With all these problems it was no wonder that the share price could do no better than hold steady yesterday at 35p. Profits in the second half are anyone’s guess. Lord Stokes’s only hint came with the statement that this year there would be no big differential between the two half-years. Figures being mentioned in the City for the whole year vary between £45 million and £50 million, against last time’s £32 million. Talk of an impending board room shuffle with John Barber becoming deputy chairman, and George Turnbull taking over as managing director, were sidestepped by the sprightly chief.
“There is lots of life in me yet.” he sparkled.
The next big event on the Leyland calendar is the launch of its new range of cars, code-named ADO67. Lord Stokes said that, as always, the group had managed to create sufficient stocks to make sure dealers could start selling the cars when they are unveiled later this month. If the new range is a success. Leyland’s profit melody could quickly slip into a higher key.