Keith Adams recalls Sir Michael Edwardes, the Chairman and Chief Executive of British Leyland’s turbulent ride at the top of the company. It might have been a rough ride for the unlikely South African car boss, but he almost managed to turn around company in the most trying of circumstances.
Sir Michael Edwardes: the miracle man
Sir Michael Edwardes, the South African-born boss of British Leyland has died aged 88. He will be forever remembered for his time at the helm of BL during some of its darkest days. Edwardes was encouraged into taking the toughest gig in the British car industry in 1977 and, from day one, was thrown into the most trying of circumstances. He was a master tactician, and stood up to the Trade Unions at a time when such a feat was considered impossible, and was responsible for both saving the company from closure and ushering in a a product-led recovery, with the Austin Metro leading the way.
On 1 November 1977, Edwardes would end up being appointed Chairman and Chief Executive of British Leyland by newly-installed Chairman of the National Enterprise Board (NEB), Leslie Murphy, but only after some tough talking. This was not going to be an easy job and, with the British Leyland industrial crisis deepening by the day, Edwardes would need to take swift and decisive action. In fact, the 47-year old South African wasn’t immediately keen on taking the job, as he was in a pretty comfortable position as the Chairman of Chloride Batteries.
The previous month, Murphy had telephoned Edwardes and asked him if he wanted the job. Edwardes recalled that it took him at least 30 seconds to utter a reply to Murphy, such was his shock, but once this had passed, he saw a certain logic in his appointment. Michael Edwardes, therefore, deliberated the offer and told Murphy that he would get back to him. Edwardes knew he would take the job; in his own words, ‘Do you think one can refuse a task like that?’
Backed by the Government to rescue British Leyland
When Edwardes accepted the post, it was with the knowledge that his actions would be sanctioned by the then Labour Government. Such was the strength of his position, he even managed to persuade the Government to accept his appointment to British Leyland on the basis that it was on a three-year secondment from Chloride Batteries, his then-current employer. But he was in a good position – he was a member of the NEB board, had been previously awarded The Guardian Young Business Man of the Year in 1975 and had earned a reputation for tough talking and turning around companies.
On the day Michael Edwardes took up his new post, Leyland Cars was hit by another stoppage. Some 1500 workers at the Triumph Speke No.2 plant on Merseyside, which produced the TR7, walked out only a few hours after they had resumed work. They had been laid off for over three weeks by a strike since settled at Triumph, Coventry. He was asked on the day if he could bring about the recovery of British Leyland. He replied: ‘Yes, if I have to stand on my head to do it.’
Within days of being installed, he was making changes. They were needed – in 1976, more than 250,000 cars had been lost to industrial action, and 1977 was shaping up to be more of the same. Firstly, he renamed the company BL Limited with the intention of this being first step in a wide-ranging reform of the company. The shockwaves were massive – Alex Park resigned immediately, Derek Whittaker followed him within weeks and it soon became clear through a series of controlled ‘leaks’ that Edwardes was there to slim the company down by reducing the number of model ranges and the factories that produced them.
He knew where the problems lay and he felt that, in order to save BL, he had to employ ‘management’s right to manage’. There would be a plan to overhaul the model range and produce cars people actually wanted, and he signed that off. Then he needed to overcome Trade Union militancy in order to increase productivity and quality.
A tough start for Edwardes
What Edwardes faced first though was an enormous cash crisis. BL may have been (to use the words of Edwardes), ‘one of the largest public sector lame ducks’, but on the very week of his appointment, it was about to run out of money again, just as it had done at the end of 1974 necessitating it to be bailed out by the Government. He had to approach the clearing banks in order to obtain funds, simply to stay in business. He then approached the Government to secure finances to develop the next generation of cars.
The Labour Government agreed to this proposal, as it had done previously. But it questioned Edwardes’ intentions for Speke, asking for a full and frank account of why this closure should take place. He met the Prime Minister, James Callaghan, and explained that the Triumph TR7 was to remain in production, but it would be transferred to Canley. Callaghan replied that a more sound business decision would have been to scrap the car, not move the assembly of it.
In February 1978 and in his first major speech in his capacity as BL boss, Edwardes laid out his plans to save the company to a delegation of 720 Shop Stewards, Union and Employee representatives. He pulled no punches, his programme was going to be ruthless – he needed to cut out the excesses in the company in order to save it. But he could save it. When balloted, this assembly backed him by a majority of 715 to 5.
Unions support Edwardes’ plans
Edwardes later said in an interview published in Autocar in November 1978, that, ‘the remarkable reception I got (made me happy) when I addressed the Shop Stewards and the national union officials. Also when I went around SU carburettors, I got a standing ovation from the work force, who shouted support for what we are doing’.
Yet, even armed with this knowledge, industrial relations between Edwardes and the Trade Unions took an immediate nosedive. Too often, strike action became the first, rather than the last resort in dealing with industrial issues; Longbridge, Cowley, Solihull, Canley and Speke were bought to a standstill. Edwardes responded by saying, ‘What made me unhappy is that the 99% of the workforce who want to get on with the job have not yet found a way of neutralising the 1% who want to paralyse us.’
Speke would end up being the battleground. When the management requested union assistance in getting the production line moved out of Speke, they were met with the Shops Stewards’ disapproval – they feared for the jobs of the production line workers. The assembly line staff staged a sit-in at the factory, while Edwardes delivered his ultimatum: assist the management or lose the entire factory for good. He had the Government behind him and he was prepared to ‘do what it takes’.
In a letter to The Times in 1980, he said: ‘The content of the 1980 plan has been welcomed by the unions as “the best the company has ever had”, and it is on this basis that we move forward into 1980 confident that we have the support of the workforce. Is it not time for responsible people (Left, Right and Centre) to support this last chance of retaining an indigenous motor industry; to stop sneering at those remaining managers and employees who are still determined to secure BL’s recovery?’
Getting the job done by spilling blood
After protracted union belligerence at the Merseyside plant, which involved not only sit-ins, but also acts of sabotage, Edwardes finally called time, and closed down the entire car producing facility at the factory. The cost of this action had been huge. As well as jobs lost, it saw the end of the promising V8-engined Triumph Lynx (above). But a line had been drawn, and the battle to save BL was gaining momentum. In the end, this would lead Edwardes into his most famous confrontation.
At Longbridge, Trade Union convenor Derek Robinson was fighting management at every turn and, in doing so, was gaining notoriety outside of the company. Support for Robinson and his countless strikes from the Longbridge production line staff had been on the wane for some time, and the closure of Speke had left the workforce with little appetite for a fight, even if Derek Robinson wanted to march them into battle.
For Longbridge to return to a sensible level of productivity, Robinson had to go. The national media was calling for it, BL management wanted it and, increasingly so, the Longbridge workforce wanted it. When this man was finally relieved of his duties at Longbridge, in November 1979, a marker had been laid – Edwardes would do what it took in order to turn BL into a profitable organisation.
After a failed appeal for his reinstatement in February 1980, Robinson would say of Edwardes, ‘He talks as though someone else was Chairman while plant after plant has been closed down and home markets are handed over to importers. My record of commitment to British Leyland is second to none. I have solved more strikes in BL than Sir Michael Edwardes has provoked, and that is saying something. British Leyland’s industrial relations policy seems to be one of blackmail. As for Sir Michael, he either sacks or intimidates people and in myself thinks that he has found a scapegoat for the company’s problems.’
Restoring sanity on the shopfloor
Sanity was, however, beginning to be restored in the car plants. When a march was held in the centre of Birmingham, culminating in a meeting of support for Robinson, the full extent of how politically motivated were the people that supported Robinson was sadly obvious. There were a lot of people at the meeting and those present comprised a great number of people with very far-left political affiliations. Very few of the delegates at this activist meeting were actually the car workers of Longbridge – the people actually affected by all these stoppages.
So, that was the state of affairs with the Unions. But market share for the actual products was tanking, and BL had far too many factories producing far too few cars that not enough people wanted. Other factories needed to go the same way. Time was called on MG at Abingdon in 1980 and, later on, the car making facility at Canley went the same way. Then came Solihull, which had its Rover SD1 and TR7 production lines halted. Eventually this plan of closures cost 90,000 jobs.
Meanwhile, the product plan was coming on stream. His first marketing shuffle was to undo the ‘lump it all under Leyland’ approach recommended by the Ryder Report, finally burying the Leyland name for good. In a reversal of the Ryder plan, Edwardes restructured the company so that it was split up into four main divisions; Special Products, Trucks and Buses, International and the motor division – something that eerily resembled the structure that Donald Stokes had put in place.
Although this may have looked to be the case, Edwardes denied this vehemently, ‘In no way are we going back to how Leyland used to be!’, he proclaimed, ‘On the outside, it might look as if we were going back to what the company was like before BL was founded. This is not so. It is true that we have done a lot of decentralising. We have decentralised operations, but we are centralising decisions.’ Edwardes had reasoned that the Leyland name was toxic in the marketplace, be reserved for trucks and buses only.
The ‘product-led recovery’ plan take shape
Plans were drawn-up to introduce a streamlined package of small-to-medium sized cars encompassing work already done on the LC10 project which had been started in late 1975 – and expanding it to include a larger saloon-bodied version. They would be launched in 1983 and ’84, following on from the Austin Metro, which would be the first of the new-generation models to hit the market. The LC8 and LC10 had to be good enough to save BL.
There would be some tough years where the Marina and Allegro would have to live on far longer than their sell-by dates and, even with the cosmetic improvements they were continuously receiving, these two volume-selling cars would be seriously over the hill – they already were. What was needed was a stopgap in order to generate sales until the new cars came on stream – and that’s where Honda came in. Edwardes had always made it known that he wanted BL to play a greater role in the world affairs – companies were all linked to form a ‘spider’s web’ of collaboration and assistance and the company needed to be a part of this.
After much deliberation and a great deal of groundwork by Ray Horrocks and Mark Snowdon, Honda was chosen from a short shortlist of companies that were deemed suitable to do business with. Once it was determined that Honda was keen to collaborate with BL, both companies quickly established a favourable working relationship after Michael Edwardes signed the deal with Honda on Boxing Day in 1979. What followed came quickly – the Honda Ballade was chosen as the basis of the new car and following extensive development work done on the company’s newly-opened test track at Gaydon, Warwickshire, the Triumph Acclaim was launched in October 1981. It was the beginning of a long and fruitful relationship with Honda.
Margaret Thatcher and Sir Michael Edwardes
When Margaret Thatcher swept into power in May 1979, she made it clear to Edwardes that she was extra-keen to return BL to the private sector as soon as possible. Her feeling was that the Government should no longer continue to fund the car company: it had already cost the taxpayer £2bn to this point in time and the economy could not realistically continue to fund the company at such a rate. Declassified documents which emerged in 2013 reveal just how close the company came to closure at the end of 1979 – with the Honda deal and Sir Michael Edwardes’ future plans ensuring the Government chose to keep the company open, despite front bench opposition.
Edwardes possessed enough acumen to convince Thatcher that, if privatisation was the ultimate goal, then BL should not be carved up because he figured that without Jaguar, MG and Rover, the high image parts of the company, there would be the ‘unsaleable rump’ of Austin-Morris left over. Edwardes managed to persuade Thatcher to release further Government funding of £990m in order to increase the development budget of the LC10 in order to get both versions into production as painlessly as possible. The fact that he managed to persuade her not to carve up and privatise the profit-making parts of BL would later become a bone of contention between the two.
During his tenure as Chairman of BL, Edwardes and his team had successfully broken the Union stranglehold on the car factories, streamlined the array of factories and, most vitally, had put in place plans, for a logical range of cars: Metro, Maestro and Montego. He had trimmed production volumes to realistic levels and improved productivity at both Longbridge and Cowley.
When his contract came up for renewal though in 1982, the eve of the launch of the Maestro, Margaret Thatcher did not renew it. Thatcher felt that Edwardes had stood in the way of rapid privatisation of the firm and she couldn’t forgive him for this. So much so, that by keeping BL together as a group, he had increased the burden the company was already placing on the economy. Edwardes had been smart enough to choose the man to replace him as Chairman, 67-year-old Sir Austin Bide, before the event, knowing that as a ‘strong businessman’, he would continue to run the company the way that Edwardes would have wanted.
Edwardes saves the company
The legacy that Edwardes had left was a leaner, fitter car producing company, one with an image that was improving – and one that was a player on the world stage again, having forged a lasting partnership with Honda. It is fair to say that quoting an oft-paraphrased statement of the time, that Edwardes had brought the company ‘back from the brink’ and allowed it to fight another day. Unfortunately for Edwardes, his grand plan of a ‘product-led’ recovery, relying on the massive success of the Maestro and Montego models, failed fundamentally.
The two cars had both emerged as worthy, but rather dull cars, not selling nearly well enough, not making a big enough return on their development costs, or enough to cover the £147m investment in the modernisation of Cowley. This meant that the products that he had conceived in order save BL from closure in the 1980s sold only adequately and merely maintained the question mark that was hovering above the whole operation.
Thankfully, in the Honda tie-up Edwardes had engineered, he had left BL with a resource to call upon in the development of future cars.
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