On May 14, 1968 – 40 years ago – the fate for some of Britain’s most illustrious marques was sealed. It was the day everything changed – the day when Britain’s car industry picked up the slow puncture that eventually rendered it a write-off. The day it all went wrong.
On that day, the British Leyland Motor Corporation was officially born. Within 24 hours, the freshly incorporated company usurped the British Motor Corporation in the era’s leading share index, the FT30, and you could invest in the new industrial giant.
The world’s third biggest carmaker, it employed 190,000 in 48 factories to keep ahead of such flaky also-rans as Toyota and Volkswagen. A year later, it reported a decent Â£29m profit and had unveiled the Jaguar XJ6, a superlative luxury car, and the Austin Maxi, Britain’s first family hatchback. BLMC could also report its first step to streamline itself. It reduced the number of brands from 12 to 11 by axing Riley… but then created a new one, Mini.
So why were the omens so dire for the jewels of the country’s motoring crown, including MG, Austin-Healey, Rover, Jaguar and Triumph?
When Octane decided to mark the 40th anniversary of British Leyland’s inauguration, we didn’t want to rake over Longbridge’s ashes again. However, Longbridge (alongside the Morris factory at Cowley) is why, ultimately, the calamitous move was made. Herbert Austin opened his vast Longbridge complex in 1905 and, after the First World War, almost went bust when demand sagged for the large and stately cars it produced. Herbert then did the impoverished British motorist a giant favour, and came up with the Austin Seven. A true people’s car, it kept Longbridge fully utilised. It also nourished the beast it fed, making it a monster effective only when shifting cars in vast numbers.
While Austin himself roamed the assembly lines in his bowler hat, that all made sense. But by the 1950s, the facilities were creaking and the employees getting restive. Morris was of a similar size and vintage, and the two arch-rivals merged in 1952 as the British Motor Corporation to share their increasing burdens. Against that background, the company did something at once inspired and also quite crackers. It lured the maverick engineer Alec Issigonis to create a futuristic small car while allowing him the fatal, contractual mistake of complete design freedom.
The Mini was a work of art of which, insisted the artist, not a single brushstroke could be touched up. It had things other cars didn’t, like a revolutionary front-wheel-drive transmission and weird rubber suspension. It was welded together differently from other BMC cars. Even its wheels, at 10in diameter, had to be specially commissioned.
Ford acquired a new, Â£498 Mini and its eggheads laboriously unpicked its 3000-plus components. They calculated BMC must be losing about Â£30, or 6%, on every one. The more Minis it sold, the more money it lost! And that couldn’t refill the pot to update factories or design new cars. By 1967, NSU had launched the Ro80 and Renault the 16; BMC was still proffering the Morris Minor and (in van form) the Austin A35. Leading BMC engineer Charles Griffin remarked on the prospect of financing new models at Longbridge around 1967: ‘The place was actually falling down around our ears so there simply wasn’t the money.’
What can have been in Sir George Harriman’s mind on his way to Chequers in October 1967 to meet Prime Minister Harold Wilson? No doubt an exercise book was tucked inside his tuxedo trousers, ready for the slippering he would receive for his abysmal tenure at the lossmaking – but market-leading, with 35% – carmaker. The grinning mug of bitter competitor and golden boy Sir Donald Stokes at the dinner table certainly wouldn’t have been a welcome sight.
Stokes, after all, had topped a stellar career selling Leyland trucks by moulding the Triumph success story, and snapping up Rover and Land Rover. What’s more, he’d been in cahoots with the Labour Government since 1964, sitting on its Industrial Reorganisation committee.
It was all Tony Benn’s idea, the merger. Well, that’s what they called the shotgun takeover of BMC by Leyland. Benn, Minister for Technology, was a robust advocate of the ‘planned economy’ and protecting British manufacturing jobs. He’d just seen the spavined Rootes Group swallowed up by Chrysler. He said later he ‘did not want the British Motor Corporation destroyed by Ford and General Motors. If we had done nothing, BMC would have collapsed.’
The announcement was made on January 1, 1968, shortly after BMC revealed a pathetic Â£3m loss on annual sales of Â£467m.
But, here! We don’t want to get all Austin-‘n’-Morrisey again. BMC had brought automotive goodies, like the hearty if ageing MGs, and it did come with Jaguar, thanks to a 1966 merger, that had managed to keep its autonomy intact. But Leyland had the better-run carmakers whose products made you proud to be British: the ever-cute Triumph Spitfire and GT6; two varieties of executive car – the Triumph 2000 and Rover P6 ranges; the urbane 3.5-litre P5B. And let’s not forget the fire-cracking TR5, which had seen off BMC’s decrepit Austin-Healeys, and the solid Land Rover operation.
Triumph and Rover had long been lean, nimble organisations overseen by entrepreneurs who understood their customers and recognised the folly of chasing volume over profit. They were also lucky to have, in Triumph’s Harry Webster and Rover’s Spencer King, engineers accustomed to a working environment shorn of corporate fat. If these guys had a fleet-footed, cost-effective idea – Webster’s employment of stylist Giovanni Michelotti, King’s enthusiastic embrace of a Buick V8 engine that Rover picked up cheap – then they could get on with it.
Moreover, the Leyland pipeline was frothing with new products. The Range Rover was waiting in the wings, the Triumph TR6 and Dolomite were good to go, and even the much-maligned Triumph Stag was an inspired idea. Spen King and his team even had posters of the Ferrari Daytona on the design studio wall as they planned the next new Rover.
Donald Stokes was rewarded with a peerage by Harold Wilson in 1969. But he must have been well aware of his poisoned chalice. He was expected to reinvest the anticipated profits back into the company while at the same time putting social engineering above the real thing. Genuine rationalisation was out, because factory closures and redundancies were unthinkable: the 1930s depression was still recalled with trepidation by the voting public. Stokes couldn’t countenance selling off even the truly peripheral companies he now controlled, which made such un-car-like things as Prestcold fridges and Aveling Barford road rollers.
Caught in a pincer grip between Government and workers, Stokes was hard-pressed to combat industrial action in the highly unionised motor industry. In 1969, British Leyland built over a million vehicles, yet it would have been 100,000 more but for strike action. Instead, the naturally ebullient Stokes tried to make a virtue of the company’s, er, capacity. He told Auto Motor Und Sport in a 1970 interview that he aimed to boost production to 1.5m vehicles by 1975 and would use British Leyland’s factories in Belgium and Spain to crack Europe.
Of course, we now know his optimism would end in abject failure. On December 6, 1974, Tony Benn announced the Government was stepping in to guarantee British Leyland’s capital. Basically, the company was insolvent and the Labour Government, back after the 1970-’74 Tory spell during which the company’s malaise had been ignored, was nationalising it. By June 1975, BLMC had been renamed simply British Leyland, the Government owning 99.8% of its shares. Ministers oversaw the company’s division into four parts: cars, trucks/buses, international and special products, but still no factory was actually closed until Triumph’s strike-paralysed TR7 plant at Speke, Merseyside, was shut in 1978, and not a single asset was disposed of until 1981, when the Alvis military vehicles company was sold.
With British Leyland, Tony Benn introduced his treasured plan of ‘industrial democracy’ to the shopfloor. That meant union shop stewards virtually controlled the factories and, simultaneously, product quality nosedived. The ‘British disease’ spread like a virus and for British Leyland it was death by a thousand cuts as multiple small strikes sapped its lifeblood.
During 1970-’75 the lacklustre Austin Allegro, Morris Marina, Princess and Maxi hogged the dingy limelight, against the background of the fuel crisis, economic recession and the three-day week that made living in Britain so depressing. In fact, during that period, not one entirely new Jaguar, Rover or Triumph went on UK sale. The focus was on launching high-volume/low-margin products – simply BMC’s old ways perpetuated. Even motoring magic-makers Donald Healey and John Cooper simply had their royalty agreements trashed, instead of being sought out for inspiration.
Hence, we tend to overlook the work that went into the Jaguar XJ-S, the Triumph TR7 and the Rover SD1. Working against the odds, designers and engineers at Jaguar, Triumph and Rover went all out to beat the Germans, the Americans and the Japanese with cars that were forward-looking, cleverly resolved and, of course, as British as roast partridge.
Don’t believe me? Well, the XJ-S was far closer to William Lyons’ original idea of a silky grand tourer than the E-type – the company always profited more from the golf club car park than the race track paddock. It was refreshingly different to anything else around, and packed the incredible new Jaguar V12 engine. The TR7? A car of its time, planned carefully to meet the potential requirements of its biggest market, the USA, and actually the best-selling TR sports car of all. And, then, the Rover SD1. Such a stonking concept, it was voted Car Of The Year in 1977, with its wacky dashboard, its V8 power and – yes – those Daytona eyes. If the original, tight-knit Rover team had been allowed to nurture it, the marque might still be up there with Mercedes-Benz and BMW.
After Stokes was forced to cede defeat in 1975, British Leyland became a lagoon of introspection. The export markets, where one uplifting MG, Triumph, Jaguar and Rover after another had been lapped up, were ignored as the company became a bear pit of product mediocrity and union-management aggro.
Back in 1970, the pro-Europe, pro-export Stokes had declared: ‘We no longer live on an island, mentally… British Leyland holds solid assets which we will develop further.’ In that same year, the company lost 5m man hours to strike action, doubling to 10m in 1971. In a 2001 interview, Lord Stokes gave a frank overview of his time in the hot seat.
‘If we had sold one-and-a-quarter million vehicles, we would have been making so much money that our problems wouldn’t have mattered. It’s that extra bit over the top that makes the difference. It was a Herculean task.’
He was right. When Michael Edwardes moved in and began reining in British Leyland’s ambitions, it eventually lost the economies of scale to compete globally. That vaunted SD1 would turn out to be the last Rover that Rover could actually develop on its own.
So perhaps, 40 years after British Leyland was formed, we should actually celebrate a valiant – if failed – attempt to save the British car industry. We should enjoy the good, and not so good, cars it left us as a legacy. And we should be extremely grateful we’ll never have to go through it all again.