The end & beginning of the British motor industry

There can be few readers of this column whose lives – and those of their families – have not been touched in some way or other by the activities of the British Leyland Motor Corporation, which began life 50 years ago on 17 January 1968. 

Whether mum owned a Prestcold refrigerator, dad drove an Aveling Barford road roller, you caught an Atlantean bus to school, flew in an aviation industry workhorse HS748 turbo-prop airliner, or were employed almost anywhere in the British motor industry in the 1960’s or 70’s… somewhere the tentacles of the BLMC leviathan probably reached into your life – sometimes in the most subtle of ways. 

Maybe a debt of gratitude is the wrong phrase given what eventually happened, but its difficult to overestimate how far BLMC became woven into the tapestry of the daily British grind, helping life along all those decades ago. 

Around lunchtime on that January day, after behind the scenes manoeuvring which began a month earlier, and with much last minute Government persuasion, Plymouth-born and Tiverton-educated Leyland boss Sir Donald Stokes, and British Motor Holdings (BMH) supremo Sir George Harriman signed a “Heads of Agreement and Principles of Management Structure” bringing together their respective companies in a merger like no other before it. At 2pm the press was informed, and thereafter the eulogistic floodgates opened with a vengeance.

BLMC was to offer one share for each existing Leyland and BMH share, valuing the new company at 1968 prices at around £410m on announcement day. Under Stokes, Leyland had long been eyeing a possible takeover of BMC and later BMH, but the merger alternative was reportedly brokered by then Minister of Technology Anthony Wedgwood Benn, who is credited with opening discussions on the possibilities in 1967.

Concerns were raised over whether the newly convened monopolies commission might object to a merger involving virtually every major British car, truck and bus maker, but a referral was somehow avoided. Its known that the Labour government was particularly keen on a merger… 

Late in December 1967, after much talking, the two sides reached an impasse. Rapid progress towards the announcement just a fortnight later is credited to Leyland’s Finance chief John Barber, and Chairman of the Government’s Industrial Reorganisation Corporation, Sir Frank Kearton. 

As combined catalysts and negotiators they moved the talks forward – becoming instrumental in forever changing the shape of Britain’s motor industry. 

The scale of the merged operation could be described in a various ways, and the press did just that – reaching for superlatives which may or may not have been entirely accurate.

History records the combined operation having over 40 factories and almost 200,000 employees, with annual vehicle production just below 1m units and  alone accounting for over 35% of Britain’s new car market early in 1968. 

Its extremely difficult now to verify many other quoted “facts” of the day – in headlines guaranteed to grab attention. “£500m annual sales – Britain’s fifth biggest company by sales value…” “The world’s fourth-biggest car-making combine…”  “The biggest car maker in Europe…” “The second largest motor manufacturing group outside the USA.” 

GLOBAL

Never before had there been and never again would there be a single British vehicle maker offering everything from a small car to a luxury limousine, through vans, light and heavy trucks, tractors, specialised plant and equipment, fork lift trucks, military vehicles, bus body and chassis manufacture – and a range of non-vehicular consumer and industrial equipment.     

Both parties had major overseas sales networks and manufacturing facilities around the globe, with major vehicle production facilities in Australia and South Africa. 

Though not all marques were represented in all markets, both also either owned and operated, or had interests in, sizeable joint-venture type manufacturing or assembly facilities producing cars and commercial vehicles – in places as diverse as Italy, Belgium, Spain, Africa, South America, India – and beyond.      

With such a network, and UK capacity of over 1m vehicles a year, the merger’s strength was its new ability to fully compete on the world stage – selling vehicles against head-on competition from the worlds biggest automotive players. 

The strongest competition then came from US automakers, though vehicle manufacture in Europe was also on a roll and Japan would emerge as another giant player in coming years. BMH UK car sales had been sliding for some time under sustained pressure from Ford, and to a lesser extent General Motors’ Vauxhall-badged products. Adding Leyland’s Triumph and Rover products staved off that immediate challenge, giving BLMC easy UK market dominance 

But…. bringing all the products under one roof instantly led to one of the most complex and unwieldy model ranges imaginable – one of the key inter-related seeds for the corporation’s future downfall. 

For years Leyland, and to a greater extent BMC and BMH, had seen expansion as more important than profitability and future planning. In many – though not all – cases, rationalisation of products, plants, locations, marques, model lines and workforces had been ignored, avoided, or progressed at a glacially slow pace.

Product quality was falling, investment in new models to replace ageing best sellers like the Mini and 1100/1300 ranges endlessly delayed. 

At birth BLMC was already too big, sprawling, and unprofitable to survive at scale without inspired management, major surgery and some very rapid, informed and penetratingly clear thinking about where its future really lay. 

It soon became clear that sadly, BLMC was benefiting from none of these – and facing a future punctuated by growing industrial strife, fast rising motor industry competition notably from Japan, collapsing customer confidence, growing political interference, and ultimately cap-in-hand approaches to government for vast cash bailouts. All would dominate 1970’s and 1980’s headlines and from here it was downhill all the way.

Fifty years on from the announcement of the grandfather of all British motor industry mergers, as the products, personalities and story recede into history, the world’s motor industry has moved on and is thriving. Thankfully too, dinosaurs are extinct. 

© Words Dave Moss