1968 - 1986
The growth and demise of British Leyland is studded with births, deaths and marriages. Major decisions were made or influenced by single, strong-willed individuals who had shaped the destiny of its various branches. However, it was not just as a result of growing pains that British Leyland was formed.
The coming together of the various companies operating within the British motor industry was also brought about by enormous political and economic pressures which forced many concerns to merge with others in their own interests, to be taken over by more powerful and aggressive firms, or to go to the wall in times of economic stress.
The Spurrier Family and William Morris
In essence, British Leyland was formed by the coming together of three separate strands of UK motoring history: the Spurrier family, William Morris (who later became Lord Nuffield) and Herbert Austin. It was the Spurrier family who provided the money and the brain power behind the Leyland side of the business. Originally formed in the 1890s at the instigation of a Lancashire blacksmith, James Sumner, and called the Lancashire Steam Motor Company, the first efforts of the firm were concentrated on producing steam-powered transport vehicles.
Three Spurriers were on the original board: Henry Spurrier, his son Henry II and the Reverend Arthur Spurrier. Another founding father was Basil Nixon, who eventually became Chairman of Leyland and who held that position until 1956. It was not until 1907 that the company came to be called Leyland Motors.
Building Trucks and Ambulances During World War 1
By the outbreak of World War 1, it had a turnover of £½
m and annual profits of £100,000. The war did not curtail the firm's progress. It built trucks, ambulances and travelling workshops and almost trebled its turnover. With a comfortable future before them, the directors had already planned on moving into the private car field at the end of the war and had designed and built the Leyland Eight, a luxury passenger car aimed directly at the Rolls-Royce market.
But fate, in the form of the Inland Revenue, had other ideas. An enormous amount was owed to the Exchequer in the form of various back taxes. The company was also beset by the problem of thousands of ex-military vehicles which they thought would flood onto the market at a very cheap price and therefore undercut their own products. It was at this time that the thought of a merger with other firms first raised itself amongst the members of a by now expanded board of directors. Talks were held with Daimler, which led to nothing, and the board therefore decided to expand the financial base of the company by instituting a scheme dreamed up by Clarence Hatrey, a director of Leyland who later went to jail for financial offences.
Arthur Liardet Is Appointed General Manager
The basis of this scheme involved the company changing its name. This was duly done and the new concern raised £¾
m from a new shares issue. Leyland then embarked upon using this cash to buy vast stocks of ex-WD vehicles with a view to re-fitting them before offering them for sale. This was an error in judgement, compounded by the fact that the 1920s witnessed a slump and vehicle prices plummeted. The net result was that the share price slumped from 70 shillings to 2 shillings and, by 1923, Leyland was' trading under a £1m deficit. Leyland's saviour came in the shape of Arthur Liardet, who was appointed General Manager.
Taking the Leyland operation by the scruff of the neck, he quickly and ruthlessly went through the more moribund sections of the company and established a firm, disciplined management structure and a system of financial accountancy and accountability which was to be a major factor in Leyland's regeneration and future success. He was helped by a resurgence in the home market for buses and an upswing in export markets. By 1929, Leyland was free from debt.
The traumas had their effect on Henry Spurrier III, the youngest board member, who was later to be the inspiration of Leyland - he was knighted for this. By the end of the decade Leyland was once more a healthy, vigorous concern and attracted the attention of Lord Ashfield, who was chairman of a group of companies, including the AEC bus company which had a virtual monopoly on the supply of vehicles to London Transport. A merger was proposed and investigated by both sides, but in the end nothing came of it and both concerns carried on with increasing prosperity towards the outbreak of World War 2.
Albion, AEC, Dennis, Leyland and Thornycroft
As in the previous war, Leyland did as well as any other company, supplying equipment and material to the armed forces, with the net result that it emerged in 1945 full of good prospects and with a healthy outlook, partly engendered by a bright young ex-apprentice of Leyland called Donald Stokes. He had prepared a report on ways in which Leyland could expect to develop once the war was over. But other manufacturers were anticipating increased prosperity, and at an historic meeting at the Dorchester Hotel, London, five of the major commercial vehicle producing companies in the UK - Albion, AEC, Dennis, Leyland and Thornycroft - discussed a 'Grand Design' for commercial vehicle manufacture in the future.
Despite the good intentions of everyone concerned, little of immediate impact or importance came about from this meeting. Part of the Stokes philosophy was that Leyland should make every effort to increase its penetration or exploitation of the booming export markets. He was right. Appointed to head the export office in 1946, he completely revitalised the structure and methods of the sales force. So successful was he that, by 1957, Leyland Africa alone was contributing one seventh of the total profits. In fact the whole concern was enjoying a boom time, culminating in the achievement of £1m profit in 1954, one year after Stokes was appointed to the board.
But other companies were equally active. AEC bought the Crossley and Maudsley concerns shortly after the war and changed the company's name to ACV. For a time, Rolls-Royce and ACV held discussions with a view to a merger of some type or another. Just as Leyland had its Spurrier and its Stokes, so ACV had William Black, one time head of the sales office who was appointed Managing Director in 1957, and a young financial wizard called Jim Slater. Slater proposed that ACV buy into J. H. Plane (Africa) Limited and then inject ACV's Rhodesian interests into it. This was a technique which Slater was to use to make himself a millionaire several times over when he branched into business on his own account.
Slater later joined the board of British Leyland and Jack Plane, a very tough, no-nonsense businessman, was to play an extremely important role in the eventual formation of British Leyland and also to hold a seat on the board. However, in broad terms, this common style of management, with its emphasis on power being concentrated in very few hands, was eventually to lead to many of the difficulties experienced by both Leyland and ACV. But long before this situation became apparent, Spurrier was also set on an expansionist course. He wanted to build cars and to form a complete automotive company with a product range covering the whole spectrum of mechanised transport; he was determined to get it.
The massive British Leyland works at Cowley near Oxford. The plant combined the main car-assembly works and body shops. The Cowley complex featured a conveyor system between the different buildings, so that the car bodies could roll straight from the body works to the final assembly line, without having to be moved by road.
Alex Park, who was Chief Executive of British Leyland Limited through the 1970's.
Rovers on the British Leyland production line at Solihull, Midlands, UK.
Creating A Complete Automotive Company
Of the companies then operating in the UK, Spurrier decided that Standard-Triumph was the operation most suited to his plans. Before Spurrier was to get even close to making a deal, Standard-Triumph were to talk to a wide variety of people, all of which showed the increasing restlessness of the post-war industry, world-wide, as the benefits of bigger and more powerful operations began to make economic sense. Standard was originally formed in 1903 and had taken over Triumph in 1945, buying it from the Official Receiver in whose hands it it had been since 1939. Again autocratic management, this time under Sir John Black (no relation to the Black at ACV), led to eventual friction and he was removed by a boardroom coup in 1954, his place as Managing Director being taken by Alan Dick, then very much a motor industry whizz-kid.
It didn't take Dick long to realise that the only long-term hope of salvation for Standard-Triumph was a merger of some sort and his opinion was further, strengthened after a disastrous budget in 1960 and a very tough credit squeeze immediately afterwards. Cash raised by selling Standard-Triumph's tractor manufacturing interests to Massey Ferguson was frittered away in bad deals and the operation gradually drifted towards financial and economic disaster. It came as no surprise, therefore, that Henry Spurrier's approach in 1960 should be welcomed by the board of Standard-Triumph.
Standard-Triumph Become Part Of Leyland
But even during the opening rounds of what was to be a fairly quick courtship, culminating in Standard-Triumph becoming part of Leyland in 1961, Leyland was still looking at other people-particularly ACV. The still emergent BMC, formed basically by a fusion of Austin and Morris interests, was also holding talks with ACV and at one point a joint venture of the two companies-together. with Rolls-Royce-was seriously considered. Following the breakdown of those particular negotiations, Spurrier approached ACV and Leyland itself was approached by Chrysler in what was by now a very fluid situation within the motor industry. It was also around this time that the Rover Company bought Guy Motors, a truck manufacturing concern, to form yet another piece in the massive jigsaw.
However, Spurrier's proposals were the ones that made economic sense to ACV. The bringing together of the two commercial giants meant that much harmful and expensive duplication and commercial in-fighting could now be avoided. So, in June 1962, the two companies merged their interests. A comparatively short while after successfully completing the negotiations for the merger, Sir Henry was afflicted by a very serious illness. His first decision was to make Donald Stokes Managing Director of the Leyland group and to appoint Sir William Black (as he had become) Deputy Chairman. Despite the set-back of Spurrier's illness, by 1964 Leyland was selling everything it could produce and order books were full for months in advance.
The Labour Government Asks Leyland and BMC To Save Rootes
But the going was not to be easy. The recently elected Labour Government brought in a vicious credit squeeze, the first impact of which meant that the Standard-Triumph works had to go on a four-day week. But even this economic set-back could not slow the inexorable progression of Leyland towards a confrontation with BMC. By now, each industrial giant was wary of the other and, in 1967, Leyland was forced to buy Rover in order to stop BMC taking it over. Even so, the logic of a tie-up between the two giants was plain to see and the Labour Government made the first tentative steps in the right direction by asking Leyland and BMC to mount a joint rescue operation on the Rootes Group, in partnership with a recently formed, Government-sponsored organization called the Industrial Re-organisation Corporation. Despite the fact that the Government was deadly serious in its efforts, no proposal put to either of the two companies made commercial sense and the project was shelved, Rootes then falling into the hands of the American Chrysler Corporation.
BMC was, in many ways, suffering from exactly the same problems as Leyland, problems brought about in exactly the same way. It was a product of the merging of Austin and Morris, two original constituent companies which had been the surrogate children of men who were heirless and who became very rich, old and increasingly autocratic - especially William Morris. By 1929, the two companies shared 60% of the British market. They had also both ignored the danger from the infant Ford operation being set up in the South of England. Along the way to massive success Morris had bought Wolseley, Riley, MG and SU carburettors
. More an assembly operation than a production engineering set-up, the Morris share of the market had slumped to 27% by 1933. Following the appointment of Leonard Lord, later Lord Lambury, who had successfully re-organized Wolseley, to the post of General Manager, things started to improve and, by 1935, Lord had brought the Morris stake in the market back to 33%.
Herbert Austin himself had seen the benefit of co-operation very early on in his career with his own company: in 1924 he favoured a merger with both Morris and Wolseley, but nothing came of his approaches. Revitalization for the flagging fortunes of Austin came when Lord left Morris, after a dispute over money, and joined the Austin operation. Determined to succeed again, Lord brought his very special talents to bear on Austin. Helped by a profitable World War 2, Lord planned to get back into car production very early on and even announced the first post-war Austin before YE Day.
Austin Has The Competitive Edge Over Morris
Virtually from that day on, Austin had the competitive edge over Morris. The end result of two such similar operations being at each others throats was inevitable: they had to get together or commit commercial suicide. It was a great day for Leonard Lord when he went back to the Morris works at Cowley as the undisputed master of what was to become BMC. But he couldn't resist the temptation to crow over his victory and many people in the industry feel that Leonard Lord created breaches between the Austin and Morris branches of BMC which were never repaired. Even so, the company prospered in the boom markets of the late fifties and early sixties. This prosperity still masked the fact that basically little was done to reorganize the two companies into a cohesive unit and little or no attention was paid to correct financial control procedures.
Management could not, at any one time, say how much a car cost to produce. Yet another personality enters the stage at this point in British Leyland's developing story: Joe Edwards. One of the most successful production engineers in the history of the motor industry, Edwards was sacked from his position as a director of BMC by Lord in a particularly brutal manner over an insignificant incident. Appointed Managing Director of Pressed Steel, at that time the UK's biggest producer of car bodies, Edwards found himself once more working with Lord when BMC took over Pressed Steel in 1965. The experience of his sacking still rankled and Edwards was determined to kowtow to no one from that moment on. Edwards was intent on re-organising BMC into a viable production entity, with effective control over its own destiny, and he quickly realized that a merger with the still growing Leyland group was inevitable.
Talks between Sir William Black, Stokes and Sir George Harriman - who had succeeded Lord as Managing Director of BMC - began as early as 1954. In comparison, the differences between the companies was quite marked. Leyland was comparatively little known, especially in the sophisticated South of England, while BMC was considered to be very important in the UK's still-booming economy. Talks petered out after a disagreement over share values, However, moves on the Continent, where the industry was coalescing after a series of mergers, take-overs and alliances, meant that it was obvious that the two, companies would have to get together if the UK was to have one single entity large enough to compete against the European giants and the European-based off-springs of General Motors
In 1966, talks between Leyland and the British Motor Corporation were resumed, despite the fact that the share value and profits forecast of each company remained a problem. Meanwhile, another significant piece of the drama unfolded. Jaguar, again very much a one-man band under the direction of its founder, Sir William Lyons
, had been pursuing a policy of protection by expansion through take-overs and had bought Daimler in 1960, Coventry-Climax in 1963 and Henry Meadows in 1964. Fat with profits, yet lacking the kind of commercial power to expand much further, Jaguar was ripe for plucking. BMC couldn't resist it and, after some discussion with Sir William, Jaguar passed into the BMC camp, although Sir William retained effective control over his company.
The Industrial Re-organisation Corporation
During all these manoeuvres, the Industrial Re-organisation Corporation had been trying to get the two giant protagonists to agree. Initially the IRC tried to get the two involved in a Third World project using the talents of both concerns. This failed, but the Government was determined. It got its way eventually but not without some tough bargaining on both sides. In February 1967, the British Leyland Motor Corporation was formed. The new company had twelve directors, six from Leyland and six from BMC, plus a chairman without a casting vote. Chief Executive of the whole operation was Donald (later Lord) Stokes, who with the 1975 reorganization was 'promoted' to President.
The British Leyland Motor Corporation Is Formed
Of course, the signing of the merger document was only the first step in an almost superhuman reorganizational job. The new management was faced with an enormous task on all fronts; to inject life into a rapidly ageing car model range (there was only one new model in the pipeline at the time of the merger) while at the same time trying to make up for years of under-investment in plant and machinery. At the outset, Leyland claimed it would take five years to bring the company to the state of an efficient operating unit and, indeed, record profits were announced for 1973 of £58 million.
The corner, it seemed, had been turned but then came, in quick succession, the quadrupling of oil prices, economic upheaval in Britain and the three-day week. In common with motor manufacturers throughout the world, British Leyland was hit heavily by these factors and after studying the recomendations of Lord Ryder, the head of the National Enterprise Board, who was commissioned to make a detailed report on Leyland's operations the Government stepped in to give badly needed financial support. They bought 95% of the shares of the British Leyland Motor Corporation and the company was reorganised to become British Leyland Limited. The change caused radical upheavals and a different management direction.
Leyland Cars, Leyland Truck and Bus, Leyland Special Products and Leyland International
Under a new Chief Executive, Alex Park - who was previously Director of Finance - the company's operating activities were split into four largely autonomous groups - Leyland Cars, Leyland Truck and Bus, Leyland Special Products and Leyland International. Each group has operational control of its own activities and is a profit centre within the company with a Managing Director responsible to the Chief Executive. British Leyland began carrying out an extensive programme of new model introductions and modernisation programmes.
Within eighteen months the Princess, Jaguar XJ-S, TR7 and the Rover 3500 were introduced, while a new manufacturing facility at Solihull-the most modern in Europe-was opened for car manufacture. Labour relations within the motor industry have always been volatile and British Leyland operate a programme of 'worker participation' to involve employees in all aspects of the company's activities. The UK success of the Ford Fiesta, launched in 1976, redefined the small car class and ADO88 would soon be cancelled. Massive investment in the Longbridge plant would nevertheless take place in preparation for the introduction of the slightly larger "LC8" subcompact hatchback, which would be launched as the Austin Mini Metro.
In 1977 Sir Michael Edwardes was appointed Chief Executive and Leyland Cars was split up into Austin Morris (the volume car business) and Jaguar Rover Triumph (JRT) (the specialist or upmarket division). Austin Morris included MG. Land Rover and Range Rover were later separated from JRT to form the Land Rover Group. JRT later split up into Rover-Triumph and Jaguar Car Holdings (which included Daimler).
In 1978 the company formed a new group for its commercial vehicle interests, BL Commercial Vehicles (BLCV) under managing director David Abell. The following companies moved under this new umbrella:
- Leyland Vehicles Limited (trucks, tractors and buses)
- Alvis Limited (military vehicles)
- Coventry Climax Limited (fork lift trucks and specialist engines)
- Self-Changing Gears Limited (heavy-duty transmissions)
- BLCV and the Land Rover Group later merged to become Land Rover Leyland.
In 1979 British Leyland Ltd was renamed to simply BL Ltd (later BL plc) and its subsidiary which acted as a holding company for all the other companies within the group The British Leyland Motor Corporation Ltd to BLMC Ltd. British Leyland's fortunes took another much-awaited rise in October 1980 with the launch of the Austin Metro, a modern three-door hatchback which gave buyers a more modern and practical alternative to the iconic but ageing Mini. This went on to be one of the most popular cars in Britain of the 1980s. In 1982 most of the car division became the Austin Rover Group marking the end of the Morris and Triumph marques although Jaguar and Daimler remained in a separate company called Jaguar Car Holdings. The Austin Rover Group started a partnership with Honda.
A rationalisation of the model ranges also took place around this time. In 1980, British Leyland was still producing four cars in the large family car sector - the Leyland Princess, Austin Maxi
, Morris Marina
and Triumph Dolomite
. But the Dolomite was discontinued in August that year - and replaced by the Honda Civic based Acclaim - in a move that saw the Canley plant closed, with the Austin Maxi also being axed a year later. The Marina became the Ital in August 1980 following a major facelift, and a year later the Leyland Princess received a similar upgrade to become the Austin Ambassador, meaning that the 1982 range had just two competitors in this sector. In April 1984, these cars were discontinued to make way for a single all-new model, the Austin Montego.
British Leyland Becomes The Rover Group
In 1984 Jaguar Cars became independent once more, through a public sale of its shares. Ford subsequently acquired Jaguar. In 1986 British Leyland changed its name to Rover Group and in 1987 the Trucks Division – Leyland Vehicles merged with the Dutch DAF company to form DAF NV, trading as Leyland DAF in the UK and as DAF in the Netherlands. In 1987 the bus business was spun off into a new company called Leyland Bus. This was the result of a management buyout who decided to sell the company to the Bus & Truck division of Volvo in 1988.
Nanjing Demolishes Longbridge
In 1988 the remaining Rover Group business was sold by the British Government to British Aerospace (BAe). They subsequently sold the business to BMW, which, after initially seeking to retain the whole business, decided to only retain the Cowley operations for MINI production and close the Longbridge factory. Longbridge, along with the Rover and MG marques, was taken on by MG Rover which went into administration in April 2005. All MG (formerly MG/Rover) products are now Made In China for the Chinese market by Nanjing. Nanjing have demolished the Longbridge site all but for a very small section, which is used to assemble the Chinese MG TF from complete knock down (CKD) for the European market (i.e. the whole car is Chinese-made, but it is partially disassembled, before being reassembled at Longbridge to avoid certain European Union taxes); this small operation employs 50 people.
As only a negligible number of parts are made in Europe (oil sumps), this operation does not support many if any jobs outside the 'assembly operation' elsewhere in the UK or Europe, unlike in 1993 when 29,000 UK jobs and many other European jobs were supported by Rover. Many of the brands were divested over time and continue to exist on the books of several companies to this day, and perhaps with the desire of many car companies to develop retro products (VW Beetle and Mini are just 2 examples), maybe one will rise like the Phoenix. But we wouldn't put money on it.