Matters of Moment, May 1986

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British Leyland

Amid all the brouhaha there has been about British Leyland recently, the most important fact about the company has been consistently ignored. That fact is that British Leyland is a success story.

How can one say this when the company has just reported an operating loss for 1985 of £39.5 million, a figure reported sneeringly by some of the cheap sections of the national press? It so happens that a great number of motor companies are returning losses. This is because of chronic over-capacity among European car makers which has resulted in “to the bone” discounting rather than rationalisation of production. BL’s car division, the Austin Rover Group returned a loss of just six million pounds, something which Renault, another state-company, has been doing every few days. Had ARG, a company which has put its house in order, not had to compete in a currently suicidal market, it would have shown a profit.

Gone are the days when customers were treated as guinea pigs, with the first buyers of a particular car finding out all the faults (remember the 1800 series, the early Maxis, the early TR75?). The news that the launch of the forthcoming Rover 800 series has yet to be finalised because the company is determined to have the car exactly right, demonstrates that.

Gone are the days of endless strikes and works to rule which damaged the company’s image, profitability and products. Last year, 99.95% of working time was strike free.

Gone are the days when BL’s productivity was a joke in poor taste. Its productivity is now among the best in Europe.

BL’s past is littered with dreadful decisions and mistakes. There was the decline of Jaguar. The fact that the Mini hardly made a penny during the first 10 years of its life because it had been incompetently costed. There was the dropping of the Mini Cooper to save on the two pounds per car royalty which BL paid to Cooper. There were missed opportunities, like failing to replace the MGB, passing up Pininfarina’s sensational restyling of the hideous 1800, the failure to exploit the hatchback which the Farina 640 nearly was.

That’s in the past, though. ARG now has a good model range and all reports indicate it will be greatly enhanced by the Rover 800. It has the confidence to go racing and rallying, and is successful. It has the confidence to make a “concept car”, the MGE-XE which was the star of some of last year’s motor shows. It has the confidence to tackle the American market once again with the “Sterling” (Rover 800) and apparently American dealers have been delighted with the car, calling ARG’s production estimates “pessimistic”. In terms of the new technology, ARG is at the fore.

In 1985, ARG’s production increased by 14% and its exports to Europe by 27%. One of the reasons for this dramatic improvement must be that ARG has learned the knack of putting together an attractive package which was once a gift we associated only with the Japanese.

It’s not all rosy: there have been some detail failures, but then there is hardly a maker in the world about which this cannot be said, including some which have an exaggerated reputation for quality. The refreshing thing is that nobody is more aware of the hiccups than ARG. And everyone from the company we’ve spoken to is dedicated to improvement. All the signs indicate that this awareness and dedication is present throughout the entire workforce, from the directors to the shop floor.

We need a wholly-British car mass producer, to safeguard jobs and, let’s face it, because we don’t want to be a banana monarchy. There’s nothing wrong in national pride, when it’s not blinkered, and ARG is a company to be proud of.

It’s about time it was allowed to live down its past and be judged on its present and potential for the future. It has gone through its blood-letting and reorganisation and come out intact.

There are other companies in Europe which have been putting off the same process and are now paying for it.

Overall, BL made a loss last year, and that’s not the aim of being in business, but let’s keep a proper perspective. And let’s give due credit where it has been earned