The rise and fall of the auto men's empires; Whatever happened to British cars?
Remember the MG? Thirty years ago it took America by storm -- wire wheels, leather seats, polished dash- board, fold-down windshield, and all. This year it may see the final checkered flag in its production history -- a history entangled with the fortunes and misfortunes of the British motor industry.
The MG, in fact, is a symptom of the difficulties facing the industry -- and, many would add, Britain as a whole. As it disappears around the last curve, many here are wondering how to keep the rest of the motor industry -- and many of the best qualities of British industry -- from following in its tracks.
A government official reflected on the agonies of BL Ltd. -- the mammoth state-owned automobilemaker familiarly (but imprecisely) known as British Leyland: "No government can go on pouring public money into noncompetitive industries producing products that people just don't want."
The problem: In a single year, 1979, the firm dropped its share of the domestic market from 25 to 15 percent -- and lost L122 million ($268 million) somewhere along the road.
How has it happened? Thirty years ago the British motor industry -- typified by the sporty MG, the high-strung, elegant Jaguar, and the world-renowned Rolls-Royce -- was a postwar success story. British engineering prowess made these cars the envy of the world.
Then came the spate of mergers that brought most of the indigenous British firms -- including Austin, Morris, Triumph, Rover, MG, Jaguar, and Leyland, but not Rolls- Royce -- into a single 36-factory conglomerate. In 1975 the financially ailing giant dropped out of the free-enterprise race and limped into state control.
In the past year:
* MG has been sold to Aston Martin Lagonda.
* Chrysler, struggling here as in the United States, has been taken over by Talbot Motors ltd.
* Rolls-Royce, hammered by high interest rates and a strong pound in the export market, has seen its profits cut by more than half this year.
* Vauxhall, acquired by General Motors 55 years ago, has remained straitjacketed into a less-than-10 percent share of the market.
* BL Ltd. continues to sink. Even with a massive oversupply of unsold cars and a prediction of further losses in 1980, the 86,000-man work force is still bickering over whether to accept a 5-to-10 percent pay increase offered by the corporation's tough and daring chairman, Sir Michael Edwardes.
What remains are two unpleasant facts for Britain: Imported cars took nearly 60 percent of the 1.7 million- unit market here last year; and of the British-built cars, the market leader has a distinctly un-British name: Ford.
A tour of the sprawling Thames-side ford plant at Dagenham explains something of the reason. Amid the grease and rattle of aging but well-kept factories, some 28,000 employees can build more than a million engines a year and 1,000 cars a day in the popular Cortina and Fiesta models. Rarely do two look-alikes follow one another. Ford builds each car for a particular customer's order, and assembles it strictly in sequence according to the date the order was received.
When Japanese motor officials toured the plant, says tour guide Fred Ferguson , they commented on what seemed an uneconomical mixing of styles. Their preference, like BL's, is to churn out identical batches of models and trust the sales force to move them.
But the lots surrounding the BL plants in the Midlands are chockablock with unsold Minis, Marinas, and Allegros. Ford, by contrast, has had such a backlog of orders for the Cortina -- reportedly up to six months -- that the Dagenham plant has had to cut back fiesta production. Even so, nearly 50 percent of the cars ford sold in Britain last year were imports from continental plants.
Why have things gone so right for Ford and so wrong for BL? The answers go beyond the nature of the British workforce, the structure of government policy, or the popular -- but contested -- notion that BL builds poor cars and Ford good ones.
Lord Stokes, former BL chairman, traces the problems to the mergers and the nationalization of the BL enterprise. The mergers came, he told this correspondent, at a period of great social change, when legislation was cushioning workers from the financial hardships of going on strike -- so that, he says, "They suffer very little, but the company goes bust."
Ford spokesman Reg Wheatly agrees. He sees BL as an "agglomeration of companies that have very little in common." in a period when "everybody seemed to think that big was beautiful," he says, "BL went for size without really getting the advantages of size -- like a fish that swallows a smaller fish."
One commonly heard excuse for BL's sputtering performance is that Britain had the misfortune to win World War II. While bombed-out continental factories were rebuilt with Marshall Plan money, it is argued, the English plants are still of prewar design and house ancient machinery. But BL's difficulties, instead, appear to be financial.
Ford UK, which has an annual sales revenue approaching that of the entire British budget, has steadily invested in new plant and design and has settled its strikes quickly.
BL, by contrast, has had to scramble to make ends meet. It has been particularly vulnerable to labor. While skimming off profits from the relatively profitable commercial-vehicle side to keep the car side afloat, BL has been unable to invest heavily enough in new designs.
The one design that, like the Volkswagen Beetle, has been fashionable is the tiny, austere, blunt-snouted Mini. BL officials admit, privately, that the Mini has not made BL's fortune. Even at the current selling price of about $7,000, each Mini turns in a profit of less than $10.
Can BL survive in its present form? Many observers, here and abroad, have their doubts. "I don't see any future in BL as long as they are owned by the state and as long as the trade unions don't pull up their socks," says a British subject who is a Volkswagen executive in Hannover, Germany. At his clean, crisp 250-acre factory -- where some 1,300 bicycles help personnel get around -- robots do much of the welding.
"The English are just as hardworking as the Germans if they want to be," he observes. Even so British productivity has fallen dramatically. The British motor industry ranked first in 1953; by 1973 productivity was the lowest of all major manufacturing countries.
It may take years, says the VW offficial, for the British to support their home-based industries with the same degree of nationalistic fervor that the French, Japanese, and Italians do.
An expensive "Buy British" advertising campaign is now trying to whip up such fervor. One non-BL auto executive says the campaign is "obviously failing" because cars must sell on their merits. But a dealer in Surrey recently told this correspondent he had sold two BL cars that morning, and credited a general upturn in his sales to the campaign.
New BL models are in the offing: several trucks, the Mini metro, and the Bounty (built in Britain under license from Honda), which should be out within 18 months. Nevertheless, BL is expected to lose money in 1980 as it did in 1979 .
But the money, it seems, will not be irreplaceable. The Conservative Party government, while eager to keep hands off the day- to-day management of its various troubled nationalized industries, has offered BL up to L300 million ($ 660 million) for 1980. A further L130 million ($286 million) is available if needed through 1983.