Mini Metro may turn the corner for Britain's BL
Is BL turning a corner? The fortunes of British Leyland, the nationalized car manufacturer, are just now hanging in a balance. But amid its many troubles, two signs of hope have emerged:
* Its 73,000-man work force has called off a threatened strike over pay.
* Its newest compact, the Mini Metro, has had a particularly successful launch.
The decision Nov. 7 by union stop stewards to avert a strike is significant for several reasons.
It means workers at the sprawling carmaker's 34 factories have agreed to a basic pay increase of only 6.8 percent -- less than half the going rate of inflation, and well down into the single-figure pay-settlement range the government has been urging.
They settled when BL's tough chairman, Sir Michael Edwardes, insisted that the loss-making corporation could afford no more, and that its cash-flow position was so bad that a strike would lead to a complete shutdown within two days.
The union also recognized that the corporation, which wants another $:1 billion ($2.45 billion) of government financing over the next two years, will need a bright production record to persuade Cabinet cost-cutters of its case.
BL already has begun to put its house in order. In the past year, it has cut 25,000 jobs, closed or trimmed several factories, imposed a 5 percent pay deal on most workers, and sacked a particularly troublesome union official, Derek Robinson -- and, in each case, fended off strike threats with deft brinksmanship.
The no-strike decision has been greeted with sighs of relief from BL's 18,000 dealers. A strike just now would have scuttled BL's hopes of establishing the sales momentum of the Mini Metro. The snub-nosed hatchback, which reportedly gets up to 83 miles to the gallon at 30 m.p.h. and gets equally high marks from automotive writers, has captured 4.5 percent of the British market -- after only two weeks of sales in October.
Its success has boosted BL's market share from an abysmal 15 percent during the summer to a respectable 22.25 percent. Joined by the new Ford Escort (10.7 percent of the October market), it helped drive the importers' share of new car sales to a 27-month low of 50.7 percent.
According to the Society of Motor Manufacturers and Traders, however, imports will continue to decline "only if the British alternative is sitting in dealers' show-rooms every day of the month" -- in other words, if there are no strikes.
Mike White, a dealer in the Surrey suburb of Claygate, is delighted with its success: He has sold 15 already and has seen his overall sales jump in the usually quiet month of November.
BL hopes he is part of a trend.