GM bid for Britain's Land Rover fuels anti-American feeling
It surfaced with the Westland controversy. It was driven home in the proposed sell-out of BL Trucks and Land Rover. It's the emergence of anti-American feeling in Britain stirred by what citizens here perceive to be the United States' expansionism into Britain's declining industries.
The debate over who controls British industry has set off alarm bells and brought acute political pressure on British Prime Minister Margaret Thatcher, who is seen here to be staunchly pro-US.
After first inviting General Motors to make a bid to buy into BL (formerly known as British Leyland) and Land Rover, the British government has abruptly reversed course. This rebuff to GM leaves the ailing truck division of BL with no viable commercial buyer.
Prime Minister Thatcher's enforced retreat for political, not economic, considerations was instigated by her own backbenchers -- rank-and-file Conservative Party members of Parliament.
The backbenchers could not countenance the selling off of Britain's last-surviving indigenous car manufacturer in a country that was once a world automobile leader. What hurt national pride even more was the proposed sale to GM of Land Rover, which is as much a national symbol as Rolls Royce.
The fact that Mrs. Thatcher was forced to yield to pressure from her own party is seen as a sign of how vulnerable she has become since the Westland affair, in which a US-based division of United Technologies bought a minority holding in an insolvent British helicopter company, beating off a strong bid by a European consortium.
Apart from serious concerns as to how she handled that affair, the Westland dispute raised sensitive questions about Britain's industrial future. Critics of the proposed sale, such as former Defense Minister Michael Heseltine, charged that if Britain did not work with Europe it would find itself becoming little more than a ``metal bashing'' factory for American multinationals.
Yet the prestigious Times of London in a recent editorial suggested that, when it comes to modernizing the aging British industrial structure, the ``chief obstacle has turned out to be those perverse patriots on the Conservative backbenches who prefer losses achieved by Britons to profits won under American management.''
BL, a nationalized industry, has been a drain on the national economy. More than 2 billion ($2.9 billion) of taxpayers' money has been poured into BL, but the results have been disappointing.
The company's truck division is not expected to break even for another two years, and it faces a 40 percent overcapacity in the European truck market.
Austin Rover, also part of the BL conglomerate, boosted production 22 percent last year to 475,000 cars, but it needs to about double its current production -- to even be viable. It was negotiating with Ford for a possible takeover, but the outcry over the GM bid for BL Trucks and Land Rover forced the government to call off the talks. Land Rover is making a small profit and was dangled as a ``sweetener'' by the British government to offset the losses of BL trucks.
The government's subsequent attempt to sell the two separately was unacceptable to GM negotiators, who packed their bags and left for the US over the weekend.
One US source suggests that the problems afflicting the British auto industry and the anxiety over GM's offer, in particular, reflect the sense ``of [economic] slide in Britain.''
This source also suggests that Thatcher has come across as too pro-American has made the mistake of asking Britons: ``Why can't you be more like the Americans?''
There is also concern that Britain is failing to grasp the need to move into the big leagues and have a more international outlook. Such an adjustment was necessary in a world dictated by high technology.
Yet Britons appear to be overwhelmed by the high-tech world, particularly as it reflects American influence. A recent poll commissioned for the Sunday Times shows 56 percent of Britons saying the US had too much influence over British industry, while 24 percent said US influence on British industry was about right.
The specter, however, of US firms gobbling up British industry is misleading. The level of US investment here has remained static in recent years, while British investment in the US has soared to the point where Britain and Japan are the US's largest foreign investors.