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Where The Profit Isn’t So Sweet

4 February 1972

DAILY MIRROR
Where The Profit Isn’t So Sweet
By Robert Head

Mighty British Leyland, our biggest exporter, is less profitable than most of the tiny sweetshops around the corner. The 193,000 workers who are paid an average of £32 a week to make Jaguar, Rover, Triumph, Austin and Morris cars and Leyland trucks and buses are told this by their bosses today.

The company last year sold £1,177,000,000 worth of vehicles at home and abroad for a profit of £32,400,000 before tax. “This means that profit margin after tax is only just over one and a half per cent, which is not enough even for the sweetshop around the corner,” says British Leyland’s finance director, Mr John Barber, in a report to his workers.

That is a lot better than in 1970, when profits dropped to £3,900,000, which meant a pathetic return after tax of only one quarter of one per cent on sales – equivalent to £2.25 on a £1000 car.

No self respecting sweet shop owner would sell his bubblegum, chocolate or toffee unless he was making at least ten per cent. One told me last night: “Any sweet sop making only one and a half per cent would go bust overnight.”

But British Leyland is far from going bust. These low profit margins are, however, the stark reasons behind the company’s call on its 220,000 shareholders to put up an extra £51 million in capital. The new cash is needed to expand production to pay for new models to beat off foreign car makers whose sales have been soaring in Britain.

Lord Stokes was his usual optimistic self about the future yesterday. “Barring very serious strikes and a prolonged coal strike, I am hoping for an increase in both sales and profits this year,” he told me.

“But there is a hell of a lot still to be done.”

He added: “The measures we have introduced throughout the business are now beginning to bear fruit.” On the stock market, British Leyland shares last night closed at 48.5p – down 1p on news of the new cash call.

More news from the archive

Sat, 29 Jan 1972
Clifford Webb writes: Negotiations to end piecework at British Leyland's Longbridge, Birmingham, car plant opened yesterday with yet...
Sun, 30 Jan 1972
THE GUARDIAN STRIKES A new dispute stopped production of 1100 and 1300 cars at the British Leyland assembly works at Longbridge...
Tue, 01 Feb 1972
By Clifford Webb Midland Industrial Correspondent A strike by 500 white collar workers brought car production to a standstill at British...
Fri, 04 Feb 1972
More than 1000 engine assemblers on the day and night shifts at the Austin- Morris factory of British Leyland at Longbridge, Birmingham,...
Fri, 04 Feb 1972
"Sir William's success, and eminence in the motor industry are too self evident to require further words from me." This was yesterday's...
Sat, 05 Feb 1972
Meanwhile another 3,500 Scottish vehicle industry workers are still on strike at the British Leyland truck and tractor plant at Bathgate....
Tue, 08 Feb 1972
All production of Jaguar Cars in Coventry was halted yesterday and more than 2,000 workers made idle by a fresh walkout of clerical...
Wed, 09 Feb 1972
By Clifford Webb More British Leyland workers were laid off at Austin-Morris car plants in Birmingham yesterday bringing the total...
Thu, 10 Feb 1972
By Clifford Webb Midland Industrial Correspondent British Leyland is being made to pay dearly for its determination to replace piecework...
Thu, 10 Feb 1972
By Clifford Webb Midland Industrial Correspondent British Leyland Motors Corporation launches three new trucks for operating at the...
 

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