Leyland's villain of the piece

Clifford Webb weighs up the confrontation at BLMC over the vexed question of piecework

Piecework is much more than a system of payment in the Midland car factories on which the fortunes of British Leyland rest so precariously. It is a way of life.

Every production process is geared to its requirements, and it is slowly draining the lifeblood out of Britain's only motor giant. In the financial year which began last September it is estimated that BLMC has lost car sales with a showroom valuation of £100m because of strikes at Triumph, Jaguar and Austin- Morris. Over 80 per cent of these strikes were caused by disputes over piecework prices.

The Jaguar strike at Coventry, now in its ninth week, has cost British Leyland £16m in lost sales. ruined the launch of its new and outstanding XJ12 and is still nowhere near settlement.

On the face of it, a system which pays men more for higher production at every stage in a long process would seem to be a logical and simple method of getting the best results. When it was introduced some 40 years ago it was hailed by management as a major breakthrough. Indeed, until the late 1950s Midland car factories claimed a higher output per man than anywhere else in the country. But problems were already evident. As mass production techniques improved it only needed a wobble in the delicately poised production machine to throw the whole thing out of balance.

To try to avoid this firms spent heavily on personnel trained in the negotiation of the rate for the job. To a large extent, however, this work was offset by the growing status of shop stewards. Negotiation gave way to another system of fixing the rate, the calculated strike. When months of talking had produced the firm's best offer a well-timed walkout could always be counted on to squeeze a little more. The frustrations inevitable in such a system spread to designers and engineers.

What was the use of coming up with exciting new modifications when the works manager threw his hands up in horror at the thought of another nightmare round of negotiations? The introduction of a complete new model frequently led to nervous breakdowns. Thousands of separate piecework prices had to be laboriously hammered out. And always the shop stewards held the whip hand, knowing that the new car's launching must be carefully timed to take advantage of market requirements-and beat the opposition.

To all intents and purposes this meant Ford, for long a non piece-work company. The way in which Ford brought successive new models to the market on time and remarkably close to cost targets, was one of the Midlands shop stewards' most powerful allies. This was the situation which faced British Leyland four years ago when it was formed by the merging of BMH and Leyland. But to change a way of life necessitated a costly confrontation which Sir Donald (now Lord) Stokes, chairman of British Leyland, could not afford at such an early stage in the life of the new group.

Indeed, it was not until October, 1970, that the board approved a new industrial relations policy and put it into the hands of Mr Pat Lowry, recently arrived from the directorship of the Engineering Employers' Federation. The main plank of his brief was simple enough. Replace piecework by a flat rate system of payment with as many men as possible receiving the same basic wage.
As a guide for what could be done he had the non-piecework Bathgate and Llanelli plants built in the early 1960s and more recently the Cofton Hackett engine factory near Longbridge.

This new factory was built expressly to manufacture the Maxi engine. In May 1970, all seven trade unions in the factory had signed a three year pay agreement which cut out piecework. To make such a revolutionary change starting from scratch in a new plant was a very different proposition, however, from tackling Cowley or Longbridge. But Cowley in particular had to be faced and soon, if piece-work was not to blight the launching of the first all-British Leyland designed car, the Marina. From January to October, 1970, there had been 347 piecework stoppages at Cowley.

Months of tiresome negotiation including a major strike, ended when the company presented an ultimatum to the Marina workers to accept a flat rate system when they reported for work on Monday or be put into a standby labour pool on the lowest wage scale. There were inevitably rumblings including short-duration walkouts but the result was the end of piece-work. Since then, one section after another of the Cowley labour force has made the change. An identical situation to the one which faced British LeVland at Cowley two years ago has now arisen at Longbridge.

Another new model is on the way with the code name ADO67. This will be the British group's first mass produced but technically advanced offering since the merger. The Morris Marina (generally regarded as Leyland's Ford) put the British firm into another sector of the market, the cheap, medium sized family saloon with traditional engineering and easy maintenance. It was a " natural " for the growing fleet sales market.

Now the need is for it to be complemented by a more sophisticated contender to be sold through the Austin half of the dealer network. Longbridge talks to end piece work began more than a year ago. At first they were carried out on an informal basis and then became official earlier this summer. At the same time management gave the powerful shop stewards committee convincing evidence that they meant business.

All requests for increased piece-work prices were rejected. The shop stewards were told that wage increases would only be paid as part of a new flat rate system. The answer was expected. One after another groups of workers went on strike for periods of up to a fortnight.

In July, management tabled its own offer, £44.20 a week plus overtime and shift work premiums. Over the next three years this would rise to £50.25 a week. The shop stewards rejected it out of hand and said they would not take part in further talks which were related to a new pay system. A group of engine assemblers gave notice of strike action to begin on August 18. It seemed that the stage was set for the plant-wide strike which stewards had warned would be the outcome if management pressed ahead with its plans. It was not a time for faint hearts in British Leyland board rooms. A similar confrontation earlier in the year had cost Triumph dearly and ended without a clear cut decision. Piecework still continues at Triumph.

Jaguar had been paralyzed for eight weeks (and still is) by management determination to end piecework and 2,000 workers' equal determination to retain it. The next development was quite unexpected. Two days before the Longbridge strike was due to begin the 300-strong shop stewards' committee refused to call for financial backing for the strikers, advised them to postpone such action and notified management that they were ready to re-open talks. Usually outspoken shop stewards, now obviously embarrassed by the about-face, said they were only playing along with management because their own union leaders had negotiated the disputes procedure which the company was using to reopen talks.

Management had a different interpretation. They suggested that as practical men the shop stewards were only acknowledging the changing opinions of their membership. It was learnt that company soundings among 8,000 of the 10000 direct workers at Longbridge had produced a large majority in favour of reopening negotiations. Nearly 3500 Longbridge workers were already on an interim flat rate payment pending the introduction of new and permanent proposals. The first stage discussions ended with an expected failure to agree being recorded. Both sides indicated that this was to permit full-time union officials to join the second stage talks. This meeting should take place within the next fortnight. But time is short.

British Leyland must introduce the ADO 67 by next spring to inject new life into its flagging market performance. The final outcome of the Longbridge piecework confrontation is very much in the balance. A successful outcome before the autumn is crucial to British Leyland's plans to take 45 per cent of the United Kingdom car market. In recent months it has fallen to 28-29 per cent. In talks with British Leyland shop stewards in recent days I have been told that many of them now accept the inevitability of an end to piece-work. But they are adamant that they will only change a way of life which has given them a substantial say in their working conditions and the size of their wage packet when they are convinced that the company has made its best possible offer. And they do not believe that £44.20 is the best.