BLMC awaits Spain's approval for switch in output programme

By Roger Vielvoye

British Leyland Motor Corporation has completed the negotiations for a complex reorganization of its manufacturing facilities in Spain and is now awaiting Spanish government approval to put them into operation.

The deal involves British Leyland's sale of its 25.1 per cent holding in the ENASA commercial vehicle company and its acquisition of 100 per cent ownership of the Authi car production unit at Pamplona. It is expected that government approval will be forthcoming, but there is no indication how long it will take ministry officials to pass the deal. An offer from a group of private banks for British Leyland's holding in ENASA, the Spanish government controlled commercial vehicle building company, has been accepted.

The company uses British Leyland licences for the production of a number of heavy duty engines, and this arrangement will continue when BLMC severs its direct connections. The second part of the deal concerns British Leyland's 50 per cent holding in Authi, which produces Minis, 1100/1300s and the Austin Victoria, a special version of the 1100/1300, restyled and enlarged for the, Spanish market.

The remaining 50 per cent of the company is held by the North Spanish Bank. Once British Leyland has complete control it, will start an expansion project, to double the present annual production capacity of 50,000 vehicles a year within three years. It is understood this could cost over £10m.

Although British Leyland has management control of the car- making operation, it has not been a profitable venture. But, with considerable investment, British Leyland sees the operation as one of its three chief production units on the continent. The plant, which is a complete manufacturing unit rather than an assembly plant, already supplies Minis to Switzerland. Once production begins to expand, it is expected that exports will also be stepped up. Other models may be introduced.