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Why a Government hand-out is only half the cure for Britain's ailing giant

24 April 1975

DAILY EXPRESS
By Graham Turner
Author of "The Leyland Papers," the inside story of our biggest car-makers.

When I went to British Leyland's London headquarters last week to see Lord Stokes, it was like walking into a building under threat from an unlocated time bomb. Everybody was holding his breath for the Ryder Report. And one or two top executives had the well-washed look of men afraid that, when Ryder, came out, they would be out too.

As for Lord Stokes himself, I've never seen him more relaxed. Gone was all the old abrasiveness, the occasional flash of acidity , though he was angry that, even then, he'd not had a whisper of what was in the report and suspected that, its conclusions had been reached, before the inquiry began. What was left was a man with a lot of guts who was sad that things hadn't gone better and worried that some of his best people were going to be made scapegoats.

As for his own, future he said there were plenty of other things he could do if the Government decided he ought to go, but he really had not thought that far ahead. In any case, he added, he had wanted for some time to hand over his executive powers to somebody else. . Then he looked back over what he'd done in the company since he first took over seven years ago. He didn't think there was much he'd have done differently if he could start all over again.
The Australian operation , a multi-million loss-maker, now sold- had been an extensive bloomer, he admitted, and Spain had been a disaster too. But that was about all.

He agreed that the people , including his own managing director John Barber , who had said right at the beginning that British Leyland ought to shed 30,000 of its labour force had probably been right. But he wasn't going to agree at the time and anyway that wasn't his way of doing things. He talked of the changes he would have made even if Ryder hadn't appeared on the scene - eventually cutting down the Leyland car range to five basic models, getting rid of some senior people. And of the deeper things that worried him, about the company, like the fact that so many of his managers were actually afraid to talk to the men on the shop floor.

What did go wrong at Leyland?

1. I believe Lord Stokes walked away from the crucial over-manning problem - with the result that, in the first five years of the corporation's life, the work force actually went up instead of down. It was in those years, I believe, Stokes could without brutality have pruned 40,000 out of the labour force. This would have made a difference of £80 million a year to the company's cash flow and might well have saved it from falling into Government hands.

2. The company tried to behave as though it were a British General Motors, with operations in just about every market in the world. As a result it spread its limited cash far too thin and robbed the home factories of much needed money for modernisations.

3. Top management never unscrambled the vast mass of factories and facilities it inherited. The key Austin-Morris division remained a managerial shambles for far too long. The models it turned out fell well below the quality required, cost control was poor, labour relations bad.

4. There was virtually no response from the trades unions to Stokes's generosity on manning levels. With staggering irresponsibility, they took it as a symptom of softness and made some plants a by-word for feather-bedding and skiving.

So much for the past. The key question is : Where is Leyland heading now?

Its present troubles could not have come at a worse time. The car market is deep in recession. Morale is at rock bottom in many areas. Further redundancy looms in the wings. The worst thing that could happen now is for the Government to nationalise Leyland in such a way that it became part of the Welfare State, perpetually dependent on handouts from us, the taxpayers.

That would simply mean everybody lying back and waiting for the regular Government cheque, and none of the things that should be done would be done. It would create a condition of built-in somnolence. What the Government must do is create a climate in which Leyland's managers are given the backing and muscle to tackle its problems, particularly overmanning.

If not, public money will be poured down the drain year by year. The company, unable to stand on its own feet, will become little more than a gilded industrial sanatorium. The Government and its trouble-shooter Sir Don Ryder should name managers they can trust, and then encourage them to do the job unfettered by fumbling Whitehall bureaucrats.

We desperately need an efficient, British-owned motor industry. Two of the three American-owned companies in Britain have not so far provided Leyland with really tough competition , and given good management, it should be able to take them apart. The vital thing is that the company should not be allowed to become so isolated from reality by Government money that it never sorts out its problems.

If that happened, Leyland would go steadily downhill, and the British economy with it.

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