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BL dealer network near collapse after defections to European car groups

14 November 1979

BL dealer network near collapse after defections to European car groups
By Clifford Webb

Sir Michael Edwardes, BL's chairman, is fighting to prevent the collapse of his entire UK dealer network through widespread defections to competitors. In the past 12 months 92 have left for lusher pickings mainly with European'motor groups. The result of the recent employee ballot, 87 per cent support for his latest survival plan will boost dealers flagging morale; But the question is:
'Is it too late'?

Dealers appreciate that employee acceptance of a loss of 25,000 jobs and. 13 whole or partial plant closures has made it virtually impossible for the Government to deny Sir Michael the £400m to £450m he needs to finance the recovery. But they have been taken along that path before.

BL executives insist that under 5 per cent desertion, from 2,000 dealerships in the face of a sustained recruitment campaign is not bad. Independent motor trade observers differ. They say that if 92 dealers left in a year that on the whole proved profitable for BL dealers, a flood could follow in the next 12 months when all the signs point to a slide in BL's already disastrous 20 per cent market share.

Renault, Peugeot, Volkswagen and others are tempting BL dealers with lavish wining and dining on the Continent. That back-door approach, is bitterly resented by BL executives. One of them told me: 'We get crucified publicly for planning to spend £1m to take our dealers on a ship to the Isle of Man for the launch of the new Metro next year.'

BL's UK market share for 1979 will be about 20 per cent, a 3 per cent drop on 1978 and a full 10 per cent below its traditional 30 per cent penetration. The first boost will come next August, when the Marina will be relaunched- with a completely new'skin '. Two months later, will come the £275m Mini Metro, arguably the most written about new car in the history of the motor industry. Very limited production is under way at Longbridge.

It is bigger and roomier than the Mini and reportedly has exceptional fuel economy. BL is confident that it will sell in large numbers alongside the older model. Even so, the original production target of 6,500 Metros a week has been reduced to 4,500. That caused some concern among workers until it was made clear in the latest reorganization proposals that Longbridge is re-designated as a two-car plant. LC10, the much needed medium-range car, is due to go into production there in 1982, nine months ahead of the original target.

At present, a good week's production at Longbridge is 3,500 cars, about half its installed capacity. Metro and LC10 together are planned to give 90 per cent utilization, or between 6,500 and 7,000 by 1985. Meanwhile, the Allegro will continue to. be produced at Longbridge. Increased fuel prices have given it a belated new lease of life. In 1981 there should be a restyled, five-door Princess, a long overdue response to motorists demands for a lift-up tailgate version. Later that year the Honda/ BL is scheduled for production at Cowley. Code-named 'The Bounty ', it will be a high quality, front-wheel drive, four- door hatchback intended to slot between the Metro and LC 10.

A BL spokesman said: 'Of course it will be tough. It will be the most costly new car programme any British company has ever attempted. We are under no illusions about the task ahead of us, but there is no alternative.'

He said that was why the chairman had made it plain that any employee who could not stand the heat in the kitchen should get out now.

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