BL chief admits setback in recovery and doubts about future

By Jonathan Davis, Business Correspondent

The recent setback in BL's recovery programme, which has raised fresh doubts about the state owned motor group's long-term viability, was acknowledge publicly yesterday by BL's chairman, Sir Austin Bide (left). In the- company's annual report, Sir Austin said that BL faces a "difficult and challenging" year after falling back into loss last year.

"Although much progress has been made over the last few years, further improvements are necessary in 1985 for BL to achieve its aim of being a competitive successful and durable business".  Sir Austin says that the rmarlets for BL's bus and truck businesses remains "deeply depressed", while Austin Rover, BL's volume car business faces a "severe test" , after last November's strike and the subsequent loss of production and market share.

Mr Ray Horrocks, chief executiye of BL's car activities, says that the European motor industry continues to suffer from severe over capacity.

The markedly cautious, even gloomy, stance of BL's senior management comes at a time when the company is facing tough questioning from the Government about its latest corporate plan. Ministers and officials at the Department of Trade and Industry are known to be worried about BLs prospects, after its poor market showing in the second half of last year which contributed to the company's return to trading losses in 1984, after its small operating profit of £4.1 m in 1983.

The Government has expressed doubts about how Soundly based some of BL's financial projections will prove to be unless it can show a marked improverment in sales and profitability this year.