The history of BMC and its decendents has been inextricably
linked to that of whoever has been resident at number ten Downing Street...
Be it Conservative or Labour, the government has been unable to maintain a watching
brief; always favouring a more 'active' role...
IAN NICHOLLS takes a look at how each successive government has
handled the company since the creation of BMC in 1952...
OW much did the British government
contribute to the downfall of the British owned motor industry? In this article
each government's performance in dealing with BMC>Rover will be analysed,
to see how much of a contribution it made to its downfall. Ability and competence
seems to be of secondary importance in political leaders compared to those who
posess good public speaking skills. I do not believe any politician deliberately
set out to destroy the British motor industry and often they meant well...
Harold Macmillan (1957-1963)
THE
Macmillan government's main contribution to this story was to force British
motor manufacturers to build their new factories in areas far from their Midlands
base. This resulted in more costly manufacture using new and untrained workforce.
Rover was repeatedly thwarted in its attempts to expand in Solihull, but it
perservered, and was able to build the P6 assembly block at its main factory.
But Rover seemed to be the exception. Leyland Trucks had to go
to Bathgate in Scotland, and Triumph went to Speke in Merseyside. In addition
to these future BL plants, the Rootes group went to Linwood in Scotland where
the ill-fated Hillman Imp was built. By the Seventies, the appalling militancy
of the Speke workforce and the consequent shoddy workmanship, all but destroyed
the reputation of the Triumph marque.
But with Merseyside's reputation for militancy, the factory should
not have been built there in the first place. Speke, Bathgate and Linwood all
closed. Why did the government force manufacturers to build factories in these
places they did not want to go to? Perhaps the answer lies in the personality
of Harold Macmillan?
Macmillan came from a wealthy background and survived the horrors
of the trenches in the first world war. Entering parliament after the war he
witnessed the land fit for heroes become a nation of social injustice and poverty
for his fellow survivors of the terrible conflagration. He became one of a select
group of MPs on the left of the Conservative party who argued that more should
be done to help the poor, particularly after the Wall Street crash of 1929 plunged
the world into the Great Depression.
Macmillan saw the damage mass unemployment could inflict on the
fabric of society and this would help shape his economic policy when he became
premier. Macmillan remained a backbencher until the second world war when a
series of appointments under premier Winston Churchill brought him to the fore.
One of the unfortunate by-products of the Labour landslide of 1945 was that
many politicians of the other parties who had worked in the wartime coalitition
govenment for final victory lost their seats.
The leader of the Liberal party and Air Minister, Sir Archibald
Sinclair, was one of them and Harold Macmillan was another. Macmillan, however,
was more fortunate in that in a by-election held later in 1945, he managed to
get back into parliament. Churchill and his annointed successor, Anthony Eden,
were foreign policy specialists with little time for domestic issues. The task
of rebuilding the Conservative party after the drubbing of the 1945 election
fell to MPs like Macmillan and R.A Butler who recognised the British voters
wanted a land fit for heroes and they would have to acept the welfare state
as the new political consensus and adopt the "New Jerusalem" philosophy
of the Labour party.
The Conservatives were returned to office in 1951, and Harold Macmillan
was appointed Housing Minister. The need for new houses was huge in the post
war period and record numbers of council dwellings were built under Macmillan's
stewardship. Macmillan rose through the ranks and following the Suez debacle
under the auspices of PM and foreign policy specialist Anthony Eden, Macmillan
became Premier in early 1957. Macmillan's economic policy was based on the principles
of John Maynard Keynes and full employment was maintained at all costs, and
the true financial cost would not become apparent until 1964. The government's
concern about maintaining low unemployment led to industry being denied the
opportunity to expand where they wanted and being forced to build factories
in unemployment blackspots such as Speke, Linwood, Bathgate, Halewood and Ellesmere
Port. Wait a minute though, the last two factories are still open. Ford and
Vauxhall have managed to make their factories viable and their older UK bases,
Luton and Dagenham have ceased car production. So what did they do that British
Leyland and Rootes couldn't do?
Harold Macmillan soldiered on as PM until 1963, when ill health
forced him to resign. By that time he was being portrayed as an out of touch
Edwardian, his government was tarnished by scandal and it was under attack by
a new breed of trendy satirists, many of whom went on to lead more scandalous
lives than the man they were mocking. "Supermac" was replaced by Alec
Douglas-Hume and the Conservatives lingered on in power until late 1964 when
they narrowly lost the general election to Harold Wilson's Labour party. When
Wilson and his team closely inspected the books they found Britain was practically
bankrupt and went cap in hand to Washington for a loan.
Harold Macmillan's reputation today rests on his maintainence of
full employment, which was an admirable achievement but he broke the bank to
do so.
Harold Wilson (1964-1970)
IN
THE Eighties, it was fashionable for the left of the Labour party to deride
Harold Wilson for having practiced watered down socialism. But what is forgotten
is Wilson was a winner. He fought four general election campaigns and won three
- no mean achievement. Wilson narrowly won the 1964 general election, overturning
a 100-seat Conservative majority in the process, by promising a new and vibrant
Britain using the "white heat of technology". He was marketed as the
British version of John F. Kennedy, which seems laughable now. as he was slightly
podgy and not good looking!
Harold Wilson's team believed it could have a planned economy,
and this would be the route to prosperity. On assuming power the new Labour
government found the economy was in a mess, there was a balance of payments
deficit and Britain was practically bankrupt. The first stop was Washington
to negotiate a loan to prop-up the ailing economy.
The Wilson government cut defence expenditure and hastened Britain's
withdrawal from empire in an effort to balance the books. The planned economy
concept took a severe knock with the 1967 devaluation of sterling. This led
to Wilson becoming a target of satirists as public disillusion set in only a
year after Labour had been re-elected with a thumping 100-seat majority. However
Wilson salvaged the situation by getting Chancellor of the Exchequer James Callaghan
and Home Secretary Roy Jenkins to swap jobs. By common consent Roy Jenkins was
one of Britain's most successful post-war Chancellors of the Exchequer. A wartime
Bletchley Park codebreaker, he left the job in 1970, with the economy in better
shape than in 1967 - or indeed 1964.
However, it was James Callaghan who ultimately became Premier while
Jenkins was exiled to Brussels. The "white heat of technology" philosophy
was symbolised by the Labour government's backing of the Anglo-French Concorde
project. At times they may have had cold feet about the programme and it may
have led to clashes with Paris, but ultimately they stuck with it. It is only
with hindsight that the project came to be seen as a financial mistake. The
metal fatigue problems with the early Comet jet airliners had given the American
aircraft manufacturers such as Boeing and Douglas a huge lead and Concorde was
a justifiable gamble to regain the initiative.
That an energy crisis lay ahead and the American government would
put economic pressure on governments not to buy Concorde for their state owned
airlines could not be forseen. The Minister of Technology associated with Concorde
was one Tony Benn and he would be a major player in the formation of British
Leyland.
The above outline of the 1964-70 Labour government is meant as
a guide to the kind of thought process that existed in the corridors of power.
The formation of the British Leyland Motor Corporation was entirely in keeping
with the Wilson administration's concept of a modern Britain. Rather than nationalising
the remaining British motor manufacturers at great cost to the taxpayer, they
would be persuaded to merge amicably and the formation of BLMC took place in
the belief that it was in the national interest to have a large British manufacturer
to take on the American and European giants. If one takes the view that the
original formation of BLMC was a mistake, then the Wilson government was culpable
and a villain of the piece, but nobody thought so at the time. And who to lead
the new grouping? I can but repeat a line from a previous article:
"Harold Wilson was looking for a way of creating a British
motor industry to take on the world and Donald Stokes was the obvious man for
the job. BMC's financial results certainly did not point to Sir George Harriman
as the man to lead the British motor industry into the Seventies."
Where the Wilson government can be held at fault is over the thorny
issue of legislation to control Trade Union power. In 1968 a white paper entitled
"In Place of Strife" appeared. It proposed restricting trade union
power and the debate within the Labour government had two main protagonists.
Advocating "In Place of Strife" was Barbara Castle and opposing was
James Callaghan who had relied on trade union support to ascend the political
heights.
Callaghan won the argument and the proposed legislation was shelved.
When James Callaghan became premier in 1976 he fired Barbara Castle from his
cabinet...
"In Place of Strife" was a lost opportunity. The Seventies
political landscape was dominated by strikes and Trade Union power that destroyed
Britain as a major industrial power. British Leyland was brought to its knees
by endless strikes that financially destroyed it from within and tarnished the
reputation of its products. One can only speculate what the British motor industry
and indeed Britain would be like today if Barbara Castle had won the argument?
Edward Heath (1970-1974)
Edward
Heath's Conservative party unexpectedly won the 1970 general election. At first
the new government practiced an early form of moneterism, indulging in public
expenditure cutbacks. However when unemployment hit the one million mark in
1972 it embarked on a rapid U-turn and began pumping money into the economy.
This reduced unemployment to half a million by 1973, but also resulted
in chronic inflation and a balance of payments deficit. The high inflation rate
also caused more industrial strife as workers sought to keep pace with the escalating
cost of living. The Heath governments Laissez Faire attitude to industry was
put to the test in 1971. Rolls Royce went bankrupt and the government stepped
in to nationalise the concern on strategic grounds. Also that year the government
decided to close down the loss making River Clyde shipyards. The Daily Mirror
had the emotive headline "CLYDE BUTCHERED" and the shipyard workers
responded by organising a sit in led by their articulate senior shop steward
Jimmy Reid.
This resulted in widespread public sympathy and the government
backed down. Indeed many strikes did have the support of the public. The government
did legislate against Trade Union power but in the public relations war it was
successfully portrayed as an attack on the working class. Heath had two run-ins
with the National Union of Miners in 1972 and 1973/74 and lost on both occasions.
The last occasion combined with a power workers strike resulted
in early evening power cuts and a three day working week. To many on the right
of the Conservative party, Edward Heath had proved to be a weak premier, lacking
the resolve to see things through to the bitter end, to floating voters the
Heath administration seemed all at sea with its vision of Britain.
Edward Heath went to the polls in February 1974 in the midst of
the second miners' strike in order to obtain a mandate from the British people
over who really governed Britain. The public decided it wasn't Edward Heath
and Harold Wilson's Labour party gained a few more seats. Heath tried to negotiate
a deal with the other parties in order to cling onto power, but it was Harold
Wilson who entered number 10 Downing Street.
So how did Edward Heath's government affect British Leyland? Not
directly or immediately but decisions taken by his government did have some
long term effects. Both Macmillan and Wilson had failed to gain Britain entry
into the European Union (or Common Market as it was then known), Edward Heath
pulled it off and in 1973 Britain became a full member of the EU. The dropping
of tariffs on imported EU cars gave consumers more choice and exposed British
Leyland to increasingly tough competition.
In the Sixties, European small cars were often seen as quaint and
technically outdated with strange engines in all the wrong places. By the Seventies,
the European family car was a much more competent creature and products such
as the Renault 5, Fiat 127 and Volkswagen Golf increasingly found favour with
British buyers. EU membership also enabled Ford and Vauxhall to import cars
into Britain from their European factories and bring into play their greater
economies of scale.
The production of some Ford models was even transferred to Germany.
The Granada and Capri were made in Germany and imported into the UK where they
competed against BL products that were badly assembled by a workforce who had
been brainwashed into not caring about their jobs. In the late Seventies, the
Society of Motor Manufacturers went on endlessly about the threat of imported
Japanese cars, but kept quiet about the vast quantity of cars some of their
members were importing from their continental factories. And by the Eighties,
this had become a torrent of imported cars, and many of their buyers honestly
believed they were buying a British-built car.
If this sounds like an anti-European diatribe then I must state
the opinion that a Europe working together after centuries of bloody warfare
is a noble concept.
Harold Wilson (1974-1976)
HAROLD
WILSON'S Labour party returned to power in February 1974 and increased its parliamentary
majority in the October 1974 general election. As the Heath government had in
reality been brought down by the Trade Union movement, Wilson was in debt to
them and his new government had a more left wing agenda than that of 1964 to
1970. Wilson appointed as Trade and Industry Minister Tony Benn, a cradle to
the grave socialist, who believed (and still does) the state should provide
full employment and top notch public services without explaining where the money
to pay for it would come from. Between 1964 and 1970 he had reinned in these
views, but became more vocal after 1974.
The Wilson government gave in to the miners and began to impose
higher taxation on the wealthy. But the Britain of 1974 was a much more divided
nation than that a decade earlier and it would remain that way for another two
decades. Within months of coming to power, British Leyland became a matter of
the greatest urgency for the government. BLMC ran out of money in December 1974
and went to the British government for financial aid.
Although BL would become a major headache for successive governments,
Harold Wilson and Tony Benn had little real choice but to save British Leyland
from going under. If BL had folded then the economic damage to the Midlands
would have been enormous. But where Harold Wilson's government can be brought
to account is how the now state owned British Leyland was managed.
Tony Benn imposed on BL something called "industrial democracy"
to disastrous effect. This was operated in BL's factories, presumably to reduce
the number of stoppages and produce an atmosphere of industrial harmony. In
reality, the factories were controlled by the workers representitives, the shop
stewards, who indoctrinated into the workforce the concept that all symbols
of management from foreman to chairman were their natural enemy and not rival
car firms.
"Industrial democracy" may have worked in theory, but
in reality some individuals are naturally lazy and Tony Benn's naive concept
that the workforce would pull together to rescue BL without the whiphand of
management was undermined by the shoddy workmanship of many individuals who
couldn't be bothered to do their jobs properly.
And these individuals knew they would be protected by the shop
stewards if management did try to remedy matters. During this period the build
quality of BL cars was truly appalling. One car badly affected was the ADO71
18-22/Princess which had the potential to be a great success. It must be remembered
that BLMC had asked the government for aid because of cash flow problems, it
had a series of exciting new cars in the pipeline and with state aid there was
no reason why the company should not have been a great success. "Industrial
democracy" put paid to this and a look at the sales charts reveals a continuing
of the decline in BL's market share since 1973.
But in 1973 BLMC still had many ageing models, by 1976/77 they
had some new and exciting cars such as the Princess, Rover SD1 and Triumph TR7
and still the sales decline continued. This has to be put down to the shoddy
workmanship in the factories and the lack of will in the DTI to remedy the problem.
This period probably in reality marked the end of any dreams that BL could be
saved in its current form and remain a world player. Too many stories of BL
cars' appalling build quality and unreliability abounded for it to survive without
major surgery.
In 1976 Harold Wilson announced his surprise resignation and his
place as premier was taken by James Callaghan.
James Callaghan (1976-1979)
James
Callaghan inherited a mess. Britain was broke again, unemployment stood at 1.5
million, inflation hit 26 per cent, strikes ravaged the country, and Chancellor
of the Exchequer Denis Healey had to go cap in hand to the International Monetry
Fund for a loan.
The price for this was that the IMF demanded public expenditure
cutbacks and public services began to feel the squeeze. To control inflation
James Callaghan persuaded the TUC to restrict their wage demands to an agreed
level and during 1978 this began to bear fruit. The economy began to stabilise
and the possibility that the Labour party could win the next general election
against the opposition Conservative party under their dynamic new leader Margaret
Thatcher looked like it could become a reality.
As far as British Leyland was concerned, James Callaghan at last
took some decisive action to help the ailing company and fired Tony Benn as
Trade and Industry minister. In his place he appointed the far more realistic
Eric Varley who displayed such competence that he was later able to leave politics
for a business career. Callaghan was astute enough to realise that the endless
scenes of striking BL workers that went into every home through the television
screen was politically damaging and the company had to be turned around. New
BL chairman Sir Michael Edwardes had Callaghan's ear and there is every evidence
that the premier had the best interest of the company at heart.
Back in 1968 James Callaghan had opposed the proposed "In
place of strife" legislation to restrict Trade Union power. In late 1978
he was about to be hoisted upon his own petard. In 1978, the Labour government
proposed a 5 per cent ceiling on the next wage round. At that years TUC conference
the unions rejected this, advocating free collective bargaining, to use the
phrase of the era, and the TUC were set on a collision course with the government.
At the 1978 Labour party conference James Callaghan was expected to call a general
election when the odds of victory were good.
Instead Callaghan sang a music hall song and the country would
have to wait until 1979. Then Ford workers went on strike after rejecting a
5 per cent pay offer. The government had stated that it would inflict penalties
on any company that settled above 5 per cent, but Ford UK under Sir Terence
Beckett did just that and soon other workers went on strike for higher pay.
The scene was set for a chain of events that would lead to 18 years of Conservative
rule. Public sector workers all over Britain went on strike, rubbish piled up
everywhere and the Callaghan government's economic policy collapsed in tatters.
This period was christened by the media as "The winter of
discontent". Anti-trade union feeling grew and the demand for something
to be done about union power grew and many voters began listening to the right
wing agenda of Margaret Thatcher's Conservative party as their worst fears had
seemed to have been realised. James Callaghan finally called a general election
in May 1979 and the result was a foregone conclusion, although the Conservative
majority was only 30-odd seats. The Labour party then embarked on a period of
infighting as the left led by Tony Benn blamed the parties defeat for not practicing
radical socialist policies. James Callaghan, like Edward Heath was overwhelmed
by outside events and lacked the will to take on those elements seeking to de-stabilise
both his government and the country. His successor as PM would take on a more
pro-active approach.
Margaret Thatcher (1979-1990)
SATAN'S
representitive on earth or national saviour? The jury is still out. The descriptions
of the preceding governments were necessary because they explain the reasons
for their demise as well as their competence. However, Margaret Thatcher displayed
an indomitable determination to stand firm against strikes, wars and three Labour
party leaders, only to be brought down by her own jittery backbenchers. By and
large the Thatcher government controlled events as opposed to her predecessors
who allowed events to control them.
Margaret Thatcher came to power in May 1979 with a mandate to
break the power of the Trade Unions who had just brought down their second government
in five years. The TUC may have defeated the Callaghan government's 5 per cent
incomes policy but it was a short term victory that had put into power a hard
line right wing Conservative government that was determined to smash the TUC
as the de-facto third force in British politics and by 1981 wildcat strikes
and sympathy strikes were outlawed.
BL chairman, Sir Michael Edwardes, managed to convince the new
government of the need to continue to support the company and all went well
to start with. The Metro was launched in 1980 and the government agreed to fund
the development of the new K-Series engine. The Tories wanted BL returned to
the private sector as soon as possible and Jaguar was indeed privatised in 1984.
The BL board had hoped that the forthcoming LM10 and LM11 medium
cars would provide the company with the profits to enable it to go it alone
and provide the funds for the next generation of models. These cars were launched
as the Maestro in 1983 and the Montego in 1984. For reasons outlined in the
respective development stories, the cars simply did not sell in the numbers
expected and this led to the Thatcher government becoming frustrated at the
inability of BL to free itself of the state life support machine.
All this disenchantment became public knowledge which did the
companies market share no good at all, as the media speculated over the companies
future. In 1986 it was revealed that the government was trying to sell the volume
cars division to Ford and Land Rover to General Motors. On the face of it, this
was a disgraceful state of affairs and the media outcry forced a climbdown.
But to be fair to the Thatcher government, they had been sold a business plan
that had failed and were now expected to pump yet more taxpayers money into
a company that seemed incapable of producing cars that the public wanted to
buy. And as the patriotic fervour that had surrounded the launch of the Metro
dissipated, more and more people were asking questions about BL's prospects.
A night of the long knives followed and the government appointed
a new BL chairman in the shape of Graham Day. A clearing out of old management
occurred which itself was the subject of a BBC Panorama documentary and the
company was re-christened the Rover Group. However the Thatcher government was
determined to rid the public purse of the money pit that had been British Leyland,
and in 1988, the Rover group was offloaded to British Aerospace. Was this a
right move?
It would have been had BAe been determined to make a go of a non-military
business which would have been desirable as the cold war was gradually winding
down. BAe had agreed to hold on to Rover for five years, and if there was any
will to make Rover succeed it soon disapeared as penny pinching, cost cutting
and asset stripping of Rover occurred by BAe. So the Thatcher government has
to be held to account for finding the wrong partner for BL/Rover if indeed it
should have sold off the company when it did.
The government adopted a new approach to the British motor industry
and that was to start afresh with new factories making the cars of foreign investors.
And who were the foreign investors. Why the Japanese car manufacturers who needed
to build cars in europe to circumvent EU tariffs. The Japanese were persuaded
to set up in the UK and those buyers who wished to purchase a British built
car had a wider choice than for a long time. They could choose between Rover,
Ford, Vauxhall, Peugeot, Honda, Toyota and Nissan.
Inevitably this would hit sales of the longer established UK manufacturers,
more choice means less market share. In two decades Ford's share of the UK car
market slumped from 33 per cent to a measly 14 per cent in 2005. By 2004 the
Nissan factory at Sunderland was producing more cars than any other British
factory, so clearly there is a demand for these Anglo-Japanese vehicles.
The Thatcher regime ushered in the era of consumerism and freedom
of choice. Consumerism would have happened anyway, the Thatcher government sped
the process up. Consumers became more cosmopolitan in their choices and the
days when people blindly bought British cars was over. If consumerism and freedom
of choice is wrong then the Thatcher government can be blamed for that.
John Major (1990-1997)
JOHN
MAJOR succeeded Margaret Thatcher as a compromise candidate, and against all
odds defeated the hapless Neil Kinnock's Labour party in the depths of a severe
recession in the 1992 general election.
It was an era of never ending incompetence and ineptitude. The
Conservative party only had a small majority but behaved like it had won a landslide
and would be in power for all eternity.
The party was racked with scandal, both sexual and financial and
on Black Wednesday 1992, Britain was forced to withdraw from the ERM. This policy
kicked off the Euro-sceptical procrastination that has since stopped the UK
taking on the Euro - and was cited by BMW as being a major economic handicap
for any company producing cars in the UK.
No sooner had the last ballot paper been counted in the 1992 general
election then Britain began regretting re-electing John Major's government.
After the "Iron Lady" the John Major years marked a return
of the weak style of government of the Seventies and the total collapse of his
party at the 1997 general election revealed the contempt most British people
felt for it.
The main contribution to the Rover story played by the Major administration
was in assisting BMW buy the Rover Group off BAE... and then ensuring that the
subsequent economic climate in the UK was far removed from the Euro-centric
policies followed in Germany, just at the time BMW needed all the help it could
get in making Rover cars viable for export.
Should the government have done more to persuade Honda to take
a majority share in Rover? it was probably out of its hands, even though Honda
was the ideal partner for Rover. The BMW deal may have ultimately proved disastrous,
but at the time of its annoucment in 1994, many people in government thought
it was a winning combination...
Tony Blair (1997-date)
TONY
BLAIR is an election winning machine; three landslides in a row. Blair seems
to have learned from the mistakes of the past and has adopted a strong but pragmatic
approach to government. He knows the public don't want a dogmatic government,
just a competent government that tries to do its best for the people whatever
their background or social standing.
The Blair government's first encounter with what remained of BL
was in 1999 when BMW wanted the government to offer state assistance to help
re-develop Longbridge for production of the upcoming R30 model. In the end,
Trade and Industry Minister Stephen Byers offered some of the money BMW was
offering, but not the original amount of £130m, and shortly afterwards,
the company took to talking to the Venture Capital Company, Alchemy about purchasing
remnants of the Rover Group for £50m.
Once BMW was well on the way to committing itself to offloading
the Rover group and its Longbridge factory to Jon Moulton's Alchemy Group, Byers
stepped in again, and became a player in the deal that saw control of Longbridge
pass to Phoenix Venture Holdings.
After the final collapse of MG Rover in 2005, the media accused
the government of backing the wrong horse but what must be remembered is that
Jon Moulton and Alchemy were subject to a vicious media campaign aided and
abetted by the trades union over the number of redundancies they intended to
implement at Longbridge. The government simply backed what seemed like the best
option at the time.
By the time MG Rover did finally collapse in April 2005 it was
well beyond government aid.
Conclusions
SO, did the politicians kill BMC/BL/Rover?
Well yes and no.
And who was the prime suspect? If one selects Margaret Thatcher,
then her defence would be had the Maestro and Montego been more desirable motor
cars then she would not have acted as she did. And the fact that the Maestro
and Montego were not desirable motor cars can be blamed on BL management.
Certainly some figures emerge with credit. One wonders what would
have happened if Eric Varley had been Trade and Industry minister responsible
for BL from 1974 instead of 1978. So who else could I demonise? James Callaghan
for opposing laws curbing Trade Union power in 1968, as Britain stared into
the industrial relations abyss that became the Seventies?
But in the end, I have to settle for socialist hero Tony Benn whose
simplistic world view entrances so many to this day but whose "industrial
democracy" experiment at BL between 1975 and 1977 resulted in so many badly
built and unreliable cars that those unfortunate enough to buy one vowed never
to buy a British car again and told the world and the world decided not to buy
British either.
Tony Benn: Would you buy a car from this man?
Have your say...
I WOULD like to
add on a note about the the continued (ab)use of the motor industry as a central
part of the Keynesian economic demand management strategy during the 1950s and
60s by successive governments. This meant the MI was especially affected by
Stop-Go to the detriment of forward planning, investment and labour relations
(e.g. The 1956 Standard and BMC redundancy strikes).
Regarding the reason why Speke and Linwood failed, while Halewood
and Ellesmere Port succeeded, I think you can break it down into two areas:
1) Commitment by company. The latest research by Steven Tolliday
(University of Leeds) shows that both Ford and Vauxhall had looked at sites
on Merseyside before applying for permission to expand at Dagenham and Luton.
The refusal of an IDC on their original sites was thus just the opening gambit
in extracting as many grants as possible to go to a site they had always actually
favoured! Thus both Halewood and Ellesmere Port were then opened as fully integrated
self- sufficient plants (£30m of investment at Halewood compared with
£6m at Speke) - as opposed to Speke and Linwood where bits and pieces
had to be continually carted up and down the M6 to keep them operating. Such
branch plants could be easily lopped off in a time of recession and indeed they
were!
STI sort of stumbled into Speke, first acquiring Hall Engineering
to solve a pressing shortage in 1957 (I think). Only after permission to expand
at Canley was refused did they look at the Speke No. 2 site and even after purchasing
the land dithered for 5 years before committing to the factory - their hand
being forced by Liverpool Corporation in 1964 who threatened to sieze back the
land it having been sold on the understanding that construction of factory would
be underway within 3 years. It seems that Triumph were never that enamoured
with Speke No. 2 and put as little investment in as possible - in complete contrast
to Halewood and Ellesmere Port (See: H. Beynon, 'What Happened at Speke?' [1980]).
Linwood is a little different in terms of commitment by Rootes, but it still
had no engine plant meaning it was relaint on Stoke for engines. After Chrysler
acqired Rootes they had little time for the place and spent hardly any money.
Certainly Macmillan's original idea that Linwood would become the nucleaus of
an MI hub in Scotland never came to pass!
2) Product. Both Speke and Linwood were single model plants reliant
on models that failed to meet targets in the market place (Imp, Stag and TR7).
The failure of the TR7 at Speke meant that the full range of Bullet / Lynx cars
that would have taken the plant to full capacity was axed. In the case of Linwood
surplus capacity was only mopped up by models on the way out (Hunter when 4
years old, Avenger when 5 years old) or by stopgap models (Sunbeam). Plants
that run under full capacity always lose money like it is going out of fashion
whereever they are located! Contrast with Halewood and Ellesmere Port that either
began with a range of already successful models (Anglia and Corsair) to spread
the risk, before becoming the home plant of a roaring sales success (Escort)
or had a success on their hands from the word go (Viva). They were running at
full tilt all the time.
Another reason would be the type of product. Ford and Vauxhall
both made fairly simple machines while the TR7 and Imp both strived to be
a little more advanced. Both BL and Rootes massively under-estimated the difficulties
of making new models in new factories with a new (green) labour force. They
paid the penalty in terms or quality, relaibility, company image and ultimately
sales.
OW much did the British government
contribute to the downfall of the British owned motor industry? In this article
each government's performance in dealing with BMC>Rover will be analysed,
to see how much of a contribution it made to its downfall. Ability and competence
seems to be of secondary importance in political leaders compared to those who
posess good public speaking skills. I do not believe any politician deliberately
set out to destroy the British motor industry and often they meant well... 
THE
Macmillan government's main contribution to this story was to force British
motor manufacturers to build their new factories in areas far from their Midlands
base. This resulted in more costly manufacture using new and untrained workforce.
Rover was repeatedly thwarted in its attempts to expand in Solihull, but it
perservered, and was able to build the P6 assembly block at its main factory.
IN
THE Eighties, it was fashionable for the left of the Labour party to deride
Harold Wilson for having practiced watered down socialism. But what is forgotten
is Wilson was a winner. He fought four general election campaigns and won three
- no mean achievement. Wilson narrowly won the 1964 general election, overturning
a 100-seat Conservative majority in the process, by promising a new and vibrant
Britain using the "white heat of technology". He was marketed as the
British version of John F. Kennedy, which seems laughable now. as he was slightly
podgy and not good looking!
Edward
Heath's Conservative party unexpectedly won the 1970 general election. At first
the new government practiced an early form of moneterism, indulging in public
expenditure cutbacks. However when unemployment hit the one million mark in
1972 it embarked on a rapid U-turn and began pumping money into the economy.
HAROLD
WILSON'S Labour party returned to power in February 1974 and increased its parliamentary
majority in the October 1974 general election. As the Heath government had in
reality been brought down by the Trade Union movement, Wilson was in debt to
them and his new government had a more left wing agenda than that of 1964 to
1970. Wilson appointed as Trade and Industry Minister Tony Benn, a cradle to
the grave socialist, who believed (and still does) the state should provide
full employment and top notch public services without explaining where the money
to pay for it would come from. Between 1964 and 1970 he had reinned in these
views, but became more vocal after 1974.
James
Callaghan inherited a mess. Britain was broke again, unemployment stood at 1.5
million, inflation hit 26 per cent, strikes ravaged the country, and Chancellor
of the Exchequer Denis Healey had to go cap in hand to the International Monetry
Fund for a loan. 
SATAN'S
representitive on earth or national saviour? The jury is still out. The descriptions
of the preceding governments were necessary because they explain the reasons
for their demise as well as their competence. However, Margaret Thatcher displayed
an indomitable determination to stand firm against strikes, wars and three Labour
party leaders, only to be brought down by her own jittery backbenchers. By and
large the Thatcher government controlled events as opposed to her predecessors
who allowed events to control them.
JOHN
MAJOR succeeded Margaret Thatcher as a compromise candidate, and against all
odds defeated the hapless Neil Kinnock's Labour party in the depths of a severe
recession in the 1992 general election. 
TONY
BLAIR is an election winning machine; three landslides in a row. Blair seems
to have learned from the mistakes of the past and has adopted a strong but pragmatic
approach to government. He knows the public don't want a dogmatic government,
just a competent government that tries to do its best for the people whatever
their background or social standing.
I WOULD like to
add on a note about the the continued (ab)use of the motor industry as a central
part of the Keynesian economic demand management strategy during the 1950s and
60s by successive governments. This meant the MI was especially affected by
Stop-Go to the detriment of forward planning, investment and labour relations
(e.g. The 1956 Standard and BMC redundancy strikes).