Whatever happened to British Leyland?

A perfect storm of world trends, labour strife and a declining economy crashed the one-time giant.

British Leyland’s managing director Lord Donald Stokes had a love-hate relationship with the mighty Mini.

Britain’s car industry is no longer British. There’s no Austin, Morris, Riley, Rover, Wolseley, MG, Austin Healey, Triumph, Jaguar – at least as there used to be across the 52 factories that made them through to the 1960s and ’70s. What was worth keeping is now owned by China, India and Germany.

It’s not hard to find diehards who will blame one man for the demise. Once seen as the country’s super salesman, that man is Lord Donald Stokes, who died in 2008.

Sir Alec Issigonis designed the Mini, Stuart Turner made it legendary as head of the British Motor Corporation competitions department at Abingdon, added John Cooper and rally drivers Paddy Hopkirk, Timo Makinen and Rauno Aaltonen to the mix and went on take to the “brick on wheels” to victory in no fewer than three Monte Carlo rallies – 1964, 1965 and 1967. Peter Browning took over from Turner. His tenure was short-lived.

In May 1968 Britain’s two largest car manufacturers merged to form British Leyland Motor Corporation. It employed 200,000 people and was the fifth largest motor manufacturer in the world. The merger was that of British Motor Holdings (BMC) and Leyland Motor Corporation.

“We did not form British Leyland in order to destroy it,” Stokes famously said. But that’s exactly what eventuated.

Leyland had built its reputation on the manufacture of trucks and buses. In 1961 it added Standard-Triumph International to its portfolio. BMC’s stable included Austin, Morris, Wolseley, Riley, Rover, MG, Austin-Healey and Jaguar.

The main instigator of the merger was Stokes, Leyland’s managing director, who was knighted for services to export. Slowly but surely the British car industry began to disintegrate. The symptoms set in on his watch, though it was not all of his doing. Streams of labour disputes and a declining national economy fuelled the erosion.

The Mini was one of the world’s best sellers, a feat Stokes treated with a degree of contempt. It was the star of movies such as The Italian Job. It was fashionable, especially when in black with heavily tinted windows and badged Cooper S. It was a hit, the car to be seen on the King’s Road, Chelsea, or in the hands of the Beatles. The Mini was on a high, not just for its Monte Carlo wins but for the numerous races and rallies around the world. Some of the credit goes to Browning and his colleague Alan Zafer, who added to the legend. They even managed to turn the Austin 1800, the so-called land crab, into a respectable long-distance rally car for events such as the London to Sydney Marathon and the mount for drivers such as Gelignite Jack Murray and Evan Greene.

What happened to the competitions department? Stokes shut it down.

Today, the British car industry is but a shell of its former self. The name Stokes is not fondly mentioned by those who remember the heydays of cars such as the E-Type Jaguar and the ubiquitous Mini. Yet around his board table were highly credentialed BMC chairman Sir George Harriman, Austin-Healey’s Sir Donald Healey and Sir William Lyons, who founded Jaguar. Men who should have known better. Men who should have seen the writing on the wall. What went wrong? Well, for starters, the Mini cost more to make than it made in the marketplace. It was unreliable, particularly its electrics, and it was prone to rust.

Stokes studied mechanical engineering. At the age of 32 he was appointed export development manager of Leyland Motors Limited and became a pioneer of the company’s post-war export drive.

He implemented a mission to survey sales and market potential around the world during which he visited almost every country except China and Japan. His career soared. By 1964 Leyland had 1115 acres of manufacturing and assembly factories throughout the world.

In 1965 he was knighted. In 1967 he was appointed Leyland’s chairman and managing director. Board appointments followed: a director of National Westminster Bank and London Weekend Television. In 1969 he was given a life peerage and took the title of Lord Stokes of Leyland in the Country Palatine of Lancaster.

In a speech to financial journalists in January 1969 Stokes said “we owe no allegiance to any foreign company or foreign country. Profit before tax and interest as a percentage of operating assets was 13 per cent and after tax return on shareholders’ capital was just under 8 per cent. We sold 1,024,000 vehicles, the first time a British manufacturer had sold a million vehicles in a year.”

At this time, British Leyland held 42.9 per cent of the home market, and 45.7 per cent of all vehicles made in Britain were made by British Leyland. Much of its success, indeed aura, came down to one car – the Mini.

A 1959 creation by BMC’s Issigonis, its East-West engine and front wheel drive were revolutionary. But Issigonis and the Mini never impressed Stokes; it was not his creation. He was very much a truck and bus man. Neither was he a fan of BMC. When he boasted of the Mini’s success he always called it “the British Leyland Mini, our most successful rally car”.

“Out of the major rallies in the last six years British Leyland Minis have won 31, which is far greater than anyone else. We won the Monte Carlo Rally outright three times. We were also pleased with results of the London-Sydney Marathon when we came in second overall in an Austin 1800.

“We intend to go on participating in sporting events where we are satisfied they will improve our products as sold in the open market and where we feel we will benefit by it commercially.”

That was 1969, when two million Minis had been sold. “We have a better record than any other country except West Germany and if it wasn’t for the very special case of VW Beetles in the States we would be at the top of the league.”

In that same year Stokes made his first speech to the House of Lords: “I have always accepted that industry must regard the whole world as its market and until we do, we will never be successful either profit-wise or in developing an aggressive industrial mentality.”

But it was this speech that sounded the first warning bell: “Fifty-nine per cent of the mach­ine tools in the UK’s motor industry are over 10 years old compared to 42 per cent in Germany and only 36 per cent in Japan. As a country we are devoting a lower proportion of our gross national product to investment than all our European competitors.”

Later that year in an address to the Institute of Production Engineers, Stokes made an interesting reference to Australia: “It is possible that in the long run it might be cheaper to supply the west coast of the United States from Australia rather than the UK. We have to think in global terms.”

His moment of “big thinking” came in the shape of the notorious Leyland P76, “designed and engineered by Australians in whom we have the utmost confidence. It is our intention to step into this sector of the market which hitherto has been American dominated.”

Stokes reported that Issigonis and the chief engineer of Austin Morris, Harry Webster, “are very enthusiastic about its potential”.

Its competitors would be Ford Falcon, Holden Kingswood and Chrysler Valiant. The P76 was promoted as “anything but average” . But the market was quick to describe it as a lemon. The P76 was launched in 1973; production ceased a year later. Once the national champion, British Leyland led by Stokes became a basket case. To save face, the company was nationalised in 1975. In 1988 it was sold to British Aerospace, resold to BMW, then handed to a consortium that went broke.

Jaguar and Land Rover were acquired by Ford and sold to India’s Tata. Ironically Nissan, Honda and Toyota now have car plants in Britain. BMW makes the Mini. China makes the MG.

It’s all a far cry from the 1950s when the British car industry was the second largest manufacturer in the world. And a far cry when in 1969 Stokes told London’s financial press: “We have commercial vehicles of all types which are accepted as the best in the world. We have gas turbines, military vehicles, earth moving equipment, quarrying equipment, refrigeration plant and the like – you name it – if it’s on wheels, or if it freezes, we make it.” The one thing Stokes could not make was a success of British Leyland.

Des Power is a former motoring journalist who spent two years working at British Leyland in London.