Decline, fall and a modest resurrection

Britain's car industry has suffered terribly. But it is probably through the worst, says Peter Rodgers

When the British Motor Corporation was formed more than 40 years ago from a merger of two famous old names, Austin and Morris, it was the largest car company outside America. The worst part of the history of increasing competition, under-investment, bad marketing and dreadful labour relations that came to typify the British-owned motor industry was that the outcome was never inevitable, and failure might well have been reversed at several critical points.

BMC and its successor companies, British Leyland and Rover, slid backwards in the league tables despite receiving more than £2bn of state aid in the 10 years to the mid-Eighties.

Yet as Chrysler has shown in the United States, inefficient production, dud models and enormous losses do not always have to be fatal, given dynamic managers, supportive owners and a workforce convinced that change is necessary. The one-time basket case of the US automobile industry now has $7bn cash in the bank, a pot of honey that last week attracted a $22bn takeover bid.

In the mid-Eighties, even British Leyland began to look seriously competitive again after a decade of rationalisation that included the loss of more than 80,000 jobs and the closure of five large car plants.

Its achievements were all the greater because it had been through a deep recession that slashed demand and provoked a price war between its biggest UK competitors, Ford and General Motors' subsidiary Vauxhall.

But BL had its unwilling shareholder, the British government, to contend with. Margaret Thatcher could not abide a company that to her was a symbol of all that had been wrong with British industry. She was against state ownership in principle, and any emotional attachment she may have had to continuing British ownership of an important part of the car industry was weakening rapidly. Ray Horrocks, then chairman of the Austin Rover division, described to a Commons committee in 1986 what he called the "cruel and shameful persecution of British Leyland."

That year the government attempted to break up and sell BL to foreigners: truck manufacture was to go to General Motors and cars to Ford. The Ford talks broke down over detail within three days of announcement, and GM withdrew in a huff after public outrage forced ministers to withdraw Land Rover from the sale.

Shortly afterwards British Aerospace volunteered to take BL off the government's hands for a song. This was politically popular, because the public still preferred a British solution. But BAe was soon to face difficulties of its own from which it is only now emerging, and could not afford to give BL, renamed Rover, the backing it needed to develop its chosen strategy of high quality and relatively low volume. The sale to BMW was as much to secure BAe's precarious future as Rover's.

The British government's priority by then had become investment and employment in the UK, not protecting national ownership. While Rover was scorned, and Jaguar left to be taken over by Ford in 1989, the Japanese were increasingly assiduously courted by government officials.

Honda had paved the way in 1978 with an agreement under which BL built cars to its design, and a decade later it bought a fifth of the British company, successfully helping it to modernise. But the key developments were the Japanese "transplant" factories of the mid to late Eighties, set up to get round European Union quotas on shipments of Japanese cars. The Nissan plant near Sunderland was announced in 1985, followed by Toyota, near Derby, and a Honda engine plant in Swindon. By 1999 their combined output is expected to be near 1 million cars a year.

Japanese management methods have influenced British companies and the component-supply industry has been forced into enormous leaps forward in quality that have made Britain as a whole more competitive and done wonders for the trade figures. But if continental fears are proved right, the transplants would be better described as Trojan horses. The Japanese in the 21st century could have as big a stake in European car manufacturing as the Americans now have through subsidiaries of Ford and General Motors. This will benefit Britain, now that it has been through the pain of adjustment to foreign ownership of its motor industry. The rest of the EU is right to fear the effects.

News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
sportColombian World Cup star completes £63m move to Spain
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Life and Style
News to me: family events were recorded in the personal columns
techFamily events used to be marked in the personal columns. But now Facebook has usurped that
News
news
News
i100
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Sustainability Manager

Competitive: The Green Recruitment Company: Job Title: Scheme Manager (BREEAM)...

Graduate Sustainability Professional

Flexible, depending on experience: The Green Recruitment Company: Job Title: T...

Programme Director - Conduct Risk - London

£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

Project Coordinator/Order Entry, SC Clear

£100 - £110 per day: Orgtel: Project Coordinator/Order Entry Hampshire

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn