Back From The Brink – A Review

We welcome stalwart reader and commenter, Daniel O’ Callaghan to the ranks of DTW guest-writers with a latter-day review of the combatative former BL Chairman’s 1983 memoir.

Image: The Author

This book tells the story of the author’s five years as Executive Chairman of BL (formerly British Leyland). Sir Michael Edwardes joined the 99% state owned company in November 1977 at the invitation of the Labour government of James Callaghan. The book charts the many crises faced by the company as it struggled to deal with disastrously poor productivity and product quality; labour militancy and a dismal record of industrial action; occasional political interference; lack of investment and an outdated product range, with new products only in the early planning stages and still years away from production.

Back from the Brink is not, however, a ‘car’ story in any real sense. Anyone reading the book in the expectation of revelations in this regard will be sorely disappointed. Edwardes refers to existing and future models in an almost incidental manner. The Austin Metro and Triumph Acclaim, both launched in 1981 during his tenure, are the only models that get more than a passing mention, and the latter only for the ground-breaking commercial deal with Honda that spawned it, rather than the car itself.

I think this reflects Edwardes’ personal lack of interest in and passion for motor cars, but also his avowed intention to delegate responsibility for the products down from main board level to the operating companies within the group. Running through the book, there seems to be a confidence on Edwardes’ part that BL already had the design and technical expertise to deliver new models that would be wholly competitive in the market, if only the other issues afflicting the company could be resolved. That confidence appeared to be well founded after the hugely positive reception for the Metro, and was likely to have gone unchallenged by most readers in 1983, the year the book was published.

1980 Metro.  (c) thismoney.co.uk

With the benefit of hindsight regarding the relatively underwhelming Maestro and Montego, the two vital mid-market models developed during his tenure, perhaps Edwardes was guilty of some complacency in this regard? In mitigation, if such is needed, the successful relationship with Honda that Edwardes established was soon extended to the joint venture XX/HX project that would become the Rover 800 and Honda Legend. This in turn lead to a whole range of jointly developed products that allowed what became Rover to flourish, albeit briefly, in the 1990’s and survive in different forms until 2005.

There is no doubt that BL was treated as a political football by absolutists on all sides during Edwardes’ tenure as Executive Chairman, which hugely complicated the task of restoring it to a sustainable future. Interestingly, although Edwardes is careful not to be overly critical of Margret Thatcher’s Conservative government, which remained in power when the book was written, one gets the distinct impression that relations were more cordial with Callaghan’s pragmatic Labour government than the ideologically driven administration that followed.

Thatcherism espoused ‘small’ government and free markets, and was implacably opposed to state ownership, especially so of a company that was not part of the infrastructure of the country. One of Thatcher’s most influential economic advisers, Professor Alan Walters, on first meeting Edwardes, espoused the view that BL should be summarily closed down! Walters argued that the shock value of doing so would hobble excessive union power, sweep away restrictive practices, moderate wage demands, improve competitiveness and thereby have a net positive effect on the economy in just six months. Walters seemed to have little thought for the impact on hundreds of thousands of workers that relied directly or indirectly on BL for employment.

1981 Acclaim.  (c) Classicshonestjohn

The single greatest threat to BL’s survival during Edwardes’ tenure came not from any of its many internal issues, but from the Thatcher government’s monetarist economic policies, intended to get inflation under control. This policy manifested itself in high interest rates and a very strong pound. The latter hugely undermined the company’s competitiveness and undid all of the benefits from the productivity gains it was making.

Cheap car imports flooded in from Europe and Japan, eroding BL’s still large but fragile domestic market share, while export sales became increasingly difficult. Unlike its nominally domestic competitors, BL had no overseas mass manufacturing facilities to offset this competitive disadvantage, so was uniquely affected by the high exchange rate.

BL faced a similar existential threat from the radical left in the form of militant shop stewards that controlled the workforce at many plants, often in defiance of the unions they nominally represented. Edwardes suspected a hidden agenda on their part: far from defending workers’ pay and conditions, some were determined to bring about the collapse of the company in the hope that the chaos that would follow might provoke serious civil unrest and lead to the rise of a populist hard-left socialist government.

One of the most notorious, Derek “Red Robbo” Robinson, in his thirty months as shop steward at the Longbridge plant, was allegedly responsible for 523 disputes resulting in the loss of production of 62,000 cars and 113,000 engines. He was finally sacked by BL, but only after this decision was ratified by a mass vote of the plant’s workers. The militant shop stewards had an influence far in excess of their small number, assisted by a culture of intimidation and bullying of workers who might disagree with them.

1983 Maestro.  (c) BBC

In contrast, the vast majority of workers and senior union officials seemed to be realistic and fair-minded in their appreciation of the company’s difficulties. Edwardes adopted the tactic of publishing press advertisements or writing directly to the employees at home to put the company’s case regarding disputes, often to good effect despite union objections at being disintermediated in this way.

The book is a fascinating read, a reminder of an extraordinarily different and difficult time in recent British history. I was a young adult in the late 1970’s and early 80’s with a keen interest in both politics and the motor industry, so well remember the events being described. Younger readers may find some of the high-wire negotiations and stand-offs described almost unbelievable in the context of the power (im)balance in the relationship between employers and (often non-union) employees today. If there is a moral to be drawn from the story, it’s that ideological absolutism of any sort is often the enemy of good business sense.

This book is long out of print, although secondhand copies do appear on internet booksellers’ lists from time to time. Should anyone like to read the book, I’m very happy to post my copy to you. The only condition is that you should post it, either to me or onwards to another reader within the DTW family, so that it will eventually find its way back to me.

Author: Daniel O'Callaghan

Shut-line obsessive...Hates rudeness, loves biscuits.

30 thoughts on “Back From The Brink – A Review”

  1. Hi Daniel,

    A big bravo for your first contribution as a writer here. I look forward to read more from you.

    1. …. I’ve started reading Louis Schweitzer’s book about his time at Renault and it is a fascinating book for me too.

    2. I assume you’re referring to ‘Mes Années Renault’ and that you’re hence fluent in French – would that be correct?

    3. I see.

      If you can find the time, I’d very much appreciate your take on the book. Most of what I’ve heard about Schweitzer from those who worked with him has been highly complimentary, so his own view would be of quite some relevance.

    4. Because of your article I took the book out Daniel.

      I use to read a chapter here an there whenever I went to the library but now it’s at home, I just need to find the time (and tranquility) to read it properly.

      Btw, nothing to do with Renault but I’ve seen the film “Driven’ a couple of days ago, the story of De Lorean and his dodgy life. I wasn’t even interested in his story in the first place and only put the movie running as background noise. But I thought it was really good entertainment, I found it funny, fast-paced with decent acting from most of the cast. I recommend it.

  2. Congrats on your first article here, Daniel. Well written, if I may say so. I’m also happy to see your shut-line obsessive, like me, even though I might come across as a bit rude every now and then and I don’t eat biscuits.

    1. Thank you all for your kind words. There’s another, very different, piece in the pipeline and a couple more ideas bubbling away on a low simmer in my brain.

      Guy, hank you for reminding me that I’ve got Iacocca’s book on his Chrysler days somewhere, gathering dust. Now, he was a car guy, unlike Edwardes. I must dig it out.

  3. Very interesting article Daniel, looking forward to more articles from you, wellcome as a guest-writer!

    1. Thank you, Daniel, for an excellent review of a long standing favourite book. As you rightly say, younger readers will find the world it describes as incredible; but the previous decade was, in the UK, an era during which the tail wagged the dog and the motor industry was no different to all others. Strikes were endemic (known globally as The English Disease – an epithet perhaps now more appropriately French) and managements ineffective. It was probably inevitable that extreme views such as those of Professor Walters would find political appeal and electoral support. Unfortunately, the cure was at least as destructive as the disease – as many of us discovered as our industries collapsed around us. But let’s not get political! Keep up the good work, Mr O’Callaghan.

  4. Thank you for this article, Daniel. This book seems to be fascinating and depressing at the same time, just like the industry itself at that time.

    For further examples of workers ruining their (in this case literally) employer read Geoffrey Robinson’s (of Jaguar fame) book “Saving the Bonneville: the inside story of the Meriden workers’ co-operative”.
    For examples of managerial ineptitude and arrogance may I recommend Abe Aamidor’s “Shooting star. The rise and fall of the British motorcycle industry” or Bert Hopwood’w “? Whatever happened to the British motorcycle industry”.

  5. Good work Daniel. You are a fine writer and I look forward to reading further contributions from you.

    You are absolutely right to say that BL was pulled between two extremes – hard left union agitators on one side (increasingly in defiance of their exasperated union bosses, as well as the company management), and free market anarchists on the other, who saw mass unemployment and turmoil as a necessary price for turning Britain into a modern capitalist economy.

    This mutual distrust was highly destructive, and it took companies like Nissan to show how a more collaborative culture could create a very different kind of car factory.

    But BL / Austin Rover / Rover faced a bigger structural problem too. The Conservatives had their heads turned by the ‘dynamism’ and swashbuckling global ambition of the City and financial services. But the City was predominantly interested in short-term gains, not long-term investment: to them, a five year plan = long term. This is a big problem to an industry that looks at returns on investment over a decade or more.

    Through little fault of their own, the UK legacy industry was starved of long term thinking and long term investment. Each new car necessarily became ‘make or break’, because they were forced to try and deliver huge hits that could deliver profits within a few years AND create enough cash to invest in the next model. This is no way to run a car company.

    Eventually, the UK brands either folded or were sold to foreign companies who did know a bit about long term investment.

    1. Lack of investment was a chronic disease of the British industry already before the City became almighty and it killed British motorcycles first, cars (at least partially) later.
      Look at Jaguar whose production equipment was bought used for next to nothing from Standard and which was shown to visitors in the Eighties including tools that had been damaged in WW II and were welded up and still used decades later.
      Anecdotes of workers using fag paper to adjust their precision lathes of pressing blocks of wood against the axles of cylinder bore drills are numerous and old.
      Lack of investment in R&D and lack of investment in new production machinery can’t be blamed on workers.
      Workers also weren’t responsible for cars designed so that they couldn’t be produced and workers weren’t responsible for the Triumph bike frame design where freshly built and tested engines had to be dismantled because they couldn’t be mounted into the frame in one piece.

    2. The story of the UK industry could be mirrored with Rhineland capitalism which was more consensus driven, with a lot less us-and-them. I tend to dislike extremes and the Rhineland model sits nicely between the extremes of short-termist Anglo-Saxon capitalism and dirigiste Soviet economic management. I notice that small scale British firms do quite well though much as smaller Italian firms do well enough. What is it about scale that leads to Anglo-Saxon capitalism to be so unstable (and for Soviet economic management to be so rigid). Might I suggest personal relations as a mediator of information? Small companies have better interpersonal relations that means information flows and can be trusted?

    3. Large companies offer opportunities for a certain type of manager to polish their careers – think Jürgen Schrempp and similars.

      Daniel Goedevert one said “the further up you climb in a hierarchy the more the windows to the world turn
      into mirrors and once you’re at the top the only thing you see is your own image.”

    4. Interestingly, and contrary to prevailing theories on management then and now, one of the first things Edwardes did when he took over was to demote the senior executives who were main board members to a subordinate “advisory board” and create a new and much smaller small main board comprising senior industry figures he invited to be non-executive board members. Even Edwardes, notwithstanding his Executive Chairman title, was never a BL employee but remained on secondment from Chloride, initially for three years, but later extended to five. His thinking was that the main board needed NOT to have “skin in the game”in the form of salaries and share options, so they could take truly impartial business decisions about the company’s future, including a decision to close it down, if that were deemed the “least worst” course of action in the interests of its major shareholder, the UK government.

  6. Congrats to your first article, Daniel! It was interesting enough to make me look into a topic I normally have limited interest in – and enjoy it! I’m looking forward to reading more of your ideas, once they have become mature enough to be written down.

  7. The story of the decline and fall of the British automotive industry is something I have spent a lot of time thinking and reading about, which normally tends to solidify opinions one way or the other – but in this instance it is a subject I am still open to having my mind changed about more than most. Having not lived through the worst of it, it invariably makes it a bit more difficult to attribute blame, but the word that springs to mind for Edwardes is, I suppose, ‘adequate’. Yes, he could and should have handled certain critical things better, most notably keeping a closer eye on Maestro and Montego – it was clear even from early on in Edwardes’ tenure these projects were drifting and spiralling into a developmental soup that could never end well. On the other hand, he could also have been markedly more incompetent and brought the whole thing to a shuddering halt there and then.

    In the end, I have the impression that BL was a sufficiently diseased entity that by the time Edwardes arrived it was beyond the ability of any one person, no matter how talented or able, to ‘fix’, however one attributes meaning to that word. I do agree that in general there was far too much complacency at a managerial level about the competencies (or lack thereof) within the company’s product planning, development and engineering departments. This is, of course, an easy critique to make with hindsight – but I dare say that someone with more of an engineering background could have picked up this critical flaw. It rather suggests a top-down dialectical approach that defined BL-ARG-Rover Group all the way to the end. While the unions are hardly blameless in this saga I personally do tend toward the view that weak and arrogant management (albeit that Edwardes is far from the most egregious offender in this respect) was the primary culprit of the slow-motion collapse, not least because that short-sightedness and arrogance is reflected both in their contemporaneous public statements and recorded for posterity in historical documents. It was also something that lasted in Rover right to the end. Forget the mistakes made in the 1970s, forget the lack of investment by British Aerospace, forget the deep reliance on Honda to the point of hollowing-out the organisation’s core engineering abilities. The truth is that Rover had the chance of a lifetime to salvage itself out of the mire under BMW and it totally, unequivocally, unquestionably blew it – and the reasons for that boil down to a poisonous culture that multiple generations of management ultimately have to take responsibility for.

    1. Stradale,

      I completely agree with you. The collapse of the BMW relationship was a tragedy, in that Rover brought it upon itself.

      Talking about products, just looked at what BMW signed off: Rover 75, New Mini, Range Rover. All very credible products, and two out of three came with a credible sales plan and market positioning too (the 75 was not, initially).

      Worringly, I see some of the mistakes Rover made repeated by JLR more recently: for example, the assumption that strong sales for a popular model justifies a hefty price hike.

      Hopefully they have learned from these mistakes now.

    2. I think it’s broadly accepted now that 1977 was the tipping point for British Leyland, and that from that point onwards, the situation had become too acute to remedy. BLMC (as was) probably needed a Micheal Edwardes in 1975 instead of a well meaning, but largely ineffectual technocrat in the form of Lord Ryder. Had the difficult decisions been taken then, perhaps the outcome might have been less dire, but of course, in the realms of theory, everything is possible. With that in mind, it’s probably fair to say that Edwardes did the best he could with what he had available, but I think we can all agree, product strategy was not his forte. However, he was viewed as a good and fair-minded boss (John Egan rated him highly), a man who was as good as his word. Not necessarily the case with his replacement, Ray Horrocks, it would appear.

    3. I sometimes think it is very easy to get caught up in what-if situations at certain critical junctures. I have done it myself. Sometimes – not frequently – it is easy to plot an alternate course that would have seemingly delivered unequivocally more positive outcomes than those which eventuated. But in BL’s case, one of the problems in playing this game is that virtually the entire enterprise amounted to critical mistake piled on critical mistake, even before 1968.

      Probably Edwardes’ most consequential decision was his implied acceptance of the fact that BL/ARG’s production capacity would be capped at 700k annually (or whatever the ultimate figure was). It may be that was the only practical way forward, I haven’t studied the subject in enough depth to know one way or another. But as I’m sure everyone here knows, these sorts of decisions are the result of creeping consequentialism over years, decades even, by multiple influential individuals and groups within a very substantial political economy. By the time it got to the point that Edwardes had to make those sorts of decisions, one could point blame at:

      * The chronic unprofitability of BMC throughout the 1960s, and dismal smoking-room management thereof;
      * The weakness that resulted from this, that led to the ill-advised creation of BL in the first place;
      * The impossibly misguided managerial and engineering practices that yielded cars like the Marina being built (see also: implementation of the Maxi gear linkage, entire MGC, Stag, SD1 projects etc);
      * Poisonous relationships between unions and management;
      * Bizarre prioritisation of funding towards certain projects over others, as well as the wastefulness that comes from indecisiveness;
      * Ridiculous industrial geography of the company;
      * Etc etc.

      The thing that strikes me, I suppose, is that there was widespread denial within the company not just about the severity of BL’s problems, but perhaps even a reluctance to acknowledge that some of them were even problems that needed addressing at all. To that end I am somewhat inclined to take the view that BL’s fate would have been the same even if it had ten times the amount of resources – it might have taken longer to get to that point, but as GM proves, all that means is that a greater amount of wealth is dissipated along the way. With big organisations like this (and state actors even more so), the consequences of individual decisions can take a long time to ripple through the system, have long-term ramifications, or both. Or neither. All of this is to say both that consequentialism is terribly important to historians, but needs to go hand-in-hand with the adage that correlation is not causation. But one conclusion at least seems reasonably sound – decades-long runs of bad decision-making, even if that amounts to choosing ‘less-bad’ options, tends not to emerge with a sparkling track record.

  8. Well done Daniel on the first article – a very balanced and adroit review of a book I know quite well as part of the research I did on the Acclaim.

    I think Edwardes was one of the more competent general managers of BL/ Leyland Cars/ ARG/ MG a Rover. I know, tallest dwarf and all that. He certainly worked damned hard to keep the company alive and introduce new approaches. He had to cope with a Government which would have rathered that BL wasn’t there, in spite of all the jobs it supported at a time when the unemployment totaliser was a regular weekly feature on ITN’s News at 10. That he trail-blazed Japanese investment in UK production, which Mrs Thatcher embraced can easily be overlooked.

    Thanks again.

  9. Welcome aboard, Daniel. An excellent toe in the water and very much looking forward to seeing what’s next from your “simmering brain.”

  10. Thanks for that book review, Daniel. Made me think. And now for something completely different, as Terry Jones might have said in his heyday, RIP.

    Edwardes had that most difficult of tasks – trying to bring together the warring factions of the various marques under the BL umbrella as had his predecessor, and coping with the new (what is now called neoliberal) order. The ideas behind that theme were developed during WW2 by the Chicago School of economists, pointy-headed academics quite at odds with the FDR way of lifting the US out of depression, and thus quite right wing. It’s been said, and I believe it, having been subjected to several university level economics courses required of engineers-in-training here, that economics is a pseudo-science where people who really don’t understand mathematics gin up graphs of this and that to prove a certain point-of-view. Certainly we engineers were able in our lectures to tie-up in knots the lecturers borrowed from a nearby university, and that was only on Keynesian economics. Practically, all we got out of it was the need to understand the time cost of money for financing big projects depending on borrowing rates and missed opportunity costs.

    The Chicago School were definitely anti-union and anti just about everything that had to do with society as a whole looking after its citizens. You were on your own and may the most ruthless win, was the summing up of their outlook. It took a long time to take hold in Western society so for the period 1945 to perhaps the late 1970s, the movers and shakers allowed social progress but became more and more alarmed that programs that reflected “entitlements” like old age pensions and social security were a constant drag on “progress”. And of course, the European ideal of free health care was right out. It was therefore interesting to see you mention Professor Alan Walters who was an enthusiastic Chicago School espouser and who had the ear of the Iron Lady. Firing hundreds of thousands of recalcitrant workers would bother such a person not one jot. Ideology reigned supreme

    Edwardes wasn’t tough enough for Thatcher, so she got the privatization king from right here in Nova Scotia, one Graham Day, to do what Edwardes and his disorganized successors wandering about in a haze for four years running this and that bit of the old company wouldn’t or couldn’t do. There’s very little published about Day the man, (the Wikipedia entry is a farce) but one can be sure that that the privatization of the provincial electrical utility here in 1992, where I worked, was vouched for by the upper echelons of our local society including Day.

    Following Day’s break up of the British shipbuilding industry and then BL, a time as head of Cadbury-Schweppes, he then proceeded to break up the giant Ontario Hydro organization for the Conservative provincial government much along the lines that ruined the British electricity industry. It was all ideological nonsense to people who worked in the industry, because there was no need whatsoever to do so. Labour strife and innovation and efficiency were not a problem – it was just a case of shafting the people who owned the asset i.e. citizens, and flogging off the assets to the private sector. The proof is easy to spot — Hydro Quebec next door remained a provincial crown corporation and has gone from strength to strength, while the disparate parts of what was once mighty Ontario Hydro fumble about in the dark. Hydro Quebec makes money for its citizen owners who are proud of the asset.

    This neoliberal privatization zeal spawned the ongoing “austerity” theme of right wing governments ever since, and is rolled out as justification for whatever nonsense our “betters” decide to subject us to at any given time. It also started the real overuse of the planet’s natural resources to line the pockets of the already overly wealthy by mortgaging all our futures. Look where we are now, where people can’t really cook and buy fast and convenience foods all wrapped up in plastic because they are all tied up working too hard for someone else and have little time to spare for niceties. We are made to feel bad about ourselves and accept diktats from bureaucrats. The whole EV thing has struck me from the start as a new industry hell-bent on using new resources like lithium and cobalt to power more “wealth” generation while the Earth groans at the assault.

    Edwardes was nominated by Labour to run BL, got lost in the everyday routine, and was essentially dumped by Conservatives. Isn’t that a sum-up of what happened, removed of all gloss?

    I mentioned that there is no real biography of Graham Day anywhere. It is therefore a surprise to discover the only one of even minor detail extant is put out by a marketing company. A once proud high quality shoe manufacturer sort of revived by entrepreneurs from Fredericton, New Brunswick is the source. Fredericton is where Lord Beaverbrook emerged from. The Hartt shoe company whose original products I was proud to wear, and have two pairs left that are over thirty years old and in excellent condition, essentially went broke. Now as a reborn marketing entity it professes Canadianism on its web site, while all its product is “designed in Canada”, but “handcrafted in Spain”. Better than China, I suppose. Nevertheless, they interview some of their well-heeled customers, ahem, and one such is Sir Graham Day. You’ll learn more about Day the man here than anywhere else, as he assumes a very low public profile.

    https://hartt.ca/blogs/the-shoe-guys/sir-graham-day

    I hope this all provides some interest to DTW readers, as some may well wonder what happened after the British car industry uproar following Edwardes’ departure and the four years of general vacuum before Day’s arrival on the scene. Nor can I be construed to be some leftist hooligan — survival instincts prompted me to borrow and invest in Nova Scotia Power when it was privatised, and my share dividends contribute mightily to my retirement income these days. However, years of beating about industry and the attitudes it generates have made me despair as to the environmental future of our world as things stand now. I am thus a two-faced devil, with one foot in the investment world while I also bleat about GHG emissions and the way things are going in this unfettered present day using up of resources without a plan other than to make money. And to think this essay of mine was spawned by your book review, Daniel! There are tentacles everywhere.

    1. thanks to Daniel, for exhuming some undead skeletons,
      and to Bill for taking the ball and running with it, far,
      wide and deep. good thinkers and generous writers.
      (I’m hoping Bill that you some day get to nut out the real
      comparative costs – at all levels – of EVs and hybrids.)

    2. “… economics is a pseudo-science where people who really don’t understand mathematics gin up graphs of this and that to prove a certain point-of-view,” wrote Bill. Quite right. The relative certainty of mere accountancy is wrongly translated to the messy world of the overall flow of money and the mass behaviour of society. I teach a course on science theory; economics barely, just barely, counts as a science if you apply a test of what might constitute a science at all. Freudian psychology ranks just about astrology.

      I take the view now that there were so many factors involved in the demise of the old British car industry that you can´t
      really ask “what if Rover had been closed” or “what the management had been better at x”. Counterfactuals explore the importance of one key element. But in the case of the UK car industry, it is not one bullet wound that killed the beast but fifty bullets plus poison, stake-pits, carcinogens, traumatic wounds, burning, boiling, chopping and falls-from-great-heights. If the unions didn´t kill the UK car industry (they didn´t) at least ten other things did (Stradale listed about 4% of the factors). And (to be satirical) the same clustermess applies to dear old Blighty today.

    3. With all due respect to economists, I couldn’t agree more with Bill and Richard regarding economics. I had the misfortune to study it in the first year of my Computer Science degree course, and also as part of my professional banking qualifications. As someone who loves the precision and certainty of mathematics, I found the attempts to map human behaviour in this pseudo-scientific way very frustrating and unsatisfactory.

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