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.
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labour militancy and a dismal record of industrial action; occasional political interference; lack of investment and an outdated product range, with new products only in the early planning stages and still years away from production.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.
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.
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.
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.