British Leyland was a British automotive engineering and manufacturing conglomerate formed in 1968 as British Leyland Motor Corporation Ltd (BLMC), following the merger of Leyland Motors and British Motor Holdings. It was partly nationalised in 1975, when the UK government created a holding company called British Leyland, later renamed BL in 1978.[1][2] It incorporated much of the British-owned motor vehicle industry, which in 1968 had a 40% share of the UK car market,[3] with its history going back to 1895. Despite containing profitable marques such as Jaguar, Rover, and Land Rover, as well as the best-selling Mini, BLMC had a troubled history,[4] leading to its eventual collapse in 1975 and subsequent part-nationalisation.
After much restructuring and divestment of subsidiary companies, BL was renamed the Rover Group in 1986, becoming a subsidiary of British Aerospace from 1988 to 1994, then was subsequently bought by BMW. The final surviving incarnation of the company as the MG Rover Group went into administration in 2005,[5] bringing mass car production by British-owned manufacturers to an end. MG and the Austin, Morris and Wolseley marques became part of China's SAIC, with whom MG Rover attempted to merge prior to administration. As of 2024, Mini, Jaguar Land Rover, Leyland Trucks, and Unipart are the most prominent former parts of British Leyland that still exist, with SAIC still operating its UK base out of the former Longbridge site.
BLMC was founded on 17 January 1968 by the merger of British Motor Holdings (BMH) and Leyland Motor Corporation (LMC),[6] encouraged by Tony Benn as chairman of the Industrial Reorganisation Committee created by the first Wilson Government.[3] At the time, LMC was a highly successful truck and bus manufacturer - as well as owning prosperous car brands Triumph and Rover - whilst BMH (which was the product of an earlier merger between the British Motor Corporation, Pressed Steel and Jaguar) was perilously close to collapse. The Government was hopeful LMC's expertise would revive the ailing BMH, and effectively create a "British General Motors". The merger combined most of the remaining independent British car manufacturing companies and included car, bus and truck manufacturers and more diverse enterprises including: construction equipment, refrigerators, metal casting companies, road surface manufacturers; in all, nearly one hundred different companies. The new corporation was arranged into seven divisions under its new chairman, Sir Donald Stokes (formerly the chairman of LMC). At the time of its founding, BLMC was the world's fifth largest vehicle manufacturer after General Motors, Ford, Chrysler and Volkswagen.[7]
The seven divisions were:
While BMH was the UK's largest car manufacturer (producing over twice as many cars as LMC), it offered a range of dated vehicles, including the Morris Minor which was introduced in 1948 and the Austin Cambridge and Morris Oxford, which dated back to 1959. Although BMH had enjoyed great success in the 1960s with both the Mini and the 1100/1300, both cars were infamously underpriced and despite their pioneering but unproven front wheel drive engineering, warranty costs had been crippling and had badly eroded those models' profitability.
After the merger, Lord Stokes was horrified to find that BMH had no plans to replace the elderly designs in its portfolio. Also, BMH's design efforts immediately prior to the merger had focused on unfortunate niche market models such as the Austin Maxi (which was underdeveloped and with an appearance hampered by using the doors from the larger Austin 1800) and the Austin 3-litre, a car with no discernible place in the market.
The lack of attention to the development of new mass-market models meant that BMH had nothing in the way of new models in the pipeline to compete effectively with popular rivals such as Ford's Escort and Cortina.
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Immediately, Lord Stokes instigated plans to design and introduce new models quickly. The first result of this crash programme was the Morris Marina in early-1971. It used parts from various BL models with new bodywork to produce BL's mass-market competitor. It was one of the strongest-selling cars in the United Kingdom during the 1970s; being the second-most popular new car sold in Britain in 1973, though by the end of production in 1980 it was widely regarded as a dismal product that had damaged the company's reputation. The Austin Allegro (replacement for the 1100/1300 ranges), launched in 1973, gained a similar reputation over its ten-year production life.
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The company became an infamous monument to the industrial turmoil that plagued the United Kingdom during the 1970s. Action by unions frequently brought BL's manufacturing capability to its knees. Despite the duplication of production facilities as a result of the merger, there were multiple single points of failure in the company's production network which meant that a strike in a single plant could stop many of the others. Domestic rivals Ford and General Motors mitigated against this by merging their previously separate British and German subsidiaries and product lines (Ford combined Ford of Britain and Ford Germany to create Ford of Europe, whilst GM eventually merged the operations of Vauxhall and Opel), so that production could be sourced from either British or Continental European plants in the event of industrial unrest. The upshot was that both Ford and Vauxhall ultimately overtook BL to become Britain's two best-selling marques. At the same time, a tide of Japanese imports, spearheaded by Nissan (Datsun) and Toyota exploited both BL's inability to supply its customers and its declining reputation for quality. Continental carmakers including Fiat, Renault and Volkswagen were also achieving strong sales on the British market.
By the end of the 1970s, the UK Government had introduced protectionist measures in the form of import quotas on Japanese manufacturers to protect the ailing domestic producers (both BL and Chrysler Europe), which it was helping to sustain.
At its peak, BLMC owned almost forty manufacturing plants across the country. Even before the merger, BMH had included theoretically competing marques that were in fact selling substantially similar badge engineered cars. The British Motor Corporation had never properly integrated either the dealer networks or the production facilities of Austin and Morris. This had been done partly to appease poor industrial relations, as decades old rivalries between Austin and Morris workers at Longbridge and Cowley respectively, had persisted after the 1952 merger and creation of BMC. The upshot was that both plants were producing badge engineered models of otherwise identical Austin and Morris cars so that each dealer network would have a product to sell. This meant that Austin and Morris still, to an extent, competed with each other and meant that each product was saddled with effectively twice the logistics, marketing and distribution costs that it would have if sold under a single name or if production of a single model platform was concentrated in one factory. Although BL did eventually end the wasteful double sourcing – for example production of the Mini and the 1100/1300 was concentrated at Longbridge, whilst the 1800 and Austin Maxi ranges moved to Cowley, the production of sub-assemblies as well as component suppliers were scattered all over the Midlands which greatly increased the cost of keeping the factories running.
BMH and Leyland Motors had expanded and acquired companies throughout the 1950s and 1960s which were in direct competition with each other, with the result that when the two conglomerates were brought together into BL there was even more internal competition. Rover competed with Jaguar at the expensive end of the market, and Triumph with its family cars and sports cars against Austin, Morris and MG. Internal politics became so bad that one marque's team would attempt to derail another marque's programmes.[8]
Individual model lines that were similarly sized were therefore competing against each other, yet were never discontinued nor were model ranges rationalised quickly enough; in fact, the policy of having multiple models competing in the same market segment continued long after the merger – for instance BMH's MGB remained in production alongside LMC's Triumph TR6, the Rover P5 competed with the Jaguar XJ, whilst in the medium family sector, the Princess was in direct competition with upscale versions of the Morris Marina and Austin Maxi, meaning that economies of scale resulting from large production runs could never be realised. In addition, in consequent attempts to establish British Leyland as a brand in consumers' minds in and outside the UK, print ads and spots were produced, causing confusion rather than attraction for buyers.
BL marketing and management attempted to draw more obvious distinctions between the marques – most notable was the decision to pitch Morris as a maker of conventional mass-market cars to compete with Ford and Vauxhall and Austin to continue BMC's line of advanced family cars with front-wheel drive and fluid suspension. This resulted in the development of the Morris Marina and the Austin Allegro. The policy's success was mixed. Since the dealership network was still not sufficiently rationalised it meant that Austin and Morris dealers (which had, in BMC/BMH days, each offered a full range of cars both advanced and traditional) had their product range halved and found that they could no longer cater to many previously loyal customers' tastes. The policy was also carried out haphazardly: The advanced, Hydragas-sprung Princess began life in 1975 sold as an Austin, a Morris and a Wolseley before being rebadged altogether under the new Princess name. The Princess (and the Mini, which BL also turned into a marque in its own right) was sold across the Austin-Morris dealership network, making any distinction between the two even more vague to many customers. Critically, the new models that had been introduced by BLMC failed to sell in high enough quantities outside of the home market, despite the UK now being a part of the European Economic Community – with the Allegro and Princess, in particular, having been tailored for European tastes. However, both these vehicles were saloons when the trend in Europe was moving towards family-sized hatchbacks, typified by the Volkswagen Golf in 1974 and the Simca 1307 (Chrysler Alpine) in 1975.
The company also wasted many of its scant funds on concepts, like the Rover P8 or P9,[9] that would never be produced to earn money for the company.
These internal issues, which were never satisfactorily solved, combined with serious industrial relations problems with trade unions, the 1973 oil crisis, the three-day week, high inflation and ineffectual management meant that BL became an unmanageable and financially crippled behemoth. "Following a disastrous couple of years in the marketplace, by the end of 1974 BLMC was on the brink of bankruptcy. Its financial backers – the City banks – had become very nervous about its future, and persuaded Lord Stokes to approach Tony Benn for financial assistance."[10]
Sir Don Ryder was asked to undertake an enquiry into the position of the company, and his report was presented to the government in April 1975. Following Ryder's recommendations, the organisation was drastically restructured and the Labour Government created a new holding company, British Leyland Limited (BL), of which it was the major shareholder, effectively nationalising the company.[11][12] Between 1975 and 1980, these shares were vested in the National Enterprise Board which had responsibility for managing this investment. The original seven divisions of the company were now reorganised into four:[13]
There was positive news for BL at the end of 1976 when its new Rover SD1 executive car was voted European Car of the Year, having gained plaudits for its innovative design. The SD1 was actually the first step that British Leyland took towards rationalising its passenger car ranges, as it replaced two cars competing in the same sector, the Rover P6 and Triumph 2000. More positive news for the company came at the end of 1976 with the approval by Industry Minister Eric Varley of a £140,000,000 investment of public money in refitting the Longbridge plant for production of the company's "ADO88" (Mini replacement), due for launch in 1979.[15] However, poor results from customer clinics of the ADO88, coupled with the UK success of the Ford Fiesta, launched in 1976, forced a snap redesign of ADO88 which evolved into the "LC8" project – eventually launched as the Austin Mini Metro in 1980.
In 1977, Michael Edwardes was appointed chief executive[16] by the NEB. Edwardes quickly reversed the Ryder Report's policy of giving prominence to the "Leyland" brand, and returned focus back to the individual brands. Leyland Cars was thus renamed BL Cars Ltd, consisting of two main divisions; Austin Morris (the volume car business) and Jaguar Rover Triumph (JRT) (the specialist or upmarket division). Austin Morris included MG. Land Rover and Range Rover were later separated from JRT to form the Land Rover Group. JRT later split up into Rover-Triumph and Jaguar Car Holdings (which included Daimler). At the same time the public use of the "British Leyland" name ceased, being abbreviated simply to "BL", whilst the company's "hurricane" logo was redesigned with the central "L" removed. The Austin-Morris division was given its own unique brand identity with the introduction of the blue and green "chevron" logo, which was later expanded in use when the car manufacturing operations were further consolidated into the Austin Rover Group in the 1980s.
In 1978, the company was the subject of an important legal development concerning corporate civil liability.[17] In the case of Walton v British Leyland, the court held Leyland liable for negligence owing to a design defect in the wheel bearings of their new model of the Allegro.[18] The company were aware of the issue but had decided against a recall.[18] They were held liable for damages as they had failed to take reasonable care, because the costs of the recall were deemed in proportion with the potential risks of injury.[19]
In 1978, the company formed a new group for its commercial vehicle interests, BL Commercial Vehicles (BLCV) under managing director David Abell. The following companies moved under this new umbrella:
BLCV and the Land Rover Group later merged to become Land Rover Leyland.
In December 1978, British Leyland Limited was renamed BL Limited and its subsidiary, which acted as a holding company for all the other companies within the group. The British Leyland Motor Corporation Limited was renamed BLMC Limited at the same time.[20][21]
