Waterloo Closure

The P76 is often blamed for the demise of Leyland Australia and quoted as “the car that killed Leyland”.

While there were certainly problems with the P76, particularly in its first year – as we will look into in more detail next issue – this is a very simplistic view which doesn’t take into account any of the many other factors that were adversely affecting the company at the time.

Frankly, there is no single car that could lay claim to being the “Leyland killer”, although two or three come close in their own right; again something we will look at next issue.

The fact is that Leyland faced so many problems at the time, most beyond its control and faced by the entire Australian car industry, that only miraculous sales from the P76 and a healthy parent company in the UK could have saved it.

This feature seeks to look at those forces acting on Leyland in detail and provide a balanced view of the social, industrial and political environment in which it was operating.

Leyland’s Workforce

During the boom period of the 1950s and 1960s large numbers of migrants were attracted to Australia with the promise of high living standards and good job prospects, thanks to post-war expansion and infrastructure projects like the Snowy Mountains hydro electricity scheme.

To encourage skilled workers from the UK to emigrate here, the Australian government offered assisted passage – for a cost of only £10 per adult and £5 per child: known locally as Ten Pound Poms.

According to the Australian Bureau of Statistics; “Between 1947 and 1973, immigrants from the United Kingdom constituted 41% of Australia’s total immigration intake of 2.5 million”. Of those, most had come through the Assisted Passage Scheme.

However, the UK was unable to meet the large numbers required, and Australia turned to Europe, where millions of people displaced by the war were looking for new homes.

Australia’s population grew from 7.3 million to 11.5 million between 1945 and 1971 (with indigenous people being included in the figures for the first time). Other countries which were major contributors to our population growth included Greece, Italy, Germany, Yugoslavia and the Netherlands.

The long-standing White Australia Policy restricted non-European immigration, and completely excluded it from some countries. This policy began to be relaxed in the late 1960s, with large numbers of refugees arriving from Vietnam and Cambodia.

Many of these immigrants found themselves working on production lines in the car industry. By the 1970s, there were over 60 different languages being spoken among the 8,000-strong workforce at Leyland’s Waterloo plant, which made it difficult to pass on instructions and for training.

Under John Engel and Peter Robson the workforce was restructured into autonomous workgroups. “This used the Japanese style, where you give them the focus, and they make up their own mind about how they go about things. That increased the productivity enormously”, Leyland’s Managing Director of the time Peter North recalled.

Within each workgroup of eleven people, one would be allocated the role of interpreter and trainer, to teach the others the basic fundamentals of workplace English to do their job, to make appointments at dentists and doctors, and so-forth.

Social problems for this multicultural workforce were compounded by the language barriers and industrial strife that existed within the factory and the industry as whole.

Parts shortages often saw people laid off, while the quality of workmanship dropped and Quality Control struggled to keep up.

These problems were not unique to Leyland, but it was that company which came up with a unique solution.

With the US military withdrawal from Vietnam, many hundreds of highly skilled Filipino mechanics, who had maintained US war machinery, began to arrive back in the Philippines, with no work and few prospects.

Leyland PR Director John Pola put forward a plan to bring 1,000 of these workers to Australia to be employed in the Leyland factory, saying that because of their skills the Filipinos would “help to relieve some of the malaise in the motor industry. Because of their cultural background and the similarity of their lifestyle with our own, they will make wonderful citizens”.

The programme revolved around a successful pilot of 35 workers, which was agreed to by Australian Prime Minister Gough Whitlam, who made the announcement during a speech at the University of the Philippines. However, there was no mention of the additional 965 Filipino workers to follow.

According to Peter North; “Philippine personality, Junie Morosi, helped organise the scheme which John Pola put to Prime Minister Whitlam, but then there was huge political turmoil about Morosi’s alleged affair with Cabinet Minister Jim Cairns, and the Prime Minister vetoed the plan!”

However, the alleged affair between Cairns and Morosi, to which Cairns finally admitted only recently, did not play any part in the programme being cancelled, as the first hints of a scandal only appeared on 5 December 1974 – long after the decision to close Waterloo had been made.

ACTU President Bob Hawke was reported by The Canberra Times on 12 February 1974 as saying the unions would not oppose the initial batch of 35 Filipino workers. “But Mr Hawke said that approval rested upon qualified Australians going to the Philippines to check on the Filipinos’ trade qualifications”, the paper reported.

It is more likely that the scheme died a natural death once the fate of the Waterloo factory had been decided, which, according to North, was taking place in the UK at about the same time.

Later newspaper reports said that unions were strongly opposed to the Filipino workers scheme. It may be that the unions objected once they were aware that almost a further 1,000 Filipinos were to be brought in, and it was their pressure on the Government that saw the scheme dropped.

Buyer Protection Plan

There is no doubt that many cars being produced by Leyland during the later part of the 1960s and the early ’70s were sub-standard. Apart from new model teething problems, which happen with most car brands, shoddy workmanship and some design flaws were responsible for many problems experienced by customers.

Again, though, Leyland was not alone in this. The problem was so bad at times in this period that the perception among many buyers of Australian cars was that the manufacturers, in general, weren’t interested in looking after the customer; particularly when something went wrong with their car.

It even resulted in a question to parliament about the legality of the existing warranties being offered by car companies.

In early 1972 the Australian Automobile Association wrote to the Commonwealth Attorney-General’s Department requesting an investigation into the conditions laid down in warranties for new vehicles. The AAA said some warranties precluded the protection of the common law to purchasers.

All four major companies denied their warranties included very harsh conditions, but criticism in the media brought much negative publicity.

A survey by the AAA of 3,500 used cars, of sixteen popular models, found that every car tested had defects that could affect safety or cost the motorist money.

The Canberra Times reported that; “Leyland cars generally came off better in the survey than their Big Three counterparts, with Ford’s Escorts and Cortinas falling down badly in several areas.”

The resultant bad publicity and consumer backlash led to Ford, Chrysler and Leyland completely revising their new car warranties in February 1973. Holden believed its warranty was already satisfactory.

Leyland actually fared better than its competitors in the public eye, thanks to the substantially positive response to the launch of its Buyer Protection Plan, which put an emphasis on an 88-word plain-English statement of purpose. The Plan had been devised by Marketing Manager Max Hamilton, and launched by Peter North amid great fanfare at a meeting of all staff and employees at the Waterloo factory.

“It was a way to break the cycle of what people thought of warranties generally, with all manufacturers”, North explained. “Essentially, change the attitude of the workforce, change the public attitude towards warranties generally, and change the public attitude towards our bad reputation about how much warranty work you had to put up with – wrap it all up in one package, for not much more cost than running a normal warranty programme.”

The Buyer Protection Plan was an important element in gaining consumer and dealer confidence in Leyland prior to the launch of the P76, which was supposed to take place in May, and proved successful.

That month saw Leyland’s market share in the passenger car market rise to 8% - the highest level in over two years.

The Steel Crisis

Another problem facing car companies was the supply of steel. After the boom period of the Second World War and the rebuilding and expansion programmes globally, came a drop in demand and a glut of supply of steel, following the oil crisis. Prices dropped drastically, forcing many steel producers out of business. Hardest hit areas were the American “rust belt”, the British Midlands and Germany’s Rhur Valley.

The Canberra Times reported on 5 June 1973 that steel and other component shortages had meant a delay in the release of the P76 by about three weeks.

Ford and Holden also reported poor supply of steel, Ford admitting it had tried unsuccessfully to source steel from overseas.

Ironically, while BHP was unable to supply sufficient quantities of the correct grade of steel for local car manufacturers, it was making record profits on overseas sales of pig-iron, steel ingots and slabs.

BHP’s profit from steel exports for 1971-’72 was reported to be $22 million and the following year this rose to $55 million – in the seven months to January!

“The bald figures would indicate that BHP is exporting at the expense of local consumers who have been told certain grades of steel and certain products are in short supply”, The Canberra Times said.


Although the steel supply situation improved after January, the supply of new cars continued to be held up by industrial action.

The early 1970s was a time of terrible industrial unrest as unions of just about every persuasion fought for higher wages and improved conditions, in many cases bringing industry to its knees.

If you would like to read the rest of this story, grab a copy of the magazine from your local newsagent (in Australia) or subscribe today – or download the digital version

The BMC Experience Issue 11. Oct-Dec 2014 Magazine


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