Crisis – The Closure of Leyland’s Waterloo factory: Part 3

The closure of Leyland Australia’s main plant in Sydney is often explained as part of a global money-grab by the financially-strapped UK parent company, with the closure of factories around the world. 

There was massive union trouble in the UK in the early 1970s; the on-going strikes by workers in the car factories and at suppliers, compounded by the general drop in productivity and build quality in many of the factories. This was all overshadowed by the coal miners’ strikes of 1972 and 1973, which crippled industry and caused a government-imposed three-day working week. 

At the same time, British Leyland was suffering from plummeting sales due to quality issues in most of its new products, the poor reception from the newly-introduced Allegro, the outdated designs of many of its existing models, a general shift by the market toward imported cars, the oil crisis and a restrictive credit squeeze announced in November 1973.

Just as things looked like they might improve, a month-long strike at Triumph in that same month cost BL around £1 million per day.

The end result was a massive loss by British Leyland.  

In a speech to the BMC-Leyland Australia Heritage Group in 2003, and restated in an interview for The Mini Experience five years later, former Managing Director Peter North said; “The BLMC UK board, faced with a negative cash flow of three quarters of a billion pounds (£750 million) sterling as a result of the five-month miners’ strike, decided to close all manufacturing plants outside the UK and sell the assets to help their parlous cash position. Australia – the most property-rich – was to be first, followed by the plants in Spain, Italy and South Africa.”

In his book British Leyland: Chronicle of a Car Crash 1968-1978, Chris Cowin puts the figure substantially lower, at around £39.4 million, but no less destructive. “…BLMC announced a loss for the first half of the 1973/74 financial year of £16.6 million, compared to a profit of £22.8 million in the same period before…The end of the 1973/74 financial year in September saw a loss of £24 million recorded.”

Many people felt that 1975 could be a much better year. The Triumph TR7, to be launched in November 1974, was seen as the “great white hope” of the company, alongside the 18/22 Series (March 1975), Jaguar XJS (September) and Rover SD1 (eventually launched in 1976).

Leyland’s board approached the banks to extend their loans, without success, and it would only be a matter of time before the company collapsed. Leyland needed cash and it needed it fast, but would the closure of overseas factories provide enough money in a short-enough time? 

The simple answer is no, and British Leyland fell into state-ownership, with the UK Government guaranteeing the company and appointing new management in April 1975.

At this time Leyland had CKD assembly plants in about 15 countries, with varying degrees of ownership, from full to none, but had full production plants in only seven. Of these, Chile was independent (we will have a story on the EMSSA plant in an upcoming issue), while Australia, Italy, Belgium and Spain faced a bleak future. Only South Africa would come through the early 1970s relatively unscathed. 

Following the Nationalisation of British Leyland in the UK in 1975, former deputy chairman of the company, one time Leyland truck distributor for South Africa, and later non-executive Chairman for BLMC in Australia, Jack Plane, was quoted in a South African Newspaper. “Leyland UK has a very poor record of operating its own overseas assembly plants. The group has either sold or closed down nearly all of them recently…and would welcome, I’m sure, any plan that got rid of a continual loss maker”, he said.

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The BMC Experience Issue 13. Apr-Jun 2015 Magazine

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