The Formation of BMC

BMC had a lot of potential to showcase British industry, but the merger would never work properly while old rivalries were allowed to remain.

The formation of BMC in 1952 took most people by surprise, not the least because of the intense rivalry that had existed between the Nuffield Organisation and Austin Motor Company. However, this was only one in a series of mergers and take-overs that took place across the British motor industry, and talks for a merger between these two companies had taken place numerous times previously, as far back as 1924.

At that time, the Wolseley Motor Company was in financial trouble and its owners, Vickers, wanted to sell it off. It was suggested by Vickers board member Dudley Docker that it should be part of a joint company formed by a merger of Wolseley, Austin and Morris. The Austin and Wolseley boards were reportedly in favour but William Morris rejected the idea, claiming that such a large company would be unwieldy and “might tend to strangle itself”.

In the early days William Morris and Herbert Austin had apparently got along quite amicably, partly because by the mid-1920s both had been through and overcome tough times – Morris with near bankruptcy in 1904, when his fledgling bicycle manufacturing concern nearly failed, and Austin in 1921 – as described in more detail on p46.

By 1926, Morris Motors was in a strong financial position, while The Austin was still recovering – due mainly to the success of the Austin 7, released only four years previously.

The boards of both companies now considered a merger would be of benefit to each of them. While talks were ongoing, though, William Morris bought the now bankrupt Wolseley company from its receivers in 1927, by outbidding Herbert Austin’s offer. 

Austin was reportedly furious and stopped the merger talks. His significant emotive ties with the Wolseley Motor Company, as detailed in Issue 1, had played a part in his bid for the failed company, and he was taken by surprise by Morris’ move.

In 1928 Morris Motors released the 8hp Morris Minor, which was based heavily on an already well-advanced Wolseley design and was a direct competitor to the Austin 7.

Austin and Morris became fierce rivals, with each trying to out-do the other in all segments of the market. But, William Morris and Herbert Austin had very different views on managing their companies, and the direction in which to build them.

Morris had pioneered Henry Ford’s production line methods in England, but was concerned that suppliers of essential parts would not be able to keep up with his needs in car production, so set out to buy up as many supplier companies as he could. 

This included Hollick and Pratt body builders, Hotchkiss engines, Osberton Radiators, Skinners Union Carburettors and others. 

All were renamed Morris companies, except SU Carburettors – ie: Morris Motor Bodies, Morris Engines, Morris Radiators, etc.

Austin was also concerned about parts coming from outside suppliers but, with his engineering background, more from the viewpoint of maintaining consistency in quality. Following his experiences in building up the Wolseley shearing and automotive businesses, he believed the best protection was to keep everything in-house. To this end he ensured the Longbridge site was large enough for considerable expansion and built the factory up to be a huge enterprise, including its own foundry, with almost every part for his cars produced on-site.

Austin and Morris had both been knighted for their service during the war. Austin’s son had been killed in France during the war, and he had two daughters, so was keen to maintain his personal wealth. Morris, on the other hand, lived a fairly austere existence, had no children and was well known for his philanthropy – donating millions of pounds from his personal fortune to charity. 

As a result, he was made a Baron in 1934, becoming Baron (Lord) Nuffield.

In 1938 Morris personally bought the Riley Motor Company, which had gone into bankruptcy, and then sold it to his own company Morris Motors. He had sold Wolseley, MG, SU and his other companies to Morris Motors in 1935, and in 1938 re-established the company as the Nuffield Organisation.

The rivalry between Britain’s two motoring giants only increased with the move of Leonard Lord from Morris Motors to The Austin.

Lord had worked in a munitions factory for the First World War, and afterwards in the Daimler engine works. In 1923 he went to work for Morris Motors in a management role, on rationalising the production process.

When William Morris bought the Wolseley Motor Company in 1927, Lord was installed as General Manager, where he modernised the production line, revitalised the company and turned it into a significant profit-maker. 

In 1932 he became General Manager of Morris Motors, but disputes over his share of profits, particularly after the sale of all Morris’ private companies to Morris Motors, resulted in him being sacked by William Morris (some reports say he quit) in 1937.

Lord was incensed, and reportedly vowed to one day return to Cowley and “tear the place apart, brick by bloody brick”. 

At that time, Herbert Austin, by now in his seventies, was looking for someone to take over his company. Although it has often been reported that Lord immediately defected to The Austin, in fact there was a break of about a year before he stepped into an almost identical role to that which he had held at Morris Motors. His defection to The Austin in February 1938 was even more galling for Morris, though, when Lord’s protégés George Harriman and Joe Edwards followed him to Birmingham.

During the Second World War, this inter-company rivalry seems to have been put on hold, possibly at the insistence of the British Government, as the two companies worked tirelessly, sometimes on the same military equipment, for the war effort.

Herbert Austin, who had been made a Baron in 1936, died in 1941 from a heart-attack while ill with pneumonia. Leonard Lord took over as joint Chairman, and became sole Chairman of the Austin board and Managing Director in 1946.

The release of the Morris Minor in October 1948 caught The Austin off-guard, as it had nothing comparable that was ready for production. Talks between Lord and Morris late in the same year, on the two companies sharing information or even merging, continued until mid-1949 without resolution. 

On the end of these talks, Lord told Morris that Austin would proceed with plans to build a car to compete directly with the Morris Minor.

However, both companies were struggling to make headway in the US market, with the notable exception of MG, and further talks were instigated in October 1950 by Lord Nuffield’s private secretary, Charles Kingerlee – who numbered Leonard Lord among his closest friends. 

These talks again proved fruitless, with Morris refusing to negotiate with Lord. In response, Lord said that Austin would go ahead with its planned release of the A30, which was previewed at the Earls Court Motor Show in October 1951, powered by the new A-Series engine – with production commencing in May 1952.

If you would like to read the rest of this story, order your copy of Issue 2 of The BMC Experience through this website, or subscribe today.


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