BLMC was created on 17 January 1968 by the merger of British Motor Holdings (BMH) and Leyland Motor Corporation (LMC), encouraged by Tony Benn as chairman of the Industrial Reorganisation Committee created by the first Wilson Government. At the time, LMC was a successful manufacturer, while 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 100 different companies. The new corporation was arranged into seven divisions under its new chairman, Sir Donald Stokes (formerly the chairman of LMC).
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.
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 Britain during the 1970s, although 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, earned a similarly unwanted reputation over its 10-year production life.
The company became an infamous monument to the industrial turmoil that plagued Britain in the 1970s. Industrial action instigated by militant shop stewards 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. Both Ford and General Motors had mitigated against this years before by merging their previously separate British and German subsidiaries and product lines (Ford had created Ford of Europe, whilst GM nurtured closer collaboration between Vauxhall Motors 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, a title they hold to the present day . 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 – by the end of the 1970s, the British government had introduced protectionist measures in the form of import quotas on Japanese manufacturers in order to protect the ailing domestic producers (both BL and Chrysler Europe), which it was helping to sustain.
At its peak, BLMC owned almost 40 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 - workers at Cowley for example still perceived themselves as "Morris" employees and still, therefore they refused to assemble cars badged as Austins, and the converse was true at the former Austin plant at Longbridge. The upshot was that both plants were producing badge engineered models of otherwise identical cars so that each 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 in order to compete with one 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 programs.
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 cheaper versions of the 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 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.
The company also wasted many of its scant funds on concepts, like the Rover P8 or P9, 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 which went bankrupt in 1975.
British Leyland 270 tractor fitted with aftermarket loader in the USA.
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. Between 1975 and 1980, these shares were vested in the National Enterprise Board which had responsibility for managing this investment. The company was reorganised into four divisions:
- Leyland Cars – the largest car manufacturer in the UK, employing some 128,000 people at 36 locations, and with a production capacity of one million vehicles per year.
- Leyland Truck and Bus – the largest commercial and passenger vehicle manufacturer in the UK, employing 31,000 people at 12 locations, producing 38,000 trucks, 8,000 buses (including a joint venture with the National Bus Company), and 19,000 tractors per year. The tractors were based on the Nuffield designs, but built in a plant in Bathgate, Scotland.
- Leyland Special Products – the miscellaneous collection of other acquired businesses, itself structured into five sub-divisions:
- Leyland International – responsible for the export of cars, trucks and buses, and responsible for manufacturing plants in Africa, India and Australia, employing 18,000 people
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 million investment of public money in refitting the Longbridge plant for production of the company's "ADO88" (Mini replacement), due for launch in 1979. 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 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 "plughole" 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.
Coventry Climax forklift truck
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 1979, British Leyland Ltd was renamed BL Ltd (later BL plc) and its subsidiary, which acted as a holding company for all the other companies within the group The British Leyland Motor Corporation Ltd, renamed BLMC Ltd.
BL's fortunes took another much-awaited rise in October 1980 with the launch of the Austin Metro (initially named the Mini Metro), a modern three-door hatchback which gave buyers a more modern and practical alternative to the iconic but ageing Mini. This went on to be one of the most popular cars in Britain of the 1980s. Towards the final stages of the Metro's development, BL entered into an alliance with Honda to provide a new mid-range model which would replace the ageing Triumph Dolomite, but would more crucially act as a stop-gap until the Austin Maestro and Montego were ready for launch. This car would emerge as the Triumph Acclaim in 1981, and would be the first of a long line of collaborative models jointly developed between BL and Honda.
A rationalisation of the model ranges also took place around this time. In 1980, British Leyland was still producing four cars in the large family car sector—the Princess 2, Austin Maxi, Morris Marina, and Triumph Dolomite. The Marina became the Ital in August 1980 following a superficial facelift, and a year later the Princess 2 received a major upgrade to become the Austin Ambassador, meaning that the 1982 range had just two competitors in this sector. In April 1984, these cars were discontinued to make way for a single all-new model, the Montego. The Acclaim was replaced in that same year by another Honda-based product, the Rover 200-series.
Edwardes steps down, Jaguar divested and Austin Rover Group
By the end of Michael Edwardes tenure as chairman of BL plc in 1982, the company had been restructured into two distinct parts - the Cars Division (which consisted of Austin-Morris, Rover and Jaguar, and was led by Ray Horrocks) and the Commercial Vehicle Division (which consisted of Land Rover, Leyland Trucks, Leyland Buses and Freight Rover) - whose chief executive was David Andrews. The holding company BL plc was now chaired by Sir Austin Bide in a non executive capacity. Around this time, the BL Cars Ltd division renamed itself Austin Rover Group, shortly before the launch of the Austin Maestro and Ray Horrocks was replaced by Harold Musgrove as its chairman and chief executive. The emergence of the Austin Rover brand effectively put an end to the separate Austin-Morris and Jaguar-Rover-Triumph divisions, since by this time, Jaguar now resided in a separate company called Jaguar Car Holdings and was now led by Sir John Egan, and this was later de-merged from BL completely and privatised in 1984. That same year, with both the Morris Ital and the Triumph Acclaim being discontinued, their respective brands were effectively shelved, leaving only the Austin and Rover marques, whilst Land Rover moved into the Freight Rover Group alongside the light trucks division. After the divestment of Unipart and the van, truck and bus divisions in 1987 (see below), leaving just two subsidiaries - Austin Rover (volume cars) and Land Rover (SUVs) this essentially remained the basic structure of BL and subsequently the Rover Group until the 2000 break-up.
Rover Group sale
In 1986 Graham Day took the helm as chairman and CEO and the third joint Rover-Honda vehicle – the Rover 800-series – was launched which replaced the 10-year-old Rover SD1. Around the same time, BL changed its name to Rover Group and in 1987 the Trucks Division – Leyland Vehicles merged with the Dutch DAF company to form DAF NV, trading as Leyland DAF in the UK and as DAF in the Netherlands. In 1987 the bus business was spun off into a new company called Leyland Bus. This was the result of a management buyout who decided to sell the company to the Bus & Truck division of Volvo in 1988. That same year, the British government controversially tried to re-privatise and sell-off Land Rover, however this plan was later abandoned. 1987 saw the Austin name dropped on the Metro, Maestro and Montego, signalling the end for the historic Austin marque, in a push to focus on the more prestigious (and potentially more profitable) Rover badge. In 1988 the business was sold by the British Government to British Aerospace (BAe), and shortly after shortened its name to just Rover Group. It subsequently sold the business to BMW, which, after initially seeking to retain the whole business, decided to only retain the Cowley operations for Mini production and close the Longbridge plant. Longbridge, along with the Rover and MG marques, was taken on by MG Rover which went into administration in April 2005.
Many of the brands were divested over time and continue to exist on the books of several companies to this day.
Until the 1980s, the Leyland name and logo were seen as a recognised and respected marque across India, the wider subcontinent and parts of Africa in the form of Ashok Leyland, a company formed from the partnership of the Ashok group and British Leyland. However, now the Leyland logo is no longer used and the company has been largely Indian in its owning for over three decades. Now a part of the giant Hinduja Group, Ashok Leyland manufactures buses, trucks, defence vehicles and engines. The company is a leader in the heavy transportation sector within India and has an aggressive expansionary policy. Ironically, since 1987, when the London-based Hinduja Group bought the Indian-based Ashok Leyland company. Today, Ashok-Leyland is pursuing a joint venture with Nissan and through its acquisition of the Czech truck maker, Avia, is entering the European truck market directly. With its purchase, in 2010, of a 25 per cent stake in UK-based bus manufacturer Optare, Ashok Leyland has taken a step closer to reconnecting with its British heritage, as Optare is a direct descendant of Leyland's UK bus-making division.
During the time of British Leyland's transition into Austin Rover during the 1980s, a version of the Rover SD1 was licence built in India as the Standard 2000 from 1985 to 1988, briefly reviving the Standard brand which had been axed in 1968.
British Leyland also provided the technical know-how and the rights to their Leyland 28 BHP tractor for Auto Tractors Limited, a tractor plant in Pratapgarh, Uttar Pradesh. Established in 1981 with state support, ATL only managed to build 2,380 tractors by the time the project was ended in 1990 – less than the planned production for the first two years. The project ended up being taken over by Sipani, who kept producing tractor engines and also a small number of tractors with some modest success.