5 MARCH 1977, Page 3

Let the bleeder bleed

With only five British Leyland models still in production there is no doubt that—yet again--the company faces a grave crisis. Despite every financial incentive offered under the Ryder plan (though it could well be argued that the technical aspect of the reorganisation Lord Ryder recommended frustrates rather than encourages exportaimed productivity) there seems no way in which the Leyland management can ensure stable production over !Ong periods. One could be forgiven, indeed, for wondering what Leyland's workers have against making motor ears: the time has come round again, as even ministers now seem to realise, to consider whether any serious longterm interest is served by the preservation of the company. Essentially, the Ryder plan was to provide the finance required for a ten-year investment programme: of the 100 million provided by Parliament Leyland has already taken up £25m, and it now seems that the company will haye to spend large sums, not in investment in forward Production, but on keeping itself afloat until some settle'Tient is reached with the toolmakers. And unless the toolmakers back down from their demand for the restoration of differentials, everybody must be aware that the CPtnPany will remain just as vulnerable to such disruptions thatfor the indefinite future. Since there is no indication those working at Leyland feel any sense of responsitowards the company, the social contract or the Government's industrial strategy, the likelihood must be that disruptions will be just as frequent in the future as theY have been in the past. The central question must therefore be whether there is anY method of turning British Leyland into the inter

ly

national .. competitive car manufacturing company of Lord Ryder's dreams and—as part of this—of keeping its workforce in some state of reasonable discipline. It now sZe.nts clear that, whatever the foreign demand for i'ntish cars, and whether or not any of the component carts of the company are viable on their own, a strategy ased both on providing extraordinarily generous sums in the way of government investment and on the imposition of the kind of incomes policy the social contract allows simply cannot work. On the other hand there is no evidence whatever that even lifting the restraints of the incomes policy, so as to end the frustration of the more skilled members of the workforce would provide the required incentives to work. As long as the workers believe—and, given the past they have every reason to believe—that there is a bottomless well of public money to see them through any difficulties they create they will not produce motor cars with the required efficiency and speed. It should be said, in any event, that the restoration of competition in wages in one company would destroy the basis of the Government's whole economic strategy, which is already, to put it mildly, in some disrepair.

It would not quite be true to say that the Government has only itself to blame for the mess it finds itself in, but .neither would it be grossly unfair. This Government, even more than its several predecessors (which is saying something), has encouraged the belief that it will always be on hand to pick up the pieces when anything goes drastically wrong. Of course, all modern governments see part of their role as intervening to avert industrial and social disaster, but the consequence of continual intervention is that industry—management as well as unions. loses all contact with reality, all grasp of the simple principle of cause and effect. Sooner or later this elementary lesson must be relearnt. It may seem hard to talk of making an example, but it may as well be made now. British Leyland is an organisation signally undeserving of public sympathy, let alone endless public subsidy. It has been badly managed, has been crippled by a troublesome, spoilt workforce, and has even failed to maintain a respectable share of the domestic car market. Unless there is a dramatic-and immediate reversal of this trend, Mr Kaufman's warning should become reality. British Leyland has enjoyed too many expensive transfusions from the rest of the nation. Now let the bleeder bleed.