Lord Robens on the rise of Lord Stokes
The Leyland Papers. Graham Turner (Eyre and Spottiswoode £2.75)
I picked up this book with the feeling that it was perhaps just another one of those business histories, very often only modestly interesting and then only if you happen to know the central characters' business histories which in the main are fairly boring. I finally put it down having read it to the end without a pause, feeling as though I had had a ringside seat at the most exciting combination of a boxing and all-in wrestling match that had ever been staged. No young, enterprising, ambitious man in the ranks of middle management anxious to succeed in business can afford to miss it, and I suspect it will make more than interesting reading to the leaders of the trade unions in the motor car industry.
It is the story of thwarted ambitions and industrial savagery, of kindly and expert intervention; the story of a human catalyst of all that is good and bad in the tough jungle of the business world, of political intervention, of secret meetings and corridor discussions that finally gave birth to the second largest motor manufacturer outside the United States and the fifth largest non-nationalised company in the United Kingdom. The British Leyland Motor Corporation controls 40 per cent of home car sales and 35 per cent of the truck market, and at its head is the Leyland apprentice of the 1930s, son of the. Plymouth transport manager, Peer of the Realm, Lord Stokes.
Although this is the story of a merger, it is really an oblique study of Donald Stokes, the man who made his name as one of Britain's greatest salesmen: 620 buses to Cuba with the US looking on with a somewhat wry face. A somewhat unorthodox deal as Leyland was paid out of the bus fares and put men into the Cuban depots to collect the money. It is said that Stokes overheard a rumour in an aeroplane that the Cubans might be wanting buses and he was after it like a shot. In the year the war ended, Stokes was serving on the staff of the Allied Forces in Italy, his rank, lieutenant-colonel, and he was asked by Henry Spurrier, then head of Leylands, to write a paper on the way Leyland should organise its export business after the war. It was a document that spelled out immediately the qualities which Donald Stokes possessed. He recommended a simple organisation for the export department with one man answering directly to the directors. His business acumen took him to the heart of the export potential, which was to look to the sterling area and to countries with large sterling balances for its markets. He foresaw that the European countries would soon be producing vehicles for themselves once again, and so the emphasis had to be laid upon the Middle East and South America. In 1946 he was given the job of running the new export department and decided to exclude Leyland's export drive from countries which had their own manufacturing facilities, directing his efforts to the markets of the British Empire where there was no indigenous competition and where there were tariff
preferences. This did not however prevent some infiltration on the fringe of the big European markets. We can now read on from there. Stokes has been rarely out of the newspapers since that time, and television had made his face a familiar one to millions. His rise to the top of British Leyland is not meteoric, but the result of hard battling, long hours, a supreme confidence in himself and a certain determination to be there.
For the United Kingdom the establishment of the mammoth vehicle producer gives Britain the opportunity of coming out on top in this highly competitive field. The success of British Leyland will have its repercussions on the whole of the country's economy. Its success will reflect itself in the success of the British Steel Corporation, which depends so much upon the car industry for its sales of sheet steel. The vast number of suppliers are impotent if the giant has no appetite; the vehicle industry has become the nerve centre of the British economy, and today after nearly seventy years of motor vehicle production by a small host of manufacturers there is now only one, and Donald Stokes is the boss. Not only the shareholders but the whole nation should pray that he succeeds in his mammoth task.
Rationalisation of the motor car industry is not a new idea by any means. The advantage of size was recognised as far back as 1929 when Lord Ashfield, who was the Chairman of the Underground Electric Railway Company, had a subsidiary, Associated Equipment Company, which built virtually the whole of London's buses and was Leylands chief competitor. He suggested the creation of a holding company which would acquire the shares of Leyland and AEC and ultimately take over other truck and bus companies. This gambit however did not come off and the next attempt to produce a grand design was in 1945 when the chief executives of Albion, AEC, Dennis, Leyland and Thorneycroft met in the October of that year to talk about a fusion of their companies. This attempt, too, failed, and the companies continued to go their separate ways. The 1950s however proved to be a decade of talks and counter talks, in which the subsequently ill-fated RollsRoyce was involved and this book reveals with startling reality the paucity of thinking and inability to move with the times of some of the then greatest names in motor car manufacture. Most of them appeared to consider themselves prima donnas, not to be challenged; there was an obvious paucity of forward thinking and as for succession, this was the last thing to be considered.
Reading this book, one wonders how the motor car industry survived at all. MainlY I suppose it was due to the increasingly affluent society which turned to the ownership of a motor car. However badly a company was managed, it survived, for a while. Mr Turner deals choicely with this theme as a lead up to the most dramatic industrial story that can possibly have been written — the events that led up to the fusion of interests of Leyland and BMH. The story cannot be precis'd: it must be read not once but twice, to be able to grasp the whole drama. Meetings with the Minister of Technology, the Prime Minister at Chequers and elsewhere, meetings in hotel rooms and flats in Belgravia and the West End, meetings of groups of the same people in varying permutations, plus the intervention of the IRC, and the genial Lord Kearton, then chairman of that body, doing his utmost to calm down the angry feelings and to provide a calmer, happier atmosphere in which a friendly merger Might take place rather than a fight which would accompany a take-over bid. There are all the ingredients of high drama, with men fighting for their own positions and Ultimately Joe Edwards, formerly managing director of BMC, as he finally severed his connection with British Leyland, saying to Stokes as he bade him farewell: " It's all yours now, Donald, the bloody lot."
Then the high drama at the London Clinic where Sir George Harriman in a state of semi-consciousness, deeply distressed, signed the letter in which he agreed to " vacate all offices and appointments in the group of companies on or after November 1st, 1968." The nurse insisted that the bearers of the Missive should only stay for a few minutes; that's all it took. One of the bearers of the letter was Joe Edwards. At one stage when the merger had seemed set, It nearly all came to pieces again. Ronald Lucas, formerly finance director of BMC In the corridor outside the room of Donald Stokes, was asked by Mr Plane, a Leyland director, about how BMH had arrived at their profit forecast. Their discussions became animated and other directors Joined the two and the group moved into Stokes's room, and what they heard disturbed them greatly. Stokes heard a full account of this conversation from Mr Fogg, who was present, as they were driving to Euston Station on their way to a prize-giving ceremony at Leyland. What Stokes heard made him turn the car round and gather as many colleagues as he could for discussion, with a strong inclination on Stokes's part to call the whole thing off.
What of the shareholders? Until they read The Ley/and Papers they won't have had the faintest idea as to what was happening, or finally happened, to the Company. At the Leyland shareholders' Meeting not a single shareholder asked Whether in agreeing to the merger they were doing the right thing. One director Subsequently said that it was a blistering indictment of the shareholders.
All in all, no one seems to have come out of the in-fighting with any degree of credit. But there are many lessons to be learned from what is really a rather sordid story of men and their ambitions, their Personal likes and dislikes; and many consciences and minds of the participants must be bruised as a result of the encounter. With hindsight, I have no doubt, the chief contestants would have done it all differently, and that is where this book is going to be of inestimable value to the up and coming young men in management. The title of the book could easily have been ' How Not to Arrange a Merger.'
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