Blow No.1
Due to the number of leapfrogging wildcat and official strikes over pay and conditions, Sir Michael Edwards, brought in by Maggie Thatcher to attempt to sort out the BL quagmire, declared that same pay for the same job throughout BL was to be implemented. What he didn’t publicly add was ‘come what may’. Effectively this meant 'everyone' ascended to Jaguar pay levels. However, this wasn't good news for Rearsby from a business viewpoint. Rearsby, in its rural location, had paid agricultural wages + 30%. Where did a lot of local people want to work? Rearsby. Simple.
In 1979 alone, I increased wages by 65% and about half as much in the following year. Significantly higher than inflation - it plunged the company into losses.Only Ford and GM contributed to part of the resulting increased costs. The BL OEMs, Austin-Rover, Rover-Triumph etc. told us to get lost! Yet we encountered these increased costs to reduce strikes within the BL vehicle OEMs! Teamwork - NOT.
Blow No.2
The SU-Butec companies were a disparate grouping, with no connection, empathy, or to use the then in word – synergy. HQ were always seeking such, trying to make a whole out of ill-fitting, ill-matched parts.
If you’ve heard this before ‘we're from head office, we're here to help you’, beware. You are heading for unproductive and unrewarding burdens that detract and fail to contribute to success, or to the bottom line. I always had the impression head office staff had more time than productive duties to fulfill. So they looked for areas to meddle in the front line businesses. Mainly seeking information in order that they may look for areas of ‘synergy’. Of course seeking, collating and presenting such information was a non- productive activity for the front line trading businesses. We were measured on profit. The parent of Rearsby was undoubtedly a burden.
Being part of BL was an obstacle to gaining sales to vehicle customers outside the BL family. Inside the ‘family’ there was a deal of ‘corporate games’ being played out. Cost+ pricing, artificially low pricing for affiliated component divisions of constituent vehicle producers. ‘Wooden dollars’ prevalent. Past loyalty issues and personal relationships were coming into play. Prejudices were rife and political games being played out; management scores being settled and so forth. Deals behind closed doors.
Rearsby, to its credit, kept away from these complexities. We always walked through the front door. That is, we treated our customers and ourselves as an ‘arm's length’ supplier, queuing up with all the other independent suppliers, asking for no favourable treatment as a result of the BL ownership when selling to BL OEMs. In this case Austin-Morris, Rover-Triumph, Leyland Truck, Jaguar Cars and to a limited extent Unipart.
In addition, we sold to Ford, Chrysler UK and G.M. approximately 30% of sales were to these OEMs. This was of course pure arm's length trading. It possessed the simplicity that all our endeavors to quote for business, were on the same financial footing for both BL and external OEMs. We could negotiate with a sound basis and confidence with both and there was no cross-subsidy. This was ingrained and vital to our integrity in dealing with both customer groups. During one period, we had a full side elevation drawing of the Ford Sierra body shell, something Austin-Morris would have loved to examine. We kept our customer confidence. This philosophy was ethical and fair and had the advantage of giving us the best chance of being competitive with those European suppliers we were up against. Providing we kept our costs down and efficiencies up, from design through to dispatch.
My SU-Butec boss who had a background in marketing, unbeknown to me, organised a presentation to senior Ford Executives in their Dearborn worldwide headquarters. Of the eight SU-Butec (a crib of GM's ‘AC-Delco’ - dear oh dear, my oh my IFV) constituent BL companies: Llanelli Radiators, SU Carburetors/Fuel Systems, Oxford Exhausts, Alford & Alder, Butec Electrics, Beans Engineering and Rearsby Components, only Rearsby had achieved significant ‘external sales" and direct export sales. That is to say sales to non-BL OEMs and sales to Ford's German, Belgium and Spanish plants and GM's Opel in Germany. This result was achieved in spite of constant criticism from the marketing man and his HQ team for ‘Rearsby having no robust products’.
Prior to the doubling of wages, Rearsby was the most profitable of the eight companies. I rejected my boss’s poor judgment as being uniformed nonsense. Every vehicle needed the products Rearsby manufactured and we were amongst the best in our sector. Rearsby competed across Europe and had interlinking goals. We also had a strategy to get there and a plan to achieve our goals. Conformance to miss-guided HQ thinking wasn't one of the goals.
It was dangerous to our prosperity and to Rearsby’s future survival.
The SU-Butec HQ team, unbeknownst to me, presented to the assembled Ford Detroit Execs.
Within hours of that presentation Ford of Europe’s purchasing executives were contacting us asking “What the hell have you been saying to Ford Corporate HQ?” Our response was, of course “We know nothing!”
Later one of the attendees at the Detroit presentation revealed what had transpired. My SU-Butec MD was intent upon attempting to sell his 'robust' products to Ford, North America (namely exhausts and radiators). In my view, products which are largely encapsulated air, bulky products which are expensive to ship across the Atlantic and through Continental North America. My boss thought his trump card was to announce at the end, that Ford of Europe already relied upon one of his companies for 60% of their vehicle output.
At this point, the Senior Vice President of Supply, Northern Hemisphere (no less) interjected, "Explain this to me".
The hapless MD explained one of his companies, which he didn't outline in his earlier presentation, was a company called Rearsby. They made metal parts. In fact, they supplied 50% - 60% of Ford of Europe's handbrake levers. "I see and this Rearsby is part of SU-Butec and SU-Butec is part of BL, and I would know BL better as BL?"
Within weeks Rearsby lost £1m sales out of £8m. A real body blow. The Ford ‘Red Book’ (procedure bible) stated, "Thou shalt not deal with competitors or their subsidiaries, unless there is an overwhelming technical reason to do so". Ford of Europe were aware of this, but traded with and trusted Rearsby because we had an unblemished record of supply with them, were highly competitive and a quality supplier. This worked, provided both Ford of Europe and Rearsby kept well below the horizon. Plus, our biggest competitor, Schawaeckter (Edschwar) of West Germany, had previously suffered a design/production technical issue which had resulted in thousands of defective handbrakes on the 'Bobcat' (Fiesta).
Rearsby was asked to double production overnight and maintain Fiesta vehicle production across Europe at their plants in Germany, Belgium, Spain and UK. For a period we supplied Edschwar with component parts at Ford’s request. Ford was appreciative of Rearsby's response and performance having, up until the Detroit gaff, remained fiercely loyal to Rearsby, on the unwritten understanding we were always competitive and remained under the radar. My boss destroyed years of hard won gains.
Help like that Rearsby could do without.
George Townhill, Senior Buyer of the car division, was an immaculately attired old colonial type, a Ford ‘lifer’ and like most Ford personnel I met over 40, counting down the days to his retirement, concurrently doing his utmost to maximise his final salary pension. He wasn't going to challenge Detroit. In his case I made great use of Betty Harvey, my secretary, otherwise known as 'Queen Bee'. Betty was over 60 years old and women in BL were supposed to retire age 60. Betty was a ‘posh old bird’ (as I called her) from Surrey while I was a 32 year old whippersnapper when I arrived. George, I could see, was very susceptible to feminine charm and Betty possessed it in spades. I would say to Betty…
"Betty, George is arriving this morning. Turn on the BHBS."
"Excuse me? BHBS?"
"Betty Harvey Bull S**t. Trowel it on” and she did!
Some nasty s**t wrote to BL corporate personnel, reporting the fact I employed Betty aged 63 and most regrettably I was forced to retire her. She didn't want to go and I didn't want to lose her. Especially after 'forcing' her to upgrade from an old Imperial 78 typewriter to an IBM golf-ball electric model. Oh the tantrums I had to endure. Equally I had to retire Charlie Robertson, our best new ideas man aged 76 or was it 79? We gave them both a great send off. Myself and about 20 others ended up at Charlie's house in the early hours. Charlie, in good ‘spirits’, declared he had a good whiskey upstairs. On his way back down, he slipped and tumbled rolling from top to bottom. He stood up, his precious bottle still in hand - not a scratch. Top man!
The secret that poor old George Townhill lived in fear of being discovered, was that his wife (I imagine she was the prototype of Hyacinth Bouquet) refused to drive anything other than a small car with an automatic gearbox. Tragically for George, Ford made no such product! His guilty secret was that his wife drove an Austin Mini automotive! A capital offence within Ford management.
There was some minor good news. Whilst the Ford car division abandoned us tout suite, the Ford commercial vehicle division (Langley) did not.
The CV division, especially Langley, was independently minded and far less ‘corporate’ and political internally than the car division. In particular, Eddie Hymas Senior Buyer, took the view that Rearsby was a good supplier and he saw no reason to change. Top man. He learned to ski in his late 50s. His wife was not interested, so he did it all on his own. It was a measure of the man.
Blow No.3
This was the least of the three. Rearsby had for decades run a Payment by Results (PBR) payment scheme for direct production workers. The more you produced, the greater the rewards in the pay packet. So did most of the constituent companies that composed BL. Many such piecework systems were corrupt; over-booking was rife and controls were lax. Ford by contrast ran a Standard Daywork System of payment. There arose varying levels of pay, as a result, across BL. Controls of piecework bookings at Rearsby were, by contrast, reasonable.
Across the vehicle OEMs, Standard Daywork was declared to be the corporate answer. There ensued an ‘orgy’ of recruitment of so-called ‘Productivity Engineers’. Essentially time study engineers. Longbridge, while I was there, recruited hundreds. Of course the quality recruited varied from the very good and conscientious, to those at the other end of the scale – with too many at the latter end. There was also an ‘orgy’ of recruiting Ford management. They know best.
As part of the effort to gain control of a runaway piecework system in many of the car producers, the BL Board issued an edict to convert to Standard Daywork, throughout. I first took Longbridge North and South Works through the transition to SDW. Later I did the same at Alford and Alder (a great pity as it was a pioneer on Group Technology and in Cellular manufacture adopted pretty well world-wide).
Rearsby was next. Now, by this stage, I was probably the most experienced in BL at this transition. I had not only been through it twice, but had also visited Dagenham to understand how Ford had made SDW a success. The critical issue lay around first line supervision (the foreman) and his support/reporting systems. Secondly around the established system, culture and ingrained practices built up over years of practice.
All the skills in a PBR environment were built upon years of running such a system particularly amongst management and those colleagues on the shop floor. Moving from PBR to SDW is a 180 deg shift like chalk and cheese. Very different skills, controls and attitudes are required. At best, the transition was going to be expensive and painful, for all concerned. The potential and real damage is so easily done; productivity, followed quickly by increased costs. Especially if the transition is rapid, as was the case throughout BL.
Ford had been operating SDW for decades. Their controls, systems, supervision, shop floor and attitudes were all aligned to getting the best from SDW. In short, they were good at it. But simply transplanting Ford management into a non-Ford environment was totally underestimated. The Ford in-depth systems and procedures were absent. Above all, the BL many varying cultures ‘the way WE do things around here’ disciplines, measurement and controls were totally different to Ford's centralised one-size-fits-all, take-it-or-leave approach.
BL were going through and enduring pain of change.
I had avoided the transition at Rearsby for as long as I could. I had trained Longbridge supervision and learned a lot through that phase and gained even more at Alford and Alder.
I addressed all 830 Rearsby personnel. I emphasised…
“No one owed any of us a living. No one. If we were to lose productivity it will do us all harm. Costs will rise. Orders and then jobs will fall - like night follows day. It is essential pre and post SDW productivity remains the same. A laudable, understandable aim. In my experience, a minority of those present will test the system. They will reduce effort as they are now paid (more) ‘work or play’. And see if we notice.
Well we won't see it immediately. But those of you working around that person will. If we don't do something about it, all my words now, will become history and it becomes a matter of FAIRNESS. If he/she gets away with it, why should I continue working at the past incentive scheme pace?” That is a fair question. My promise to you all, we will notice and we will act”.
In the first year, we dismissed 35 recalcitrant’s and endured 35 industrial tribunals, winning every one.
Nevertheless, like a Chinese water torture, measured productivity fell by circa 5%. Not promising for the future.
The result of all three successive blows?
The previously profitable Rearsby (High point 1977 £1.2m profit before interest and tax on sales of £7m) plunged into losses and fast.
Sympathy - there was none from any quarter and from BL in particular.
To be fair, as reported earlier, only Ford & GM responded by aiding us through this crisis via small, but above inflation price increases. We were competitive nevertheless thereafter. Austin-Morris, Rover, Land Rover were all totally unsympathetic. Totally.
I said to my boss, these enforced changes on Rearsby were plunging a good business into losses and out of business. 830 good people. 830 people who had never joined in the strikes.
"Ivor, these changes, including the across BL parity wage and salary increases will result in 20,000 job losses throughout BL. Your 850 people, it just adds to the score"
I was assured, to be unconcerned, as I was a rising talent and another role awaited me within BL.