P.R.V. - House of Commons Debate
Here I reproduce the text verbatim of the House of Commons debate on the 22nd October 1979 referring to the intended closure of Park Royal Vehicles. The text is now in the public domain and is reproduced by grant of the Open Parliament Licence (Contains Parliamentary information licensed under the Open Parliament Licence v1.0.)
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HANSARD 1803–2005 → 1970s → 1979 → October 1979 → 22 October 1979 → Commons Sitting → ORDERS OF THE DAY
HC Deb 22 October 1979 vol 972 cc160-72 160
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
§ 10 p.m.
§ Mr. Laurie Pavitt (Brent, South)
I am sick at heart at the closure of the Park Royal vehicles factory, one of the finest factories in my constituency. It is a factory with which I have had the honour to be associated since I was first elected to this House 20 years ago—[Interruption.]
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
Order. Will hon. Members please leave the Chamber quietly?
§ Mr. Pavitt
Like my hon. Friend the Member for Fife, Central (Mr. Hamilton), I find it nauseating and highly irrelevant that at a time when 630 families in my constituency are to be thrown out of work next June, British Leyland can be interested in backing the horses of Princess Anne's husband and sponsoring something that is entirely irrelevant to the industrial concept underlying British Leyland. It is akin to Nero fiddling while Rome burned, because it seems that we are deciding to back horses rather than to put a viable industrial complex into action.
I have watched the Park Royal vehicles factory decline within a thriving industrial complex of skilled engineering in an area which is now typical of our inner city problems. Park Royal is now a wasteland and a desert of empty factory space and warehousing. This is having a tremendous effect upon my constituency, because one immediately gets a different mix of citizens and this brings local government and social problems. The closure of the Park Royal vehicles factory is a threat to any attempt to try to get Park Royal back to the prosperity that it once enjoyed. The factory is one of the last bastions of skilled labour in my area. For 10 years I have watched it being run down. I used to have a great pride in the fact that I could boast that London buses were made in my area and that they were the best in the world. These were built 30 years ago, but in the last 10 years an erosion has set in until we have seen the final collapse and toppling of the latest bus—the Titan—which is typical of the arrangements that have existed within British Leyland over the last five years.
The Titan is probably one of the best examples of skilled bus building ever to be seen in this country. It cost £13 million to develop. That will go down the drain, because the Titan is going down the drain. I should like to refer to the speech made earlier this year by Sir Michael Edwardes, when he said: The Titan bus, the most advanced double-decker in the world, has attracted more than 500 orders, worth £25 million from passenger transport authorities. London Transport will take the bulk of the buses, which have won awards for human factors' design, particularly to help elderly and infirm people to use buses. All of that effort and labour will now be wasted. I indict the vacillating and indeterminate management of British Leyland as the cause of this failure. I suspect that the death wish was ever present in the Leyland hierarchy, which always concentrated its mind on cars and seemed to know very little about bus building. If small is beautiful, then Leyland has shown that so far as my constituency is concerned, big is absolutely disastrous.
At the centre of this disaster have been years of uncertainty, the consequence of which has been a complete demoralisation of the work force. I have visited the factory about every six months during the last 20 years, and I have watched demoralisation creeping like gangrene through that factory. I was there in April, and the factory was a travesty of what it used to be when I was first elected to this House.
§ Mr. Bob Cryer (Keighley)
I should like to tell my hon. Friend that buses are urgently needed in my part of West Yorkshire. Seventy buses were ordered for 1979 and so far only 15 have been delivered. I am following my hon. Friend's splendid argument extremely well. I just wish that Park Royal could continue to turn out buses for West Yorkshire.
§ Mr. Pavitt
I echo my hon. Friend's request. That is the burden of my speech tonight.
What has happened with this uncertainty? The board first decided to transfer from Park Royal to the Southall factory. This threat was hanging over the Park Royal area from 1975, and it was only last October when this plan was reversed. How can one get confidence within a work force when for four years the whole situation has been that the bus building will move from Willesden to Southall and then one changes the plan and just a year ago closes Southall? Is it any wonder that there has been a lack of confidence in the work force? When I asked for a firm decision from the top man at that time, Mr. Alex Parks, I did not even get the courtesy of a reply.
There is no quicker way of slimming down the fat of the British Leyland empire than a recipe which meant that the work force could be made so discontented that conflict would be inevitable, and that the usual British Leyland alibi—labour troubles—could be made the scapegoat.
I started by mentioning Nero, but I think that probably Machiavelli would be the more appropriate historical candidate for the analogy of what has happened in regard to my buses.
In the recent statement on 10 September about British Leyland, Sir Michael Edwardes said that although on the commercial side, the AEC plant at Southall has now closed … today Leyland Vehicles has announced the intention of closing Park Royal Vehicles, not as part of the current exercise, but simply because of the appalling lack of productivity. The plant has a three year order book for the new Titan double-deck bus, but is running at a loss because of lack of co-operation by the work force in respect of both productivity and recruitment. But all factories have labour problems and all management must deal with man management. What has happened here is that since 1973 I have had a file of letters in my office at the House. Every time I have tried to get more chassis and more components, there has been the excuse "labour troubles", "difficulties". It has seemed to me that the Leyland management has reached out for this stereotyped answer with a certain amount of glee.
I have a marvellous factory in my area—Glacier Metals. It is perhaps one of the finest in the country for man management. Would that it were possible to get British Leyland's management into a seminar there to learn how to do its job. Perhaps Leyland managers could go there and learn some of the ABC of labour relations, because they certainly seem to have missed that in their original training.
We should bear in mind that this factory was established in the 1920s. It was originally AEC, under Lord Black. It then became the Leyland Motor Corporation. In 1966, 1967 and 1968 there were changes in management and mergers. By 1975 the Government had to step in in order to rescue this disastrous failure of capitalism.
Since July 1975, when the Government bailed out this company by buying the equity for £46.49 million, the taxpayer has contributed a total of £1,021 million plus other financial assistance in order to buttress up inefficient management.
At Park Royal the management has been absolutely chaotic. Previously, for most of the time I have been a Member of this House, the manager was a Mr. J. W. Shirley. He was there from 1953 to 1976. He was succeeded by a Mr. Field, who was there from 1976 to 1978. Under their regime, they knew what they were talking about. They were experts and they were well versed in the whole question of bus building. They had the confidence of the work force. Since then, what an article in The Guardian of 24 September indicts as top heavy management has led to the contempt of the work force. I quote from the article: At the root of the contempt is a mythical character called Hurry-up Harry. He is the archetypal Leyland career man who comes down from the Midlands with his well-researched theories and his expertise and runs into distrust from the shop floor every time he opens his mouth. 'All our management are British Leyland whizz kids,' said that worker. 'They call them expediters … They make up the titles as they go along. There are that many of them you have to make two buses a week to pay for them.'". I have two charts showing the management structure as it was before Leyland started the reorganisation, when the top brass could be counted on the fingers of my hand. There is now a chart that makes the family tree of Henry VIII appear a minor matter. It starts with the top echelons and goes down through shade after shade of various assistant managers. As has been said before in the House, there are far more chiefs than Indians.
I was approached by shop convener Harry Bailey and manager Shirley in 1974 when the company had made the decision to expand and produce 15 buses a week. I was able to get from the then Minister an industrial development certificate within three weeks. I wrote to the Brent council on 14 June 1974 asking for priority for planning permission. The company changed its mind. It did not even apply for planning permission and never used the IDC granted by the Ministry, and the company must have decided to scrap this proposal. That was in 1974, and it is no wonder that there have been five years of uncertainty.
As long ago as 21 January 1975 I met union representatives upstairs in this House. I learned then—and I quote again: Our labour force has been reduced over the last two years from 600-plus to 483, so it is obvious, in order to achieve maximum output, the labour force will require to be built up. How can this be done when it must be recognised a number of our members over the past two years have left because of the uncertainty of the industry? That was five years ago, and we were 193 buses short of the programme at the end of 1974. The main reason for this shortfall was—chassis shortage—uncertain delivery—material shortage—glass, pop rivets metal threads etc. apart from electrical equipment. The above shortages are the direct responsibility of Leyland management.
The representation of that time went on to say: You should also understand the problems our members are encountering once the vehicles are delivered … the servicing and maintenance. If we take London Transport and pick out a few items which result in buses being off the road, apparently we are facing shortages in the garages on at least 80 mechanical items, urgently needed, complete holdup, no substitutes possible. The two examples given below do not show the total buses off service … 90 DM buses and 40 DMS buses. There follows a schedule of parts where 15 important items are subject to delivery delays from eight to 50 weeks.
In my area we have two other coachbuilding firms—Rolls-Royce and Mulliner Park Ward. In the malaise and uncertainty, these powerful magnets have drained more than 200 skilled workers from Park Royal.
What a paradox. Here is a plant that is profitable and viable, and British Leyland has neither the will nor the managerial ability to make a go of it. Here is an export winner Only recently Park Royal sent 400 buses to Baghdad. Urban congestion throughout the world from the Argentine to Zambia means that double-decker buses are one of the largest export potentials for the next 50 years, yet the whole factory here is to be closed by June 1980.
Once the closure and golden handshakes were agreed, production went up from two to five buses a week. That increase is only temporary, because skilled toolmakers have been diverted and heavy overtime worked. Before the decision to close, the average paypacket was £80 a week. It is now £100. Management should have taken that sort of action to save the factory and not close it.
What are the alternatives? London Transport needs buses. The present order will be only half the requirement, and that will be completed in June 1980. British Leyland has turned down a contract for a further 250 buses and it is possible that the rival firm of MetroCammell-Weyman will bridge the gap, but what will happen about the remainder? Shall we see West German buses in the streets of London, in contrast to the famous 1914 General Omnibuses, which took the Old Contemptibles to the Battle of Mons? What kind of initiative and effort is this Government making to capture the export market? This is an export winner, which suddenly is being turned down out of hand.
I plead with the Greater London Council—the only hope—to come forward with a firm decision that London buses should be built in London and nowhere else. London Transport should accept the suggestions being put forward by Councillor Norman Howard, who pleaded with London Transport to have a feasibility study in order to keep this factory open. Secondly, he urged that it should use Park Royal to build the new type of bus that London Transport wants, either the B15, which is the "Titan" or the B45, or the alternative, XLM.
The first thing that London Transport should do is to integrate the production of buses at Park Royal with the maintenance work that London Transport needs and employs at present at Chiswick.
I have already written to the Chairman of the Public Accounts Committee asking for a thorough investigation, because I believe that this closure is such a scandal. It is a matter that is immediate and urgent and in this respect I have had support from my hon. Friend the Member for Newham, South (Mr. Spearing), who knows something about this area, because he once represented it in this House. The Public Accounts Committee should have one of its most thoroughgoing investigations to find how it is that this marvellous company, which has been the pride of my constituency for decades, is going out of existence.
I should be grateful if the Minister who is replying to the debate will use his influence with the Government to lend their support to saving the livelihoods of the families in my area, who will be thrown on the dole because of what I deem to be gross mismanagement over a long period of years. Had this been avoided it would have benefited not only my area, which suffers from inner city problems, but the country as a whole.
§ 10.17 p.m.
§ The Under-Secretary of State for Industry (Mr. Michael Marshall)
The House is indebted to the hon. Member for Brent, South (Mr. Pavitt) for raising a number of important issues. The House is aware of the hon. Member's wide experience, it respects his views and understands why he wishes to draw attention to the problems within his constituency arising from the proposed closure of Park Royal.
I want to make clear to the hon. Member that, in taking the view that I do, I do not wish to appear disrespectful or in any way unwilling to help. If I could help him I would like to do so. However, the matter which we are debating is one in which the Government have no locus for action, although it is certainly one on which I would express a view.
Secondly, British Leyland's decision to close Park Royal must be looked at quite apart from the survival plan, which we are all anxiously studying at present. This problem pre-dates that survival plan. I do not intend tonight to go into any of the wider questions of British Leyland. I shall address my mind to the particular problems that were highlighted by the hon. Member's speech.
Although the Government must stand back on this matter, they are following the precedent of the previous Administration in saying that the future of British Leyland is something that must be worked out essentially by BL and the trade unions. Just as the previous Government felt unable to intervene in the Speke closure, so we must take the same view on this occasion. However, we can look at the problems at Park Royal and the lessons that are to be learnt. The hon. Member has performed a service in highlighting these tonight. In terms of the sheer approval or disapproval of this decision, the BL board neither sought our approval or advice on this closure nor would it have been appropriate for it to have done so. Therefore there is no scope for us to do anything to reverse the decision or to encourage the company to reverse it.
I say that the issue is serious because no company, least of all BL, can sustain repetitions of the story that we have heard tonight. The hon Member put his own interpretation on the story. I do not wish to express my view of where the blame may lie. However, I agree with the hon. Member that the story basically amounts to one of self-destruction.
The hon. Member said that after a period of uncertainty the introduction of the Titan presented a great opportunity for Park Royal. He argued strongly that it was nonsense for a firm to close when it has a full order book. I agree.
Park Royal has much in its favour. It has a long tradition which stretches back for 50 years. It has an unrivalled experience of bus manufacture. It has major capital investment in a new product. The Titan is a first-class example of modern technology. Customers are queueing up for the product.
When we examine the problems facing the country, it is fair to say that Park Royal has many things in its favour which other manufacturers would envy. But they are being thrown away because—and here I come to the nub of the argument as I see it—no customer is content to see deliveries lag further and further behind. No company can continue to bear great losses.
The hon. Member spoke of profitable operations. He is aware that Park Royal has been losing money at the rate of £250,000 a month. Its estimated annual loss has been £3 million. I do not seek to apportion blame, but certain facts speak for themselves. The hon. Member quoted Sir Michael Edwardes' views on productivity, but he did not extend the management's arguments about the difficulties of additional recruitment. He described the problems which arose through the loss of skilled labour. He would have given a more balanced picture if he had described the problems involved in the inability to reach agreement on bringing in other skills and other forms of labour which could have been trained to help overcome some of the productivity problems.
The hon. Member said that productivity improved when closure was in sight. He will recall that productivity was greater in the past and that there has been a decline.
The difficulties in recruitment have also played their part in the problems. Production could have been higher, because the target of seven buses a month was reckoned to be modest. A higher rate of output was sought for the long term.
In such a position, BL had to face the realities. Ample productive capacity is available, and therefore the hon. Member should not be surprised if BL feels that it must cut its losses as efficiently as possible with as little further damage to customer confidence as possible.
§ Mr. Nigel Spearing (Newham, South)
Irrespective of the merits of the closure of Park Royal, does the Minister agree that there is some obligation on both the firm and the nation in respect of the Titan bus on which £13 million of public money has been spent? Since there is further capacity in the company, do not the Government have further responsibility?
§ Mr. Marshall
I shall come to that in a moment.
Opposition Members often refer to job losses and suggest that they stem from Government policy. Park Royal provides a clear illustration of how the real threat to jobs comes not from Government but from a failure to come to grips with commonsense realities. I understand that there are fairly generous redundancy payments. I also understand some of the personal problems that will arise.
To take the point that has just been raised, there is additional capacity within British Leyland with which to continue the production of the Titan bus. I have been assured of that. To put the matter in its correct perspective, there may be a slight hiccup in terms of phasing in and out but British Leyland intends that the Titan bus shall be continued. The hon. Member for Newham, South (Mr. Spearing) was right to draw the attention of the House to the wish to see a return on taxpayers' money. The taxpayer is entitled to be fairly angry about the saga that I have described tonight.
I shall not leave the subject without reverting to the human problems that arise. All hon. Members will understand the feeling in the constituency of the hon. Member for Brent, South particularly with such a record of employment there. Whatever the redundancy payments and the opportunities for skilled labour—I believe that the hon. Gentleman's constituency is more fortunate than some—one-off payments cannot compensate for the permanent loss of jobs by some employees. Some employees will not be redeployed and there will be no compensation for the loss of opportunities for school leavers to take up apprenticeships in manufacturing, particularly in the bus industry.
Will the traders and their employees in the area be compensated? For, however marginally, they are dependent upon Park Royal. Such consequences have to be accepted from time to time. However, I agree with the hon. Gentleman that at Park Royal all that was unnecessary. That is the nonsence of the story, and that is why I believe the taxpayer has a right to be angry.
Turning from the dismal and closed chapter of Park Royal, the future of the Titan bus is good. Let me make clear to the House that the Government, on the advice of British Leyland, have good hopes for its future. The plans, which have been mentioned, for the relocation of Titan are in hand. It is expected that the interruption in production will not be major. In addition, other British manufacturers are interested in the matter. I do not wish to pour too much cold water on the hon. Gentleman's purple passages, but I believe that he should recognise that there is no reason why British manufacturers cannot continue to compete to hold the domestic market. I do not see the sort of bogy that he raised of our friends across the Channel stepping in automatically. The competitive aspect should sharpen our minds. Had there not been a competitive market here and an alternative capacity the hon. Gentleman's point would have been even more poignant than it is tonight.
If a fine product were discontinued simply because of one plant's inability to meet production targets and to operate at profit, that would be wrong. I hope that lessons can be learnt from the Park Royal story. The future of any company lies in co-operation to beat competitors without. The lesson that we should learn is that internal dissension can serve only the purposes of competitors. Those competitors sometimes include those who want to win the jobs of the work force, as well as the company's profits. We have also learnt that it is reasonable for the management and the work force to argue over increased levels of remuneration, the precise basis of negotiating for skilled employment and so on, when profits have been made. However, to carry on the sort of long-running saga that we have seen in recent months at the expense of the livelihood of the work force is a tragedy. Although the work can be put elsewhere and the future of the Titan bus is assured, we in this House should do all we can to draw the obvious moral from the story and look to the future prosperity of BL as a whole.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes past Ten o'clock.
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