The car industry national and international trends: the 1970s

The period between the Second World War and the late 1960s witnessed unparalleled growth in the car industry and in the Luton economy. The 1970s saw a considerable change in the fortunes of the British-owned car industry in particular, and the American-owned companies generally, as international and national events caused a grimmer situation to emerge. By the end of the 1960s four major producers were dominant in the British car market: Ford, Vauxhall, Chrysler and British Leyland Motor Corporation (BLMC). Most of the large British-owned companies, notably Austin, Morris, and Rover, had begun to merge in the 1960s into the BLMC. By 1976 BLMC had become known simply as BL. British manufacturers were aware that survival in an expanding, but increasingly competitive market, placed a considerable emphasis on being able to produce lower-priced cars. This in turn required higher production to bring down unit costs. It was perceived at the time, by those in the industry and in the government, that this could only be achieved by merger. A more long-term view has put the difficulties of the industry down to a combination of factors, including uninspired model design, poor productivity, the relatively low quality of vehicles, lack of investment, poor industrial relations and poor management. None of the major car companies were totally exempt from these influences.

Marsden et al. divide the 1970s into three fundamental phases:

• 1. 1972/3, when imports had little impact and, apart from Vauxhall, major car companies continued to be profitable.

• 2. 1973 to 1978, a period which begins to reveal the full impact of the oil crisis and its effects on reducing the size of the market and thus sales, although employment levels in the industry remained relatively high.

• 3. 1978 to 1980s, a period in which demand had recovered from the oil crisis but UK production fell and imports from Japan and Europe increased. Employment levels came in line with market demands.

The period was marked by a high degree of turbulence reflected in the conflictual industrial relations at the time and bound up with, what the popular press dubbed, The British Disease’ - continual strikes and industrial disturbance. Subsequent more sober accounts have tended to correct this picture and sought deeper causes.

The oil crisis

The oil crisis was to have a devastating effect on the industry.