Anchor Lisa Mullins speaks with British journalist Giles Chapman about the crisis in Britain's auto industry 40 years ago. Back then, the British government intervened in a big way, just as the US government has done now.
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LISA MULLINS: Forty-one years ago, Britain's auto makers were looking into the abyss, just as American car companies are today, and like the U.S. government today, the British government then intervened in a big way. British journalist Giles Chapman writes about the auto industry. He's at a BBC studio right now in Tunbridge Wells, England. 1968 was the year. Why were British private automobile makers in such trouble then?
GILES CHAPMAN: Well, they had sustained a long campaign of competition from American firms. In fact, Ford and General Motors had stepped up the competition to provide great family cars in this country. And the government of the day, the labor government, decided that the only way that they could maintain the British industry was to force all the remaining British companies to merge into one big organization.
MULLINS: So, were they on the verge of collapse, though?
CHAPMAN: They were but I think they figured that if they got some of the successful ones and some of the lame ducks together that a kind of stardust would rub off from the Jackie Os and the Triumphs of this world onto the Austin's and Morris's which were not doing so well. So, it was a case where the government brought them all to Downing Street, all the chief executives, and sort of sat them down and told them what was going to happen.
MULLINS: And what did happen?
CHAPMAN: And what happened was they created a gigantic company, which they called British Leyland and they forced them into a merger. So, we had a company of 190,000 employees, 48 factories, and 12 different brand names. The following morning there they all were sitting around the board room table say, "Umm, what now?"
MULLINS: All right, let's just take it from there. Now the British companies and automakers were forced to merge at that point. Fast forward now to 1975. What happened then?
CHAPMAN: Well, what happened then was, I think that they became insolvent and reality hit with a major blow to the head, and what is happening in America today happened in the U.K. in 1975. There was absolutely no alternative but to take the company into state ownership. It was a bailout and the government ended up owning 99% of this company. Now, I think in General Motors' case, it may end up being sort of somewhat between 70 and 72% in the last figures I read.
MULLINS: Well, lets see here. The President Obama is saying today that GM will be smaller, it'll have a different profile but it will be solvent at the end of all of this. In Britain, it sounds like nationalization did not result in these car manufacturers growing stronger.
CHAPMAN: No it didn't. It resulted in a long and lingering death for this entire enterprise, from which two or three things have survived. In the end, the Mini business became part of BMW and has been spectacularly rejuvenated and ...
MULLINS: You mean like Mini Cooper.
CHAPMAN: Indeed, and, you know, may I say that under BMW, Minis have gone on sale in America and been very successful. Under British, Leyland, they could never get their act together to import the Mini to the States, and we have Land Rover has survived and a couple of other things. But generally speaking, the whole process in retrospect was something that was staving off the inevitable which was that they didn't read the right cars at the right quality.
MULLINS: Did the British government and hence the British people, lose money on that enterprise, British Leyland?
CHAPMAN: Yes, they lost billions and billions and billions of pounds.
MULLINS: So as the United Sates sees this major U.S. company really emblematic of manufacturing here in the United States go under government control, should we draw any lessons from what Britain experienced?
CHAPMAN: Well, I mean, yes there is a way out if you employ the most fantastic designers, you know, it is possibly in theory to return the General Motors brands to preeminence. I mean, why not? A brand from an unknown country can appear and suddenly some hundreds and thousand of cars in the space of five years. So, you know, why not General Motors but the experience in Britain is that, you know, once the insolvency issue is there, it's very, very hard to pull that company back and make it what it was and, you know, perhaps the glory days for General Motors just as they were with British Leyland are something to be kept in the past.
MULLINS: And Giles, since you were the author of many books including "Chapman's Car Compendium" with lots of little fun facts about various cars, can you give me an interesting GM fact that maybe even Americans don't know?
CHAPMAN: Well, I can, I think. I think you could safely say that General Motors invented car design because in 1926, they opened up a department called "The Art and Color Department," and that was really the first time that they'd actually decided to expend some attention on how cars looked as opposed to the design of the car underneath its metal. So, you know, that is something that they brought all the entire global car industry. And that's what their success was founded on, on being absolutely brilliant in that. And we think it's something like the 1959 Cadillac with these gigantic fins or the '63 Corvette Stingray with the split rear window. You know, they were the result of years and years of trying to create spectacular automobiles, and somehow its got lost recently, I think.
MULLINS: Thank you, very much. British journalist Giles Chapman, author of the book, "Chapman's Car Compendium" and the very newly released, "The Illustrated Encyclopedia of Extraordinary Automobiles." Thanks a lot, Giles.
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