BRITISH MOTOR CORPORATION
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A YEAR OF EXPANSION AND ACHIEVEMENTS SUCCESS OF NEW MODELS INCREASE OF CAPITAL APPROVED
SIR LEONARD LORD'S STATEMENT
The Third Annual General Meeting of the British Motor Corporation Limited, was held on December 16, at Longbridge Works, Birmingham, Sir Leonard Lord, K.B.E. (Chairman and Managing Director) presiding.
The following is the Chairman's Statement which had been circulated with the Report and Accounts for the year ended July 31, 1954, and was taken as read :— May I say "Welcome to Longbridge" to those of you who are attending an Annual General Meeting here for the first time. The venue has been changed from Cowley as it was suggested to me that Birmingham would be more convenient, and also that it would provide Shareholders with an opportunity to inspect these Works. Those of you who are conversant with businesses of this nature will, I think, find that the manufacturing processes here are more diversified and complete than those at any other Motor Plant in this Country. The year has been a good one in every respect and I am sure you will consider the results satisfactory, but figures alone cannot show the continuous progresS which has been made in the development of your factories nor tell, the story of the truly remarkable Engineering and Production feats which your Staffs have accomplished.
For these achievements our thanks are due to our Employees at every level of responsibility. To those thank._1 would like to add my personal congratulations.
Capital Expenditure Plans for extension in the Motor Industry, involving tens of millions of Pounds, have been very much in the news recently, and am sure you expect me to say something in this regard. You will recall that in 1952, at the time of the Merger, the Austin Motor Company and the Nuffield Organisation 'were two complete and separate manufacturing entities, with Design Offices, Machine Shops, Foundries, Body Works, etc. One of the attractions of the fusion was the immediate opportunity it presented for standarchmLion of components, leading ter intensified manufacture with a resultant saving of over 1,000,000 sq. ft.' of floor space and its attendant economies. As evidenced by the models now in production, this programme of rationalisation and the standardisation of B.M.C. units has been successfully carried out. This has involved the uprooting, transfer and re-installation M different factories of large masses of machinery, together with the introduction of hundreds of new machines and processes. Since the moves began two years ago about 15,000 machines have been installed or rearranged. In spite of all this new models have been introduced, and at the same time Production has been steadily increased.
Space Saving An interesting example of space saving is provided by those B.M.C. Series Engines made at Longbridge. Current production is 8,000 Engines a week from less space than was required for half that number three years ago. Similar savings have been made in your other factories producing axles, transmissions, etc., with the result that greatly increased production has been obtained without the addition of new buildings. On the contrary, considerable demolition and site clearing have taken place. By late Spring of next year overall output should rise from the present 8,000 up to 10,000 vehicles a week plus spares. Thus, in under three years, Production will have been more than, doubled, using less space, with all the most modern machinery installed. At the same time, almost unnoticed, the many millions of Expenditure involved will have been provided by the ploughing back of Profits.
Thus my Report to you is not of a series of forward surges involving enormous sums of money, with delays at each stage, but rather of smooth carefully controlled and very rapid expansion with a regular current of Capital Expenditure budgeted for and provided as needed.
Plans to Raise Output
Market Research and Sales experience now suggest that further expansion should be put in hand, and plans have been approved and expenditure sanctioned by your Board which will raise output to 2,500 vehicles a day eighteen months from now. This involves the purchase of additional machinery and the erection of some new buildings at Longbridge, Cowley, Tractors and Transmissions Branch, Birmingham, and Fisher and Ludlow, Birmingham.
At this stage it seems that a proportionately small amount of fresh Capital could be usefully employed. You will see from the Directors' Report that the Ordinary Shareholders are to be given the opportunity of providing this Capital on attractive terms.
Your Board are alert to the world-wide trends in our Industry, and are keenly aware of the competition likely to be encountered
in the future. To meet it successfully we shall have the very latest modern plant with every conceivable labour-aiding device, laid out in the most efficient way, occupying the absolute minimum of floor space together with the highest standard of working conditions, and carrying the lowest possible burden of .overheads.
I have used up most of my time and space on what I thought wouldhe the topic of most interest to you, and I feel sure you will agree that it is far better for me to have confined myself to telling you what we have actually accomplished and what -we shall. most certainly do in the near future, rather than to have indulged in flights of financial or production fancy.
You will have received with your copy of the Accounts a brochure which will give you some idea of otir activities and the type of Plant installed, and I would like to take this opportunity of extending a constant and very hearty welcome to all our Shareholders or any Engineers who would be interested to visit our various factories. The only departments which 'would be closed to them are those concerned with Research and. future development,
Production Figures
The total vehicle despatches for the year under review were 353,834. an increase of 27 per cont. over the previous year. Of these vehicles 183,749 wept to the Home Market and -170.085 to Export.
Home Market: The Home Market continues buoyant, with long waiting lists for every model, both of Cars and Commercial Vehicles, and this, coupled with the Export derfiand, makes it clear that your factories will be able to run at full capacity for the next 12 months. At the same time, the increasing number of vehicles being put onto the roads of Britain will cause still grater congestion and there is no doubt that the enormoos problem of new road construction must be tackled vigorously and with imagination in the immediate future.
Overseas: Building to provide additional assembly space is still going on at the Plant in Sydney, Australia. .Plant is being installed for Engine production in the new building recently completed for that purpose. This will he capable of turning out 1,000 " B " type Engines per week by September next year. Another Factory, of 200,000 sq. ft. with 20 acres of land, has recently been bought at Fishermen's Bend, Melbourne, and this will be equipped for the production of Austin and Morris Vehicles.
mentioned last year that the factory buildings near Cape Town, South Africa, were completed ready for occupation. I am now glad. to say that permission to make a start with the installation of equipment has recently beer) received from the South African Government and production in small quantities should be under way by lune next year.
This growth of overseas assembly and progressive manufacture has naturally caused concern to our British Employees, and the question is often asked "Will it affect our jobs?" The answer as I see it is that it will not, because of the natural expansion of our Industry, but at the same time it must be borne in mind that if we wish to trade in other countries, we must be prepared to conform with the policies of their Governments. Thus if they insist that assembly or manufacture shall take place on the spot we must either agree or lose the market to foreign competitors.
New Models and Developments
During the year several new models, both 'fi om the Nuffield Organisation and the Austin Motor Company, have been announced and have met with immediate success.
A range of B.M.C. Diesel Engines has been put into production and is proving eminently satisfactory. You will have seen the Press reports on the Austin Gas Turbine fitted into a Sheerline Car. Development on this and On Gas Turbines for industrial purposes is proceeding apace, and further interesting developments can be expected in the next year or Iwo. During the year World Records for Endurance and Speed have been taken both by M.G. Cars and Austin Healeys.
The Future : You will have gathered that I expect competition to become progressively more keen during the next year or two, but I believe our prospects are excellent and in the absence of any adverse unforeseen circumstances the current year should produce results at least as good as those at present under review. The Report and Accounts were unanimously adopted and a final dividend on the Ordinary shares of 81 per cent., making 121 per cent, for the year, was approved.
The Retiring Director, Major A. C. Herring, V.C. A.C.A. was re-elected and the remuneration of the' Auditors, Messrs. Parker and Co. and Messrs. Thornton and Thornton, was fixed.
A Resolution was also passed approving the increase of the Capital of the Company from £36,250,000 to 00,000,000 by the creation of an additional 15,000.000 Ordinary shares of 5s. each