WORLD

A choice they couldn’t refuse

CAROL KENNEDY November 16 1981
WORLD

A choice they couldn’t refuse

CAROL KENNEDY November 16 1981

A choice they couldn’t refuse

BRITAIN

It was a week that saw strike-prone production workers and well-paid company directors both accepting— if reluctantly—the need for sacrifice in the cause of economic recovery. It was also a watershed in the long “them-andus” battle of Britain’s industrial relations. First, striking car workers at British Leyland (BL) finally swallowed an unpalatable pay package in the face of the chairman’s threat to put the auto giant into liquidation. Then, leading industrialists at an annual convention acknowledged the need for the boardroom to pull together with the shop floor. It began to look as though Margaret Thatcher’s much-vaunted “new realism” in industrial relations could become more than a flash of speechwriter’s rhetoric.

Certainly something had fuelled the prime minister’s determination to stick to her beleaguered economic policy. The Queen’s speech last week charted a strong rightward course, including further denationalization, tight money control and moves—albeit cautiously outlined—to end the long immunity enjoyed by Britain’s unions from the legal consequences of strikes.

Yet there was little inclination among Britain’s managerial classes to crow about the latest tightrope triumph of Leyland Chairman Sir Michael (Supermike) Edwardes. After four years of imposing pay restraint, demanning and productivity deals on a work force noted for its militancy, the

feisty little South African had tried to bulldoze through a pay deal below the government’s four-per-cent target. The work force rebelled, as much against Edwardes’ take-it-or-leave-it style and his acceptance of a 38-per-cent raise in his own $144,000 salary, as against the deal itself. Edwardes, backed by the government, promptly put more than $2.6 billion in annual exports, up to 500,000 jobs in the depressed West Midlands, and $6.8 billion of public money on the line.

As a result, BL lives. And it will prove or disprove the claim of its car chief, Ray Horrocks, that the company will become profitable after a new generation of cost-effective family cars—led by the already successful Metro—is fully on stream. When even mighty Volkswagen of West Germany has seen its profits dive (partly because of unsuccessful diversification), Britain’s weary taxpayers will need a lot of convincing before they believe that Leyland, a classic lame duck, can ever make a profit. But then it is even being hinted that with good luck and a smaller work force, ailing British Steel—the biggest albatross of all—could break even in a couple of years.

In the aftermath, it was no surprise that industrialists meeting last week in genteel Eastbourne for the Confederation of British Industry convention were inclined to be humble. Sir Colin Campbell, chairman of a Glasgow trading company, called for a freeze on boardroom salaries until the slump is over. Simultaneously, ICI, the huge

chemical firm that is Britain’s biggest company, announced in the wake of a dividend cut that 100 of its top executives had volunteered to waive pay increases and bonuses of up to $36,000 each for the the coming year.

Several years ago, a leading British industrialist confided to a sympathetic listener that, come what may, “There will always be smoked salmon in the boardroom.” Last week the message seemed to be that, to survive, everyone will have to share the fish-paste sandwiches. —CAROL KENNEDY