How Sir John Egan saved Jaguar
Car-maker Jaguar might now be flying high under the ownership of Tata but its former boss Sir John Egan has revealed it was once just a whisker away from being shut down for good and British Leyland’s unproductive Castle Bromwich plant closed.
Sir John, who successfully turned Jaguar around after becoming its chief executive in 1980, has lifted the lid on his time at the helm in a new book ‘Saving Jaguar’, which was released recently.
When he arrived at Jaguar in April 1980, Sir John could not have started at a worse time.
Not only was Jaguar part of struggling British Leyland, it was one of the weakest parts and, to make matters worse, the Castle Bromwich workforce was on strike.
Sir John said: “When I got there, half of British Leyland was ready to close Jaguar.
“One of the few people who didn’t want to was chairman Michael Edwardes and he thought he would give it a chance by letting me have a go with it.
“Nobody would buy it and it was losing a pot full of money. Castle Bromwich was absolutely going to close – there were only 15,000 bodies going through that huge plant.
“I remember when I tramped around it I thought we were like squatters in this great place only using part of it.”
Although not exclusively a Jaguar plant – Castle Bromwich had also produced the Triumph TR-7 before Sir John’s arrival – it did become a dedicated Jaguar facility, meaning Sir John could focus all his efforts on improving it.
He also found an ally in British Leyland boss Harold Musgrove, who might have had a fearsome reputation in the industry, but Sir John said he worked well with him.
He said: “I got on with Harold Musgrove. He gave me Castle Bromwich and without that we wouldn’t have survived.
“I was one of the few to get on with Harold but he was straight as a die. I would describe him as a hero of the Midlands.”
One of the defining features of Sir John’s time at Jaguar was his relationship with the trade unions and it is covered in depth in the book.
He believed winning some key battles was crucial to Jaguar’s turnaround, seeing it go from being a loss-making part of British Leyland to a profitable one.
He said: “Jaguar had some of the worst trade unions to deal with. They were all on strike when I went there – on the first day.”
Much of Sir John’s book focuses on the Jaguar turnaround which, along with better industrial relations, was achieved by improving quality, meaning the company could compete against German rivals.
“Three years later we were number five in the JD Power list, with only Mercedes and Japanese companies in front,” he said.
“We did make the cars saleable and were able to utilise the huge sales network in the US as Triumph and MG were withdrawn there.
“We had a saleable car and we turned it around in three years from a loss of £50 million a year to making £50 million a year.”
However, to a certain degree Jaguar became a victim of its own success.
The fact it was profitable meant the Government wanted to privatise it, as much as a tester for the privatisation of BT as anything else, and it parted company from British Leyland in 1984.
Sir John said: “At that point, we were the only profitable company in British Leyland so were privatised, much against the wishes of the British Leyland board.
“They had BT to privatise six months later. They wanted to establish in the public mind privatisation was a good thing. We were a sprat to catch a mackerel.
“We made a mistake, it should have been a private purchase. We knew when we were privatised everyone in the world would want to buy us.
“We were able to progress for about five years and when the golden share ran out everyone clambered to buy Jaguar. There was not much I could do after that.”
Sir John oversaw Jaguar’s sale to Ford for £1.6 billion in 1990, after which he became chief executive of the British Airports Authority.
Although he didn’t think much of Ford’s tenure, he is delighted at Jaguar’s revival under Tata’s ownership.
He said: “Ford didn’t do a bad job with Land Rover but they didn’t know what to do with Jaguar. The final postscript is about
Tata taking Jaguar on and it has been a huge success since.”
* Saving Jaguar is published by Porter Press and available via Amazon and other outlets.