AUTOMOBILES.

"From 1885 to 1895, men struggled to make the car go," writes Laurence Pomeroy in the 1956 book From Veteran to Vintage. "From 1896 to 1905 they contrived to make it go properly. Between 1906 and 1915 they succeeded in making it go beautifully" (Karslake and Pomeroy, p. 3).

THE EARLY YEARS

On the eve of the First World War, the products of the European motor industry had reached a level of mechanical development that would have seemed unthinkable just ten years earlier. "Time was when it was the exception rather than the rule to get home, even on a 20-mile run, without having to do something to the car," commented Henry Sturmey, who had been a key figure both in the birth in 1896 of the British motor industry and editor in 1895 of the country's first motoring magazine, The Autocar. "Today, we have vehicles that will take us 'there and back again' with a certainty and a celerity that can be equaled by no other form of conveyance" (The Motor, 4 April 1911).

But though the design of the motor car had progressed to a point where reliability could—almost—be taken for granted and the basic mechanical layout had been standardized to such an extent that beneath the skin there would be little discernible change between a popular car of 1914 and its 1939 counterpart, manufacturing methods were still by and large a question of assembling cars on the spot with the components being transported manually from other parts of the factory or delivered by outside suppliers. Labor-intensive hand fitting of those components was a virtual given.

The turning point came in 1914, when the Ford factory that had opened in the United Kingdom at Trafford Park in Manchester in October 1911—the first Ford plant to be established outside North America—installed Europe's first moving assembly line a matter of months after the production chains had started rolling in the company's Highland Park, Michigan, factory. At the time, it was perhaps the most dramatic example of technology transfer from the New World to the Old—Ford inaugurated plant tours so that the public could watch this industrial marvel in action, turning out anything up to twenty-one cars an hour from standardized parts that needed no hand fitting. Yet, this production model was virtually ignored by the rest of the automobile industry, which was still reliant on an abundance of cheap skilled labor.

Nowhere was this truer than in France, the dominant nation in Europe's automotive sector; surprisingly, the British Ford plant, with just 1,500 workers, almost immediately overtook France's leading manufacturer, Renault, where some 4,000 workers built 5,500 cars annually, in terms of output. Output in 1912, the first full year of production, was 3,081 Model Ts and passed 6,100 in 1913.

Despite the outbreak of war in August, in 1914 Ford produced 8,300 cars, outselling the combined total of Britain's next five biggest marques, and the assembly lines operated throughout the hostilities, providing 30,000 Model T troop carriers, water carriers, ambulances, and munitions wagons to the Allied forces. Nimble-footed as a goat, simple to drive and maintain, the Model T was an ideal military vehicle; Lawrence of Arabia (T. E. Lawrence; 1888–1935) declared that the Model T and the Rolls-Royce Silver Ghost—many of which had cast off the patrician coachwork of peacetime in favor of armored carapaces—were the only two cars suitable for desert warfare.

The Model T also ushered in the concept of a global automobile industry: from 1913, Fords were also being assembled in a little plant in Bordeaux, France, and an office had been set up in Paris to coordinate European sales, with its American manager being paid the colossal salary of 24,000 dollars annually.

IMPACT OF THE FIRST WORLD WAR

Despite the stalemate of the trenches, the First World War was the first motorized war. The internal combustion engine provided power for everything from trench electricity generators to dispatch riders' machines and made possible two major new weapons that changed the nature of warfare—flying machines and tanks.

Moreover, the exposure of a generation of young men, previously unused to motoring, to the cars and motorcycles used for military purposes, fueled an immediate postwar demand for motor vehicles and the creation of companies to meet that demand. In Britain, forty new makes of cars came on the market in 1919–1920, and another forty-six appeared between 1921 and 1925. However, the inevitable slump that hit the market in 1922 saw more than eighty motor manufacturers go out of business during the same period. For the most part, these were small firms that attempted to break into the popular car market, most notably Clyno of Wolverhampton, which reached third spot in the industry before crashing spectacularly in 1929. Paradoxically, it was specialist sports-car makers like Aston-Martin and Bentley, though perennially short of cash, that survived, thanks to backing from moneyed enthusiasts. In the late 1920s and early 1930s the brothers William Edward "Billy" Rootes and Reginald Rootes snapped up the failed Humber, Hillman, Singer, Sunbeam, and Talbot companies to make their Rootes Group a major player in the motor industry.

Though they had lost their lead to Ford, some French motor manufacturers also came out of the war well: in 1918 Renault had 22,500 workers and built 14,500 vehicles, Hispano-Suiza employed the technological lessons it had learned in building aircraft engines in the design of luxury cars, and Louis Delage, ever the opportunist, used a military contract to supply staff cars as the testbed for his postwar model. But the only one to follow the Taylorite (efficiency) principles of Fordism was André-Gustave Citroën, who launched his own marque in 1919, mass-producing a single model in his former munitions factory on the Quai du Javel, Paris.

In 1920 the French government, anxious to stimulate a market hindered by high taxes, created a reduced-rate "cyclecar" tax for two-seated vehicles weighing under 350 kilograms, but the concession was short-lived. France at that time had an estimated 350 manufacturers: only a handful would make it through the decade.

Britain, having erected a tariff wall of 33.3 percent in 1915 with the McKenna Duties to discourage the imported American cars that had gained a foothold while domestic production was suspended during the First World War, sought to tackle what it saw as the enemy within with the introduction of a one pound per horsepower tax in its 1920 Finance Act, which charged the large-engined but very cheap Model T Ford—still regarded as "foreign" even though it was British-built—the same rate as a costly 3-liter Bentley. The result was that Ford quickly lost its market lead in favor of the indigenous Morris marque, established in 1912 in Cowley near Oxford, away from the motor industry's traditional Midlands location but in an agricultural area with abundant cheap labor. Curiously, Morris—who overtook Ford as market leader in 1924—did not introduce a moving assembly line until 1934.

Another successful rival for the Model T—on price, at least—was the diminutive Austin Seven. Against the advice of his board, Sir Herbert Austin (1866–1941) introduced the car in 1922 as a rival for the then-popular motorcycle combination. At the time, Austin's American-style one-model program had stalled, and a plea to Henry Ford to buy his company had fallen on deaf ears.

Ford had other plans for Europe; in 1917 the company had begun work on the first purpose-built Ford factory in the Old World—a tractor plant at Cork in Ireland—signaling the start of a relentless program of installing assembly plants in every major European market, but offering the same product—Ford's Model T "universal car"—regardless of market conditions or fiscal regimes.

General Motors (GM), however, only operated very low-key assembly operations of its United States products in Europe, gaining a stronger toehold during the 1920s with the acquisition of well-established but financially weak companies—Vauxhall in England and Opel in Germany—which enabled the corporation to introduce new models more attuned to European tastes.

Production in Britain and France remained roughly on a par in the 1920s, with Germany and Italy trailing a long way behind. For some years after the war, there was a ban in many countries on buying German-built cars; this, coupled with raging inflation, meant that the German industry remained in a generally backward state. The main development was the amalgamation in 1926 of Germany's two oldest companies to form Daimler-Benz—its vehicles were sold under the Mercedes-Benz name. In Italy a plethora of small manufacturers gave way before the relentless march of Fiat of Turin, whose ambitious founder, Giovanni Agnelli (1866–1945), had hitched his wagon to the rising star of Fascist leader Benito Mussolini (1883–1945). This enabled him to suppress potential rivals, most particularly Ford Italiana, whose factory, opened in 1922 in a Trieste warehouse, had quickly secured 75 percent of a market covering thirty-six countries on three continents. When in 1929 Ford sought to expand by taking over Isotta Fraschini of Milan, Agnelli protested to Mussolini, and Ford's Italian venture was stifled.

Before World War I Belgium and Holland had both had small national motor industries mostly serving national needs, but these faded away in the 1920s as imported models encouraged by liberal tax regimes took over their markets.

THE GREAT DEPRESSION

The European industry took on a new complexion when the manager of Ford's British organization (hereinafter Ford-Britain), Percival Perry, met Henry Ford in Detroit to formulate the "1928 Plan," in which a new Ford Motor Company Limited was incorporated to take over and operate the European assembly plants previously controlled from the United States. Work began in 1929 on a new "Detroit of Europe" factory at Dagenham in Essex, which would be the center of manufacture for Europe, serving assembly plants in Manchester, Cork, Paris, Berlin (replaced by Cologne), Antwerp, Barcelona, Copenhagen, Trieste, Stockholm, Helsinki, Rotterdam, and Constantinople. But the plan was thrown into disarray as depression gripped Europe in the wake of the 1929 Wall Street crash and it was never fully implemented, as France and Germany implemented laws demanding high local content levels.

Moreover, Dagenham itself was threatened with closure as Ford-Britain plunged deep into debt, weighed down by the five-million-pound cost of the new factory and by disastrous sales of the British-built Model A, which plummeted to just five cars in the last quarter of 1931. Henry Ford himself took charge, and within five months a new small Ford with a 933cc 8-hp engine designed specifically for Europe was developed. It proved an immediate success and gave Ford 19 percent of the British market, lifting the onetime market leader to third place behind Morris and Austin.

While in 1934 Britain and France had roughly the same number of vehicles—about 1.87 million—in use, by the end of 1938 Britain had moved well ahead with an increase in the vehicle park of 670,000, almost 300,000 more than France. And while in 1929 France had been the second largest producer in the world, eight years later output had declined by almost 20 percent. British production had more than doubled over the same period. Just as telling was the decline in French exports: in 1924 French companies had represented some 25 percent of world vehicle exports, a figure that plunged to 5 percent by 1937.

After the Nazis came to power in 1933, the moribund German industry was revitalized as a showcase for German technology and as a tool to obtain foreign currency through the medium of export sales. Thus, production rose from 92,200 cars in 1933 to 270,000 in 1938. Of the twenty-one companies engaged in vehicle production that year, Opel was Germany's biggest manufacturer with about 40 percent of the car market and 30 percent of light commercials, with Auto-Union in second place with 25 percent, and Ford (hereinafter Ford-Germany) and Daimler-Benz each with 10 percent. The rise in car production was accompanied by the building of a nationwide network of high-speed motor roads, the so-called autobahns. Despite much anticipation and a saving-stamp scheme for prospective customers that would allegedly secure delivery, few examples of the much-vaunted Volkswagen "Peoples' Car" were seen before the outbreak of war in 1939.

WORLD WAR II AND AFTER

While the German industry had been heavily involved in the buildup to war, British companies had erected so-called shadow factories, which could be switched to war matériel production should hostilities break out. And when war was declared, British companies played a vital role. Austin built airplanes, Vauxhall built tanks, and Rolls-Royce built the Merlin aircraft engines that powered the aircraft that won the Battle of Britain in 1940. The following year Ford-Britain opened a new factory near Manchester that built a further 30,000 Rolls-Royce Merlins to the most exacting standards. Ford also supplied 250,000 V8 engines for fighting vehicles, over 13,000 Bren Gun carriers, and large numbers of trucks. However, the Labour government elected in 1945 placed great restrictions on motoring and the motor industry. Apart from strict material rationing, manufacturers were given an export target of 50 percent of production—and many of its vehicles were ill suited to overseas conditions, earning a reputation for unreliability that would persist for many years. In contrast to its British cousin, Ford-Germany built only some 15,000 trucks annually for the German war machine; some were also assembled in Ford's plants in occupied Europe, but these were subject to ingenious sabotage by disaffected workers.

The German occupation of France devastated the French auto industry. The Germans removed much of its machine tools, and bombing seriously damaged the remaining factories. After the Liberation in 1944, Louis Renault, accused of having collaborated with the Germans, died mysteriously in prison, and his company was nationalized. The industry recovered slowly: output in 1946 was less than one-sixth of the 1938 level and did not pass it until 1949. A degree of rationalization took place under the Monnet Plan of 1947, but the industry fell far short of its targets. The head of the National Planning Council, Jean Monnet had proposed production of 396,800 vehicles in 1947; actual production was 137,400.

Badly affected by Allied bombing, the German industry had few plants capable of resuming production after the Nazi surrender and the division of Occupied Germany. The Bayerische Motoren Werke (BMW) plant at Eisenach in the Russian zone became Eisenacher Motoren Werke (EMW) and was for a while a flagship factory for the Soviets. Of the Daimler-Benz factories, only the Gaggenau truck plant in the French zone was operable, and the badly damaged Volkswagen factory in the British zone only restarted manufacture thanks to the efforts of British Army officer Ivan Hirst. It recovered to such an extent that when Henry Ford II (1917–1987) visited Europe in 1948 he expressed an interest in taking over the business, only to find that its complex ownership made this infeasible. He was unsuccessful, too, in recruiting Volkswagen chief executive Heinz Nordhoff to head Ford's German operations.

Indeed, Ford was to make unsuccessful overtures to most major European motor manufacturers in the years ahead. A proposed merger with Peugeot in 1948 came to nothing, while in the short period between 1958 and 1964 Ford dallied with Lancia, Fiat, Mercedes-Benz, Auto Union, BMW, Berliet, the Rootes Group, Lotus, and Ferrari, yet failed to consummate a single deal, any one of which could have changed the face of the European motor industry.

The Michelin tire company, which had owned Citroën since 1934, sold the company to Peugeot in 1975, and in 1978 Peugeot acquired Simca (which had itself absorbed Ford's French production arm in 1954) and rebranded it as Talbot—an ancient name with a convoluted history that was also applied to the products of the former British Chrysler that Peugeot had also acquired in the 1978 acquisition.

POSTWAR BOOM

Partnerships could prove dangerous: in 1952 Britain's two leading companies, the Nuffield Group and Austin, merged to create the British Motor Corporation (BMC), with some 40 percent of the market. The company prospered in the booming 1950s and 1960s, but little was done to reorganize the companies into a cohesive unit. Old rivalries were rampant, and financial procedures were inadequate—typically, management had no idea of how much it cost to produce a car! A downward slide in sales ensued.

In strict contrast was the postwar rise of Ford-Britain, guided by the charismatic Sir Patrick Hennessy, with its strict purchasing and costing disciplines. The contrast between BMC and Ford was never more clearly shown than when BMC launched the advanced front-wheel-drive Mini in 1959; Ford bought one, dismantled it, and costed every part, to find that BMC could not possibly be selling the little car at a profit. But when Ford's managing director confronted his BMC counterpart with a proposal that if the Mini's price were raised to an economic level, then Ford would make a matching price increase on its new Anglia, he was politely brushed off.

BMC's off-the-cuff strategy fatally undermined its profitability. In 1966 it merged with the luxury brand Jaguar as British Motor Holdings, and two years later BMH came together with the Leyland Group—which had taken over the ailing Standard Triumph company in 1961—to form British Leyland (BL). In less than a decade BL—plagued by an appalling strike record—was in desperate financial straits and turned to the government for help. Vast sums of public money were pumped into BL, in which the government's National Enterprise Board now had a 95 percent stake, to little avail.

In 1975 the American Chrysler Corporation, which had taken over Rootes after Ford had turned the company down, threatened to close the loss-making company down unless the government gave financial aid. The government gave in, to the tune of 162.5 million pounds.

Perversely, in view of Henry Ford's vision of the "universal car," Ford-Britain and Ford-Germany had produced completely different models for the same market segments in the years after the war and, indeed, regarded each other as their main rival on the Continent, often with competing dealerships on either side of the same street. It was an insupportable position that ended in 1967, when Henry Ford II set up Ford of Europe as a blanket organization to coordinate development and marketing programs of a single model range. It took far longer for the rival General Motors brands Opel and Vauxhall to coalesce into a single European organization, although common models, differently badged depending on market, had been produced since the mid-1970s.

A new factor in the European marketplace was the arrival of Japanese imports in 1965. The increasing popularity of these models eventually led to the establishment of European production plants, particularly in Britain, where by 2005 Japanese manufacturers were building over 800,000 cars a year.

JOINT VENTURES AND COMMON MARKET

With the increasing liberalization of European trade in the 1970s, transnational joint ventures brought a new look to the motor industry. The Swedish company Volvo, which acquired the last native Dutch manufacturer Van Doorne's Automobiel Fabriek (DAF) in 1975, joined forces with Peugeot and Renault the same year in a new "Douvrin" V6 engine, which the three makers all fitted in their luxury models.

This was a period of expansion despite a fourfold increase in fuel prices following the Arab-Israeli War of 1973. In 1974 Peugeot took over a 30 per cent share in Citroën (and took it over completely in 1976); Volkswagen introduced the front-wheel-drive Golf to succeed the perennial Beetle; and Ford opened new plants in Bordeaux (transmission) and Valencia (cars) as part of a program that would see a new front-wheel-drive "supermini," the Fiesta, launched to face off against cars like the Fiat 127 and give the company a far stronger presence in southern European markets.

When it became clear that the industry was moving into a state of overcapacity, "Project Oyster," a plan to open a new Ford car plant at Sines in Portugal, was shelved in 1983. Instead, Ford began a new round of merger and takeover talks. In 1985 "Project Columbus," a merger proposal with Fiat, foundered at the last minute on the question of who would hold overall control, while Ford bids to acquire the failing Alfa Romeo and Rover (late British Leyland) companies were scuppered by high-level political machinations. Alfa Romeo was acquired instead by Fiat, and BL went first to British Aerospace and then to BMW. Movesto acquire luxury and sports marques were more successful. Ford acquired Aston Martin in 1987, the recently privatized Jaguar company in 1989, Volvo in 1999, and Land Rover in 2000, which together formed the new Premier Automobile Group.

Interestingly, Ford had to choose between Jaguar and the Swedish company Saab and had gone for the British marque largely on sentimental grounds because its vice chairman William Clay Ford had owned Jaguars since his college days. General Motors picked up Saab (which had been the Ford accountants' favorite, but by 2005, when Saab shared the common "Epsilon" chassis platform with the Opel/Vauxhall Vectra, it looked as though production of the mainstream Saabs would be transferred from Sweden to the Opel plant in Germany). Jaguar gave Ford much needed class but proved a heavy drain on corporate funds.

That break with traditional national ties was symptomatic of the rapidly changing fortunes of the European industry. By the dawn of the new millennium, the go-it-alone optimism of the mid-1980s had given way to intercompany collaboration—most notably between Fiat and General Motors—and the eastward shift of production to countries like Poland and Hungary in the wake of the fall of the Iron Curtain.

The family-car segment of the market weakened, while the VW-Audi Group—which already owned the Sociedad Española de Automóviles de Turismo (SEAT), a Spanish company from which Fiat had walked away in 1980—acquired the prestigious British brand Bentley in a bidding war that saw its rival BMW take over the Rolls-Royce name, and bought the reborn but struggling Bugatti brand to develop the world's fastest road car as a showcase for its engineering skills.

Long-established Western European plants closed: in 2002 Ford ceased car manufacture at its former flagship Dagenham factory. Only the engine plant remained operative just twenty years after a costly robotization program had transformed production methods and manning levels. And GM stopped making Vauxhall cars in Luton, U.K., its headquarters since 1905. But the most spectacular crash was that of Rover, which had been sold to a management consortium for a nominal ten pounds after BMW had failed to make it profitable (though it retained the Mini brand and its Cowley, Oxford, factory). In 2005 the Rover plant at Longbridge (the old Austin factory, opened in 1905) suspended production, unable to pay its bills because its aging models had failed to meet sales forecasts. Controversially, its assets were acquired by a Chinese group, and some, if not all, production seemed likely to be transferred to Shanghai.

After 120 years since the first Benz car stuttered into life, the European motor industry appears to be in a state of continuous change, with U.K. output, once the Continent's biggest, down to 18 percent of the British market, niche models playing a growing role in sales, Asian brands taking an ever-increasing share of sales, and the world's oldest marque, Mercedes-Benz, forced to revise its future model plans in the face of falling profitability. Past certainties have vanished, and customer requirements have changed radically in an increasingly complicated market. The motorcar now has to offer more than mere transportation, and the European industry is being forced to respond.

See alsoAgnelli, Giovanni; Fordism; Industrial Capitalism; Renault; Taylorism; Volkswagen.

BIBLIOGRAPHY

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David Burgess-Wise