A Remarkable Purchase – When Jaguar Bought Daimler

When Jaguar bought Daimler, the news came as a surprise to many, not least Jaguar’s Board of Directors.

William Lyons established the Jaguar name in the years immediately before World War Two and when peace came once again he sought to capitalise the brand.  Those years were hard as Britain was virtually bankrupt and had to earn foreign currency to boost the economy.  Lyons, like many other motor manufacturers, was in a fortunate position of having won some war contracts that kept Jaguar Cars, as it now was, afloat.  That did not mean that the Company was cash-rich but it did mean that the six-cylinder engine which had been designed and tested during the war years could be put into production.

Elsewhere we have told the story of the XK engine and how a platform was required to showcase such a jewel of engineering.  This was, in modern parlance, the concept XK120, which was never intended for mass production when it was unveiled at the London Motor Show in October 1948.  It was aluminium bodied, steel not being available as Jaguar was not considered a major exporter as far as the Board of Trade was concerned.  Indeed, before the war SS Cars/Jaguar had sold mainly to the home market and what was then the Empire, along with small numbers to Europe; only 7.4 percent of their sales went abroad.  Now the main market that had to be addressed post-war was the United States of America.  This was new territory for the Foleshill-based car manufacturer, as pre-war only a handful of Swallow/SS products had been sold in the USA – only 47 between the years of 1933 and 1938.

Following the war, Fergus Motors in New York had taken on the Jaguar dealership but in 1947 Max Hoffman of New York took over as East Coast distributor.  In March 1948, to promote Jaguar Lyons, together with Bertie Henly (Henlys Motors) made his first visit to the USA.  He visited Hoffman and then crossed the country to see Jaguar’s West Coast distributor Roger Barlow in Los Angeles.  Soon afterwards Barlow stepped down and Charles (Chuck) Hornburg took over distribution.  While in the USA Lyons met several potential customers and, helped by Hornburg, sold some Jaguars to influential clients, actor Clark Gable being one, who bought a 3½ -litre Drophead Coupé (Mark IV) and was later to become the owner of the first XK120 on the West Coast.

Expanding Jaguar

The XK120 and XK engine became an immediate success with orders for the sports car pouring in,  Hornburg, who visited Earls Court, wanted to buy the entire first year’s production.  Lyons had thought that they may have sold 200 examples of the largely hand-built car, but with the unexpected interest in the XK120, plans were put into place to make it in steel, once the first batch of aluminium bodied models had been completed.  Added to the success of the XK120 at the Motor Show the other new model on display was the Mark V saloon; this too attracted the buyers and was soon in-build at Foleshill.  Meanwhile, Lyons was at work on an XK-engined saloon for the 1950 Motor Show.  Sales increased and the factory at Foleshill was working to capacity, it was clear that more space was required.

In 1949 Jaguar produced 4,190 cars and had outgrown the Foleshill factory; Lyons had wanted to enlarge the premises in Swallow Lane but permission was refused.  A full order book demanded more space and when Lyons visited the USA for the second time early in 1950 he came back with even more orders for Jaguar cars.  When the Mark VII was shown in London and New York it was another success, with 500 firm orders being taken at the latter.  There was no time to waste, Jaguar needed more space and though Lyons was offered sites in depressed areas with Government incentives, he declined, though he did send investigative teams to Scotland, Wales and Northern Ireland, but decided Coventry was the place to stay.

Built for wartime production, there was the modern Daimler factory in the small village of Allesley to the west of Coventry, which was by 1950 under-used and only making the Ferret armoured car for the Army.  Lyons went after this location and after tough negotiations a rent for five years at £30,000 was agreed, the drawback being that Daimler seemed reluctant to move out and it was nearly a year before Jaguar could finally move in.  Later Lyons bought the whole Browns Lane factory site from the Ministry of Supply.  They now had the space to expand and production increased with 7,206 Jaguars coming off the lines by the end of 1950.

During the ensuing years Jaguar continued to expand production and the model line-up which now included; the XK150 sports car, Mark II compact saloon and the Mark IX large saloon and by the end of the decade had seriously outgrown the Browns Lane factory, which had been expanded but had now reached the limit of any further development.

Lyons (now Sir William) was on the look-out for more floor space and sent out teams to evaluate various development areas.  The Government were, once again, trying to make Jaguar move to less developed areas of the UK and offered the usual incentives but Lyons, once again, resisted as he knew that the costs involved with such relocations would be uneconomical and unrealistic.  This was the period during which Ford opened their plant in Liverpool and the Rootes Group built their plant at Linwood in Scotland to produce the Hillman Imp.

The Midlands was the heart of the British motor industry and that was where Lyons was determined to stay.

Daimler in View

Daimler had been established in Britain in 1893 and had over the years produced some exceptional motor cars and commercial vehicles as well as military materiel during two World Wars.  Post-war their fortunes had waned and by the end of the 1950s their parent company BSA (Birmingham Small Arms Company) was unwilling to aid the marque with further investment.  Sales were down and the Radford factory in Coventry, was in sore need of modernisation.  Jack Sangster, Chairman of BSA, knew Lyons through their industry-connections and also as fellow members of the Society of Motor Manufacturers and Traders (SMMT).

With his sights firmly on the Radford factory, which covered one million square feet (92,903 sq/m), Lyons approached Sangster on a personal basis, without consulting the Jaguar board of directors.  The BSA board were not keen on selling the factory, but instead offered to sell the whole of the Daimler Company to Lyons.  Jaguar’s accountants met with their counterparts from Daimler to assess the net value of Daimler and Lyons agreed a price of £3,250,000 plus the excess of Daimler’s current assets over current liabilities, subject to the accountants’ report.

On 26 May 1960 the BBC 7 o’clock morning news announced that Jaguar had bought the Daimler Motor Company and its assets, including the Radford factory.  Included in the deal was the defunct Lanchester brand.  The announcement came as a surprise to the board of directors; famously Bill Heynes, Jaguar Chief Engineer, was listening to the radio while shaving when the news came through.  He immediately called fellow-director Arthur Whittaker who had also just heard the news and was equally surprised.  The board were unhappy that Lyons had not told them what he was doing but, as he held the majority shares and considered Jaguar to be ‘his’ company, he simply went ahead and bought Daimler knowing that time wasted with board meetings may have caused a delay that would see Daimler being bought by someone else, even just for the land at Radford.  That is conjecture but seems likely as Lyons was always someone who thought on his feet and did not let the grass grow beneath them.

On 18 June 1960 Jaguar issued a press statement which detailed the purchase and ended: ‘Jaguar Cars Ltd., wish to deny unfounded rumours to the effect that sweeping changes, including even the extinction of the Daimler marque, are to be expected.  Whilst one of the most obvious and immediate benefits accruing to Jaguar as a result of their purchase is the availability of much needed additional production facilities for Jaguar cars, the Company’s long term view envisages not merely the retention of the Daimler marque, but the expansion of its markets at home and overseas.’

What Jaguar had bought was an antiquated factory, a sports car (SP250) that was not selling, an old saloon (Majestic) that had reached the end of its life, a replacement (Majestic Major) that was not yet in production and a loss-making bus division.  Jaguar had gained the space required to expand, a profitable Ferret armoured car contract and a very good compact V8 engine designed by Edward Turner.

Meanwhile, Johannes Eerdmans, who had replaced both Hoffman and Hornburg as US distributor, had surveyed the SP250 market and reported to Lyons that the cars arrived in poor condition and were simply not selling.  He also stated that Daimler was not a registered name in the USA and, though they had never traded as Daimler in the USA, Daimler-Benz in Germany could bring legal proceedings against Jaguar.

On 17 August 1960 Jaguar registered Daimler Cars Inc, which was accepted by the US authorities and not queried by the German company.  Daimler had exported 366 SP250s to the USA and despite a sales drive only 66 examples had been sold, besides, because of the poor build quality, some $50-80 had to be spent on each car to make them fit for sale.  The unsold cars were brought back to the UK and at substantial cost rebuilt to Jaguar standards.

Settling the Sale

On 4 October 1960 Lyons and Sangster met again to discuss the supplementary payment to be made by Jaguar to complete the purchase of Daimler.  Lyons stated that the Majestic and SP250s were a burden and dealers were stuck with cars they were unable to sell; Jaguar would have to compensate them in some way and probably have to buy back the unsold stock.  Lyons argued the case and asked Sangster what he intended to do about it.  Sangster wrote to Lyons a few days’ later with his final offer, which if not accepted would have to go to arbitration and in that event he would claim £193,124.  On a without prejudice basis Sangster was prepared to accept a reduced amount of £140,000, making a total price of £3,250,000.

There now came one of the most interesting facts of a Lyons deal.  On the contract is a handwritten note by Sir William Lyons: ‘Mr Sangster, agreed on telephone, Oct 12th £130,000. W.L.’  This deduction of £10,000 was because Jack Sangster had forgotten to mention some outstanding pensions to the value of £10,000, the two men tossed a coin to decide and Lyons won.  On 23 November 1960 Sir William confirmed the agreement and sent Sangster a cheque for £130,000.

Jaguar Cars had concluded the deal for the Daimler Motor Company on the toss of a coin for £10,000 taking the total paid for the Daimler Company to £3,240,000.

Jaguar Cars had become Jaguar Group with Lyons going on to buy Guy Motors, out of receivership, in 1961 and then Coventry Climax in 1963.

The New Era

Jaguar had to work fast to prop up Daimler; Jaguar’s Jack Silver took charge of the factory re-organisation and Robert (Bob) Grice took over as works director.  Initially, the plan was to keep commercial and military production at Radford and move the existing and future Daimler car production to Browns Lane alongside Jaguar models.  Daimler’s low volume would not interrupt Jaguar production and would release space at Radford for another purpose.

All machining, engine and axle production would be moved to Radford.  With space released at Browns Lane, a new production line was installed and a new paint facility (bought 2nd hand from Mulliner Body Works) was set up.

Jaguar fulfilled their promise of keeping the Daimler name going.

The SP250 was assessed by Jaguar engineers and reworked into a better model (known as ‘B spec’) that would not disgrace Daimler or Jaguar.  The Majestic Major was put into production and Sir William designed a Limousine version (DR 450), something that Daimler had been lacking since the demise of the DK400.

Daimler’s bus division took a turn for the better when their Fleetline chassis, which had been designed but not developed, was shown at the Commercial Motor Show in September 1960 and with investment from Jaguar became the standard double-decker bus chassis for several bus corporations.  In time over 50 per cent of municipal bus services in the UK would use Daimler buses, which also sold well abroad and made Daimler significant profits.

The Jaguar Mark II saloon was given the Turner V8 and appeared in 1962 as the Daimler V8, becoming Daimler’s most popular model with over 17,600 being built.  It was, however, the last model to have a Daimler engine; from now on all Daimlers would be Jaguar designs powered with Jaguar engines.  To plug the gap at the top end of the product range, Sir William looked at producing a Daimler version of the planned Jaguar 420 large saloon.  He ran his plan past the directors of Stratstone and there was some debate about what to call it – one director suggesting Royale and one, Sovereign.  Sir William said they were already thinking of Royale and that name was settled on.  Two months later he phoned Stratstone and said the Daimler would be coming out as the Sovereign – Smillie joked ‘I should have asked for a royalty!’.

Sales of the SP250 continued to disappoint and with the advent of the E-Type in 1961 there was no economic reason to to keep it going so the SP250 was discontinued in 1962 having sold only 2,654.

The Majestic Major Limousine  only ever sold in small numbers and Jaguar replaced it in 1968 with the Daimler DS420 limousine.  This was based on a stretched version of the Jaguar Mark X floorpan with bodies built at the  Vanden Plas factory at Kingsbury in London.

Radford was now Jaguar’s main engine plant, continuing to build the Turner designed V8 engine in both 2.5 and 4.5 litre versions, as well as the XK engines, and took on production of the V12 engine when it was launched in the mid 1970s.

The famous Double-Six name was revived for Daimlers powered with the new Jaguar V12 engine and the supercharged V8 powered Daimler was given the name Super Eight.

Daimler continued as an important part of the Jaguar product range as the premium version of the Jaguar models.  In 1991, the year that Ford took over the company, total Jaguar output was 36,856 cars of which about 5% (over 1,800) were Daimlers.  By 1993 this proportion had increased to 11.5%.

The Radford engine plant was closed by Ford in 1997, when it moved all Jaguar engine production to its Bridgend facility in Wales.

The marque itself came to an end in 2009 when the last Daimler, a badged Jaguar XJ, came off the line at Castle Bromwich.

Daimler was consigned to the history books but the name is still jointly-owned by Daimler-Benz (Mercedes-Benz) and Jaguar Land Rover  in a deal put together by Ford, just before they sold Jaguar and Land Rover to the Tata Automotive Group.

What cannot be denied is the fact that Daimler (and Lanchester) produced some exceptional vehicles from the earliest days of motoring right up to its demise as a Jaguar product.  In between there were some rare and exotic models that reflected the times and some failures, the SP250 comes to mind, but it is a marque that was, in engineering terms, years ahead of the competition and one that should be remembered as long as there are motorcars.

 

Author: François Prins and Tony Merrygold

 

© Text and Images – Jaguar Daimler Heritage Trust