Friday, 23 December 2011
WO: The collapse of Bentley Motors
“It was”, said WO Bentley, “the most distasteful and depressing episode in my life.” Yet recalling at the age of 70 what happened when he was 43 may have betrayed a selective memory. Some details in his autobiography, published in 1958, of what happened when Bentley Motors failed were contentious.
The main facts are not in dispute. Bentley Motors was wound up on 9 September 1931. Cricklewood’s closure and receivership ended the first chapter of Bentley’s 90-year history. The Autocar confidently predicted that selling Bentley to aero engine and former car manufacturer, Napier, awaited only formal approval. The receiver had approached WO, there were plans for a Napier-Bentley and even a price, £104,775.
If only it had been that simple. Bentley had ceased trading in June, when its monthly interest payment to The London Life Association Ltd, 81 King William St EC, fell due. London Life held the Cricklewood mortgage, but Bentley Motors failed to meet it and Woolf Barnato, who had been buying creditors off since 1925, had had enough. The end was nigh and the receiver applied to a court for confirmation of the sale.
The hearing was interrupted by the British Central Equitable Trust (BCET). A small London business house specialising in company negotiations, it stepped in with a higher offer, and said it would match whatever else was put up. Napier asked for an adjournment so that it could raise its bid. The court refused to act as auctioneer and demanded sealed tenders from the opposing barristers by half past four. The BCET’s offer was higher and, obliged to act in shareholders’ and creditors’ interests, the court had to accept it.
Headlines next day made depressing reading. “Bentley Motors – Purchase Surprise.” WO was taken aback. Napier tried to cheer him up and confirmed that they still wanted him to work at Acton but the newspaper report contained the reality of his dilemma. “The expected absorption of Bentley Motors Ltd by D Napier and Son Ltd will not take place. An unexpected last-minute bid yesterday afternoon secured the Bentley assets for a rival buyer. Nothing is known of the Trust’s intentions. Nor is any director apparently identified with motor manufacturing. It is therefore presumed that this financial corporation is acting on behalf of some firm as yet unknown.”
It was. “Days passed,” wrote WO in his autobiography. “I was in a state of acute anxiety. It was an odd and unpleasant situation not to know who now controlled my future and the firm that bore my name. I waited for an official word. None came. Napier could tell me nothing.” His future was controlled because he was contractually bound to Bentley Motors, so whoever had bought it, had also bought him.
Sloper carburettors - a Bentley classic.
WO claimed that one evening his wife came back from a cocktail party, where she had overheard a man saying that his company had recently taken over the old Bentley firm. This was Arthur Sidgreaves, managing director of Rolls-Royce.
WO’s account may not have been the whole truth. Malcolm Bobbitt, author of WO The Man Behind the Marque (Breedon Books Publishing 2003) points out that WO was estranged from Mrs Bentley, the former Audrey Morten Chester Hutchinson, whom he married in 1920. The wife in WO’s explanation may not have been Audrey at all, but her friend Margaret Roberts Hutton, with whom WO was conducting an affair. Audrey was about to issue divorce proceedings and in due course WO and Margaret married.
Bobbitt suggests that: “In the relatively tight-knit society of luxury motor car manufacturers, Audrey Bentley would have been known, and likewise she would have known Arthur Sidgreaves. Remarks made by Sidgreaves in Audrey’s presence would have been indiscreet, suggesting that it might have been Margaret, rather than Audrey, who attended the party.”
WO’s world was coming to pieces. Bentley Motors was lost. His first wife Léonie had died in the influenza epidemic following the First World War and now his second marriage, for a long time unhappy, was coming to an end. There had been rumours of WO’s other affairs and his handling of Bentley Motors’ day to day business had been rancorous. He was hopelessly self-indulgent. He was good at testing cars, which he enjoyed, but even at his prep school Lambrook confessed he didn’t persevere at things unless he liked doing them. He said, “I didn’t like doing the things I didn’t like, and that was that.” He didn’t like the business side of Bentley Motors so he didn’t do it. He loved organising the racing side at which, like Enzo Ferrari, he excelled.
The romance racing Bentleys. Le Mans by night.
It was with bitterness that he learned of the subterfuge under which Rolls-Royce, discovering Napier’s interest, had employed BCET to pre-empt it. WO wrote: “Eighteen months before Bentley Motors went into liquidation we were making a very good profit, due largely to the 8 Litre. The amount of work involved in making it wasn’t much more than making a 6½ but we charged a lot more. In fact we put on an extra £50 to make it more than a Rolls-Royce.”
Bentley among others had found that it did not cost a great deal more to make a big car than a little car. The sole advantage, reduced weight of metal, never amounted to much in terms of costs. Machining, construction, labour or the price of components meant there was in the end very little difference. It was always possible to leave complication off a cheaper car, although a manufacturer still had to go through the same processes for a car of any size.
“The 8 Litre gave us prestige and the price didn’t mean a thing to people who bought our cars. Shortly before we went into liquidation we were going to become a public company and the capital was practically underwritten. We were thinking about building a smaller car – down to 1½ litres perhaps – but then the slump arrived.” WO’s dreams were in vain. The trading loss for 1931 was £84,174 and Rolls-Royce bought Bentley for £125,175.
Major W Hartley Whyte's (the Whyte of Whyte and Mackay)8 Litre.
What really irked him, however, was not the takeover of his name so much as the realisation that he went with the office furniture. Among Bentley Motors’ 1919 Articles of Association was a clause that had far-reaching consequences. WO was paid £2,000 a year royalty for his patents on various aspects of the design of Bentley cars, but was forbidden to leave the company or compete with it. In 1925, when Barnato came in to keep the firm afloat, the shares were devalued from £1 to one shilling (5p) so most of the original investors lost money. More tellingly the new regime saw WO as vital, so although his financial interests were reduced and his salary halved, he remained under contract to Bentley Motors for life.
The contract worked both ways. There were times when Barnato and his nominees, despairing of WO’s indifference to realistic accounting, would gladly have seen the back of him, notwithstanding the difficulties that would have ensued. Many years later Barnato suggested that had WO been removed, breaching his contract might have been costly but outside the firm hardly anybody would have noticed. By the late 1930s under Rolls-Royce, WO’s input was not essential for production of Bentley cars; the make was well established.
Earlier days. WO at the wheel of a DFP.
WO’s position was, as Bobbit says, fragile and there were many differences of opinion between him and the other directors notably over the 4 Litre. He had been miffed when they went to Harry Ricardo to design its engine, although WO’s haughty claim to have had nothing to do with it at all do not stand up. His correspondence with Ricardo and visits to him at Shoreham suggest their relationship may indeed have been cordial.
By the time Rolls-Royce informed WO that his lifetime obligation to Bentley Motors remained in force, he felt embittered. Napier took his case up but lost and he had to sign up with Rolls-Royce for test-driving and tedious meetings, but no place on the design or engineering staff, and no seat on the board alongside Barnato. He had an unhappy encounter with the ailing Sir Henry Royce who gruffly forbade him from the premises. Royce wrote to Sidgreaves, “If we were to let him have the run of Derby designs, experiments and reputation, Rolls-Royce would teach him more than he would help us, and we should be making him more powerful to do us harm by perhaps in a year or two going to Napier or elsewhere.”
The pity was that had they thought it through the pair, as with Ricardo, might have had more in common than they imagined. As it was, Royce was in physical and mental decline, while WO felt frustrated and humiliated. Their spat left a Royce-Bentley a great automotive might-have-been.