JT leaves a leaner Bedford
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by Brian Weatherley
WHEN J. T. Battenberg 111 — Bedford's former general manager — gets on the plane that will take him back to America, he may pause to think about the company he is leaving behind.
When he took over at Bedford in 1983, his brief was to turn General Motors' ailing UK Truck-building subsidiary (which has not made a profit since 19 7 9) into a "viable, dynamic company in the commercial vehicle world". A simple description of a job that has been anything but simple.
In the final analysis profitability eluded Battenberg, but his successor will inherit a very different company from the one that Battenberg joined two-and-a-half years ago.
Bedford's deficit last year of .5:62.4 million belies the 010 million plus which GM has invested largely in the major restructuring and revitalisation of Bedford's facilities at Luton and Dunstable, which has taken place under Battenberg.
The company's programme of voluntary redundancy and early retirement that has cut the workforce from 9,706 to 6,969 has also swallowed up capital. The rebuilding of Bedford has been "a long and painful process'', says Battenberg. Cutbacks in staff have extended far beyond the shop floor and into the offices of the company's executive staff. According to Battenberg, Bedford has reduced its administration by 35 per cent. "We've just taken out levels of management and reduced the decision making to key managers."
In many respects the job has been made easier for Battenberg by what he sees as the "practical and pragmatic approach" with which Bedford's workforce has met the company's problems. He is pleased about the recent twoyear wage settlement with the workforce, which he sees as a significant breakthrough for the company which now Ike, two years of labour stability: "That bodes well for the future.
The turning point in Bedford's fortune, says Battenberg, was the decision taken by GM just before his arrival, to separate Bedford from Vauxhall and make it a division of GM's Overseas Commercial Vehicle Corporation. This broke up a previously large bureaucratic organisation into small, strategic business units responsible for vans, trucks and parts.
"When we put a dedicated CV warn together," says Battenberg, "and gave them responsibility for nothing but commercial vehicles, they became really focussed."
One benefit of this approach has been the strengthening of the ties between Bedford and its dealers, which Battenberg feels are now "excellent".
It is not all aver yet, however, says Battenberg. "We're not there by a long shot. More work still has to be done to be sure that you're viable in this industry, but Bedford has made a good start." Any future reductions in the workforce, he stresses, will depend on how Bedford does in vehicle sales, particularly with new models like the Rascal microvan.
By any yardstick, Bedford's product revival — particularly under 3.5 tonnes GVW — has been spectacular. Of the 11 new or revised models introduced since 1983, over half have been vans. These include the Astra Van, the Astramax, the updated CF2, the Electric CF, the Midi and — the newest of them all — the Rascal.
That Bedford should have concentrated so much at the lighter end is no accident. The increased light van volumes have provided a much-needed increase in throughput through Bedford's dealers.
Earlier this year. Battenberg was talking about returning a profit next year, but external factors have tern pered this expectation. "Our objective is to make Bedford a viable company, and to get into an operating profit as quickly as possible — we had hoped 1986 — and that's going to be a very difficult objective to reach."
In particular, currency exchange rates have hit the recent increase in Bedford's overseas sales, which are up by 40 per cent. "We're getting export orders, but profitability is not what it used to be," says Battenberg.
"The devaluation in Italy has been a particularly painful one. We've just launched the Midi against an eight per cent devaluation. And we're also fighting some very expensive interest rates."
Within the UK, over-capacity and widespread discounting have done little to arrest Bedford's falling heavy truck sales, and the company has recently been overtaken by Mercedes above 3.5 tonnes.
"We completely misjudged the significance, longevity and depth of the discounting that has been going on in the industry. We've had to back off from a lot of potential business. Because discounting is impractical we've withdrawn from some tenders. We're here to try and turn the company around, riot buy a market share."
Battenberg offers no magic solution. "It's going to take some strong leadership. With the over-capacity in Europe it's not going to be easy for everyone to wean themselves off it. I had certainly hoped we'd be over it by now, but it's still a very difficult situation."
Bedford's decision to go to Japan for its Midi and Rascal light van designs attracted a fair amount of criticism, and some scepticism on the local content of the Luton-built. models. But the choice of Japanese designs "offered a reduction in lead times beyond anything we could get with other products. We wanted to get as many vehicles through the dealerships as we could — so I don't think there is anything sinister, nor is there necessarily any directive (from GM). It's a good business decision — they provided us with the solution to our short-term needs."
Battenberg leaves Bedford to become new product manager at GM's Flint Luxury Car Group with sonic, though not many, regrets. Not least is his departing before Bedford makes it into the black. The recent breakdown in talks with a view to GM's taking a major shareholding in Enasa left him disappointed, though he stresses they are by no means over and Bedford is currently discussing the possibility of selling the Midi into Spain through the country's major truck manufacturer.
As for the joint GM/Leyland talks, which are still going on, he feels "it would be premature to speculate on the outcome".
Under Battenberg, Bedford has undoubtedly become a leaner, more cost-effective organisation with a management team that is "fully attuned to the times".
"Bedford will become viable. We're committed to doing that and my successor will be committed to that objective," he asserts.