Ryder rethinks position
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• Last May Ryder announced plans to sell its UK contract-hire and rental operations. Now it wants to keep them. Why the Uturn? "To be very candid we couldn't find a buyer to pay the price we wanted," says Ryder president Tony Burns.
The proposed sale attracted plenty of interest from vehicle manufacturers, leasing rivals and finance companies. Some even bid for the business—but none were prepared to pay Ryder's asking price,
We had assets of $400m (£249m)," says Burns. 'We expected not to take a loss, and they came short." Some bidders might not have wanted to take on the residual risk of
Ryder's 18,000 strong fleet.
However, Burns says "We feel better over the next two or three years on residuals than in 1998."
So was it all a waste of time? Having failed to find a buyer Ryder has examined its contracthire and rental businesses and concluded that the best thing to do is to keep them. "We actually learnt a great deal from the analysis and decided to retain it," says Burns. Given the lack of a suitable suitor, Ryder could hardly do anything else.
Hefty price
Last week it emerged that the company also set aside $6m (£3.71m) to cover the cost of putting the contract-hire and rental division up for sale. That's a hefty price for ringing up a No Sale".
Having failed once, Burns says Ryder won't try again. "This isn't a whim or a change," he stresses. "It was after a thorough evaluation and after going back to the Ryder Board. They unanimously agreed with it." The board has also agreed to a £200m capital expenditure commitment for the UK. Half of that will go on asset replacement, with £50m already committed to rental equipment.
Burns admits the on/off sale has been "very negative for Ryder, but we've come back aggressively and we'll keep the Ryder name".
Customer reaction
"We said to customers providing us with low margins that we'd like to renegotiate," says Burns.
"We've improved margins already. We've also found areas where we can improve the cost situation—we feel we can compete effectivety."
And if they won't pay more? He accepts that Ryder might lose some customers.
However, this job could be made that bit easier by Ryder's target audience. "We're not chasing the haulage sector," says Burns. "We not only don't want to be truckers, we don't want to lease or rent to haulage customers—and that's not going to change."
For Burns, the business lies with own-account operators and those requiring specialist equipment. Despite citing GE Capital as a major rival, Burns says Ryder will be giving the trailer rental market a wide berth, concluding bluntly: "TIP can have that."