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'As From Tomorrow'

7th December 1962
Page 69
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Page 69, 7th December 1962 — 'As From Tomorrow'
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Which of the following most accurately describes the problem?

The final article in a series of three published in successive issues of 'The Commercial Motor' describing take-over procedure in a large haulage group BRIEFLY describing the development of the company bearing his name, Mr. Charles Alexander said that he started in business in 1926 and was a pioneer in establishing long-distance trunk services by road to serve the Aberdeen fish trade. Prior to nationalization, several smaller concerns had been absorbed, and, after denationalization, the company was built up again to a strength of around 140, when it was acquired by the Transport Development Group in September 1960.

In addition to the headquarters at Aberdeen, there are six other depots in Scotland and a further three in England at Liverpool, Manchester and London. The present fleet totals. 151 vehicles and there is a staff of around 400.

Commenting on the private discussion which took place before the take-over by T.D.G., Mr. Alexander said that he had two exploratory meetings as early as 1958 and the matter .remained in abeyance when he left early in 1959 for an extended trip of America. On his return there were several further meetings before both parties were in agreement that the merger should take place.

Confidential Discussion

Despite this protracted period of negotiations, the discussions were kept completely confidential until conclusion. Then Mr. Alexander took particular pains to ensure that he personally was the first to inform, verbally, as many of his employees as possible of the intended change of ownership immediately prior to the public announcement, and to assure them as to their future livelihood.

Although Charles Alexander and Partners (Transport) Ltd was a large organization immediately before being taken over by T.D.G., the company had remained essentially a family business in which employees at all levels were entitled to consult Mr. Alexander on appropriate matters. Mr. Alexander was determined that this relationship 'should continue after the take-over.

In contrast to the situation in connection with other acquisitions by the T.D.G., when either centralization or decentralization had taken place after take-over, there has been virtually no outward change in the case of C.A.P.T. There is, nevertheless, a very good reason why this particular acquisition took place. 1.D.G., for its part, has acquired a well-organized and profitable undertaking, whilst Mr. Alexander secured his main objective, namely to ensure continuity both for the company and, in particular, the employees, some of whom had been With hirn since his early pioneering days.

Family Shares

Elaborating on the situation which faced a man in his position, Mr. Alexander said that he and his family held a very high proportion of C.A.P.T. shares, and in fact the whole business was very largely dependent on him, particularly as regards financial security. In the event of his untimely death, and however prosperous a company might be at the time, such an event could have an embarrassing effect on a company's subsequent prospects. This would apply especially to a company such as C.A.P.T. which was already by far the largest long-distance operator in the area, so making it unlikely that any other company could raise sufficient capital at short notice to acquire C.A.P.T. If, in fact, it did come on the market in such circumstances, the likelihood would be that C.A.P.T. would be broken down into smaller units which would then be sold separately. As a result, the entity of the company, as such, would disappear. And with its disappearance, Mr. Alexander emphasized, there would be inevitably some dislocation of employment or even unemployment for longserving members of C.A.P.T.

Mr. Alexander therefore considered that it was in the best interests of both his family and his employees to negotiate this acquisition carefully in his own time, with no sense of compulsion, as would have been inevitable in other circumstances. There were, in fact, other interests who had approached him as to the possibility of take-over. But his final decision to join T.D.G. was influenced

substantially by the high regard he had gained during the long negotiations for the business acumen and personal integrity of the T.D.G. directors. , Whilst it did not directly bear on Mr. Alexander's decision to throw in his lot with T.D.G., he cited the break-up, in recent years, of a Scottish transport company following ,the death of its chief shareholder. In such circumstances the value of a public company's shares, which are quoted daily on the Stock Exchange, is generally accepted whereas those of a private company, although equally prosperous, could be found difficult to dispose of at short notice.

Since take-over, the T.D.G. system of budgetary control has been introduced although in all respects Mr. Alexander remains, as before, in complete control. Mr. G. H. Scott, director, added that the knowledge that a budgetary control system is in operation has given staff at all levels the added incentive to achieve whatever target has been set.

In a family business such as C.A.P.T., said Mr. Scott, it would have been easy to destroy the goodwill built up over many years, but this had not been thc case since takeover. This had been chiefly due to the helpful approach of the T.D.G. directors which was largely in an advisory capacity, despite the obvious objective of increased efficiency.

In the field of insurance, both as regards conditions and rates, Mr. Scott said they had received valuable advice and guidance from T.D.G. headquarters.

Nevertheless, whilst in no way detracting from the value of efficient systems, Mr. Alexander insists that successful road transport operation is dependent to a large degree on the selection of the right type of vehicle for a particular job. This factor has been of major importance in their own success and, despite the take-over by T.D.G., the man on the spot, in this case Mr. Alexander, still has the authority to make his own selection, dependent only on overall capital expenditure having been previously approved by T.D.G.

In reply to a suggestion that C.A.P.T. is rather unusual

compared with other T.D.G. subsidiary companies in that a large proportion of traffic comes from one source, namely the Aberdeen fish industry, and was therefore dependent On that industry's prosperity, Mr. Alexander said that this is not entirely correct. The C.A.P.T. company issues approximately 11,500 invoices to customers each week, 3,000 only of which concerned the fish industry. As an example of other traffics, Mr. Scott added that they might handle 100 tons of fruit in one night.

In. reply to a suggestion that operation of an overall system of budgetary ,control throughout the T.D.G. subsidiary companies might result in developments which C.A.P.T., for example. might wish to carry out being rejected because of stronger claims made by other companies, Mr. Scott said that this had not occurred. In practice, the worst they had had to contend with had been a postponement.

In line with the greater financial security which acquisition by T.D.G. provided, Mr. Scott said that all staff were privileged to join the T.D.G. pension scheme and, in the case of new staff, this was obligatory. It was also possible for members of the staff to acquire T.D.G. shares at favourable rates arid, if need be, by extended payments.

Unlike the situation which is known to have occurred as a result of other take-overs, no new staff had been introduced from T.D.G. headquarters with resulting stagnation or even demotion for existing members of the staff. In fact the reverse had occurred and Mr. Scott instanced an example where their own depot manager, at Inverness had, since the take-Over, been promoted to managing director of an associated company in the T.D.G. group.

A new modern block of offices has recently been built at the headquarters of C.A.P.T. at Old Ford Road, Aberdeen, housing the traffic invoicing and accountancy departments in addition to the offices of the departmental managers. A staff canteen and shower baths are also being built—of particular benefit to operating staff handling fish. Mr. Scott commented that this development had proved a valuable aid to staff recruitment.


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