Tough Texan in the saddle
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Facing what he describes as the most uncomfortable week of his life, Bob Johnson, Seddon Atkinson's Texan md, tells lain Sherriff how he sees SA's role in the British and European cv scene
ierriff: You've now been in the saddle for just over four onths. What difference do you Id between British manageent and working methods and ose in mainland Europe and SA?
ohnson: I've now been working Aside the USA for eleven iars, so it's hard for me to ake current comparisons. 3rth American and Western iropean managers, though, exict and indeed get more of a immitment to productivity )m their workforces. This cornitment is made without the ied for additional incentives. When hired the new employee ows he is expected to give a iod day's work for the agreed te. If he doesn't, he's out. I beye that some commitment is ig overdue for management d shopfloor in the UK to pport the companies that prole their livelihood.
If we don't we'll see our mart taken over by strong foreign mpetition because of our un3listic costs.
lerriff: The British vehicle pulation is as strong and stronger than many in Europe, but it has been said that we have too many manufacturers. What is your view?
Johnson: In the commercial vehicle industry, we don't have too many manufacturers in this country, but we've got more competition than I'd like to see from the European and Japanese makers. The Europeans are determined to take the market away from those of us who produce locally, and the strong pound is helping them.
Seddon Atkinson and the other two principal UK lorry makers produce good, reliable and efficient vehicles. It is a myth that if it's European it's better.
We've got a lot to be proud of. What we must do is reduce the time it takes us to manufacture a truck down to the European standards to keep our product costs right.
Sherriff: How much, if any, rationalisation do you think is desirable between different vehicle makes?
Johnson: Rationalisation between makes is here to stay and failure to recognise it will bring failure. We must all take advantage of the benefits of scale. The customer demands a better vehicle each year. It costs millions to bring a new model, or even a new component.
We will see a shake-out of the smaller weaker companies in the next several years and those left will be using similar componentry world-wide to retain competitiveness.
Sherriff: A recent survey said that there would be an increase in leasing vehicles in 1981/82. This means that the user is one place removed from the supplier. How do you think this might affect your company image?
Johnson: I would agree with the survey forecasts. Our company image will be more in the hands of the leasing companies.
If the customer has a good experience with the Seddon Atkinson which he leases, he will come back to the lease company again and ask for our product. We've got to work more closely with the leasing companies to support them.
Sherriff: If the Armitage Report is adopted by the Government how ready is SA to meet demand? What do you anticipate the overall demand to be?
Johnson: If adopted, 1 believe it will be a stimulant to our market. Users will replace their current trucks a little earlier than planned in order to get a new product that best takes advantage of the new legislation.
At Seddon Atkinson we welcome adoption. We designed our units for years to operate at weights above current limits in anticipation.
Our new 401 is plated at 40 tons with single rear axle. The design work is done for a threeaxle 401 plated at 44 tons.
Sherriff: If you had any national influence on industrial relations in the UK what major step would you take?
Johnson: I would give the employer more ability to resist industrial action — more flexibility to counter it. It is sad for me to see so many companies — big and small — that have the beat planning and a good product brought to financial ruin by continued or sustained industrial disruption.
The final result is that the corn' parry closes and all the jobs are lost. Al.,o, we need stronger government action to reduce the number of unofficial stoppages. Sherriff: What are your development plans? Will it be in styling — engine options — or lighter models?
Johnson: Currently our development engineers are working on some options for models that we believe will bring us increased market share. Over the past two and a half years the emphasis was on quality and reliability, and we've made great strides in this area.
Last October we introduced the 401, which has the finest cab in the UK market. The cab steel components are of Zintac to give it the best corrosion resistance that metal technology can provide.
Also, to give better service and lighter weight, we used a lot of smc material in the frontal area and lower sides where chipping is prevalent.
The chassis has several components that are lighter in weight but stronger than before. We took a quarter ton of weight out of this vehicle and improved on the reliability as well.
Also last year we introduced a new lightweight 300 tractor for the 32-ton-gross load. It has been very well received.
We've done a lot in the last two and a half years, but we must keep at it. The customer won't let us stand still.
Sherriff: How much influence does 1H have in your product planning? Do SA have a free hand, or is there development by direction from USA?
Johnson: Our parent — IH — exercises little influence and certainly issues no directives regarding product development at Seddon Atkinson. The only rule they impose is for our benefit and that is that we must follow the IH procedures for, new product development.
They stand ready to help us meet our market needs with componentry, purchasing power, engineering and testing facilities — many things that we, a relatively low volume manufacturer, couldn't afford as an independent without backing.
Thank goodness we have accessibility to IH's tremendous resources. We have all the advantages, without a cost penalty.
They do look to us for direction and guidance on what the UK and European markets will require of a product in the years ahead. With International Harvester's heavy involvement in Spain now, and our determination as a truck group to be a major factor in Europe in a few years, the proper product selection and development is critical.
Our company, through our manager of engineering, Roy Wild, will play a vital role. In fact Roy is in the States now.
Sherriff: You are in an area where there has been little growth in the last decade. Do you see an improvement in the next five years? If so, can you quantify it?
Johnson: We are in a market with only small growth potential for the foreseeable future when we confine ourselves to the UK market only. We must continue to pursue increased market share.
Also, with International Harvester's help, we must look beyond our home market and make some moves to market aggressively in Europe and develop Middle East and African markets.
Sherriff: I imagine you are now quoting immediately delivery on all models or have you supply problems?
Johnson: We can meet most orders quickly despite the threeday week, but there are obviously some models affected by the short-time working at many of our suppliers. We need rapid reaction from them, but the lower quantities from all their customers prevent any increase in working to satisfy us.
Nobody can afford the inventory levels of a year ago and so the vicious circle is maintained.
The future market situation is now a lot clearer than it was before Christmas, and though the picture is no happier, it does allow more helpful supply arrangements.
Sherriff: Money, of course, is tight. Do you find operators have problems getting financial aid? Johnson: We must be the only vehicle manufacturer with our own "in-house" finance company, which is International Harvester Credit Corporation. This naturally gives us advantages over those using outside finance houses. We can and do negotiate better terms than average and these benefits are being passed directly to customers to ensure continuing business.
As well as attractive interest rates from two per cent per annum which, unlike some schemes, are paid monthly in arrears, our distributors and IHCC are able to offer a wider permutation of interest rates, discounts and deposits. These offers range from free credit for a short period to repayments of up to 60 months.
Sherriff: At a time when local authorities are cutting back expenditure, should they consider leasing their vehicles?
Johnson: That is a good point and one which may be forced to local government notice in the lean times ahead.
There is no problem in arranging vehicle leasing and financial credit with city or district councils in the same way as we deal with haulage companies. Our distributors are willing and capable of negotiating with the necessary officials. The reluctance of local authorities to consider anything but capital expenditure is well-known.
As far as our specialist municipal vehicle is concerned, we seem to enjoy a much better relationship with local government, and in this we are considerably helped by the specialists providing complete vehicles on our chassis — particularly Jack Allen (Motor Bodies) Ltd, Bradley Municipal Vehicles Ltd and Norba UK Ltd.
Sherriff: Alongside the big Europeans, SA doesn't appear too often in the public eye with massive investment and new vehicle launches.
Johnson: Last year's investment into Seddon Atkinson was split between the cost of introducing the many new truck designs and our new parts distribution centre near Preston.
We brought out no less than eight new trucks last year; five 300 models in April, our new municipal chassis in May; the 401 tractor range in October; and a high-powered 300 16-tonner in November.
The centre cost us £2.5m and has two-and-a-half times the storage and handling area of the previous facility.
It holds some 30,000 different lines worth f51/2m and these, together with some E5m worth of
parts in our distributors' pa stores, will enable us to e first-class assistance operators on their maintena programmes.
Sherriff: You are obviously %. pleased with your parts serv but surely you don't conside the be all and end all of al sales service?
Johnson: There is more providing the best possi after-sales support than opening a new parts centre, matter how good it is. We h made tremendous strides "beefing up" this activity du the past two years.
We started by moving our vice training centre to r premises and doubling number of courses on offer the present time we are pn cally booked up until the eni the year, despite the reducec come among so many haulie
More recently we have in duced our own breakdown covery service, Sabre, wl provides roadside assista after one phone call to a cen ised control room. There is surcharge for call-outs, and control office can arrai accommodation, secu parking, hire vehicles and ph calls home for stranded drive The latest introduction i contract maintenance and re scheme for up to three year: new 400 and 401 vehicles. It taken us a long time to intro( such a scheme, but a c amount of work was neede ensure we could offer very c petitive prices. We hope to tend this scheme to our c models, but it does take a time to gather sufficient op ing data on which to calci meaningful costs.
In total, the contract scher quite complex, but it is ea.5 explain to individual inqu and has advantages for small and large operators. Sherriff: By popular "dem; you have reintroduced the E to your logo. Why do you this demand came about what might it mean in future image?
Johnson: We've had an idi problem for the last SE years. Our product range good but not easily recog by people outside the indus
We wanted a symbol everyone could identify an Atkinson Big A was the n, choice. It has always been nymous with quality, relii and ruggedness.
The operators dictated tl cision. So many of our ye produced in the last five carry the symbol — placed by the drivers.