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The cars are still the stars

18th May 2000, Page 12
18th May 2000
Page 12
Page 12, 18th May 2000 — The cars are still the stars
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Which of the following most accurately describes the problem?

One car plant was axed and another was reprieved in the space of three days last week. But, as Guy Sheppard reports, these announcements are unlikely to end the turmoil hauliers in the motor industry still have to face: if the work returns, will it be at the right price?

• Several thousand employees in transport and logistics are dependent on the fortunes of Ford and Rover. The news that car assembly at Ford's Dagenbarn plant in Essex will cease in 2002 and that Rover's Longbridge factory in Birmingham will survive is therefore a blow to some and a relief to others.

Among those most vulnerable to redundancy are 900 people employed at Ford's UK parts depot in Daventry and more than 500 drivers who work for Ford's in-house parts distribution fleet. More than half of these drivers are based at Dagenham. Exel is also heavily involved in Ford's parts distribution, which accounts for most of the work at its Lander Street depot in Birmingham, where 150 people are employed. There could also be job losses at Exel's .£10m integrated logistics centre for Rover at Cowley as a result of Rover 75's production being moved to Longbridge.

Hundreds of smaller operators who move parts and mate

rials to the main motor component suppliers will be hit as well.

Even after it becomes clear where the job axe will fall, continuing over-capacity in the car industry means that transport operators are unlikely to see an end to their problems.

Clive Hampson, chairman of the Road Haulage Association's Midlands and Western region, says the rescue of Longbridge by the Phoenix consortium might have saved manyjobs, but that competition for work is hkely to intensify.

"It is not a case of whether haulage companies will get the work back, but whether they will get it back at the right rate. I think competition is going to be more fierce than in the past: when Phoenix want cars moved and parts brought, they are going to screw prices down from the people supplying the service."

Sharply intensifying competition was apparent before BMW announced that it wanted to sell off Longbridge. At the end of January, TNT lost a 15m-ayear contract to run the plant's distribution centre. It subsequently lost a 110m-a-year distribution contract at Land Rover's Solihull plant to the same company, Rudolph & Hellman. This is a joint venture company between a German automotive sector specialist and Lichfield-based Hellman Worldwide Logistics.

Paul Goldsbrough, Hellman's sales and marketing managing director, says substantial savings are now being made. "Traditionally, the automotive industry in the UK has bought its transport and warehousing services from large companies such as Exel on a 'cost plus' basis." This means charging the client all the on-going costs of the contract plus a management fee. "What we have done is give a price for every item that comes into the warehouse, thus moving the risk away from the car producer to us." He says this increases the incentive to be efficient.

He adds that Rudolph & Hellman has been talking to two other automotive companies since winning the Longbridge and Solihull contracts.

It looks as if the company will benefit from the Rover 76 transfer to Longbridge, but Leigh Pomiett, president of Exel's worldwide automotive division, says nothing is certain following the Phoenix take-over. "It depends or how the new boys want to run their logistics. They many not want a distribution contractor." Instead, he says, parts could be delivered by the supplier directly to the plant, as happens with Toyota.

He also questions whether the closure of Dagenham will have such an adverse impact on Exel. 'It depends where car production goes. it is a very complex, dynamic situation. People assume these fairly simple assessments. If cars are going to be made in Cologne, it is not necessarily bad news for us."

Car transport operators also play down the threat posed by the Rover and Ford announcements. Noel Sutton,

mercial, which works for Rover, says: "If Rover had failed completely, its share of the market would have been taken up by other people who make cars. The pie is the same size, but might be shared out slightly differently."

Mark Morgan is marketing

director for AutoLogic Holdings, which set up a subsidiary, Ansa Logistics, to work for Ford last year. Ansa employs 660 people and has 270 transporters. "When production stops at Dagenham, we assume that production will be replaced from Cologne, and we will be transporting a similar number of vehicles in the UK. We are not expecting to see a dramatic change in our business from Ford."

managing director of Birmingham-based Car & Corn


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