Shake-up at York group
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By Tim Biakemore
NEWS of a reorganisation in a York Trailer subsidiary (CM. February 16) will inevitably lead some industry observers to recall the group's deep troubles of the early Eighties.
That was when, like all trailer manufacturers, York suffered from the plummeting trailer sales figures, and the group's response was a "rationalisation", which turned out to be a euphemism for plant closures and large scale job losses. So serious was York's position then that when it was put up for sale there were no offers.
Jim Davies, the York group managing director, is well aware that the instant conclusion that some will reach on hearing of his latest plans will be along the lines of "here we go again". He would like then to think again before reaching that conclusion, mainly because he says it simply is not correct.
Jim Davies explained to me how York's position in the UK in 1985 is very different from the one it occupied in 1980, and why he judges the planned changes necessary.
The first obvious difference is in the group's financial results. York's heavy losses of 1980 and 1981 were turned into a net profit of nearly £507,000 in 1983, the last full year for which results were available.
Chairman Fred Davies (Jim Davies' father) described York Trailer as being "back in the fast lane". The results for 1984 are not expected to be published for another month and Jim Davies thought it too early to give any indication of what they might show, but it is fair to say that it would come as quite a shock if York were seen to be veering from the fast lane towards the hard shoulder. Half year results show a profit of £250,000.
But, if the group is rolling along so smoothly why tamper with the branches of an important operating subsidiary, York Truck Equipment?
Jim Davies would probably dislike the word "tamper" as much as he does "rationalisation". As we reported last week, some branches are to be closed. Rainham and Bridgend are at the top of the list, and in the short-term at least, some of the 220 jobs in York branches will be lost. Rainham currently employs 14 and Bridgend three, The central parts store for the fleet of 36 Transpart vans is to move from Cannock to Corby. But Jim Davies insists that he "is not looking to reduce the overall head count" nor the number of York "dots on the map".
York is looking to reduce its site costs and the general policy which lies behind the reorganisation programme, which is expected to last about one year, is to reduce the size of branches in line with the requirements of modern York customers.
With the benefit of hindsight it is now clear that York management recognised the need for this about 12 months ago.
In his comments on "the outlook" in the chairman's statement in May last year, Fred Davies wrote: "The objective now is to build on our recovery by improving returns on capital employed at various locations.
"Particular scope for this rests in sundry valuable properties surplus to our needs both in the United Kingdom and Holland, the saleability of which should increase in line with a general trade revival."
Selling large and expensive branches and moving smaller, more economical ones may be an attractive proposition, but is that not bound to affect adversely the service York's customers can expect?
Jim Davies explained why that is not so by detailing a typical York Truck Equipment's branch's three principal activities which are: • Providing parts; • Providing labour intensive repair and maintenance for trailers mainly; • Providing local engineering support, mainly for vehicle and trailer conversion work. He described how these have changed since most branches were established in the Sixties, It is in the last two activities that the emphasis has changed most in recent years. There is less trailer repair and maintenance work being done by York and so the use of large workshops is diminishing. Jim Davies sees service vans visiting customers' premises as the best way to tackle this work in the future.
National type approval of goods vehicles is mainly responsible for the great change that has taken place in branch engineering work.
Now chassis convertors have to work closely with vehicle manufacturers and the Department of Transport engineers, and that demands a centralised pool of engineering expertise such as York has at Corby, rather than individual engineers at branches going their own way.
The need for local stocks of parts has hardly changed except that the motorway network makes it easier for each branch to serve a larger area.
Jim Davies's plans mean that a typical York Truck Equipment branch of the future will be smaller than a current one, occupying a workshop area of around 5,000 to 8,000sqft instead of the present average of 20,0 00sqft. Essentially the branches of the future will be bases for Transpart vans and a fleet of service vans.
Jim Davies accepts that "this will involve some disruption". But he considers that worthwhile for the benefits resulting for York and its customers alike. "We are breaking some eggs to try to make an omelette," is how he phrased it, with not a mention of rationalisation.