MARCHING DOWNHILL
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• The failure of York is not likely to be greeted with glee by fellow trailer manufacturers. True, a rival with a 30% market share and a portfolio of strong brand names, including Neville Charrold and Abel Demountables, is in receivership. But this must be cold comfort for trailer builders who are bottling to survive in the toughest environment since the last war.
New semi-trailers are traditionally well down a hard-pressed haulier's shopping list: trucks and engines have a limited shelf life and must be replaced at some stage, while a trailer can generally be made to last that little bit longer.
The trailer builders' concern is summed up by the biggest, Crane Fruehauf, which says York's troubles "are an indication of how long and deep this recession is. A lot of people must be very worried".
The move by Jim Davies, the Grand Duke of the 1988 York buyout, was ambitious and well planned. Leveraged buyouts (which depend on a massive loan to be paid back with the revenues of an expanding firm) were all the rage in the brash world of the mid-1980s. Davies' plan was to push into Europe by takeover.
This would have protected the group from a downturn in the domestic UK market, but it depended on continuing access to cash, and high interest rates meant hefty monthly repayments to York's bankers. In the end, York quite simply could not sell enough trailers to fund its debts.