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• COMMENT DAVID AND GOLIATH
Page 5
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• The series of events which has led to the formation this week of AWD is a David-and-Goliath story with a difference. Instead of slaying the giant, this particular David has bought a part of it.
The American giant, General Motors, may still be described as the world's largest automotive group, despite all its recent near-frantic shedding of CV-related businesses. Thirteen years ago David Brown was living in a council house in the north east of England, having sold his former home to raise the initial capital of 260,000 he needed to set up DJB Engineering. What reason is there to suppose that David Brown can make a success of the Dunstable plant when GM failed to do so, even though DJB has been spectacularly successful and made Brown a millionaire?
Those who say there is none will talk of "economies of scale" and how CV manufacturing has become "a global business". They are not likely to welcome the restart of truck and bus production at Dunstable because it reverses the recent moves to cut back overcapacity in European CV manufacturing. That trend, goes the argument, ultimately benefits the CV operator because only big, profitable manufacturers can afford the research and development budgets required to develop efficient commercial vehicles of the future.
There are several flaws in that line of argument, the most obvious being that one need not look beyond General Motors to see that big certainly is not synonymous with successful in the CV manufacturing business.
We believe that David Brown stands a better-than-fighting chance of making a success of AWD, although, as he has already acknowledged, his task is not going to be easy — particularly given the , recent dark forecasts of depressed truck markets from next year. One of Brown's ace cards is that he speaks the same plain language as many of his potential AWD customers. Newly-appointed AWD managing director, Ron Hancock, does the same. Furthermore, AWD will have the support of an impressive engineering team, both from Luton and from the DJI organisation.
Perhaps the most significant factor in AWD's favour, however, is that its formation is likely to be welcomed by a significant proportion of truck buyers in Britain. Like Brown, most of them have little time for macro-economic theories. They are likely to believe that a healthy increase in competition among their suppliers must be for the good.
One of the most interesting questions in this industry to be answered over the next few years is whether AWD can profitably pick up the Bedford pieces.