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1113 may pull out of £48m Ford deal

28th September 1995
Page 7
Page 7, 28th September 1995 — 1113 may pull out of £48m Ford deal
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Which of the following most accurately describes the problem?

• Tibbert and Britten is threatening to axe its £48m-a-year Ford car distribution business after financial results posted last week showed that the contract could cost the company ..4:10m this year The warning threatens 750 jobs, including 400 car transporter drivers, and the distribution of up to 350,000 cars a year.

It follows the removal this month of Axial's managing director in the UK, Steve Keeling, and a claim from Axial against Ford for some "exceptional costs".

A restructured board of Axial directors is poised to push for "more flexible labour agreements" and to address "contractual weaknesses" with Ford.

Top of the list are the working practices that have dogged Axial—such as an agreement which enabled car compound workers on the Ford contract to earn up to £1,600 a week this summer.

Axial also aims to increase earnings from Ford while introducing financial protection against volatile changes in car volumes.

In the the six months to 1 July T&B's pre-tax profits fell by 60% to £5m, despite a 52% rise in turnover to £307.9m. In the UK Axial made an operating loss of £3.4m, compared with a alin profit during the same period last year.

Tibbett chairman John Harvey says: "The situation (at Axial) is not out of control. The wound is very narrow but it is deep."

Axial's other UK customers include Honda, Daewoo, Nissan, VAG, Jaguar and Peugot: they are not expected to be unaffected by the situation with Ford.

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