CAR TRANSPORTING
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including BRS Automotive. However. BRS is putting a lot of effort into Toyota and I think it is well placed.
"Lead times are coming down so inventory control has become a key issue," says Pegg. "There is a trend towards staggered delivery, which requires much better information control systems." That has led Toleman to invest heavily in computers. Every car passing through its hands is entered into a central database and its progress is closely monitored — £10m was poured into computerisation during the 1980s.
"We are not a company that could be accused of under-investment, but we are going through a difficult time," says Pegg. "We get squeezed as a service company to provide lower costs for the manufacturers but we are still strapped into wage agreements linked to the car manufacturing sector.
"Toleman set out a national agreement of drivers' wages in 1983 but it has gradually been eroded by collective bargaining and bolt-on deals," he adds. "Certain areas, like Birmingham and the West Midlands, have never come into line. We are now having to say, `those times have gone. If you want Toleman to survive and prosper for another 60 years, then you have got to play ball'."
The company has reached a headlinemaking deal with 75% of its automotive workforce involving a 25% pay cut in the final three months of the year.
Transporter drivers were persuaded to accept job sharing when they were told by management at a mass meeting that the company's chief bank, Midland, was losing patience with mounting losses. Toleman lost a week of deliveries to dealers while the employees considered the deal. Birmingham, Luton, and Halewood have separate wage agreements and a deal has yet to be reached there.
As a result of the dispute Vauxhall has pulled the plug and awarded its £2m Luton contract to Abbey Hill, Autocar and Mainland Car Deliveries. Two dozen Toleman drivers will lose their jobs.
BRS AUTOMOTIVE
BRS carries all of Peugeot's UK-built cars destined for the domestic market and 40% of those going for export. It has won the job of handling all Toyota imports coming in through Sheerness; is sole UK transporter for Saab; carries Mercedes-Benz light vans; 50% of Volvos; a third of Jaguar's output; and also claims a share of the Rover cake.
It will carry 250,000 vehicles this year — down 12-15% on last year — and vies with Autocar, Abbey Hill and Richard Lawson for number three spot in the UK market behind the two giants, Toleman and Silcock Express.
BRS is expected to slim down its Coventry operation following plans to cut car production at Peugeot Talbot's factory at Ryton, Warks. The cut could be as high as 10,000 vehicles a year, says BRS. "The marketplace is not in a state of flux — it's in turmoil," says George Inch, distribution and marketing manager at BRS. "The situation is easily described; it is dominated by a few major buyers and over-supplied with service companies facing low rates and high operational costs.
"The manufacturers are demanding higher and higher levels of service but often they are not willing to pay for it," says Inch. "There are a core of longestablished companies which are being undermined by the fact that entry barriers in this sector are low. Firms come in and follow a policy of predatory pricing, which they are able to do because they have low overheads and are looking only to the short-term."
Inch believes the newcomers will have to change their ways if they want to be come medium and long-term players. "As their operations get bigger and the time comes for re-investment, firms like Richard Lawson — and I know he is a good, tight operator — will be forced to bring rates up to realistic levels."
The most noticeable trends in car transporting, says Inch, are reductions in transit damage and shorter lead times. "A few years ago most delivery in 10 days was common — 10 days would be a joke these days; five-day lead times are the norm," Like Toleman, BRS Automotive has committed itself to major investment in an effort to meet customer demand. The 130-strong fleet has been renewed; computer systems put into place; and the regional depot network has been strengthened. The company now operates out of Wakefield, Immingham, Coventry, Longbridge, Cowley, Sheerness and Bathgate.
Inch agrees with Pegg's view that drivers' wages in the sector are inflated: "Truck drivers working in general haulage earn something around £300 a week, depending on the work. It's common for car transporter men to earn £1,200 a week, and sometimes more if they have negoti ated bolt-on deals or drive high technology vehicles. "I think the drivers have got into this sort of pay bracket because the car transporting companies just can't afford to have a strike," says Inch. "Therefore they tend to cave in to pretty much any wage demand. Crisis point has been reached, however. Right now Toleman is telling its drivers 'Enough is enough'."
RICHARD LAWSON GROUP
RLG comprises six companies, most of them operating in the car transportation sector. Richard Lawson Motor Company runs depots at Harwich (to handle Mercedes cars); Wakefield (Mercedes light vans); Ellesmere Port (Vauxhall UK production and dealer storage); Hartlepool and Sheerness (Vauxhall imports); Solihull (Land Rover); Goole (Renault); Southampton (Renault/Seat/Ford); Dagenham (ADT Ford closed sales); and Edinburgh (Scottish deliveries).
Lawson entered the car delivery sector in 1977 as an extension of his car retail interests (he won the Austin Morris franchise for the Dundee area in the early 1970s). The car delivery group now runs more than 200 transporters.
Mercedes-Benz is Lawson's longest standing partner among the major manufacturers: they clinched a one-year contract in 1980 to ferry light vans by trade plate from Immingham to Mercedes' PDI centre in Wakefield. The group currently moves 30,000 cars a year for Mercedes. It has handled all Peugeot/Citroen distribution in Southern England (this is Lawson's biggest single contract to date at 80,000 vehicles a year) and since April it has handled most of its imports through Sheerness. In 1988 Lawson got the job of carrying Fords to ADT auction sites; became national distributor for Seat; sole distributor for the Ford P100 pickup; and chief carrier/PDI agent for Avis Renta-Car. It distributes Renaults through Southampton to the South-West and Scotland, and delivers some 100,000 vehicles a year for Vauxhall through Ellesmere Port. Most recently it was awarded the total UK distribution of Land Rovers for three years. But even Lawson is not immune to the turndown currently afflicting the business.
Richard Lawson reacts to accusations of "predatory pricing" with equanimity. "I think that in any commercial environment, whether you are delivering cars or selling them, there is always a competitive edge. My competitors may not believe I can give a quality service at the prices I do, but in fact our policy is that quality is sacrosanct. There's no compromise on that. "We fight very hard on price, certainly," adds Lawson, "but we won the Land Rover contract in August because our record of transit damage since we got a slice of Land Rover's business in 1987 has been excellent."
by Paul Fisher