Walon company profile
Tim Barber missed last year's Motor Transport Awards for a sponsored walk. Okay, it wasn't just any old sponsored walk, but the notorious Four Peaks Challenge, in which teams of four attempt to tackle Ben Nevis, Scarfell Pike, Snowdon and Ireland's Carantouill in under 48 hours.
Clearly Barber is a driven man. And one suspects that it was his drive that made him the ideal candidate for the managing director's job at car transport firm Walon UK.
When he took over in August 1999 there was an imperative need to remotivate the staff. There was also scope for a management reorganisation. Eighteen months on and the board has been trimmed to a manageable six people and the work force is happier. 'There's still a lot to do – there'll be some radical changes yet,' says Barber. 'But my key priority is to enable our people to get on with their jobs.' Barber knows the business – he has been at Walon for 16 years. Commercial director for five years, he 'popped out of Walon and went up to parent company AutoLogic to do a stint as its commercial director for Europe. That went quite well, but I'd wasted enough time at European airports in previous jobs, and this little opportunity came up fairly swiftly. I haven't been on a plane since I took over this role, thank God'.
AutoLogic has been busy in Europe following its flotation in December 1997. It has bought majority shareholdings in Walon's former sister companies in Holland and Belgium. And last year it acquired RAD in France. 'We will be making further acquisitions and startups elsewhere, so watch this space,' Barber advises (see panel).
'Over a number of years it will become more difficult for the smaller, single-market players to survive. The emergence of major European players will continue. We've done a lot to get into that position in the period since flotation, but the war chest is still there for other suitable deals.' In this environment it seems inevitable that multinational automotive clients will soon want door-to-door distribution without any change of distributor. 'That's been talked about a lot,' says Barber, 'but no one is really doing it yet. It will happen, it's just a question of time. 'We've had one major contract with the Rover Group – with a joint venture subsidiary called Translogistix – to move products from the UK production centres all the way through to the holding centres in the markets we are serving. To do that we contracted the shipping, rail and road movements on the continent.' Walon UK's client list is comprehensive: Alfa Romeo, BMW, Daihatsu, Fiat, Ford, Isuzu, Jaguar, Rover, Saab, Subaru, Toyota and Vauxhall. 'It's easier to say who's absent,' says Barber. 'We don't do much with Volkswagen. And we don't do anything with Nissan or DaimlerChrysler.'
Barber is a bit elusive on the UK market share, claiming the figure is difficult to come by 'because everyone measures it differently'. But he concedes that if all of AutoLogic's subsidiaries and joint ventures are taken into consideration, the market share would be 27% to 28%. For Walon UK alone, he'd quote 10%.
In terms of growth, the opportunities are in the technical, rather than the transport, part of the market. Transport accounts for about 65% of Walon UK's business on a turnover of about £105m. Barber describes as technical anything that happens to a car between it being built and delivered to a dealer. 'It can be as simple as storage, it could be PDI, repairing cars, putting on a stripe, fitting a sunroof or air conditioning – you name it. If a manufacturer is slow in moving a product we could get involved in upgrading it, changing the specification, or doing a marketing programme. Or it could just be warranty work. It can be quite sexy stuff and it can be quite mundane,' says Barber.
By way of example, Walon UK started work with Toyota in 1993, when it won a contract to distribute vehicles in the UK. 'Then it started manufacturing here, so we gained the distribution out of the UK factory. Then we took on work at a new compound doing vehicle enhancements. Then Toyota built a new facility at the UK factory, which it manages but we staff. And more recently we've taken control of the southern import centre. 'What was just a distribution contract has now become a complete logistics process. We're involved in every part of the vehicle inbound process,' boasts Barber.
^1^ With most car manufacturers holding between two and three-months stock, vehicle storage complements vehicle transport especially well, and is quite profitable for Walon UK. If cars aren't being transported, they've got to be stored somewhere. This variety of work gives Walon UK a degree of resilience against market forces. Price is a big issue when tendering for new business. But choosing a transport operator on price alone is a dangerous business, according to Barber. 'Tendering is standard – it's the rules of the game. We tender business, so it would be churlish to complain about the process. But we've seen some contract changes recently which we believe will bring customers disappointment, especially where the contract has been changed on price rather than service issues,' Barber claims.
For many years the market had seen very few contractor changes, but in the past few years Ford, Mercedes, Chrysler, Honda and Fiat have all changed their UK transport suppliers. And where a company loses a major contract, like Axial losing Ford and Richard Lawson losing Mercedes-Benz, it leaves it with a lot of surplus capacity. Contracts in this market last anywhere between one and five years. There's one 15-year contract, which Barber says Walon UK would be more than happy to have. New ideas are demanded of every new tender as the manufacturers have looked to make their processes more efficient. Barber says: 'We've initiated a number of innovative processes. We work with Toyota on a process called COL – Customer Oriented Logistics. And with BMW we're working on a system that guarantees any given trunk is going to run.' Rail is now a serious option. Translogistix has a joint venture with STVA French railways, created solely for the movement of Rover products into Europe. And we also have a railhead at Corby, again developed with STVA for the import of Ford products.
'Rail used to be very inflexible,' says Barber. 'It used to only do full trains, then it was half trains, then carriages, and now you can do individual cars. There are more and more options for point-to-point services. For long-haul, rail works, but you'll never get away from the fact that rail won't deliver to the end user,' he adds.
At which point brings Barber very nicely onto a new service being developed by Walon UK – delivering cars to customers' doors. The company is currently investing £7m in a bespoke fleet of one, two, three and four-car transporters – Mercedes-Benz trucks so far, and, like the rest of the Walon UK fleet, on contract maintenance. These vehicles could deliver for dealers, manufacturers direct or for their Internet sales channels – 'whoever, whatever'.
'It's not being set up as a dot.com per se, but simply as a facilitator for delivery to the home, for example delivering contract hire cars on behalf of a leasing company,' says Barber.
This will require a new breed of driver. At the moment Walon UK driver's picks up cars and deliver them to dealers who know the product. 'We will be training the new drivers in customer care techniques: 'Mrs Jones, let me talk you through this.' That's happening now – we're recruiting and have some of the new guys on now,' says Barber.
Walon UK has an active fleet of about 300 vehicles, with a further 50 available for peak seasons. The company also takes advantage of its foreign sister companies to cover the peaks, when 22,000 vehicle deliveries a week isn't unusual. Following the change in 1999 of the registration age-indicator dates, vehicle sales peaks now come twice, rather than once, a year in March and September. 'Obviously for us the peaks come a little earlier – in Febru-ary and August,' says Barber. 'We're bringing over a number of trucks and drivers from abroad. In Europe their peaks are very different from ours so we can use their trucks rather than hire in vehicles.' Barber believes that the old registration scheme worked to Walon UK's advantage. He says: 'The old system was not unworkable. We were quite sad to see the old system going because we had it sussed. Our planning was superb – we even contracted spare resource to competitors who were struggling. But now the playing field has been levelled – it's a shame.' For a man who has conquered Four Peaks, a level playing field is no fun at all.
Cream is after the CAT
AutoLogic, owner of Walon, is rumoured to be in negotations to buy the French car transporter and logistics company CAT from Renault. Speculation in the French press says the two companies are in negotiations, although no announcement or comment has been made by either company. Walon itself used to be French owned until a management buy out of the UK and Benulux operations. The French operation was purchased by Tibbett & Britten.
