By Ruth Sunderland in The Daily Mail:
If anyone had predicted, back in the 1987, that someone could take a bit of the old British Leyland and transform it into a world-leading company and a beacon of employee ownership, they would probably have been dismissed as mad.
But that is precisely what John Neill, the creator and chairman of Unipart, has done. The scale of his achievement may not immediately be obvious to those who do not remember the bleak industrial landscape of the 1970s.
British Leyland was, in its heyday, the country’s greatest car manufacturer, giving the world the Jaguar, the Range Rover and the Mini. By the era of flares and lava lamps, however, it was notorious for militant trade unionism.
It didn’t help that the governments of the day used the car industry as a mechanism to try to control the economy, rather than recognising it as a long-term business.
Neill, a South African by birth who was educated in Scotland, joined the business in 1974 from General Motors and led a management buyout of Unipart, the spare parts arm of British Leyland, in 1987, when Thatcherite capitalism was at its height.
Desperate to avoid a repeat of the conflict between management and employees that blighted British Leyland, Neill offered all Unipart staff the chance to become shareholders, and the company is still 70 per cent employee-owned.
He clearly sees the 1970s as a formative decade for the UK as a whole. Britain could, he believes, be making 12million cars a year now, instead of fighting our way back to production of 2million, were it not for the damage wreaked back then.
‘You might say all this happened a long time ago, so why not let it go, but we are still living with the consequences,’ he says. ‘At one time British Leyland was this country’s largest exporter. Think about the cars. The Range Rover was years ahead of its time. The E-type Jaguar, regarded as the most beautiful performance car in the world.
‘The Mini, the Triumph Stag. I could go on. They were innovative, they had brilliant design, and they were invented by British engineers.
‘In those days we were making 2million cars a year and Japan was making a couple of hundred thousand. Now they are making 12million. Why aren’t we making 12million?
‘Think about what that would mean for the British economy – how much more we would be able to invest in healthcare, and in educating our people, in creating a strong society. Why did we mess it up?
‘The unions decided to fight the class war on the factory floor. They would go on strike several times a day. ‘Management used to get three foolscap pages every day, and every line would have details of a strike somewhere.‘How can you run a business like that? We had Red Robbo, and people whose agenda had nothing to do with the prosperity of the economy.’
Neill’s response to the rise of the Japanese auto-industry was to learn from it rather than try to fight it. What he learned was the potential in the dull-seeming science of logistics – getting parts to where customers want them, when they want them, without tying up capital unnecessarily by keeping piles of stock. His learning has been crafted into a mantra he calls The Unipart Way, which sounds a bit cult-ish, but operates brilliantly well.
Clients include businesses such as the logistics arm of ASOS, the online fashion retailer, and perhaps more controversially the public sector. Neill says the Unipart Way has saved the taxpayer £440million through its work with HMRC – though it has, perhaps predictably, been criticised by the unions – and he believes it could be applied to other parts of the state sector including the NHS.
Unipart has grown from 2,000 employees when Neill took over to around 10,000 now and has been hiring even in the slump.
‘The worst challenge we had to face was in 2008, when the motor industry went into deep freeze. Honda, an important customer, stopped production for four months, they just shut the factory.
‘If we hadn’t had the Unipart Way we would have had no choice but to let people go, but instead we put them into other parts of the business.
‘We took on 1,100 people in 2011, which is not bad going considering the state of the economy and we expect to grow this year.’
Although Neill points out the financial services industry is one of this country’s strengths, he is scathing about the misdeeds of some bankers.
‘Ten years ago I kept saying what was happening in financial services was corrosive. They brought the free enterprise system, which I think is a good system, into disprepute.
‘In any industry, if you sell toxic products, you are responsible, you are held accountable and there are consequences. How come nobody in banking has faced any consequences?’
He is also a critic of predatory overseas takeovers, though he draws a distinction between these and the inward investment into the car industry.
‘Let me give you two contrasting cases. Was I in favour of Kraft taking over Cadbury? Absolutely not. Cadbury should have stayed a British company, and they could have fought harder.
‘But a very good example is Toyota coming into this country. Had Toyota, Honda and Nissan not come here, we would not have a motor industry.
‘But they taught us how to improve productivity and cut costs, and they are still doing it. Their coming in has been wholly good. It is about adding, about investing, not about being predatory.’
Neill is a softly spoken, modest man, who claims his fund manager wife Jackie is cleverer than he is, but he still rejoices in the full title of Dr John Neill, CBE, BA, MBA, DBA, FCIM, FCIPS – possibly the longest list of letters after anyone’s name ever to be seen.
As well as serving as a non-executive at Rolls-Royce, he is vice president of the Society of Motor Manufacturers and Traders and has done a stint as a director of the Bank of England.
He says he wants to give the Coalition a chance, but adds: ‘One of the questions I keep asking government ministers is this: you run the public sector, which is nearly half the economy, so what are you going to do to improve its productivity?
‘If you can’t grow the economy, you are going to struggle to deal with a trillion pound debt. Growth comes from competitiveness, and that comes from productivity.
‘Even the Labour government and Gordon Brown said productivity is at the heart of the nation’s quality of life. Productivity isn’t everything, but in the long run it is almost everything.’
He adds: ‘If the nation has a positive outlook on life, and celebrates what works, then people might be more confident in making investment decisions and spending money.
‘Businessmen are not just analytical and driven by numbers, we are driven by emotion as well.
‘There is £750billion on UK corporate balance sheets not being invested, so we need the confidence factor to come back.’
Neill is the consummate long-termist, who believes in the value of hard work, commitment, and ‘if something works, keep doing it’.
‘People keep asking me what’s new in my business, and I say nothing’s new, this is it. ‘I just follow the Unipart way. I want to serve the real and perceived needs of our customers better than anyone else. Equipping your people at every level to do that, is very hard.’
He goes on: ‘It is like Beethoven’s Ninth. If you go to a concert and hear a fantastic orchestra, it is amazing.
‘That’s because the musicians have put in thousands of hours of hard and painful practice, and they have a great conductor.’ At 65, there are inevitably questions over how long the man who has built Unipart around his own philosophy will continue.
‘I don’t know when the company or I will come to the view that I am not doing it well enough anymore, but if and when that day comes I should step down,’ he says. No doubt he is lining up a successor from within, but still, it is hard to imagine the Unipart orchestra being conducted by anyone else.
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