Archive | September, 2016

KEEPING CUSTOMERS AT THE HEART OF THE OPERATION

Nikos Germanou shows us around the Brunswick Garage in North London

Nikos

After businessman (and CAT columnist) Andy Savva sold north-London’s Brunswick Garage last December, we were keen to see the operation in new hands. Nikos Germanou, Managing Director worked with Savva for over 16 years; starting his career at the tender age of 17. Germanou explained: “I started with Andy in 1990 at his ‘then’ garage Motor Services in Muswell Hill before moving to the Shaftesbury Garage in Crouch End where we won the Independent Garage of the Year Award 2001”.

Savva eventually sold Shaftesbury Garage, East Barnet, in 2005, with Germanou moving on shortly after to manage an independent in Welham Green for eight years before rejoining Andy at Brunswick Garage in 2014. He elaborated: “I ran the Welham Garage for eight years, building up the business and making a good profit, but I wanted a little bit more from the company than just a wage, so I decided to look for my own garage”. Germanou was advised by Savva not to buy any of the garages he had viewed and instead, offered him a Manager’s position with bonus schemes at Brunswick Garage.

In 2015, Savva was ready to sell up in order to pursue other business ventures leaving Germanou to continue working under new management. However, after completing a management buyout with a team of private investors, Germanou became one of the new owners who carried on the business. “It was a big step buying the garage because of the amount of money, but after getting a partner in, we managed to
buy the business within a month” he said.
“From day one, I have always followed in Andy’s footstep’s and the way I run the garage is exactly how he runs it by always putting the customers first”.

WORKSHOP
As we entered the workshop, it reminded us that this is larger than your standard independent with the 14,000 sq ft. space comprising 12 service ramps, one wheel ramp and two MOT bays catering to class four, five and seven vehicles. Germanou elaborated: “The core vehicles we work on are BMW, VAG and Land Rover. We also do other brands from Minis up to Ferrari, Lamborghini and Bentley, so we have quite a vast range of cars that we cater for”.

TOOLS AND PRODUCTS
With so many different models coming in for servicing, the team are equipped for the challenge thanks to the latest diagnostic tools and garage equipment on site. “The main diagnostic tool we use is the new Autologic Assist”, said Germanou. “We also use the Snap-on Verus Pro tool for fixing faults first time round”. He told CAT that Tecalemit is the firm’s core supplier for its braking, testing and lifting equipment.

TRAINING
It seems imperative whether you’re running an independent or franchised garage to invest in staff training to keep workforces updated with ongoing product developments. Brunswick Garage stays ahead of the game by sending its technicians on at least two courses each year. “We are part of the Royal Motoring Industry (RMI) so we try to do as many Bosch courses as we can”, Germanou added: “We are also doing a few BMW courses at the BMW Academy and some ZF training courses”.

Workshop has 12 service ramps

Workshop has 12 service ramps

Although it’s mandatory to get your staff fully trained, enrolling onto a course can get pricey, especially with the changes to MOT Tester Training as Germanou highlights: “The changes to MOT tester training has affected us in a way because I’m trying to get some of our guys trained up and the RMI training courses aren’t cheap anymore whereas before it was free through the government. This has left us funding the training ourselves which is a little hard along with the amount of time off for staff as well”. Funding issues aside, this doesn’t seem to have taken a toll on business with some exciting plans in the pipeline.

WINTER PREPARATION
While the team prepare for the winter months, Germanou discussed his business strategy for the New Year. “In 2017, I’d like to achieve one or two more staff from the Land Rover or VAG brands, which would benefit the company. There’s also going to be many more hybrids coming in the next couple of years so we’re trying to organise some courses for that”, he concluded: “My view is to progress with the training to try and become one of the first independent hybrid specialists. It’s all about electronics now and that’s what I’m aiming towards for the future”.

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CURRENCY MANAGEMENT IS ALL ABOUT THE PLANNING

Exchange fluctuations are avoidable

ADAM BERNSTEIN is a freelance business writer specialising in management, marketing and the law

ADAM BERNSTEIN
is a freelance business writer specialising in management, marketing and the law

While many retailers only buy and sell in sterling, the effects of currency changes will be an issue for manufacturers and distributors and by extension, retailers too. Anyone watching the slide of sterling in the run-up to the Brexit vote last month will have seen import prices rise while exports became more competitive. So how does the currency process work and what can be done to fix a commercial exchange rate?

There are undoubtedly all manner of ways to complicate things and while there are as many variations on currency products as there are permutations on a lottery ticket, there are also some straight- forward steps that businesses can take to manage currency risk.

As business becomes increasingly global, especially where products are sourced for retail, the issues surrounding foreign exchange management become ever more pressing.

PLANNING

David Johnson, a Director of Halo Financial, a foreign exchange firm, says that a conversation about currency risk generally starts with minimising exposure and that gambling on exchange rates can be a recipe for disaster. “There are risk management tools which can be utilised” ” he says. “Anyone who claims to be able to pinpoint exactly where an exchange rate will be at a certain point in the future is deluded.” Johnson adds that a market with millions of participants which transacts $5.3tn a day is not something which can be forecast with any level of certainty.

money

MANAGING RISK

For those that are entirely risk averse, as soon as they have an identifiable currency risk, they might choose to purchase all of their currency requirements. If cash f low allows, they may wish to do that and hold the proceeds of the contracts on currency accounts pending payment requests. They will have removed exchange rate variation from their planning and have the flexibility of cash at hand in the correct currency when they need it. Johnson says that if cash f low doesn’t allow for that and this is the more likely scenario, they can still cut all risk through the use of forward contracts which use today’s exchange rate upon which to put a contract in place while delaying the final settlement of that contract for up to two years. This generally requires a part payment / deposit initially but it aids cash flow by keeping the bulk of funds available as working capital. “The other advantage of forward contracts”, notes Johnson, “is that, if payment is required more urgently or if the payment needs to be delayed, the forward contract can be flexed to either draw down for early delivery or extend (roll over) to a late settlement date if necessary.” It appears that many companies find that forward contracts are the tool of choice for payment of invoices on 30, 60 or 90 day terms as they provide exchange rate certainty for the whole credit period. Forward contracts are also used where goods are received on consignment or where letters of credit are required.

A firm that wants to see if the exchange rate is moving in their favour, and who wants to wait to see if there is some advantage to be taken from that trend, should consider a stop loss order (SLO). “This device is placed into the foreign exchange market with a market maker to guarantee a minimum exchange rate. The order sits as a latent instruction but isn’t actioned until the market moves in such a
way as to trigger the order,” explains Johnson. He illustrates the point with an example: A distributor needs to buy US dollars and the current market exchange rate is $1.42 but the trend looks like it is heading higher, they may be tempted to wait for a better level. Obviously the ever-present risk is that the trend changes and the pound slumps through to $1.35, wiping out any profit. Let’s assume they cannot make a return on the contract unless they can achieve at least $1.40 or better. In these circumstances, they could place a SLO at $1.40 to guarantee that rate as the worst case scenario while leaving the opportunity to buy at higher levels if the pound continues to rally. Essentially, even if the pound collapsed, as soon as the sterling – US dollar exchange rate fell to $1.40, the order would be triggered and they will have bought their US dollars.

There is another alternative to the SLO – options. Johnson says these are used by many companies, especially where they have sizable requirements and/or long term projects. He cautions that they can be expensive because plain vanilla options, as the basic form is termed, require the payment of a non-refundable premium yet they serve the same basic purpose as an SLO. The flexibility in an option is in the right not to exercise the right to buy at the option level unless needed.

USING VOLATILITY
Automated orders can be used in another way. A limit order can be used to target an advantageous exchange rate which is above the current level. According to Johnson this works because the foreign exchange market doesn’t rest. Trading begins on Sunday night UK time and continues around the clock until the US markets close on Friday night. “One by-product of this is that some of the most volatile periods occur when individual markets are opening or closing. This volatility can be captured by placing automated limit orders at pre-determined exchange rates. As long as the market trades to the nominated level, the order will be filled.” Clearly firms need to plan ahead.

PLANNING, PLANNING AND PLANNING
To a large extent, planning is the key to every aspect of success in managing your currency needs. If you ask all of your questions in advance, dot all the i’s and cross all the t’s you will suffer fewer shocks and avoid nasty surprises.

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HYUNDAI SANTA Fe MkII

Santa_FeNamed after the mountainous New Mexico city, the bold styling of the first generation Hyundai Santa Fe got the model known in a sea of vanilla SUV-crossover models. For the second-gen designers, they decided to play it safe. The styling is so anonymous, you’d probably have to look at the badge to check what it is.

Nonetheless, these capable load-luggers are among the most popular Pacific Rim vehicles in the used car trade thanks to better than average reliability and a (very desirable) option of a third row of seats. While generally reliable, the diesel engines don’t suffer neglect well and manual cars can eat DMFs, due in part to the popularity of this range as a towcar.

IGNITION
Strangely, it seems that the spark plugs fitted at the factory on early cars were prone to breaking on removal. The plugs in question are Motorcraft PZT 2FE featuring an unusual two-piece design. Website aa1car.com explains that the crimped lower electrode shell that becomes coated with carbon, causing it to stick in the cylinder head. Rust and corrosion on the lower plug shell can also cause it to stick. When you attempt to unscrew the plug, the lower shell can twist off and get stuck in the head. If you are going to be looking after a number of these vehicles it might be worthwhile investing in a small tool that has been developed to extract it. Snap-On produce one in the US, if you ask your local rep, they will order it for you. Once you’ve got the OE plugs out, don’t refit like- for-like. Use one piece items (NGK, Denso, Bosch and Champion all produce good quality plugs that won’t break).

ENGINES
Some models had a 2.7 litre petrol engine known as ‘Mu’. This was an all-alloy V6 similar to an earlier DOHC Hyundai design, but with the inclusion of continuous variable valve timing. However, this must be rare as we couldn’t find any for sale and website howmanyleft.co.uk indicates there are only around 300 registered.

Pre-2010 diesel engines were 2.2 litre four-cylinder common-rail units that came fitted with a variable vane turbocharger that has a timing belt that needed replacing every four years or 50,000 miles. This was replaced for the 2010 model year with the more powerful and refined ‘R’ type engine that replaces the timing belt with a chain and features piezo direct injection. As most vehicles in this range are fitted with a common rail diesel engine, it is perhaps unsurprising that most reported problems relate to the usual causes of contaminated fuel and carbon build-up. The Honest John website notes that it is vital to drain oil via the sump plug on this range rather than using a siphon as a tar residue can build up with inevitable consequences. Tec RMI note that Engine 2.2 CDi-R can suffer from non starting with following fault code P0611 (Fuel injector control module) stored. This is symptomatic of a faulty engine control module.

Santa_Fe_Interior

Third row of seats is a desirable extra

GEARCHANGE
Early gearboxes are not the Santa Fe’s strongest suit. At launch, the second-generation car had a choice of four-speed auto on petrol models or a five-speed auto on diesels, or a conventional manual. The automatic gearbox was derided by journalists as being dated (most VMs by this stage offered five- speed ‘boxes). However, the unit itself is relatively trouble free, although care must be taken to ensure the correct SP III ATF fluid is used. The manual ‘box has reports of being low gears being too low – although this is probably down to customers expecting a big SUV to feel the same as a small hatchback.

Santa Fe’s have always been popular for towing (many were bought specifically for this purpose due to winning numerous towcar awards) DMFs do wear out and the master cylinder is known to give up the ghost occasionally, so bear this in mind if you are taking one in part exchange. Later models had a five-speed automatic and from 2010, a six-speed which was noted in contemporary reports for a harsh change.

The manual gearbox has always been noted for a notchy change, but if this is overly pronounced it is due to a production defect on the shroud of the gearchange mechanism, according to TecAlliance. The only solution is to detach the linkage from the gearbox and replace the shroud.

Another well-known drive train issue on manual cars is the cruise control. When these cars were still under warranty Hyundai attempted to repair it by replacing the module, but the problem seems to stem from the clock spring.

RECALLS
Only one DVSA-led recall affects UK-registered Santa Fe’s and it relates to an issue where the bonnet could chafe a fuel hose. The answer is a simple securing clip and it applies only to early facelift (2010) models. In the U.S the model didn’t fare so well as it had no fewer than ten safety recalls, mostly related to unexpected stalling.

Hyundai itself recalled a number of Santa Fe’s where brake switches may fail according to The Car Buying Group. This could result in brake lights not illuminating & cruise control not disengaging under braking.

SUSPENSION
It’s a heavy vehicle, so perhaps it is no surprise that front suspension arm bushes are prone to wear, as are other parts of the set-up. Other than this, we have no particular problems to report. However, if you take one in part exchange and the tyres are shot, be warned that the 235/60 R18s it requires will set you back £90-£100 per corner.

Tec RMI say that if ABS / ESP warning lights are illuminated and C1260 fault code is stored, then incorrect calibration of steering angle sensor might be at fault.

INTERIOR
The OE head unit isn’t the best, particularly on the earlier models. There’s no RDS and reception is poor. A third row of seats (to make a seven-seater) was a £1000 option when new and is desirable to find today. The spare wheel is underslung under the vehicle. We’ve heard a couple of accounts of the spare being nicked and a replacements being difficult to source, so check it is in situ before doing anything to a customer’s vehicle.

TecAlliance explain that another problem is moisture in the passenger compartment, which is caused by the condensation water drain hose from the interior ventilation system, becoming twisted and not allowing the water to escape. Generally, slackening the clamps and running the drain hose smoothly, before retightening the clamps can easily overcome this problem. Dealer Chain The Car Buying Group report that sun visor mechanisms in earlier models could wear out prematurely, causing the visor to drop under it’s own weight and that the fuel gauge sometimes sticks, requiring a replacement tank float.

TOWBARS
As mentioned, this range is popular with families that require a heavy towcar and any vehicles that pass through your care will very likely have a towbar fitted. Even the oldest first-generation Santa Fe is required to only be fitted with E-marked units (the ruling applies to cars built from 1998 and the Santa Fe was introduced in 1999). Don’t forget that correctly functioning towing electrics are also now part of the MOT.

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ZF CONFIRMS TRW IS ‘AN ASSET’ THAT WILL REMAIN

Helmut Ernst

Helmut Ernst

Component manufacturer ZF has re-affirmed its commitment to ZF at a press conference held during Automechanika. The conference was led by Head of ZF Services Helmut Ernst, alongside Neil Fryer, VP of aftermarket at TRW.

Ernst said in an interview with CAT after the conference that the combined organisation will change in the UK, but only as the market changes.

Describing the brand as ‘an asset’ he also said that there was ‘no reason’ to think that any of the sub-brands such as Brake Engineering would be affected. “All of the arrangements that TRW has made for a direct link to customers have their reasons. If it was logical for TRW to look at different levels of the aftermarket, we can clearly follow their logic, also” he said.

Commenting on the changes to UK operations, Ernst said: “ZF Services in the UK will change as the market changes. There will be a steady change and to bring together these two very successful aftermarket operations is only the first step”.

Ernst believes that networked vehicles with complex electronic systems represent the next big opportunity for the aftermarket. “The car is changing in respect of connectivity and we must be ready to service and repair these systems. It shouldn’t just be down to the vehicle manufacturers – it should be an open market” he said. “I don’t think it would be a threat as long as the access is there and we will deal with that”. To develop this, the firm has opened a new division called Openmatics to deal with aftermarket fleet telemetry.

When we asked what he would most like to change in the aftermarket, Ernst replied: “Nothing! I like the aftermarket just as it is”.

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HOUSE OF LORDS LAUNCH DRIVERLESS VEHICLE INQUIRY

HOUSE OF LORDS LAUNCH DRIVERLESS VEHICLE INQUIRY

House-of-LordsThe House of Lords science and technology committee has launched an inquiry into future uses of driverless vehicles in the UK.

This inquiry will collect evidence on the potential uses and benefits of autonomous vehicles in contexts such as road transport, farming and space exploration, according to the IAAF.

The committee is seeking written evidence from as wide an audience as possible and across a whole range of possible applications from cars to public transport.

Lord Selborne, committee chairman, said: “Rapid progress is being made in the development of these vehicles.

“Autonomous vehicles are being developed for a range of different purposes and have the potential to bring great benefits across a range of different sectors, for example in farming.

“We will examine what the Government is doing to support research into developing autonomous vehicles in the UK, as well as the real-world implications as these vehicles start to appear on the roads and in the work place.

“If the UK is to be at the forefront of this transport revolution, investment into research is vital to ensure the technology is perfected, allowing the public to embrace the use of autonomous vehicles.

“There are potentially considerable economic opportunities and public good benefits from this technology.

“We will look at whether the Government’s actions are appropriate in supporting these opportunities” he concluded.

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REPORT IDENTIFIES GROWTH FOR UK AFTERMARKET

REPORT IDENTIFIES GROWTH FOR UK AFTERMARKET

Volume by percentageA report has been published identifying a £195 million opportunity for UK aftermarket firms to expand in three major emerging markets, as demand grows across the world.

The UK automotive aftermarket is thriving, ranking fourth in Europe and ninth in the world in terms of size, and turning over an annual £21.1 billion, according to the report. The sector supports 345,600 jobs and contributes £12.2 billion each year to the economy. And it is growing: in line with the UK’s increasing car parc, the sector’s value is set to rise to £28 billion by 2022.1 The UK also enjoys robust trade with other European countries, with Germany its largest market, followed by France and Spain. In fact, Germany purchases more components and accessories from UK-based parts suppliers than it does from any other country.

However, an SMMT Frost & Sullivan report shows that international markets and in particular emerging markets, offer the biggest potential for growth. International Opportunities for UK Aftermarket Companies shows that suppliers exporting to these regions can grow their businesses at rates four to five times higher than the annual 3% they can expect in the UK. The total global opportunity stands at some £500 billion for aftermarket business.

The report explores the potential for growth in three key emerging markets: China, India and the GCC region of the Middle East.2 Together, these three aftermarkets are worth some £54 billion – so the potential for growth is significant. Just by keeping pace with these markets’ natural growth, UK aftermarket companies could double their income to £195 million over the next seven years.

The UK automotive aftermarket sector is part of an industry which relies heavily on the tariff-free flow of goods across borders, with component sub-assemblies often sourced from a diverse range of countries. Further growth into new markets would benefit from new trade agreements, but that should not give reason for delay.

Mike Hawes, Chief Executive, SMMT, said, “The UK’s aftermarket sector is one of the world’s most dynamic and the record attendance at Automechanika Frankfurt demonstrates the sector’s success and global ambition. To help companies exploit these opportunities, government must secure the competitive conditions that have allowed this export-led industry to thrive. This means tariff-free trade with our partners across Europe and further trade deals with emerging markets.”

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TRW: THE ORIGINAL RECIPE FOR CONTINUED BRAKING SUCCESS

TRW_IMAGE_PAINT_TESTPROMOTIONAL ARTICLE ON BEHALF OF TRW AFTERMARKET

Just weeks after the launch of TRW Aftermarket’s latest ‘True Originals’ multi-media campaign, this time focussed on brake discs, the business looks in more depth at its brake disc portfolio. This feature outlines its recipe for success; one which has kept it at the top of the leader board in this area for the past two decades.

From November 2016 all brake discs and drums manufactured and sold across Europe for passenger cars and light commercial vehicles will have to meet the minimum standards outlined in the ECE R90 legislation. In order to meet these standards, the parts must pass a series of tests and perform to levels similar to the Original Equipment part.

“The recipe for success and longevity in this industry is a complicated mixture of experience, knowledge, skill and innovation. But first and foremost, it’s down to control,” explained Kevin Price, UK marketing manager, TRW Aftermarket.

As a pioneer in the design, development and manufacture of complete braking systems for vehicle manufacturers (VMs), the TRW brand has more than 100 years’ experience. For 20 years, this knowledge has been directly transferred into an aftermarket offer, which today manufactures in excess of 12 million brake discs annually.

Kevin continued: “Committed to improving global road safety, we view the introduction of any regulation that demands adherence to the standardisation of safety critical parts as a major step forward for the industry. Provided they are universally enforced and policed, these regulations will make it much harder for sub-standard and counterfeit product to reach the market and seriously compromise driver safety.”

TRW’s internal specification already exceeds legislation so the business is prepared for and welcomes these changes; as it did in 1999 with the introduction of the ECE R90 rules for brake pads.

“We employ the strictest manufacturing control and materials management combined with extensive OE know-how and stringent testing,” Kevin said. “After this, and after thoroughly investigating the different channels to market, we intelligently market our braking products; which are developed to work in harmony with each other within the system. By controlling the process from materials control through to targeted marketing instils confidence in the whole business model.”

In order to retain control over the manufacturing and testing processes, the business manufactures more than 70 percent of TRW branded discs in-house at TRW’s global manufacturing plants, including its leading European facility in Frydlant, Czech Republic.

Kevin continued: “Because we are committed to producing the safest and highest quality discs, a carefully controlled mixture of raw materials is used to produce the finest grey cast iron. Matching quality isn’t enough; it has to be the best possible mix from the initial casting for the best end performance quality.”

Exhaustive tests carried out by the business ensure the following:
• High carbon content (the fluidity allows easier casting and machining, plus a low degree of shrinkage
• Low melting temperature (1140 degrees C-1200 degrees C)
• High wear resistance and thermal capacity
• Hight tensile & compressive strength, giving high levels of rigidity

The castings then undertake a variety of stringent tests and controls before being released for machining to ensure the highest levels of safety.

“When we design our OE discs, we control every detail of every part and we don’t compromise on raw materials, or on machining tolerances,” Kevin continued.

“All our castings are made of top quality GG.20 material or GG15HC for high carbon. A tight control is kept on three other machining tolerances: the DTV (Disc thickness variation) never exceeds 12 μm the Run Out never exceeds 30 μm and the central hole is fixed at H8 norm. All of this ensures hassle free fitment and comfortable performance without any surprises.”

In addition to all this, TRW is one of the few aftermarket manufacturers to have its own dynamometer capabilities, allowing for first-hand process control instead of relying on third party testing facilities.

“The product then has to be marketed in a way which captures the imagination, builds brand awareness and instils confidence right down the supply chain,” Kevin continued.

“No Corner Module part operates in isolation. By thinking in terms of systems, all our braking, steering & suspension parts are designed to work in harmony, and for maximum performance, it stands to reason that they work best when used together.”

Eighteen months ago, TRW Aftermarket launched its ‘Perfect Match’ initiative which advocates fitting TRW branded pads and discs together for the safest drive and to provide the most efficient and sensible business option for motor factors.

This initiative has proven to be a success in terms of boosting sales figures and communicating the safety message to an increased audience, via the businesses many digital platforms as well as traditional media routes.

TRW Aftermarket’s ‘Perfect Match’ offers a host of added value benefits. Brake pads are coated in a silicate coating called Cotec, developed by TRW Aftermarket for a safer drive. It significantly improves the stopping distances of vehicles in the first few stops after fitment and speeds up the ‘bedding in’ process of the brake pad attaching to the brake disc, enhancing braking performance during component lifetime.

TRW Aftermarket’s discs are coated only where necessary – on the hub and the edge, providing superior corrosion protection and reducing bedding in time, guaranteeing superior performance from the first stop.

Kevin added: “From a business perspective, supplying the full ‘Corner Module’ of braking, steering & suspension parts and systems, means customers need only deal with one supplier.

“We don’t just work with our customers; we partner them to offer safety, quality, range and convenience from one name – TRW Aftermarket.”

Confidence in the ‘Perfect Match’ is reflected in TRW Aftermarket’s extended three year (or 36,000 mile) warranty against material or production defects when TRW branded brake pads and brake discs are fitted together. Full terms and conditions can be found here https://www.trwaftermarket.com/perfectmatch/

Sealing the deal, is market leading vehicle parc coverage, full product marketing and technical support, and where necessary, all fitting accessories and instructions provided as standard in the product box.

And with all makes, premium product quality programmes of more than 1200 brake discs and in excess of 1800 brake pads, The ‘Perfect Match’ provides coverage for 98 percent of the European car parc.

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KEEP THE BULLIES AT BAY

Lee Ashwood It can be just banter to some, but it can be harassment or discrimination to others – and it could cost you as the employer a whole heap of trouble and cash.

Lee Ashwood is an employment law solicitor at law firm Eversheds LLP

Lee Ashwood is an employment law solicitor at law firm Eversheds LLP

Most people would hope and expect that bullying is confined to the playground and not something that we need be concerned with as adults in the workplace. Unfortunately, that is not the case and a recent report by the Advisory, Conciliation and Arbitration Service (ACAS), a government-funded organisation which provides information, advice, training, conciliation and other services for employers and employees to help prevent or resolve workplace problems, has found that workplace bullying may actually be on the rise, with ACAS receiving around 20,000 calls relating to bullying each year, more than ever before.

In recent years, there have been various reports and studies that have been carried out to determine the true extent of workplace bullying. In 2005, the Fair Treatment at Work survey of employees found that 1 in every 25 of those who responded had personally experienced bullying or harassment in the previous two years. By 2008, the number of employees who had personal experience of being bullied or harassed had nearly doubled. Also, in 2008, another survey found that nearly half of all the employees who responded had experienced what they considered to be unreasonable treatment over the previous two years.

HARASSMENT
With employees believing they are being bullied in the workplace, employers should be aware of what ‘bullying’ is. The surveys from recent years have used significantly different definitions and descriptions of bullying (which probably explains why the statistics can vary significantly). Perhaps the most helpful, concise and easiest to understand definition comes from ACAS who say that bullying is ‘offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means that undermine, humiliate, denigrate or injure the recipient’. However, what is important to realise is that workplace bullying does happen and it could happen at your workplace.

The impact workplace bullying can have on a business should not be ignored or underestimated. You can be sure that that if bullying is taking place in your business then it will have a negative impact on morale and will result in a lower level of performance and productivity. This, of course, has an impact on your business’ overall performance and it has been reported that that the economy- wide aggregated costs of bullying-related absenteeism, turnover and lost productivity is £13.75 billion per annum.

If an employee has been subject to behaviour that they perceive to be bullying, particularly over an extended period of time, and they do not think they have been supported enough by their employer, they may resign and bring an Employment Tribunal claim for constructive dismissal. Their claim would be founded on their contention that they no longer had trust and confidence in their employer to provide a workplace free of bullying. If the employee succeeds with their claim, their employer who will already have faced the time, cost and inconvenience of defending the claim, may be ordered to pay the employee compensation up to the value of the employee’s annual gross salary (up to a maximum of £78,335).

The employee may also bring an Employment Tribunal claim for discrimination, irrespective of whether or not they have resigned, if they believe that the reason they were subjected to bullying was because of their gender, disability, sexual orientation, age, race or religion. Employers may not even be aware of the prospect of such a claim, as an employee is not under any obligation to use their employer’s grievance procedure before
bringing a claim.

If an employee does bring a Tribunal claim, it can be a particularly difficult situation to manage because, of course, they will still be in work and, therefore, close to the person they have accused. Ultimately, if the Employment Tribunal finds that the bullying was discriminatory, it can order the employer to pay the employee compensation for the injury to their feelings of up to £33,000.

CONFRONTATION
Addressing bullying in the workplace is no easy task but it shouldn’t simply be ignored. Having a well-publicised grievance procedure or dignity at work policy in place certainly helps as it means that employees will know what to do if they think they are being bullied which, in most instances, is to bring it to the attention of their managers. However, that is only the start of the process and will not, in itself, be sufficient to remedy the problem.

Good practice and certainly what ACAS advocate is that the allegations of bullying are investigated thoroughly and impartially to establish what has gone on, that is, who has done what or said what to whom. The investigation should include interviewing the employee who has raised the allegations, the alleged perpetrator and any possible witnesses to the alleged events, which would normally be colleagues. Having done so, the employer should report back to the employee on their findings, what they believed happened. Most importantly, the employer should establish with the employee what is going to be done in the future to ensure that the employee is supported and comfortable at work. This can often involve moving the employee away from the bully or having them both attend a mediation session to ‘clear the air’. Of course, if someone is found to have bullied a colleague, you should consider disciplinary action and training them on the standards of behaviour that are expected of them to ensure it does not happen again.

HIDDEN COSTS

In addition to the obvious costs of increased absenteeism and lost productivity, there are the costs that are not so readily obvious, for example:

  • Increased recruitment costs due to having a higher turnover of employees;
  • Losing experienced employees you have invested time and money in training; and
  • Management time spent investigating and responding to employee complaints.

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MOVING STORY: BUSINESS CHANGING LOCATIONS

MOVING STORY: BUSINESS CHANGING LOCATIONS

rsz_1commerce_house_colchesterThe Colchester branch of the car parts and exhaust distributor EU Ltd has relocated. The company have invested over half a million pounds in the purchase and refurbishment of the new premises, just a stone’s throw from their previous rented location on the Whitehall Industrial Estate.

The new premises will be the permanent home of EU, which comes 10 years after they were forced to move on to the Whitehall Industrial Estate when the Cowdray Centre burnt down.

The new site offers a dedicated sales counter and the same fantastic service and extensive range of steering and suspension items alongside more specialised electrical and ignition components, catalytic converters and exhaust pipes.

Managing Director of EU Ltd, Richard Shortis said: “Owning properties gives us a far more substantial financial footing than most of our competitors who rent and lease their sites and also means our valued staff enjoy a higher level of job security. This purchase was done without borrowing and as part of the ongoing investment in the company.”

Also re-locating this month is Johnson Matthey Battery Systems. JMBS is a Lithium-ion battery system supplier, and the firm’s current facilities in Dundee and Coventry will be relocated to the new site which will house an electro- chemistry laboratory, a BMS laboratory and small-scale production facilities. All UK staff will now be based in Milton Keynes.

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MILLBROOK GROUP ACQUIRED FOR £122m

MILLBROOK GROUP ACQUIRED FOR £122m

millbrook bus

Millbrook Group, the UK’s primary testing ground for vehicles, parts and tyres has been acquired by Spectris PLC for a reported £122m.

The acquisition means that Spectris, a company involved in metering and measurement equipment, can look to providing Millbrook with modern hardware and software suitable for testing components and systems that will be fitted to coming generations of hybrid and electric vehicles.

The deal also includes a subsidiary business called Test World. This operation is based in Finland and specialises in testing snow tyres and winter products in the Arctic Circle.

Under the previous ownership of private equity group Rutland Partners, Millbrook has seen its stock rise over the past few years. Rutland acquired the facility from General Motors in 2013 and introduced a new senior management team lead by CEO Alex Burns with an eight-fold increase in underlying earnings following a £20m investment. Burns and his team will remain in place under the new owner.

Eoghan O’Lionaird, Business Group Director at Spectris, said: “Millbrook represents our largest purchase to date of a pure testing services business. It is closely related to our existing instrumentation businesses and, as such, the acquisition is an important step forward.”

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