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COMPANIES HOUSE – THE CASE FOR REFORM…

COMPANIES HOUSE – THE CASE FOR REFORM…

By Peter Windat – accountant and insolvency practitioner at BRI Business Recovery and Insolvency 

The work and practices of Companies House, the repository for all information on the majority of the UK’s companies and similar registered entities, is currently under review. In May, the Department for Business Energy and Industrial Strategy issued a consultation about options to reform the body and change is coming.

In recent years concerns have grown that the UK’s framework is open to misuse. Concerns arise mainly from four interrelated issues – misuse of UK companies by international criminals and corrupt elites; the accuracy of information held at Companies House; the abuse of personal information on the register; and the limited nature of cross checks between Companies House and other public and private sector bodies.

Given a span of 80 pages much is covered, and the view is clearly that much work needs to be done to help keep the UK in the leading pack of countries in which it is desirable to start and grow a business.

Know who’s managing

The government is proposing that individuals who have a key role in companies should have their identity verified. This would apply to company officers (directors), People with Significant Control (PSCs), and those filing information.

It should be possible to introduce such identity checks simply but there are also important data protection issues.

The consultation sets out why greater certainty over the identity of those shown as owning, running or controlling companies is needed, it shows how new technology offers the opportunity to obtain greater assurance over identities, and sets out far-reaching proposals to introduce identity checks for those who file information on the register, directors, PSCs and, on a voluntary basis, shareholders.

This document proposes a series of reforms that would deliver better quality information on the register – including extending the powers of Companies House to query and seek corroboration on information before it is entered on the register and making it easier to remove inaccurate information. In addition, the government is proposing improvements to the process and delivery of annual accounts to Companies House. The government intends to maintain the current approach to retaining records of dissolved companies on the register for 20 years from dissolution.

Personal information

The government has outlined how Companies House will store information if its proposals are adopted. Under identity verification proposals, access to the register will be carefully managed, allowing only identified or authorised persons to file information. New processes are proposed for sensitive information to be protected. Proposals to allow directors some additional rights to suppress their information from public view have also been set out.

Information on the register should be of real, practical use to those who wish to find out information about those taking advantage of the privilege and protection of limited liability. However, information on the register should not become a tool for abuse and so information of a sensitive personal nature will not be made publicly available.

Ensuring compliance

Companies House data on UK corporate bodies could be improved through cross checks against data held by other government and private sector bodies. The government wants to see the exchange of intelligence made easier in order to enable greater sophistication in identifying possible criminal behaviour. This will lead to faster identification of anomalies between data at Companies House and elsewhere.

Also sought were views on several related measures that might deter abuse of UK legal entities, including ending the business activities of limited partnerships which are being misused, imposing limits on the number of directorships any one individual can hold, disclosure of banking information and action to deter misuse of company names and addresses.

The routine cross-checking of information on the companies register against external data sets and powers to obtain feedback on discrepancies identified is proposed alongside adopting a risk-based approach to the sharing of intelligence with police and requiring firms to provide bank details.

Implementation

The proposals in the consultation, if implemented in full, would amount to the most significant reform of the UK’s company registration framework since a register was first introduced in 1844 and go to the core of the Companies Act. There will be an impact on the fees levied by Companies House, though the government fully expects them to remain very low compared to international standards.

The transformation will touch every aspect of Companies House’s work, covering both customer-facing and internal digital systems.

Although responses to the proposals were required by August 5, there will be a little leeway for late submissions.

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IS THE AFTERMARKET EMISSIONS COMPLIANT?

IS THE AFTERMARKET EMISSIONS COMPLIANT?

By Greg Whitaker

At this year’s What Car? Awards the coveted ‘Car of the Year’ gong was picked up by Kia for its e-Niro EV. This marked the first time that a car maker from the Pacific Rim had picked up such an accolade, but crucially it was the first time that an electric car could be considered practical enough for the magazine to recommend one to its readers as being better than, rather than just a compromised alternative to, a conventional petrol or diesel-powered car.

Electrification is one of three major areas (or to use industry jargon ‘megatrends’) where the motor industry is changing and fast, with the other two being ‘connected car’ and autonomy. This is good news for the health of all concerned, but does it mean that car manufacturers are done with conventional power trains?

The answer is no, at least if you read some of the press releases about emissions-reducing technology that is being developed in reaction to emissions. Delphi Technologies for example produces a GDI (gasoline direct injection) system that runs at 350 bar – tech that the manufacturer itself immodestly describes as ‘state of the art’. However even this has now been supplanted by a new system that runs at an intense 500+ bar, or around 7,500 psi.

Under pressure

Such pressure means the fuel vapour mix is so fine it will explode at an atomic level, meaning even very small particulates are reduced by half. However, running engines so hard is not without problems.

“The industry has long recognized that increasing injection pressure to 500+ bar could substantially cut engine-out particulates while improving CO2 emissions and fuel economy,” explained Walter Piock, Chief Engineer, Gasoline Systems, Delphi Technologies.

The challenge has been to achieve such pressures without increasing the drive loads from the pump. As most engines power the GDI pump through the camshaft drive, a conventional approach would usually require a costly redesign and strengthening of the camshaft mechanism.

“By designing an innovative new internal sealing system for our GFP3 500+ bar pump, in some applications, we have designed a downsized plunger diameter which prevents increasing the loads in the drive mechanism,” said Piock.

Descriptions of the Multec 16 injectors and ‘forged rail’ make no reference to the parts being serviceable, and it is likely that components under that significant amount of pressure will be sealed for life.

Time will tell how reliable a pump that operates under such a load will be, but there can be no denying that the increase in combustion efficiency will allow the petrol engine to be a viable proposition to both the buying public and to politicians for a while yet.

Of course, the aftermarket has to follow OE so there is little in the way of innovation in this field, although products such as ‘universal’ lambda sensors could well make the emissions from a vehicle worse as they are not calibrated to the specific values needed for the application. Fortunately there a plenty of OE-spec parts available, such as the recently launched wide band (also known as five-wire) sensor range under NGK’s NTK sensors brand.

“We have had a very positive response from our customers to the launch of our new NTK five-wire sensors. NTK has more than 40 years’ experience in the sensor business and this is a fantastic addition to our portfolio” said Mark Hallam, Marketing Manager at NGK UK.

Slippery issue

It is also no secret that lubricants are getting thinner in a bid to increase engine efficiency. “Car and lubricants manufacturers try to improve the fuel economy of cars by reducing the viscosity of engine and transmission oils. A thinner oil flows more easily and requires less energy for it to be pumped into the engine,” said Bob Wood, a Technical Engineer at Total Lubricants. “To be compliant with ACEA specifications, synthetic oils or severely hydrocracked base oils are used in combination with the dedicated additives, to not only meet the minimum requirements, but to exceed them”. Wood added that the pace of development of thin synthetic oils for modern and hybrid engines is fast, and that innovations in the additive pack, such as the firm’s patented ‘age resistant’ technology would continue.

Standards question

Buying aftermarket products that directly relate to the emissions that a vehicle produces can be complex. Equipment such as DPFs and catalysts vary wildly in price and this is due in part to different methods of producing them. One of the main areas of debate over the last few years is how effective these components are. David Carpenter of Cats and Pipes explained to us the last time we spoke that: “When buying a product of this technical complexity, in order to guarantee the product complies, it is important to purchase a product that meets Euro classification and comes with all the relevant and up to date test data and quality approval marks”.

Crucially, and in reference to a row that the aftermarket had seen in recent years, he added: “It is also important to question the data and information received to ensure it applies to the actual product you are purchasing. Also, very simply, if the aftermarket version you are buying is totally different in appearance and size to the manufacturer fitted version, there has to be a difference in performance”.

“This is particularly relevant with DPFs and CATs that are supposed to meet the Euro classification to be retailed in the UK. If they are physically only half the size of the original factory fitted part, they cannot possibly meet the standards to which they are supposed to comply. This is a challenge for the aftermarket and small companies which often do not have the time or resources to check all this information and are often buying purely on price and good faith however visual checks are a good place to start,” he furthered, concluding that apart from the environmental issue, products that don’t meet the spec result in returns and unhappy customers.

It seems that the battle of price vs quality is not over yet.

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HOW TO BE A LEADER IN UNCERTAIN TIMES

HOW TO BE A LEADER IN UNCERTAIN TIMES

 

ARTICLE WRITTEN BY FORMER ENGLND CRICKETER, JEREMY SNAPE

 

It is a difficult time to be a business leader in the motor trade, and as Brexit uncertainty amplifies, businesses that rely on the EU for supplies and trade, are being tested like never before.

Already we are witnessing suppliers stockpiling parts to avoid the mayhem that chronic uncertainty has caused this vital sector.

Jeremy Snape urges firm leadership in an uncertain age

Imagine you are the boss of an independent garage that sources obscure but vital components for a certain make of van. Your biggest customer has a 50-strong fleet of these vans, and they need to be assured that your garage will keep supplying those vital parts without disruption that Brexit could bring – what do you do?

The UK’s future trading relationship with the EU is just one of the many ongoing concerns facing independent garages and distributors. The sale of diesel cars in freefall following the 2016 emissions scandal, while automated cars are the way of the future with petrol being phased out by 2040.

Even after the Brexit dust settles, they will be no end in sight for the huge environmental issues affecting the motor trade. London, for instance, has introduced a new charging zone for older polluting vehicles that enter the city, something that could be rolled out across the UK.

These fundamental challenges call for leaders who are capable of withstanding intense pressure.

Now is not the time to dither, but instead focus on showing courage, clarity, action and most importantly, leadership.

For lessons in leadership you could do no better than look to the military or elite sport, which operate in environments of intense pressure, constant uncertainty and, in the case of the military, life or death decisions. You might argue that in professional sport, international football and rugby teams operate in environments where some people think the outcome is even more important.

The pressure powerful enough to unnerve even the most experienced players as I have learned from personal experience. Mental preparation is key to success.

Back in 2002, when I was privileged enough to be included in the England Cricket squad tour of India, my game collapsed in front of 120,000 people while I was up against batting legend Sachin Tendulkar.

The crowd roared as the pressure built up inside me that day, I couldn’t hear a thing and I ran Freddie Flintoff out. Right there and then I felt I wasn’t good enough to be there. It was only later when I started exploring psychology that I understood it wasn’t India that beat me that day, but my own mindset.

This started my research quest to find out what neuroscientists, military leaders, and Olympians could teach us all about performing under pressure.

In the last decade I’ve interviewed some of the world’s most impressive and prolific leaders, from Sir Alex Ferguson to military generals and even the Performance Director at the Cirque du Soleil to understand what tactics and strategies they use to mentally prepare for uncertainty.

In doing so I have distilled the secrets of their success into a digital library which helps my clients to maintain a winning mindset when they need it most.

Here are some essential tactics to help you cope with chronic uncertainty.

  1. Stop blaming others; own the situation.

With our current Brexit situation there are plenty of people you might feel like blaming– the electorate; former Prime Minister David Cameron; the EU; MPs in Westminster; our Prime Minister.  But when Brexit is done there will be another fundamental problem in its place. You can’t continue to blame others for everything that is wrong in the world, you need to get over it.

In the world of sport, we see elite coaches stepping up when things have gone wrong, not making excuses.

Ireland Rugby coach Joe Schmidt didn’t hide after his team was beat by Wales in the final Six Nations match in February. It later turned out some of the squad had been hit by a stomach bug in the run up to match, but that wasn’t an excuse for poor play, said Schmidt, they were simply beaten by a better team and would need to work out a strategy for the World Cup in Japan.

As Schmidt shows, great leaders don’t waste time blaming others: it may win you sympathy, but it won’t help you solve the problems.

Uncertainty creates opportunity so start by owning the situation and making a plan that turns the uncertainty into an advantage.  After all, other businesses have the same problems so those that actively tackle the situation will be the ones that succeed.

  1. Pressure is a privilege.

 

Having played in and worked with some of the world’s highest profile sporting teams, I’ve seen how they use pressure as privilege and use this mindset to tackle potential issues head on. Worrying about what might or could happen leads to paralysis, so an effective leader must embrace the challenges ahead.

In the military, the best leaders prepare their teams for Plan A, but they also throw scenarios into the training that get the teams thinking on their feet. I’ve supported several senior leadership sessions at Sandhurst military academy and heard how they create challenging and chaotic scenarios to test the soldiers’ ability to think clearly and adapt under pressure.

In a business context, this could mean equipping teams with the skills to make decisions under extreme pressure and rehearsing with scenarios. By pressure testing various challenges, you will be more familiar with the decision-making sequence that follows when chaos ensues. What if vital parts for your biggest customer was stopped at the border?

  1. Don’t micromanage – enable.

 

An effective leader needs to have confidence that their team so that they are empowered to make crucial decisions when needed.

This may sound good on paper, but, I hear you ask, what does that mean in practice?

Making sure that vital employees are given the right training is essential for building confidence in them. Equipped with the right skills and level of autonomy, team members will feel empowered to make decisions – and this could be the difference between you and your competitors, who are dally without making business choices.

  1. Be fluid not fixed.

 

Rapidly changing situations calls for leaders who can bring together diverse people to fix problems and exploit opportunities, fast.

Leaders must understand that they can’t predict and prevent all problems from arising, they must prepare teams so they can assess and respond quickly.

Understanding your biggest business threats, whether that is Brexit or environmental issues, and how your business will respond if they become reality is important to be able to withstand the pressure that comes from uncertainty.

Confidence comes from preparation, so plan for the unexpected and turn disruption to a commercial advantage.

Very few will have the perfect strategy to deal with the political uncertainty in coming weeks but those who maximise their mindset and culture will have the best chance of winning whatever the position.

 

  • Former England Cricketer Jeremy Snape founded Sporting Edge,  a consultancy that ‘unlocks the Winning Mindset in business’. Stated in 2005, the firm’s approach to corporate learning helps businesses to stay ahead of the game.

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EMPLOYMENT LAWS ARE CHANGING – ARE YOU?

EMPLOYMENT LAWS ARE CHANGING – ARE YOU?

By Tina Chander – partner and head of the Employment team at leading Midlands law firm, Wright Hassall

Tina Chander

Since 2010, the UK has experienced lower unemployment rates across every region, underpinned by a strong and innovative labour market that has seized on the opportunities offered by new technologies, emerging business models and changing ways of working. 

Existing employment law and policy framework has found a balance between flexibility and worker protections, placing Britain in a strong position to benefit from the new industrial revolution and the opportunities it will bring.

Out with the old, in with the new

The government unveiled its Good Work Plan in December 2018 as a direct and carefully detailed strategy to strengthen worker’s rights and change employment laws.

Labelled as ‘the biggest package of workplace reforms for over 20 years’, the plan builds on the Taylor Review recommendations of February 2018 and outlines an intention to improve conditions for agency, zero-hour and other atypical workers.

Within this plan, the government commits to a wide range of policy and legislative changes, clarifying the relationship between employers and workers, while ensuring the enforcement system is fair and fit for purpose.

As working becomes more flexible and varied, it is imperative that the key protections relied on by workers are not negatively impacted, and this Good Work Plan is designed to reinforce existing rights.

Requesting stable contracts

One of the main issues addressed is ‘one-sided flexibility’, which recognises some businesses have transferred too much business risk to the individual, affecting their financial security and personal well-being.

New legislation will give workers the right to request a more stable contract, allowing them to benefit from flexible working, without the financial uncertainty.

Those happy to work varied hours each week can do so, but others will be allowed to request a fixed working pattern after 26 weeks of service, giving workers greater control over their own lives.

For those working zero-hour contracts, this change will allow them to request a contract that guarantees a minimum number of weekly hours, which is crucial when looking to secure a mortgage.

Repealing Swedish derogation

The Good Work Plan also addresses Swedish derogation, which currently allows agency workers to exchange their right to be paid equally to permanent counterparts in return for a contract guaranteeing pay between assignments.

Although the original intentions of Swedish derogation were to offer reassurance that individuals would still earn during quieter periods, some employers have been using this opt-out to reduce the size of their pay bill.

Nowadays it is very unusual for agency workers to have gaps between their assignments, and in some cases, employers have devised schemes to keep their exposure to a minimum contrary to the requirements originally outlined.

The government aims to repeal Swedish derogation with new legislation, banning the use of this type of contract to withhold equal pay rights. Instead, long-term agency workers will receive equal wages to those of permanent employees.

Tougher enforcement measures

In order to create a level playing field between businesses, there needs to be effective enforcement.

The government plans to extend state enforcement for vulnerable workers, introducing tough financial penalties and an approach that already applies to underpayment of the National Minimum Wage.

This involves increasing enforcement protections for agency workers where they have pay withheld or unclear deductions made, while new legislation will increase the maximum penalty imposed during employment tribunals on the grounds of aggravated breach.

Ongoing employment developments

While the Good Work Plan looks set to bring about some wholesale changes to employment law and workers’ rights, there are other broader developments on the horizon.

On April 6, 2019, new legislation under the Employment Rights Act 1996 is due to come into force, introducing a right for all workers to be provided with an itemised pay statement and the ability to enforce this right at an employment tribunal.

On the same day, other legislation will require itemised payslips to contain the number of hours paid for where a worker is payed hourly.

Preparing for the future

With the arrival of the Good Work Plan and ongoing consultation regarding employment laws and legislation, 2019 will be a crucial year for businesses and workers alike.

It’s important that organisations take the time to review the changes and understand the requirements outlined in the new legislation, as non-compliance could cost organisations financially and damage their reputation.

If you’re unsure about the Good Work Plan and wider developments, it is important to consult a legal team with significant experience of employment law and the imminent changes.

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IS AMMONIA THE NEXT DIESELGATE?

Mark Blinston, commercial director of BM Catalysts, examines the potentially harmful effects created by the use of SCR technology in modern day diesels

Talk of emissions is never far away as of late and it seems that the problem isn’t set to go away any time soon. From CO2, particulate matter and the infamous NOx, there is another potential emissions problem looming on the horizon in the form of ammonia pollution.

Whilst Euro emissions standards continue to tighten in response to the ongoing emissions crisis, with the current Euro 6 legislation being the strictest set to date, it is apparent that not everything is quite as it seems.

With tighter emissions requirements comes the need for new vehicles to incorporate technologies designed to combat these emissions. Technologies such as Selective Catalyst Reduction (SCR) are just one method used today on modern diesel vehicles that aim to help eliminate the harmful NOx gases they emit. However it seems that everything comes with its consequences. Despite the use of SCR technology being hailed as one of the greatest and most effective feats to date in helping to tackle the NOx crisis, it doesn’t come without flaws of its own.

SCR systems work by a process of a Diesel Exhaust Fluid (DEF) being injected into the exhaust system. As exhaust gases travel between the Diesel Particulate Filter and the SCR, the DEF (most commonly ‘AdBlue’) that has been added to the mix works by reacting with the base metal coating of the catalyst, converting harmful NOx gases into less harmful by-products, nitrogen and oxygen. The DEF used in this process is comprised of urea and deionised water, otherwise known as a less concentrated form of ammonia. Whilst DEF is a non-hazardous liquid, its gases, under the wrong circumstances, can be extremely harmful.

The function of SCR technology can only be fully utilised under appropriate conditions, such as the optimal operating temperature of around 350-450°C being achieved, by which it can help reduce NOx emissions by as much as 95%. However when placed in conditions such as built-up urban areas comprised of low speeds and heavy traffic, this isn’t always possible, which can lead to further complications aside from NOx pollution. It is possible that under such circumstances of low efficiency, the ammonia which is continually injected into the system may not be used entirely leading to what is known as ‘ammonia slip’. This is where excess ammonia exits the system and is expelled into the atmosphere, thus further adding to pollutant levels.

The rise of ammonia in the atmosphere has already seen an increase of 3.2 per cent between 2015 and 2016 according to UK Government figures, which also coincides with the implementation of the Euro 6 emissions standards. This indicates that, whilst the fight against NOx rages on, the increased use of the technologies required to help combat them, in this case SCR, may be posing further emissions concerns. As SCR technology continues to become the go-to choice in new diesel vehicles for its proven NOx reducing capabilities, it begs the question of what impact the rise in ammonia pollution is going to have on both us and the environment. It is clear that whilst positive changes such as the steadily declining atmospheric NOx levels are taking shape, there are other factors that also need to be taken into consideration before it’s too late.

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MANUFACTURING IN THE MODERN AGE

Mark Blinston, Commercial Director – BM Cats

For most of us, BM needs no introduction. One of its plants, tucked away in an innocuous industrial estate in Mansfield, Nottinghamshire, doesn’t give anything away from the outside. It’s only when you step through the door that the scope of BM’s undertaking with emissions products is revealed. All of it (or most; some robots weren’t working on the day we arrived) moves with automated efficiency alongside ceiling-high racks upon racks of raw material storage. Mark Blinston, BM’s Commercial Director, cheerily explains some of the serious-looking machines churning away on the plant floor. One of them is producing a small waterfall of oil continuously, and every minute or so a freshly-machined nut tumbles out into a collection tray. “We use this for producing sensor ports and various other machined parts,” says Mark. “The most expensive one we have cost £170,000. The CNC Lathe machines can run 24 hours a day and are fully automated. We manufacture these components in-house to give us control over quality and design whilst reducing the inventory labels required when importing them.” Other automated machines at work include a 200-tonne press to stamp out the shells for BM’s catalytic converters; welders; CNC Miller machines; and three large tables upon which an automated plasma cutter line is fast at work. We have to be careful not to look directly at the beams.

The whole operation exudes a sense of pride, considering that not so long ago all of this was non-existent.

Beginnings

BM, like any company, had humble beginnings. When it was founded in 1966 by Alf Belton and Eric Massey, the company offered one service: fitting tyres for the local community. Operating out of a single base in Bulwell with five members of staff, it wasn’t until a few years later that government legislation led the company to expand its operation to fitting exhausts as well. Then, when legislation requiring mandatory catalytic converters was enacted, BM seized the opportunity to begin producing their own. In true full-circle fashion, BM has grown from sourcing exhaust parts from big suppliers in Europe to being a major supplier to them. “We were buying exhausts from all of these people as a garage,” says Blinston, “and they’ve allowed us to set up and it’s come all the way around to the fact that we now supply them! It’s quite bizarre.” Indeed, it takes some pretty astounding oversight on the part of competing European firms to allow a small garage in the East Midlands to become the largest independent manufacturer of cats, DPFs and front pipes in the whole of Europe, but this is precisely what has happened. Today, BM is almost entirely self-sufficient, manufacturing and machining its own parts – even down to the nuts used to fasten sensors on to the catalytic converters – to be used later on in the assembly process. “What we’ve got to do is keep our products as cost effective as possible, hence the investments in all the bits and bobs –” robotics and machinery, in this case “– so that we don’t then have someone in the way taking a margin as well,” says Blinston. The other benefit of being self-sufficient is that relying on European-based suppliers for parts is about to get a whole lot harder…

Brexit

For BM, the disadvantages that a hard Brexit might place upon the company are numerous; particularly frustrating given the strong position the company has earned itself over the years. “Of course, some of our European competitors will have an instant advantage over us if we have a hard Brexit. There’ll be no tariffs [for them], and it would take longer for our stock to get to our customers,” Blinston explained.

Plenty of storage at the Mansfield plant. Will Brexit affect imports?

A solution could be to move at least a portion of BM’s manufacturing into Europe before the UK officially leaves, as others have done. But for Blinston, this isn’t on the cards. “You’ve got to spend millions setting up plants in a low-cost economy that in five years’ time isn’t a low cost economy any more. Poland, five or ten years ago, was a cheap place to manufacture, but their economy’s grown quite a bit. So it’s tricky, and we wouldn’t want to be as far out as China.” In addition, all of this wouldn’t play into BM’s identity as a British manufacturer, something Blinston wears on his sleeve. “We’re proud to be a British manufacturer, to be honest with you. It can be done here. There’s this massive assumption that you can’t make things here, and we are.

“It will be interesting to see how [Brexit] affects other people. I suspect that some people will have buried their heads, and I suspect that some people have got plans like we have.” Blinston says that BM has a number of scenarios in place depending on the outcome of a Brexit deal on March 29th. And, in a worst-case scenario where trade is halted altogether, the warehouse stockpiles could enable BM to continue producing components for 10 to 12 months. But selling and sourcing parts isn’t the only issue that Brexit has brought upon the firm.

Automated plasma cutters at work

Human resource 

This year has been a struggle for BM in an unexpected way. “It’s a shortage of manpower,” says Blinston. “For the first time in our history this summer, the factory couldn’t cope with sales. We were selling more every day than we were able to make, so our stocks became massively depleted.” There were a couple of factors that made 2018 difficult in this respect: particularly high demand, a red-hot summer and a world cup (yes, really!) made it difficult to get workers in. “When you’re working a 10-hour weld shift in hot conditions, do they want to stay and do overtime for an extra four hours? Very difficult…” says Blinston.

The availability of skilled workers is another area in which the uncertainty of Brexit is proving a nightmare for BM. “Since the referendum we’ve found a smaller pool of workers from outside the UK wanting to work. People are going back because they’re worried about settled status.” But crucially, the lack of skilled workers is an issue that starts at home. “It does worry me that people coming out of school or college that would normally go into the engineering sector or fabricational welding, they don’t want to do it anymore,” says Blinston. “They want a beautiful office environment with air conditioning and table football.” Although Blinston says that BM have managed to recruit a sufficient amount of welders for now, the frustration from passing up on sales and certain supply deals over the summer, costing millions of pounds worth of business, still lingers.

Future

Despite everything, Blinston remains optimistic about BM’s future. “Our company has always thrived in difficult, challenging circumstances. I think we just tend to navigate the choppy waters a little bit better.” Plus, regardless of Brexit, the emissions market will see increasing developments which should drive sales for manufacturers. The addition of SCR (Selective Catalytic Reduction) systems, for example, “is going to drive sales for AdBlue, temperature sensors, NOx sensors, this kind of stuff,” says Blinston. Although Euro-4 products make up 37 percent of BM’s sales, Euro-5 and 6 ones are fast catching up. “The trick,” he concludes, is to “never stop investing” in new market developments. Easier said than done, but BM certainly seems to be in a position to do so.

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THE GUARDIANS OF THE ARCHES

First published October 2018

Last year, National Rail announced that it had agreed to sell off every archway property in what would become a £1.5 billion deal with private equity and property management firms Telereal Trillium and New York-based Blackstone Group.This meant that every business – and many garages and workshops – operating out of each of the 4,455 archway properties owned by Network Rail underwent rent evaluations and, perhaps unsurprisingly, prices didn’t go down.  One of these is Clapham North MOT garage, under the brick foundations of Clapham North’s railway arches, has been operating since the 60s under Ronnie Grant, now 93. Prior to the sale, the garage received a letter in November last year notifying them of a rent hike – from £33,000 per year to £147,000.

“It was a demand. End of story,” says Ronnie’s son, George Grant. “We obviously went:  ‘there is some mistake here.’” When it became apparent that the hike wasn’t a mistake, George – who recently took over ownership of Clapham North MOT from his father – and dozens of other small archway businesses formed a group called the Guardians Of The Arches. The exposure from the price hike culminated in a trip to Westminster and a meeting with Transport Minister Jo Johnson, who also brought in the bosses of Network Rail. They revealed plans for the sale. “We absolutely laid into them,” said Grant. The Network Rail figures apologised, saying that they had conducted a ‘desktop review’ of the estate, which resulted in the price hike.

But George was sceptical. He mentions that three years prior, he received a notice saying that Network Rail wanted to redevelop the garage into “a wine bar or something similar.” “How can I say it… they were being ‘creative’ in the way in which they said our garage is located on the high street. It’s not on the high street, it’s set back. We think they had ulterior motives, basically to create an estate which was highly valuable.”

Location

To be sure, the archway properties are ideally located for enterprise. Garages around the country set up shop in similar conditions. But value is more than location and potential; how much a business is really worth can often be gleaned through community feedback, something Clapham North Garage receives in spades and which would be lost if it were sold out of business. “We have a unique way of customers and that is you look after people, it’s not rocket science. We have several generations of customer, and we do such a good job that even people who have moved out of London have come in.”

For Grant, this adds a particular sting to the price hikes. “These business were thriving in their communities. Thriving in conditions most normal businesses wouldn’t occupy because of the damp and noisy arches. These are Victorian premises, and they’re not for everybody. We’ve taken the hit as a business and set ourselves up in them with the knowledge that it’s good enough for us.”

Indeed, gentrification was one of the desired outcomes of the selloff posited by Network Rail CEO Mark Carne (who has since retired). Carne said at the time of the deal that it would bring investment “for the benefit of the local communities and it will help fund a better railway. I hope to see areas around the railway positively transformed with new and refurbished shops, amenities, and extra facilities for local people and passengers.”

Of course, Grant takes a dimmer view of matters, particularly in regards to the motives of the private firms to whom matters are being handed. “You’ve got to remember that these people are completed blinkered. They’re only interested in creating wealth. They are un-transparent, unethical, unfriendly. They do not hold their tenants in any value whatsoever.”

Publicity

For now, the future is opaque. Grant hasn’t had any correspondence with the future private landlords, although he has negotiated and signed a new lease agreement with Network Rail for £59,000, which he expects to begin in the next few weeks. He’s had to adjust his business operations to account for the sudden extra expenditure.

“We’ve taken on more staff, updated our website. I’ve been promoting Clapham North in the motor racing world. I wanted to create more of an impact about what we do. From a business point of view, it’s a case of: you sit down and cry in your hands or you say ‘we’ve got to up our ante.’”

I want to preserve what my father started before I was born,” says George. “I’m going to hold onto it like you wouldn’t believe.”

Railway arch business locations are so abundant that Network Rail was technically the largest provider of small-to-medium-sized business space in the UK, until the sale. Network Rail’s initial statement explained that the sell off would create ‘a significant injection of cash to the taxpayer-owned railways infrastructure company’, allowing it to ‘focus on its core business of improving the passenger experience.’ It cites added investment towards mega projects such as the Thameslink Programme, Crossrail and the Waterloo and South West Upgrade. Meanwhile, Paula Whitworth of Network rail assured CAT that “all tenants’ current leases and rent agreements will transfer to the new owner and be protected.”  

Graham Edwards, co-founder of new archway co-owner Telereal, said at the time of sale: “We and our partner Blackstone believe that our ownership of the portfolio will provide the supportive environment in which these businesses can flourish on a long-term basis … We intend to remain particularly sensitive to the small businesses that have been long-term tenants of the Network Rail estate.”

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PROMOTING YOUR BUSINESS

Promoting your business

By Adam Bernstein

Do you really know how valuable your customers are to you? Have you ever stopped to think if they actively promote or harm your reputation?

Of course, it is entirely possible to run a business on a diet of ‘one-hit wonder’ customers, but it’s a wasteful, time consuming and expensive way of generating business. It’s much better to win and keep customers by understanding their lifetime value through studying their loyalty. One way of doing this is to generate what is termed a ‘Net Promoter Score’.

 Net Promoter Score

The Net Promoter Score (NPS) is a loyalty tool used to monitor and gauge the loyalty of a business relationship, irrespective of whether it’s business to consumer or business to business. The key benefit of NPS is that it gives insights into elements of a relationship such as customer satisfaction, effectiveness of communications and how well customer service is judged.

For some, it can be a very effective way of measuring customer experiences precisely because it’s possible to see if customers would recommend you to others, with answers based on a zero to 10 scoring method.

Calculations

From a business perspective, understanding how the scoring is calculated is essential as this drives communication with those who might buy from you. Essentially NPS asks a series of “why” and “would” questions which return scores of between zero to 10.

And over time NPS allows firms to regularly canvas customers for their opinions, asking numerous questions via a 20 – 30 second questionnaire which can be answered quickly. Because of the ease of answering NPS questionnaires the response rate can be high.

There is a standard to scoring NPS responses:

Those reporting nine to10 are labelled as a promoter. They are likely to buy again and promote the business to others as a recommendation. They are a great advocate for the business to have and they will be a loyal customer in the future.

A score of seven or eight labels customers as ‘passive’. These people fall in the middle of being a promoter or detractor. They are undecided and do not want to commit and so do not give active responses to the questions and try to remain impartial.

Customers giving a response under six are labelled as detractors. A detractor can be detrimental to a business as they can become negative, give comments that will influence others, and they may not complete business transactions.

The problem for businesses faced with detractors is that the web feeds the subconscious. This is because consumers often look online for comments made about the products and services of a business and this can have a negative or positive effect and may well influence their own buying decisions.

The actual calculation when measuring NPS is a function of the total number of respondents who reply, the total number of promoters and the total number of detractors; the percentage of detractors need to be subtracted from the percentage of promoters. The closer the result to 100, the better it is and anything with a negative should be dealt with quickly.

 Best effect

It should go without saying that NPS needs to be used properly if the right result is truly wanted. Having a score for a product or service will give an insight of how well a job has been done. If the scoring is poor, a business can see the areas that need work and take proactive action to improve them.

NPS can be used generally or specifically, depending on the strategy being deployed. For example, after a customer has purchased a simple automated email can be sent asking for feedback. It’s important to note, however, that for NPS campaigns to work a business-wide strategy needs to be implemented and it needs to take into consideration factors such as making all staff aware of what NPS is, how the measurements work and what they mean; not ignoring or failing to respond to negative comments; and actively seeking to engage with those classified as promoters.

Think also about how you will communicate further with promoters. They have given you a good score but how will you continue to communicate positively with them now that you have their goodwill? And negative scorings should also create the same thought process – think about how you will work with those customers that give a low score? Everyone needs to communicate effectively to customers and the key is to keep monitoring the scoring results and act upon them.

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AFTERMARKET LIVES: AUTOPARTS UK

Even if you’ve never been on a franchise’s forecourt, the chances are that you’ve heard of Arnold Clark. In case you haven’t, it is a huge company with 24 VM brands in it’s dealer group, that has branches dotted all over the UK.

The scale of the business was a point proven to us when we were given a tour of the vast and labyrinthine Head Office in Glasgow, which fittingly is integrated with one of the dealer’s 200 branches.

However, it isn’t the huge office that we are here to see, nor are we in town to visit the firm’s training facilities. Instead, our trip is to the former Albion truck and bus factory in Scotstoun, which for many years has been home to Arnold Clark’s aftermarket factor business, Autoparts UK.

As you might expect from a building where double-decker buses were once produced, it is very large and solidly constructed with ornate cast iron pieces stretching to the roof. There’s a large mezzanine and there is ample room for all of the sales team inside the former administrative quarters. It’s in here that we meet the Group Factor Manager, Craig McCracken who explained how it was that a company that has its main business in new car franchises has an all-makes aftermarket factor chain attached to it.

“We started with Unipart Express Factors, because in those days an Express Factors branch was always coupled to a Rover dealership” McCracken explained. At the time Arnold Clark had a Rover Group franchise, though the Express Factors network was an all-makes programme.

 

Express Factors

McCracken started the first Express Factors branch to be located in a Nissan dealership, but the landscape changed when Unipart took the decision to buy Partco/Brown Brothers. “We took the decision that we might be ‘feeding the hand that was about to bite us’, so to speak” explained McCracken. “We decided to do our own thing separately and line up our own suppliers”.

With that, the Autoparts UK brand was established in October 1992. Thanks to the team’s experience and backing there was no problem with securing stock from the best suppliers in the market including Valeo, Kilen and Sogefi etc. In addition the company has always offered a tier of products under various ‘house brand’ labels including Padtech, Goliath and Dynamach which also do very well.

“With our own brand products, we always try to make them equal to, if not better than the premium product” McCracken says, explaining that contract to supply oil, for example, is put out to tender every three years and the product is monitored to ensure consistent quality.

 

Acquisition trail

Today, Autoparts now consists of twelve branches, ranging from Inverness on the North coast of the Scottish Highlands, to Stoke-on-Trent in the Midlands. Three years ago, a second chain, Midwest Motor Factors was acquired with half a dozen branches that also fall under McCracken’s jurisdiction. The growth is unlikely to stop there as McCracken has plans to expand further and is on the hunt for any businesses that might be considering selling.

 

Unlike most all-make parts factors, Autoparts UK also supplies body panels to the crash repair market and more recently it has introduced a range of tyres. Like some other factors, Autoparts UK offers customers a garage management system, which allows them to manage daily booking and check stock online.

 

McCracken says that the system is popular with regular customers, though only a minority use it for actually ording parts.

 

“They can order parts through it, but the main thing (for them) is getting accurate service schedules” he explained, adding that in the event of a dispute with a VM, the garage will need to prove that the vehicle has been serviced in line with the manufacturer’s schedules, and that the software will advise on exactly when, and what parts are needed at certain intervals. The system is also handy for sending out MOT and timing belt reminders to customers.

 

McCracken has always been a fan of selling everything needed to complete a job in one go. For example, when selling catalytic converters he noticed that the team struggled to get garages to take all the accessories needed to fit the part at the same time. “The main problem was that when you sold someone a cat then added a fitting kit at £26 on top it was difficult” explained McCracken. “So we did a deal with a manufacturer to include the kit in the price. We sometimes get customers saying that we are slightly more expensive, but when we explain that they are getting over £20 of fitting kit in the price, it usually works in our favour”.

 

Price is a crucial point everywhere, but especially here in Glasgow, where several factors are competing for the same patch. “If you’re not competitive, your customer will go to the competitor” he explains, adding that availability, product quality and delivery speed are now areas where there is little to choose between one factor and another in the local area.

 

On the subject of how ‘independent’ can an independent factor be if it is owned by the holder of dealer franchises, McCracken said: “Our competitors will try and use it against us, but ultimately the garages we serve are charging around £40 p/h and working on vehicles that are five years plus, where dealerships are charging £90 per hour”.

 

“Last year, AC sold 297,000 vehicles. We are the food chain for the aftermarket. Is someone going to bring a six year old Dacia back to the dealer for a set of brakes, an exhaust and a clutch? No. It’s never really been an issue, I’ve never lost any business out of it”.

 

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MEETING THE BENTLEY BOYS

MEETING THE BENTLEY BOYS

William Medcalf talks us through his preparation business for vintage Bentleys

William Medcalf

Let’s say you are thinking of going on an endurance rally, what car would you take? By endurance, I mean a long, long distance across far-flung and generally inaccessible corners of the world with stretches covering unmade or non-existent roads. You might think about taking a tough four wheel drive that you could get parts for anywhere, a Toyota Land Cruiser perhaps, or a suitably prepared Subaru Impreza.

What you probably wouldn’t consider taking for such long jaunts is a pre-Rolls-Royce era Bentley. Apart from the fact the youngest machine is now 87 years old, you can consider it a given that any roadside factor you might find in the Gobi desert, the jungles of Borneo or the Canadian wilderness won’t have that many parts on the shelf. That’s before we mention that the minimum you can get your name on the logbook for one of these cars is about £300,000 – and this could easily exceed £4m if you were able to persuade one of the owners of the super-rare Blower Bentley to sell it to you.

It’s surprising then that William Medcalf, owner of the eponymous one-make specialist in Sussex says that many of his clients do take their cars on such jaunts. “Around 60 percent of our clientele like to take their cars on rallies,” he tells us as we walk into his workshop, adding that pretty much all of the cars that he looks after are in regular use and not simply museum pieces.

Bentley showroom

RALLIES
Clearly, all of these cars need to be suitably prepared for the epic jaunts they are regularly run on. The balance to be struck is how to make any modifications in keeping with the original car, and reversible if the owner chooses to put it back to entirely standard. To this end, Medcalf employs engineers rather than vehicle technicians and the firm has invested a lot of money in computer design, 3d printing and milling machines. “I’d like to think that if W.O Bentley was here, he’d look at some of our designs and he’d nod in agreement’ Medcalf said, while showing me the internals of a differential that had been made out of a piece of solid billet. “Everyone wants the modifications because you can go and drive the thing around the world. What we are not doing is turning it into something different: It’s all Bentley engineering and Bentley ethos,” he furthered.

There are plenty of other examples of this sensitive approach to making the vehicles more usable. On our visit, an engineer had the drawings for a clutch up on the computer. Previously a clutch failure could mean the car having to be shipped home without completing the rally, but by using the fittings that are already there, Medcalf’s team have developed a clutch that can be replaced far more easily.

All aspects of prep and restoration can be undertaken at the workshop. Apart from mechanical work, bodywork can be restored, welding can be undertake und there’s even a fully-equipped woodworking bench, serving as a reminder that when these cars were new, coachbuilders would have been most familiar in doing exactly that: building horse drawn carriages.

MODERN METHODS
While some of the work might have its roots in the 1800s, the industrial processes in place are not. Despite the one-off nature of working on these cars, every job is coded to a computer- based garage management system, measuring the time and materials each engineer is using on a task. “There are no projects gathering dust in the corner, to be worked on ‘as and when’” explained Medcalf. “Apart from anything else, we simply don’t have the space to clutter up.” The stockroom on the upper mezzanine is a sight to behold. With 15,000 lines, there are a lot of items in the stock drawers that look familiar, but on closer inspection are certainly not. “These screws for instance” says Medcalf, pulling out a bag of machine screws, “Are a size specified by W.O and they aren’t found anywhere else except on a Bentley engine. You can use a different size screw, but there are 136 in an engine and we make them in the original size, and with the right number in the packet – so why use the wrong ones when we have the right ones on the shelf ?”

In-house manufacturing

Other ex-stock parts include beautiful brass water rails and radiators, which are identical to the originals, only with slightly strengthened gussets to prevent blown rads in when running in hot climates. There are fun items like Castrol filler jugs, ranging to the more usual, such as bearing sets. One SKU of note is a copper gasket set, which there are plenty of in the stock location. “You could literally walk in here and buy a gasket set for a ninety year- old car. I’ll bet you couldn’t walk into a BMW dealer and buy a gasket set off the shelf for something built today,” noted Medcalf. They will happily bring engineers and parts to wherever their customers need them as well: Recently one of the team walked through Medcalf’s door on a Friday before a Bank Holiday and walked out with a ticket on the next flight to Tokyo and a differential as a regular client needed repair at the start of a rally stage. A friendly local (in Tokyo) garage was found, the part was fitted, and Medcalf’s employee was back at work in Sussex on the Tuesday. Apparently this is not uncommon.

NEW DESIGNS
New designs for parts are tested on Medcalf ’s own car (which by his own admission is regularly ‘murdered’ on rallies) but there is a plan to take development of parts design a step further. The firm has struck up a partnership with the University of Sussex to produce a ‘Knowledge Transfer Partnership.’ Simply put, the University has assigned a graduate to work with the business, effectively as an employee, for two years, looking at ways, no matter how small, that the understanding and engineering of vintage Bentleys can be honed. The idea is that new skills, and the latest academic thinking can be applied to help the business further streamline and innovate new methods of production. It sounds like an interesting project, and one we’d be interested in learning more about when it concludes.

If you want a vintage Bentley, the business also has a showroom with some cars for sale. Obviously the market is somewhat limited: Out of the estimated 1,600 cars remaining the majority are in the hands of people who neither want or need to sell them. Nonetheless, there are half a dozen cars on sale in the showroom on our visit, ranging from a fabric body doctor’s coupe (complete with cadish accessories in the boot that include a shotgun store, a sink and a fold out bar!) to a concours winning tourer and a blower replica. You’d need to bring some bunce with you though: The cars in the showroom start at £300,000 and range to well over a million.

So if you fancy taking on a new hobby and you have some spare time and a few hundred thousand quid in your back pocket, then you should visit the one-stop-shop for everything Bentley.

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