Tony Wilson speaks to CAT – he says sorry for the mistakes and sorry to those that have been hurt by the collapse of Klarius Group – 250 redundant employees and out-of-pocket customers and suppliers.
He’s accused of propaganda and bullshit, but tells us how he aims to rebuild confidence in the market and hit £50 million turnover in five years with his new emissions-focussed Klarius Products.
There’s also a lot to talk about as far as the future for QH brand goes now, but that has to be left to its new owners Tetrosyl. For the moment Wilson is on the stage.
So what went wrong?
“We made mistakes. Availability in the aftermarket is absolute king. Once your availability is affected you’re on a slippery slope. If I’m not supplying you with want you want today, somebody else is. And when somebody else is I’m on a downward spiral because people stop asking.
“It’s a self-fulfilling prophecy. If you haven’t got availability you’re dead and every single one of CAT’s readers knows that.
“One of our external factors was our bank pull on its change of ownership, and that was a body blow. Once you take a body blow you start to get an availability issue.”
With 100,00 SKUs, Wilson also admits that the company overreached itself and that, in turn, led to a problem with quality with the product which started him out in the automotive market in the first place – exhausts.
“As a company we tried to be all things to all people – management mistake – and we addressed some of the things we were addressing later than we should have – our mistake.
“There was an enormous amount of SKUs that we had, and the size of the nature of the business across the group gave it some of its own problems. What we didn’t do is cut that back quick enough.
“Klarius had a hiccough on its quality last year. It had a hiccough because we were looking in a million directions and all of sudden the quality had started to slip.
“It gets slapped down immediately. It’s not a discussion, it’s not a debate. It’s not an argument and it’s not a ‘what can you get away with?’ You get it back and you scrap it. If it ain’t right, it goes in the bin.
“All of a sudden there’s a tipping point when it just goes into a spiral. The acceleration when it tips goes rapidly and I’m talking a month. It accelerates at a speed you can’t imagine.
“Availability on exhaust, with the exception of the last month, has been good, historically above 95%. In the last six months it’s been around 80-90% and in the last month that had spiraled down as low as 60-70%.”
Anger and apologies
The fallout from the Klarius Group collapse is widespread.
“Suppliers have been hurt, and they didn’t do anything wrong. The ripples of this also go further than the employees – our demise will hurt other people,” says Wilson.
“A lot of people are going to be out of pocket. I can’t argue with that – I can apologise.
“Peoples’ jobs, livelihoods. People who did nothing wrong. Suppliers who supported us and did nothing wrong. Customers who supported us and did nothing wrong. It is a seriously, seriously difficult thing to come to terms with.
“I can understand, absolutely, people being angry and venting some of that anger. I sit at the top and I take the guts and the glory. It just so happens right now there’s no glory. I can’t walk away from that.
“A lot of people have been hurt, a lot of people have lost money, a lot of people have lost their jobs. I can’t apologise enough for that and if I could have changed anything… I don’t want to be where we are.”
One such person who’s currently out of pocket – and waiting to hear from the administrators KPMG – is Andy Ward. He owns the warehouse that Klarius Group leased next to its facility in Cheadle.
“I’m very, very pleased that the boys have kept their jobs at the factory – it’s brilliant for the area, a real contribution.
“But I feel let down. I feel I’ve been treated badly, with no respect. I’m saddened.”
Ward says he’s been trying to get hold of Wilson on the phone. We don’t talk names and about Ward specifically, but Wilson says the notice of intention to appoint administrators meant he couldn’t show preferential treatment to one creditor over another by taking a call.
Perhaps Ward will get his money and, in his own words, can move ‘onwards and upwards’. At the moment he plans to convert his building back from one big unit to six smaller ones.
Humble pie and bollocks
“The business is back where it started. It started with exhausts, it’s back with exhausts.
“We’ve got a lot of humble pie to get through, we’ve got to regain the confidence of the market. We’ve got to repay the customers who have been loyal to us. We owe them that.
“Our priority, as I said to everyone of the shop floor this morning, is availability linked with quality. Image is bollocks. If you’re out there delivering, and it’s got availability and quality, people will buy it.
“I gave a customer this morning the assurance that we will have our availability back. It doesn’t happen tomorrow, it will within the next two to three weeks. There will be a significant improvement in the next two to three weeks.
“We’re not looking for acquisitions, we’re not looking for diversification. We’re looking to do what we do and doing it right. Turnover in three to five years? I would like to see a very modest £50 million.”
Now that Wilson has fewer plates to spin, fewer products to manage, is there a sense of relief?
“There’s no sense of relief from not being out there. There’s a total feeling of immense disappointment that we didn’t get to see the job through and right now my only thoughts are with all the shit that gets cleaned up. It’s not good.
“I had people today [at the plant] saying well done. But there’s no success in managing to keep hold of this [Klarius Products]. It’s not a well-done day. It really isn’t.
“I understand people are worried about jobs. And if you’re worried and you find out it’s safe, there’s an element of euphoria. It’s not, though, is it? It’s a hollow victory.
“How do I convince people? Propaganda and bullshit? History is an interesting thing. The future will tell what the history was.”
Time will tell.