Despite it being a quiet time in the aftermarket, Richard Welland is in a positive mood.
He has every right to be. WAIglobal got through 2020 better than many, thanks in no small part to an early decision to sell sanitiser packs.
Meanwhile, he recently achieved a personal goal when he became elected to take the next two-year presidency of the IAAF, a trade body he has been involved with his whole career.
He isn’t blind to what is happening to the vehicle parc though. Rotating electrics are more reliable than ever, and thanks to the combined motor-generator units in use over a lot of newer vehicles, are fewer in number as well. As such, he has begun to eye up new markets, with ATVs such as parts for quads, beach buggys and even lawnmowers coming into range.
However, even if the firm takes a high percentage of the mower market, it doesn’t hide the fact that the parc is moving towards electromobility, although Welland doesn’t expect the switch to happen overnight. “We’re talking years out”, he said. “The number of electric vehicles is still very small, even on hybrids but it will keep escalating and we have to keep eyes on it and look at what that we could bring to market which complement our existing range”.
These new products ‘could be anything, from cables to battery technology to sensors’ according to Welland, who added that the Far East factories that the firm has established relationships with can produce whatever is required in the field of electronics.
Welland himself is no stranger to change. A decade ago he was Director of Sovereign Rotating Machines, a domestic company that remanufactured starters and alternators that employed 140 people at its height.
In 2011 a third of Sovereign was sold to Florida-based WAIglobal, in a deal Welland at the time described as ‘not a marketing thing, it is a genuine partnership’. At that date, Sovereign had already started to stock some new-in-box products, but access to WAI’s catalogues and contacts meant that the firm could move this percentage to 50 percent.
A further deal followed in 2015, where the remainder of the company was sold to WAI, and the Sovereign name was dropped entirely.
Today, the operation is very different from the Sovereign days. The firm does still deal with reman parts, but these tend to be the more obscure and high-value items. “When I sold the business to WAI I felt that remanufacturing still had a place, and I feel it still does have a place, but it is a lot smaller” said Welland, admitting that the idea of trying to find enough work for 140 people in the remanufacturing centre these days would ‘frighten the life’ out of him. “The range that we’ve developed for the last twenty years developing the new unit programme, and when you look at the number of products that we can’t produce new, it is pretty small”.
New and old
New-in-box rotating products have also come a long way over the last decade in Welland’s view. “New units from the Far East and wherever else in the world took a number of years to get right” he said. Even 10-15 years ago there were manufacturing faults, but I would say that has been really honed in on the quality control we now have. We just don’t see those kind of problems resulting in returns”.
Of course the problem with transitioning a domestic remanufacturer to a firm that distributes goods from around the world is that you have to import stuff. This might have been all well and good in the halcyon days of 2015, but today there is the issue of Brexit, shipping costs and corona to deal with.
First of all, Brexit. Like most companies that ship through Europe, leaving the EU was a big deal for WAI. Sadly, the ‘free and frictionless’ trade deal promised by Boris never really came to pass. “Had we known what we knew on January 4 this year, perhaps on January 4 last year and had twelve months to plan for it. But what they said about ‘no tariffs, we’ve got a deal and everything is OK’ was not quite the truth!” said Welland.
Operational and administrative bases had to be moved quickly. “We’ve moved our business for the Republic of Ireland from the UK to Ireland,” he said. “We’re in a fortunate position because we have a UK base and a European one, but it took a few weeks to get our head around it”.
Not all customers were not entirely forgiving about the situation though. “We have to tell them that if you can’t get something, there is a reason why, and it isn’t because we haven’t done our ordering properly”said Welland, explaining that while the situation is much improved from January, it hasn’t happened overnight.
A proposal in the last budget for so-called freeports might help the situation for WAI and a base in one is something Welland said is an option being considered.
Wave of shipping
The current state of shipping goods internationally has not helped either. Even before the Ever Given got wedged in the Suez canal, international logistics were in a state of confusion, with ships and containers being in the wrong place, with the result that moving pallets of goods from East to west suddenly became far more difficult. “We’ve seen prices batted around ranging from $4,000 per container up to $14,000, said Welland. “Plus the ship company might offload your cargo, if they think they can get a better rate from another customer”!
Coronavirius has been, and continues to be, a challenge for the business. As the firm has a number of activities in China, it saw problems on the horizon very early in 2020. “I’d had a meeting in America, and we knew the problems that our offices in China were facing, and I knew that something like this would affect us” said Welland. “On the plane back, I was thinking ‘how is this going to hit the UK?’. I did consider that our business might just stop overnight, because we are on an island and once the trading groups stop… Well, the demand comes through them, and if they close, demand is gone”.
As a result, Welland used his contacts before the virus reached these shores to buy a quantity of PPE. “I’d started to bring in masks [from the Far East] and needed to generate some income for the company as well as I genuinely wanted to do something… I came up with the thought of putting together a kit that would help garages and factors, which is when I thought of Steri-7”. Steri-7 is a company that produces commercial sanitiser, and a deal was done to distribute the product as part of a cleaning kit which was particularly designed for sanitising vehicles between each occupant. While not a substitute for the core nature of the business, it gave Welland and the team a reason for working throughout the first lockdown. “We sold it to places like car dealers, caravan centres, wherever we could,” said Welland. “My main objective was to help people, and as WAI to ride out the storm”.
Richard Welland has been involved with the IAAF and its precursors for as long as he has been in the industry. After being treasurer for seven years, he was recently appointed as President, a post with a two-year fixed term, something Welland described as ‘a real honour and a privilege’. Stating that his plan was to ‘look at how we could do things better’, he added: “We’ve come an awfully long way. I know in the past it has been accused of being a gentleman’s club or whatever, but I think the last year has proved that we can lobby and actually get things done”.
The organisation stayed open for members throughout the year. “We didn’t shut down, we didn’t put people on furlough, we kept going. Really, a test of our mettle was in a situation where the industry is collapsing around us, or could be, the Association has to stand strong, and I was proud to be part of that, last year” Welland concluded.