On the Road Again
Murdoch, Adrian, Chief Executive (U.S.)
John Neill is held in awe in European manufacturing circles. But unlike many gurus, his reputation is based on raw experience as group chief executive of British automotive parts manufacturer Unipart. Since joining the Unipart Group of Companies from General Motors in 1974, he has done the unthinkable in British manufacturing-transformed what was a sluggish industry, brought almost to its knees, into a world-class manufacturer.
The dismal state of the UK's auto industry at the time-in the late '70s and early '80scannot be overstated. When British Leyland began to have difficulties, investors fell over themselves trying to minimize exposure. As boards remained passive, banks simply wrote off loans, investors sold stock at a loss, and British Leyland came under government control. But with tight restraints on R&D and a production system that did not work, British Leyland failed to regain market share, and escalating layoffs led to worsen ing relations with the unions.
When Neill joined Unipart, he set out to establish a more independent and broadly based role for what was then British Leyland's parts division by building the Unipart All Makes range and establishing the Unipart Brand as Britain's best known brand for all makes of high quality automotive components. His plan put the company on a fast growth track. Today, Unipart Group is one of Europe's largest independent automotive parts companies, developing and marketing a full range of parts and equipment, as well as providing parts warehousing and logistics and other industry services to the automotive sector. In 1996, revenues sped to L1.01 billion and profits before interest and tax clocked in at 33 million. Last year, the company expanded its mobile communications and information technology service divisions and extended its manufacturing business with the launch of five new joint venture companies.
Building this new Unipart required changing not only the culture of the company, but also the whole philosophy by which the business was run, says Neill, who recounts asking himself: "How do you take the ideas and values, clearly successful in a marketing business, and infuse them into manufacturing?" A management buyout he led in 1987 helped set the stage. Initially, 60 percent of the company was acquired by city investors, but a 1989 buyback put more than half the company in the hands of management and employees, giving Neill the management freedom he needed to tackle the transformation.
At the time, his approach was a novel one, especially in the UK where, Ne ill concedes, "there were not that many successful British manufacturing companies in the '70s." For input, he turned to the country with the best manufacturing companies in the world at the time: Japan. …