Chapter 15
Transmissions
After giving up making rolling mills, the company had plenty of spare energy. Peter’s son, John, had joined the company and went to college to get an HND and became quite competent at running the shop floor. Colin’s daughter, Amanda joined the company and went to college to gain a qualification in management accounting.
The company’s affairs started to pick up when Amanda joined. We had established a good relationship with a local company noted for its research into transmissions and we manufactured a high proportion of their output. This was good for the development of both companies although it was to prove the nemesis of CWWalker.
The products were fairly sophisticated market leaders and required a great deal of painstaking care and attention to detail to get them right. The volumes were always low and reject rates high so that manufacturing profitability was marginal. The company persevered and gained a well-deserved reputation for technical excellence. This was rarely converted to profit.
The products were concentrated around the concept of the limited slip differential in the axles of motor vehicles. This device much improved traction of vehicles and became very popular in off-road vehicles and high performance sports cars. Eventually the main production revolved around the car rallying business and the company became quite specialised and highly competent in this field of endeavour.
The machine tool industries in the midlands, which had provided a good complementary mix of products to the company, gradually died through the 1980’s and by 1995 the company was reduced to a handful of customers, all in the transmissions business. Much of the work was at rock bottom prices as the competition from abroad was becoming fierce. For most products it was cheaper to go to the local superstore and buy an item for less than we could buy the raw materials. The writing was on the wall for most of manufacturing.
The only possible future lay in localised niche markets such as rallying. The company developed its services and eventually won a contract with a major manufacturer to supply components for limited slip differentials. It took 2 years to develop the range of products to the point that they could be reliably supplied without rework and recourse to special measures. This required the introduction of many new techniques and practices specific to these products. We successfully achieved this and started to make some serious profits. The one cloud on the horizon was that well over 50% of our production was now in one contract.
It was during 1998 that the customer told us he wanted to double production. I was highly sceptical but several circumstances conspired to force my hand. Amanda and John had for some time been running the company while Peter had concentrated on low volume production and I had devoted my time to future development. The youngsters were feeling their feet and testing their competence. They were making a tentative take-over of the company.
They persuaded us to make the large investment necessary to increase production to keep up with the customer’s requirements. This was eventually done and we spent around £300,000, or 50% of annual turnover, in new equipment. My calculations showed we needed two years to cover the repayments and get us back to a recoverable position. The contract had already run successfully and profitably for several months and the customer was adamant it would run for another five years.
The investment was made and the new processes and practices put in place and the project started to look good. Then nine months down the line the customer was bought by a multi-national and within two months our contract was cancelled. Their engineers decided very rapidly that these high quality cars did not need a limited slip differential as they could modify the ABS system to apply the brakes if a wheel started to slip. By this simple means the expensive LSD was made redundant and my company was out of business.
We negotiate a three month withdrawal contract and employed a sales agent to attempt to replace the work. This proved impossible and not one worthwhile contract was obtained. Some work was brought in at prices competing directly with a company in Slovakia. We were making a loss on this work and, fortunately, it lasted only a few months.
We attempted to keep our team together but after six months it became obvious we were not going to be able to pay our bills. For the first time in 80 years we faced bankruptcy. We were sitting one night, all the family, in the office discussing possible courses of action which all seemed to be going nowhere. The door opened and Bob popped his head round the door.
We had known Bob since we first took over the business and he had been a good customer and friend for many years. He, too was a Sagittarian and he and I got on like fire and water, but we managed to form a very good friendship.
Bob had served his time in the local Renold and Coventry Chain factory and was a well edified engineer and superb craftsman. He was working as foreman in a small workshop manufacturing specialised equipment for the tube making industry when we met him and we manufactured numerous specialised piece of equipment for him.
I have previously described the tube making machinery we made for him and after that saga we remained good friends and I saw him often. He had a job maintaining machinery and plant for a local company that had got into difficulties and had been saved by an entrepreneur who had bought the business from the receivers for £1. Their main manufactured products were for the motor sports industry and our products complemented them well.
Bob said he would have a word with his boss and left. We all went home. Things did not look good.