WINTER 13
ENTREPRENEUR
When Rover collapsed in 2005, it hit the automotive supply chain hard. Jim Griffin didn’t like all the despondency, so he took drastic action – leading a management buyout of the company he worked for. Paul Robertson reports The date 1 October 2006 stands out as the most important one in the business life of Jim Griffin. Well, it was until 30 September this year, when turnover at his company reached £12m, a target which had, to say the least, looked ambitious seven years ago. But back in October 2006, at the age of 40 and after 10 months of difficult negotiations – including the loss of a customer which threatened to scupper the deal – Griffin’s management buyout of Automotive Insulations, based in Rugby, Warwickshire, was complete. It followed months of uncertainty as the business, where Griffin was general manager having worked his way up from the shop floor, came under severe pressure when the customer it relied on for almost all its work – MG Rover – collapsed. “The business had been run by two brothers and had gone through many turmoils, including the industrial unrest of strikes and the demise of Rover not once but twice,” recalls Griffin. “They were losing spirit and I didn’t agree with the direction the business was taking. “I went on holiday to New Zealand and after three weeks moaning about work to an entrepreneurial friend he said to me I had a decision to make – buy it or quit.” Sitting
on the plane on his way home Jim made the decision to quit, but almost a year later he was the new owner along with partners Kevin Westwood and Karen Holdback. “It was a pretty stressful time and I do talks now on how not to do a management buyout,” he says. “We had taken on a business which was just plodding along and which under-estimated its exposure not only to the big players but also the supply chain.” By 2008 he risked losing his house, was struggling to pay the wages and was beginning to think, despite their best efforts, Automotive Insulations would be another casualty of the recession. With their backs to the wall, Griffin and his partners devised a whole new approach to win new customers, friends and lay the foundations for the spectacular growth it is enjoying today.
He called the workforce together and announced while competitors may go bust that was not going to happen to Automotive Insulations – instead, they were actually going to win the business of those who could no longer continue. “The easiest thing in a recession is to do things on the cheap and cut costs, but such an approach is doomed to fail,” says Griffin. “When you have a good product and a great reputation, diversification is always well worth considering. We decided that we needed to find new markets within the automotive and vehicle sector. “Furthermore, our industry has changed considerably over the past five years with customers increasingly looking for more agile and capable companies – and so we needed to find ways of meeting that demand.” A training programme was put in place so that whatever role an employee had – engineer or designer – they were also salespeople, able to move quickly to take advantage of others’ misfortune, providing a fast, efficient and reliable service with the focus on the customer. “We targeted the business of the companies which went bust and earned a reputation for winning new friends. There were times we wondered how we would be able to design and make certain products, but we found a way.” >>
They were losing spirit and I didn’t agree with the direction the business was taking
Andrew whiting weAlth ConsultAnCy llP Senior Partner Practice of St. James’s Place Wealth Management tel: 0121 215 0926 Email: andrew.whiting@sjpp.co.uk Web: www.andrewwhiting.co.uk
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BUSINESS QUARTER | WINTER 13