An individual approach

It is entirely appropriate that Charles Morgan’s background is decidedly individual. Born into the family that makes the very distinctive Morgan cars, his early career was a long way from a manufacturing shop floor; he spent a number of years as a cameraman with Independent Television News.

“I joined ITN because I wanted to work in the film industry,” he says. “The late 1970s was a very creative time at ITN. I went all round the world and spent time in the African bureau and covering the Middle East from Beirut.” We then spent a few moments trying to decide whether it was the Europa in Belfast or the Commodore in Beirut that held the record for being the world’s most-bombed hotel.

Whichever it was, the bombers never managed to catch Charles Morgan and the experience as a news film cameraman gave him a really good insight into modern communications. His jobs shift pattern also gave him the chance to indulge his core passion for racing cars.

Racing certainties and culture clashes
Although he did not join the family business until 1985 Charles Morgan was always interested in cars, both building and racing them. Joining the firm, he brought with him the passion and commitment he had shown in filming in the world’s trouble spots and driving on the racetrack.

Mr Morgan was also behind the decision to bring in Sir John Harvey-Jones, from the BBC’s Troubleshooter programme to the company. The show exposed not so much a meeting of minds as a clash of cultures; a conflict of ideas and backgrounds. The contrasts made it riveting TV.

During his career with ICI, Harvey-Jones made many necessary redundancies with genuine regret but Morgan Cars has never made anyone redundant, a record that Peter, Charles’ father, cited as his proudest achievement.

Harvey-Jones did not understand Morgan culture or its niche market. He certainly did not understand why it worked as a business – but at the same time Morgan had room for improvement in manufacturing techniques. After the programme Charles returned to university part-time to study for an MBA in Manufacturing at Coventry University.

“The course was part time but there were long weekends of intensive activity,” he says. He worked with other middle managers from the motor industry but from larger companies, such as Jaguar and Peugeot. One had to ask what sort of common ground there could be between employees of behemoth corporations and someone from a specialist, family-owned organisation.

“I found we had exactly the same problems,” he replies, “High work-in-progress, lack of consistent quality and so on. Our factory visits tended to be to companies like JCB who were becoming super-efficient. It was the time when manufacturing planning systems were being transformed, when the Toyota Production System was being taught.” Charles Morgan brought his enhanced knowledge and understanding to bear at the factory in Great Malvern, and the company now has shorter cycle times and better quality than ever before. It also builds more cars – over 1000 are scheduled in 2011, including the new Three-Wheeler.

With prices ranging from £25,000+VAT for the Three-Wheeler to £120,000 for the latest Aero SuperSports, Morgan is in the specialist, luxury end of the market. And it is in the specialist area that Charles maintains the UK has its greatest industrial and manufacturing strengths.

Engineering excellence
“The UK is the world leader in the construction of Formula One racing cars – in fact most of the foreign F1 teams are based here – and in luxury cars. As well as ourselves, we have Bentley, Rolls-Royce, Aston Martin and Jaguar. With Ford Bridgend and BMW Ham’s Hall engine plants, the UK is a major centre of excellence in engine manufacture,” says Morgan. “Ford makes over 2 million engines a year at Bridgend.

Another area where we do very well is powerboats. We have about 10 manufacturers in this country, including Sunseeker, Sealine and Princess.” He also points out the design and engineering strengths at UK Universities and Colleges, which has spread the country’s influence across the world.

“If you look at a lot of companies you will find their top designers and engineers are British,” he says. A few moments of ‘spot the British designer’ identified Peter Horbury at Volvo; Moray Callum as his successor at Ford in Detroit; Martin Smith at Ford Europe, Ian Callum and Julian Thomson at Jaguar and others at various large organisations across the world. He also mentioned companies including GKN and Riccardo as examples of excellence in advanced engineering design in the auto sector. But all is not perfect in the UK, as he readily concedes.

“Our biggest weakness in the UK is investment; we don’t tend to support our own,” Charles says. “The culture in the City is to invest globally. Also the UK customers stopped buying British cars. The French buy French, the Italians buy Fiat but we stopped buying Morris, Triumph and Rover.” However, more cars are made here than ever before and Morgan is now the largest domesticallyowned company – but he queries whether foreign ownership is of much concern so long as the research and development is done here in the UK.

Opportunities and challenges
“A modern volume production car factory is a huge investment and the manufacturers tend to put everything in one place. If it was cheaper to establish factories here, we could have more,” says Morgan. “The advantage to building overseas is labour costs, yes, but also the local government support to set up factories. Those things make other places attractive.” Furthermore, overseas economies are growing and are markets in their own right. But there are still potential attractions to doing business in the UK; and Morgan sees some moves in the right direction.

“Our corporation tax rate is low and we have R&D tax credits which make the environment in the UK attractive,” Charles explains. There is also the high skills base of the workforce and the educational infrastructure. “A lot of Chinese, SE Asian and South Asian students come to engineering schools in the UK. I think we’re second only to the USA in terms of the reputation of research departments at universities like Imperial College, Warwick and so on.” There’s also the British culture of innovation which, he believes, comes from the best examples of our education system. Morgan believes this gives us an advantage even Germany cannot match.

“Germany produces good cars but their university research is not as highly rated as ours,” he says.

What we have to do is to convert this wealth of talent into world-leading companies. “The thing to do is to back winners. We have pockets of excellence but the Germans have a good overall level of competence. The Germans engineer consistency and quality better than us. If we are to turn the UK back into a manufacturing centre we have to pay general engineers at least as well as lawyers, for example, so that talented people will be attracted.” The government has made support for manufacturing a talking point and has turned some of this talk into a kind of action with, for example, R&D tax credits – but there is still a lot of work to do and the inspirational leadership is not there yet according to Morgan’s front-man.

Taxation and investment
“The Revenue is, of course, desperate to get as much money in as possible to clear the deficit. But I think the will is also there to revive manufacturing.

That said, we have to move to backing future winners, not just creating jobs.” Morgan mentions MG Rover as an example of the latter. “The government lost £650 million overall, trying to keep those jobs. If £600 million had been put into hightech start ups then jobs might have followed and we would also have growing companies.

“I go to the Milan Design Week every year and it’s fascinating how far ahead the Italians are in modern design,” Charles says. “But the quality of the manufacturing is not as good as it should be.

Now if all those things were ‘made in Birmingham’ the quality would be there. We may not have quite got the mix right yet in the UK but if we can combine design skills, craftsmanship, lean manufacturing and our quality standards, we could come out the winners in Europe.”