Although now welded together under the crisp GKN corporate symbol, the size of the Guest Keen and Nettlefold associated companies, and their international success story is hard to grasp. Hard because British companies are not meant to derive a fifth of a successively more and more glowing balance sheet to profits made in Europe. That a total of £107.91 million was made in total surplus for 1976 (1975 surplus, £80.89 million) is perhaps less awesome than the twin facts that 38% of all the Group’s business was directly attributable to the car business, and that GKN are even now awaiting a supreme court decision on their protracted fight to take over the West German clutch specialists, Fichtel & Sachs, through the family holding company Sachs AG.
Now a British car-based company that is doing well is news, but one that is in a position to take over a West German rival in fact they already have another sizeable German transmission specialist within the group, Uni-Carden – really is a refreshing thought.
Naturally the man in charge of the 107,000 GKN group employees is equally out of the ordinary. A perfect match for his company’s success story, 60-year-old Barrie Heath DFC is a former fighter pilot with little sentiment for yesterday and a lot more interest in tomorrow. Of course his ability to go forward has roots in the past, and his family background included a father on the Board at Rootes who made sure his son was steeped in motor industry lore from the start.
This formidable man heads the innumerable companies that go to make up GKN with plenty of style, but a notable absence of protocol. The switchboard may protect him during meetings, but otherwise he rejects the buffers which most captains of industry place between themselves and the public.
The GKN people – there are now slightly fewer than a few years ago at 74,000 UK employees – are divided into nine major subgroupings. Heath keeps in touch through an instantaneous shortwave Philips radio link that brings the top men in Smethwick into the office with clarity and rapidity. It may be a nightmare for those on call, a kind of Doctor’s emergency bleep with words, but we can assure you it works efficiently.
Although we are really only interested in the car side of GKN, it may be of interest to know that the broad headings under which they earned all that money include production (especially processing of steel) of all metals; wholesale and industrial distribution, and a broadly based engineering sphere that both makes things and provides the service contractors to carry out engineering work. An amusing aside from the GKN Chairman: “When I came in on Monday, I found some fools had cut through a main power cable so we had no lift, no electric typewriters – thought it was one of our companies, gave them one hell of a blasting… they were quite hurt, it was an outsider!”
The engineering, general and civil, is the second biggest chunk of the business outside cars and trucks, but when Fichtel and Sachs is acquired, and the Supreme Court has to give a decision by the end of the year, then well over half GKN’s income will come from the automotive industry.
In the UK the names of GKN subsidiaries tend to be straightforwardly identified. Thus GKN Forgings Ltd., GKN Transmissions, GKN Axles and GKN Castings are quite self-explanatory. However it’s interesting to find that within the transmissions section there’s the right to make the Laycock De Normanville overdrive (Jaguar, Reliant and Triumph fit them). The Vandervell bearings company is also within this section. Salisbury axles and Powr Lok limited slip differentials are within the axle division, while the castings people are now quite heavily involved in the aluminium wheel business, supplying many of the best known sports wheels in both the accessory and original equipment markets. Think about it and you realise the alloy wheels have now become available in quite large volumes in Britain. Again the Triumph division of Leyland is a good customer, but you’ll also find GKN have made the wheels for the sporting Fords, Lotus, Jaguar, Vauxhall, BMW as well as the branded accessory wheels from Wolfrace and many others. Often they do not make all the wheels for such companies, but the chances are that GKN have been involved at some stage during alloy wheels manufacture.
As in some Continental countries, notably Italy, aluminium wheel advantages of strength, allied to low weight, are also being realised in the truck market, and GKN are represented here by their work on the Translite range.
The only Automotive division that does not have GKN in the title is Uni-Carden in Lohmar, West Germany, which produces Hookes type and constant velocity joints, propellor shafts and driveshafts. The lesson learned by the absorption of Uni-Carden within the GKN empire should be very useful when the Sachs AG deal can commence. You may be familiar with the Sachs business through the activities of the Sachs family, especially the brothers Gunther and Ernst, whose pictures adorned society columns for a good few years. Ernst died very recently in an avalanche accident, but this does not affect the course of the Anglo-German deal. That is presently subject to German judicial scrutiny following “an appeal to the West German Federal Supreme Court by the Federal Cartel Office. GKN is confident that the clear and categorical decision by the lower Court will be upheld,” says a GKN statement on the matter. At present GKN own 24.98% of Sachs, and they aim to buy another 50.01% that totals investment required amounting to over £79 million in sterling.
The office, the Kingsway, London, replica of their Birmingham HQ in its external corridor layout is crowded with mementoes. There’s a leaping Jaguar emblem on an ashtray, one of Rolls’ Silver Lady mascots and photographs to complement a well decorated, but very average-sized London manager’s office. Heath sits low behind his desk, wrestling with the problems of a jammed pipe… until swiftly rescued by a PR man who does carry pipe cleaners: laughter reverberates round the office as it’s agreed that this already senior PR man (who is far from the conventional ‘smooth talking, sharp-suited creation) is one who will go far.
Conversation begins cautiously around the inevitable flying achievements as I ask, “Which came first, flying or the motor industry?”
Heath clips out a characteristic answer, “Good grief man, I was born into the motor industry. Both my father and my brother were at Rootes, my father a director. I was educated at Wrekin and Pembroke College, Cambridge, but it was definitely the motor industry for me.”
“I had a first class job in the Midlands, £9 a week before the Second World War, so it was good money. Then my father decided to cut me off from the flesh-pots of London and sent me up to Liverpool, where they used to make Blenheims. All that meant was that I spent ages rushing up and down to London and back every weekend!
“I bought a Humber Super Snipe which the experimental department had been playing around with, and that cut the time down a bit.
“I learned to fly without charge. Before the war the Yorkshire Post used to sponsor a competition. You had a to-bob flip and the instructor assessed your ability from that.
“I met the man in the bar and he was impressed by my ability to drink Horses’ Necks and so we went to fly the crate outside. I flew it along straight and level and he seemed equally impressed with that. Then I noticed that the plane was going up and down” – his hand swoops in dramatic gesture of the plane’s apparently drunken flight path “and so I mentioned this to the instructor. I was just holding the stick rigidly, so I knew it couldn’t be me! That really got me extra points, for he was doing it deliberately.
“The upshot was that they thought I did have what it took. I knew there was a war coming, so I packed up my enlistment with the 16th/5th Lancers and joined the RAF’s auxiliary 611 Squadron.”
The war is simply dismissed with references to service in the Battle of Britain and the Near East – “spent some time in Turkey as a civilian as well,” is tossed in but the fascinating end comment is on his final rank as a Wing Commander: “should have been a Group Captain, I’d been a Wingco for ages!”
The RAF chose not to discover his engineering degree before he saw active service “I was credited with 3 1/2 kills; they think I was some sort of Richthofen in Germany. Of course the really important thing is, in my present role, that I was not a bomber pilot.” Hobourn Aero Components at Rochester, now a GKN Kent Alloys plant in the same Medway town, was where the young Heath re-appeared in the industry. By 1950 he was settled into a ten-year managing directorship of Powell Duffryn Carbon Products. Then he went to Triplex in a similar position: from 1965 to 1974 he was the Triplex Chairman, his reign covering that glass-roofed Reliant that Prince Philip used for so long.
Pilkington Glass has also been a part of Heath’s life for some considerable time, following a board appointment in 1967. Today he is a nonexecutive director of Pilkington, Smiths Industries and Barclays Bank. This is balanced by public appointments that include being a vicepresident of the SMM & T and having been a member of the Bullock Committee on Industrial Democracy. We have included only a sample of his recognition in the public sphere, so it’s obvious we are dealing with an extraordinary man.
His amusing verdict on such appointments is summed up by the comment, “It’s a certain sign of being a geriatric when you do what I have managed become a trustee of two museums.” The pair in question are Beaulieu and the RAF Hendon display. The latter is a magnificent free admission collection and it was heartening to hear that instead of resting on their laurels, the trustees are presently engaged in trying to raise £1 1/2 million toward a Battle of Britain additional display.
The writer was genuinely intrigued as to how a man with these sort of appointments could possibly fulfil his engagements, so without delay Barrie Heath swooped forward from his desk and descended on his desk diary to reveal the first three days of his week, including my interview. His remarks were preceded by dark mutterings about Monday and “well I’ve told you about the power drill through the mains electric cable. Damn long way up here to the seventh floor.” He smiles at the thought of the good his ample waistline has been done by such an ascent, continuing “then I had luncheon with the Barclays operating committee. Back to the office, then at 5.45 I caught the helicopter from Battersea and went to see some people at the aviation department of the company in Warwick. Then I went to the company guest house at Stratford where we “I stayed there the night and then went on to our Smethwick HQ in the morning for one of our main quarterly discussions. I then went on to my Doctor and told him how rotten I had been feeling, ” pause for hearty gale of laughter, “and he told me he had never seen me better, and how average my blood pressure was!” Still before lunchtime he was able to catch the helicopter down to Kidderminster where one of the main British operating sub-groups is based. From this point on an official car took over taking the former pilot on his speedy way to a morale boosting visit to Wednesbury steel production plant, West Bromwich, then back to Smethwick and the helicopter. That landed back in London at 7 o’clock in the evening, which left him some time at his London flat. Thus he was handily placed for his London HQ on Wednesday morning, sorting out appointments, Motor Sport’s representative, a lunch with a Pilkington Director and an afternoon appointment to see, and (hopefully) approve a series of financial ads to accompany the then-pending annual report. Characteristically Heath has shortened the Chairman’s section of the report considerably saying, “well they can read it all in the Director’s reports can’t they?”
Turning to sporting matters, Heath confirmed that GKN as a whole doesn’t tend to get involved directly. There have been rumours that some of the F1 contingent have received more than the obvious mechanical components from the company, but Heath tended to dismiss these as wishful thinking.
“When Silverstone were a bit down on their luck, Jack Scars approached us to sponsor one of their big days. This we did, co-sponsoring the Daily Express meeting, but it was hellish expensive. We have now withdrawn from that kind of arrangement, of course, but I dare say other things will crop up.
“Our involvements tend to be through Vandervell and the Transmissions people.” In fact there is a good Avenger Group 1 rally car out in a GKN subsidiary’s colours and there are occasional other individual deals.
Considering that people who fly Spitfires and earn the DFC are not usually averse to assessing the joys of competition motoring I asked Mr. Heath if he had tried competition for himself?
“No, I have not raced, but I have driven cars around tracks and enjoyed it very much. The thing was that I was married and had heavy business commitments at a time when I might otherwise have thought about competition.
“However, I have always been a keen motorist. I suppose the closest I got to the feel of competition motoring was when I owned a Ferrari Daytona a few years ago. That was an accident really. I was up on the Motor Show stand for Maranello Concessionaires with my wife and Ronnie Hoare. They were both telling me how I was now too old to have a Ferrari and enjoy it… yes, I left the stand having ordered a £9,500 Daytona: I got my first endorsement within a month.”
Heath recollects the Ferrari fondly, having taken it to the Geneva Show with him, though, “Goodness, the servicing, it really was expensive.” Since this was from a man who has to sign the bills for a company that operates Rolls-Royces on the same sort of scale as Avis rent Fords, the comment was quite relevant. In fact it was also interesting to hear that GKN also have three Aston Martins, and a pair of Jensens in the company garage: the Ferrari was Mr. Heath’s before GKN and was nota company car.
Currently Barrie Heath motors a Jaguar XJ-S and is as full of praise for the car as most of the owners we at Motor Sport encounter (voices the BBC categorically asked not to hear when their Nationwide programme ran a critique of the car some weeks ago) commenting, “It’s the best car I have had. I love driving it, and I do use it regularly. Obviously if we have to meet people at the airport, then I take a company Rolls and driver, but otherwise I drive the Jaguar and enjoy it.”
Back to business. It is not often that one has the chance to find out what is actually involved in running a multi-national company, especially one that has grown out of a Victorian family enterprise background to sprout into a modern business corporation. I naively asked what the biggest problems were in his personal business priority list for a concern that supplies something to every motorist?
“Do you know, I think the problems today are not that different to those of before the War… and probably before that, for all I know. In fact I was reading some old company reports and discovered that the general tone – ‘Bottom falling out of the market; Empire gone to pot; high unemployment – they were all the same then. It is not an original statement but I think my attitude is, the abnormal is always normal’.
“I have a pictorial mind. I like to see people in their normal working environment, so that when I go to phone them, I can picture the office in which that man is answering the phone. I don’t like a filter, i.e., a secretary between me and the callers, and I do like to keep things as short and simple as possible.
“For the future my idea is to consolidate. During the past five years we have acquired a lot of new companies. Now I want to integrate them, ensure that they are part of our main operation. We have some exciting ground to conquer, but for the immediate future I want to make the best of what we have. Fichtel and Sach’s deals would ensure that we had effectively gained the clutch business throughout Europe, either under licence or by direct manufacture, so that is enough of a future to look forward to in itself.
“However, we could have Hercules motorcycles through Fichtel and Sachs… .” Heath ponders and adds, “You know I’m really looking forward to just getting on one of those and riding it. Maybe we can do something worthwhile in the UK with it. I think there is a gap for them, they have a clearly defined market in Germany.”
That inevitably brought the conversation around to the Japanese. Mr. Heath felt that their competition was totally different to that of competing against other nationalities. “Look what they did to the electronics industry.., motor bikes… cameras. I have been on trade missions to Japan and there seemed to be some anxiety over what I would say in public. In fact I have nothing particular to say, except that they cannot go on pumping out stuff at that rate for export: people are bound to protest.”
But would they do more than that, enquired our MS reporter? “Well, that’s still a matter for further thought, but I certainly would not be surprised, though I don’t approve, if we in Britain started seriously talking about import controls. I don’t know whether it will come to that but it’s a possibility.”
Discussing present business it was a bit of a surprise, considering their European business, to find that, in Mr. Heath’s words, “Leyland is still our biggest customer. Speaking as component manufacturer I regard the future with enthusiasm, but if I was in a motor manufacturer’s position, I don’t think I would be so happy and would wonder how we were to defend ourselves against the import side. Of course imports mean a different thing to GKN, and may mean something different to the public in future, because the simple fact is that we have a major stake in imported as well as British-built motor cars.”
Already GKN are rather larger than the Chrysler and Vauxhall operations in Britain, and technically speaking they could make a motor car, especially one like the Range-Rover, where they have a very large number of transmission components (Ferguson 4-WD is a system that has obvious benefits for a company with such transmissions expertise). I asked if they would go back into the business of making complete bodies again? “Well, we have the capability, we already make lorry tractor cabs and have got in on the ground floor of tractor cab manufacture with all the refinement (stereo sound and air conditioning, life on the farm will change!) but we have no prospect of making complete car bodyshells at present.
“What may well change our pattern of business in the coming years is that Ford could overtake Leyland as our biggest customer. They are not far behind now, and with the Fichtel and Sachs European connection this could be the new pattern,” Mr. Heath concluded.
It had been a stimulating discussion about the good side of the British car industry, a very pleasant change. – J.W.