Conference terri::cars_uk

I can only agree with Sir John.  The conservatism of the Morgans was incredible.
They clearly were not running a business, more of a charity whereby they provide
these strange cars to people who are prepared to wait many years to buy them.

Now, that is what Morgan want to do.  Sir John believes that they will go out
of business doing that, and I agree.  It may even soon be illegal to sell
what is now a very old design!  Even if it is legal, inflation will drive their
cost up, defeating their goal of having an "affordable" car.

I feel that the question for Morgan is - Do we want to be a successful business
or do we want to carry on as we are as long as we can?  They want the latter and
I guess that is allowed.  It may be bad for industry, bad for exports and bad
for Britain.  It will also kill them.  But that is their right.

It was noticable throughout the series that the managers of the unnsuccessful 
companies always claimed that Sir John didn't understand their business.  I
suggest that not being able to listen to expert advice leads to their problems.

Mike.

I watched it too and thought it a stunning program.  I agree that the Morgan's
selling point is its style and the fact that it is hand built.  I'm not sure
that I totally agree with John HJ's opinions, but they could easily re-organise
themselves to make more cars without sacrificing quality, just by changing the
layout of the factory (what layout?).  I used power tools to build the
Marlin, and that is still a hand built car.  Putting in the engine last wouldn't
change the nature of the car, would it?

John HJ's point that they would slowly go out of business by doing nothing seems
valid until you think that he would probably have said the same thing in 1980,
1970, 1960 and 1950.  They're successfull because they haven't changed.  For
example, they only put different engines in 'cos the previous engines have been 
discontinued.  

As for assuming that the market could absorb some price rises, I'm not that sure.
That way, I think you could price yourselves out of the market.  Although 
some price rise wouldn't damage anything.  The current prices seem to be good
value for money if you consider that the base component cost is around 60-70%
of the final price, that means that it costs 5 or 6 K to build in labour and
factory costs. But, I think you have to ask who is buying Morgans and what do
they use them for?  They're probably bought by enthusiasts who use them on
high days and holidays in the summer months.  How much are they prepared to 
pay?

Dave

    I started to watch this program last night out of the corner of
    one eye - but was soon paying it my full attention. A very good
    program.
    
    I was STUNNED at the conservatism and business nievity (sp?) of
    the Morgan people, both managers and workforce. I nearly fell off
    my chair when the foreman replied in answer to the question from
    Sir John :
    
    SJ "Well I suppose as you've been foreman 30 yrs you've seen plenty
    of changes ?"
    
    short pause ....
    
    Fm "No,...  nothing's changed here."
    
    
    I dont know how they have survived. Infact do they deserve to survive?
    I saw little sign of ANY management. For some reason this made me
    angry.
    
    However after watching this I viewed the Beerhunter, which I had
    videoed earlier. This program featured UK ales, and spotlighted
    a small brewery in Lincs called Batemans. Here was an old family
    business running for years producing a niche product at low quantities
    to traditional qualities. A bit like Morgan. The point is whilst
    I felt that Morgan owed it to the country (and themselves) to get
    a bit more modern, perhaps I wouldn't want Batemans to change.
                               
    What do other people think. Should traditional industries "get with
    it "?
    
    Ric

    re the base note.....
    
    Sir John Harvey-Jones did most definately NOT go to Morgan to tell
    them how to increase prod rate from 9 -10 vehicles/week...... he
    was as against that minor change as the Owners were against any
    kind of reformation of their manufacturing techniques. 
                             
    It seemed to me that Morgan is run (as has been commented) as a charity
    not as a business. the waiting list causes speculation as much as
    anything else....... people buy the cars for what they are, I suspect
    and not the way that they are made. The materials used would preclude
    any revolutionary changes, but the use of power tools would certainly
    enhance their production rate. There is nothing intrinsically wrong
    in the use of power tools.....
    
    And the cost of keeping all those rolling chassis just to move things
    arounf=d the yard is what is crippling them and probably eliminating
    the cash that they need to re-invest......
    
    Morgan should stop worrying about what people think of them and
    start to concentrate on making money and what people think of the
    cars......   
         

    I can't help feeling that if Morgan "gets with it", it will
    loose the niche it has in the market place.

    Should the only goal of a business be to expand ??? Sometimes,
    expansion of a business can lead to its demise. It would be a 
    shame to see this happen to Morgan.

  Mark

	Well I think Sir John got it right in some respects and wrong in 
	others.

	The real point is, the market. Now from the waiting list, it is
	quite obvious the market wants the product. The demand is there
	and looks like being consistent for the forseable future. 

	The production line, ok what production line, could and should be
	re-organised, even the Morgan designer was behind this point. Power
	tools, jigs and other 'new' production aids I think are a must and
	won't detract from the end product.

	If the price of the Morgan rises in line with inflation, nobody at
	Morgan is going to get rich. But judging by all the comments from
	the Morgan management and shop floor staff, that isn't a primary
	consideration. 

	If sufficient working capital is available to re-invest in new machine
	tools, as and when necessary I think the Morgans will be satisfied
	they're doing ok.

	If we take the demand as being consistent, the only *real* problem
	that could face Morgan is another manufacturer making the same
	product at the same price but being able to give faster delivery. 

	That is not likely, Morgan, like it or not has the name, and that 
	counts.
		
	It's certainly NOT the way I would a company, but I think Sir John
	didn't take into account the number of enthusiasts who will wait for one
	of these cars.

	Gordon

    Expanding, on its own, is not a bad thing. It all depends on how
    you manage and finance the expansion, and on the potential profit
    in the marketplace. One of the fundamental business rules, if I
    remember my economics, is that all business will tend towards monopoly.
    ie 1 company dominates the marketplace and can earn monopolistic
    profits. In reality what happens is oligopoly, ie a few companies
    carve up the market (ie us, IBM, ICL, etc), and earn good profits.
    In these markets there is still room for the small players who can
    offer something different - your so called niche companies - and
    Morgan is one of those. Morgan will never, can never and should
    never try to expand to take on the big boys. Its too late, they
    are too small and weak. However what they MUST do is compete against
    the other niche companies in the short term, and against everyone
    in the longer term. They do the latter by continueing to differentiate
    their product against what the big boys can offer. Morgan should
    take notice of what Japanese companies are doing re sports coupe's.
    Morgan must make sure car buyers are aware of why their cars are
    different, and worth buying.
    
    Rich.

    Here's my solution :
    
                   Management Balance Sheet
    		   ========================
    
    Assets
    ======
    		a.  Skill of labour force
    		b.  Established niche - handbuilt classic GB sports cars.
    		c.  Established market name - everybody knows "Morgan"
    		d.  6 year order book
    		e.  Good industrial relations, pro work workforce
    		f.  Family own their premises (?)
    		g.  Family own all shares (?)
    		h.  Non unionised
    
    Liabilities
    ===========
    		a.  Lack of management skill
    		b.  Non dynamic attitudes of everyone
    		c.  Poor profit = low investment
    		d.  Poor cash flow - low volume sales, high stock.
    		e.  Lack of market awareness
    
    
    Solution Areas
    --------------
    
    Morgans problems can be looked at in 3 business areas :
    
    	1. Marketing/Sales
    	2. Production methods
    	3. People
    
    1. Marketing/Sales    You must know your market. Morgan obviously
    had some idea, but nowhere near enough. Therefore market research
    necessary to find out who is buying, who are the speculators, who
    are they selling to and for how much, etc etc. Morgan must clearly
    identify what market are they in, is this market increasing/decreasing,
    who are the other players and what are their profit margins, why
    do people buy/not buy their cars.
    
    	Propose   -   survey of current owners & waiting list
                  -   some specialist market research
    
    2. Production methods   Morgan must balance the essential handbuilt
    nature against some modernisation of the production line. Clearly
    great improvements could be made in shopfloor layout, production
    planning, stock control, and working methods.
    
    	Propose   -   employ production specialist to produce study
                      of possible improvements with a cost/benefit
                      analysis.
    
    3. People     The no. 1 problem is attitude. Neither management
    nor workforce seemed to see any real problem except that they had
    a bit of a waiting list. The sales manager implied that it was
    inevitable/desireable (kept his job easy !). Any changes will be
    a waste of time&money until poeple recognise the need for them.
    This recognition must start at the top, and be communicated downwards
    to the workforce.
    
    	Propose    -    top management decide on company direction
                   -    Hold lots of seminars/debates with the workforce
                        to get the message across that management are
                        serious about change. Also essential to involve
                        everyone in this process, so that everyone "owns"
                        the change and can influence it. Poeple can
                        be very adaptive once they want to be.
                   -    Re-negotiate bonus systems once the new production
                        methods have been agreed upon. Workers should
                        participate in evolving the new prod. methods.
    
    (Anyone still reading ??)
    
    Morgan have such potential.
    
    Richard (any offers for consultancy jobs will be considered  :^)
    

	Interesting replies here. I wonder if anyone shares my 
	interpretation?.

	Morgan decided to take part in the program for a bit of
	free pulicity of the vanity type.

	It's family owned. They're very well off and have a nice
	little earner and a fur lined rut to live in. Incentive
	for change nil. Interest in having someone improve their
	lot nil.

	Endless future carrying on just the way it is. Being a 'Morgan'
	sounds like a very nice job to me, why change it.

	And what if the company should fail (which it won't)?. Sell the
	name for millions to someone prepared to put in the work. I
	think it's called decadence and very nice too!.

	-John

  	A different view indeed John ! and probably some element of
	truth in your latter comments, I don't know about the free publicity
	bit though, they don't seem to need it.

	It would be interesting to compare Morgan with someone like TVR, who
	have a newish factory and a management/workforce who planned the
	production side of things from scratch.

	Gordon

    re .11
    
    i wonder how many of tomorrows potential enthusiasts know something
    about Morgan.
    
    Rich (synical about their survival chances)

From watching the programme last night, the most obvious thing for Morgan to do
is restructure the production line.  They waste a lot of time moving bits of car
around the factory unnecessarily (increased labour costs) and have a lot of cash
tied up in rolling chassis sitting doing nothing.

This would not affect the construction methods of the car at all, hardly cause
any change to working practice, and release some money so that they can...

...buy some power tools.  I don't think anyone would object to a Morgan whose
panels were sanded with a B&D Power thingy, or cut out with a power saw.  And
having jig-made chassis can only be an advantage from every point of view.

But unfortunately the workforce and the management don't want this.  I am afraid
I think the young Mr Morgan (Peter's son, can't remember his name) is a bit wet
and ineffectual and isn't prepared to shake things up.  He's inherited a fortune
so can't see any reason to change it; I'll even go so far as to say he's being
a bit lazy.  Peter's position is more understandable; he's been doing the same
thing with the same workforce in the same way for so long, it's a bit hard for
him to try and start changes at the end of his working life.

There is a lot to be said for tradition, which I think is something Sir John
failed to appreciate.  Morgan has amazing labour relations, and trying to change
too much would upset the "happy family" atmosphere in the company.  I agree
with Morgan's desire to remain an enthusiast's company rather than a maximum
profit company, but even to do this they must be prepared to evolve and keep up
with the times.

Morgan quite rightly opposed suggestions to increase car prices; I would go
further and suggest prices should come down.  Morgan want enthusiasts for
owners, and with the current ridiculous escalation of classic car prices with
non-enthusiasts buying them and locking them away for investment, I agree with
them.  But even the current prices are too much for many enthusiasts.

Morgan don't like speculation on the waiting list: two easy ways to stop this.
First, make waiting list places non-transferable, as part of the contract.
Second, use the two sensible, simple and not-very-controversial "modernisations"
given at the start of this note to increase production and reduce the wait.
Also, if there was no waiting list, there wouldn't be the ridiculous high prices
for second hand Morgans.

The only problem with this is that if prices were cheaper, and there was no
waiting list, lots more people would (initially) buy Morgans, and it's very hard
to say when the market would reach saturation.  Once anyone could have one, the
desire to own an exclusive rarity would no longer apply.  This was hinted at by
Morgan as a problem of increasing production, and I think it's something they
would need expert advice on.

They are walking a very narrow path between not producing enough and so going
bust with too little profit, and producing too much and reducing the car's
appeal.  Faced with the dilemma, they do nothing and hope they can carry on in
the same way.  They may well succeed; the motor car has, I suspect, less than a
hundred years of life left before lack of fuel or zealous environmentalists kill
it, so Morgan are half way there already.

As to which way they should go, there was once a donkey walking along a road.
The donkey reached a fork in this road, and looking along the left fork saw a
pile of hay which looked good to eat.  It then looked to the right and saw a
pile of equally succulent hay.  Looking from left to right, it could not decide
which fork to take, as both piles of hay were very appetising.  So the donkey
stood at the fork, unable to choose which way to go...
and eventually it starved to death.

So I think Morgan should change, at least in the ways I've indicated.  If
they're worried about saturating the market, they could hold back production; at
least the cars they do produce will make more profit for the company.  But I
think such business tactics are beyond the management's comprehension, and if
anyone else suggested it I don't think they would listen.

Scott

    I didn't see thye program, but have just read the review, plus an
    article in todays Telegraph....
    
    Pre-tax profits last year were nearly 500,000 on revenue of around
    �9million. Thats about 5% isn't it?....is that good in the motor
    industry or bad?
    
    They evidently don't _want_ more profit.... the workers are happy,
    the buyers are happy, the directors are happy.... what's the problem?
    
    Ray (who_would_love_a_Morgan!)

Morgan don't need and don't want more profit out of the company.
What they do need is more profit from sales to put back into the company.
IE they need to produce more cars more efficiently.
They also need to sort out the cash flow by not having money tied up in so many
unfinished cars lying around the factory.

Scott

    Profit is good ?
    
    If they have sales of 9,000,000 pa,  but a very slow stockturn,
    then I would guess they probably have assets of that amount as well.
    (A fast turn company will generate 2 or 3 times sales revenue of
    their assets).  If they sold up and invested in zero risk building
    society a/cs they would get minimum 10% pa.
    
    9,000,000  x  10%  =  900,000 pa
    
    Therefore a profit of 5%pa is actually an 'opportunity loss' of
    450,000.  A perfect company for asset stripping & selling the company
    name for maga bucks as well.?
    
    Rich
    
    ps - this is also an implied critism of high interest rates.

    Frankly, I thought Sir J was mostly right, and the Morgan owners wrong.
    
    What is so bad with bringing production methods a little up to date.
    If this doesn't happen, it would seem that the company will go down anyway !
    
    What is so wrong with attempting to satisy the demand, and at the same
    time putting some finance into the organisation

    Could some of our learned friends shed some light here...
    
    Why if Morgan are so inefficient,old fashioned,badly managed
    have they managed to survive so long while other 'classic' 
    British sports car marques eg: Triumph,Mg etc with their
    more 'modern' approaches to car production(compared with Morgan)
    gone down the tube a long time ago...??????
    
                                    yours curiously
    
                                         Huw....

They make 450 cars a year - most of which are sold to people who already own
a Morgan.

/. Ian .\

I believe that there was still demand for MGs when production was stopped, so
if they had been independent then maybe they would still be making them now.
Most, if not all, of the British sports cars were killed off by lack of 
management belief.  Perhaps they just applied pure financial criteria to the
problem rather than a bit of heart.  Perhaps they just didn't know what they
were doing.  I mean, what do you think the end result of a period of running
down investment is?  Usually a lack of sales.  Lack of sales? - it's not
profitable, so shut it down.  Bad logic somewhere.

Dave

> Most, if not all, of the British sports cars were killed off by lack of 
> management belief. 

       Management belief is something that Morgan are really strong on.
       Their product may be popular now, but it was only the belief of
       the management that kept it going through *extremely* lean times
       in the late fifties and early sixties when the design was
       considered old fashioned. There were some years when the Morgan
       stand at the Motor Show attracted no visitors at all.

       My contempt for the Leyland management at the time of the MG
       'killing' knows no bounds, but conversely I'd concede that they
       couldn't be expected to continue manufacturing an outdated model
       in the hope that it would one day return to popularity.

       Ian.

	These Morgan people know what they're doing. Morgans have a
	truly antique, and not very effective, sliding pillar front
	suspension system. Every now and then some writer will pillory 
	it. So why then don't they change it?.

	The answer is that it looks right and it has to look right on
	a car where it's visible below the swept up wings. This is
	also one reason why the kits which imitate vintage cars so
	often look wrong. The double wishbone or whatever arrangement
	that is taken from a modern car may work a treat but looks
	decidedly odd and not very pretty beneath a flowing wing.

	Do Morgans still have wooden floors?.

	-John

    Just as a little side point..
    
    I spent 7 long years working in the UK for a 'Family' run engineering
    company in the north west of England..During the mid 70's the majority
    of engineering firms around us where hit by the ravages of firstly
    the 3 day week(lack of work etc)and eventually closure.Our valiant
    little company survived and profited all through these periods
    of hardship until eventually in 1984 we were taken over by United
    technologies who applied various 'proven' techniques inorder to
    make us more efficient and 'up-to-date'in the areas of management
    and production...
    One of the major contributing factors to our success was that our 
    products were sold on the reputation of the company name and the 
    quality of workmanship associated with it...Given a new name,new
    improved manufacturing capabilities the company'sunk' 2 years later
    in 1986 despite a 30% increase in production..Our customers wanted
    to see OUR name on the products,OUR craftsmen working on the products,
    with OUR management supervising all the activities.
    I find it hard as I sit here writing this not to draw comparisons
    between my old company and Morgan....I'm not saying that new approaches
    definitely wouldn't help Morgan,however,while they continue to
    have an order book of their proportions,while they are one of the
    few surviving British sports car manufactures,while they continue
    to be a success when other 'text book'shining examples of modern
    technological manufacturing companies go to the wall.......
    Why change ?
    
                                     Yours traditionally 
    
                                               Huw.....
    
    
    
     

    Out of curiosity how many of the contributors to this discussion
    have ever driven or owned a Morgan ? The Morgan Owners Club is very
    active and stays in close contact with the factory. Through the
    owners club interest is generated outside the club. I believe that
    basically the Morgan's have got it right, if they wish to step
    production upto say 15 cars a week thay could to so with the
    introduction of hand power tools. The service that owners get from
    the factory is exceptioal from technical advice to parts. Yes they
    still use Ash frames and the floor boards are timber. A number of
    contributors appear to think that Morgans should change simply for
    changes sake. Many businesses would be glad of the order book they
    have. Now the programme is over perhaps they can get back to turning
    out cars that still represent good value for money both new and
    second hand.
    
    Pete
    
                                                       

I've driven one. Loved it.

Now can I order a Plus 8 as my next company car? I'd be happy to wait 6 or
more years to get it. (Actually I'd be more interested in making it my next
but one car - I'll get a Land Rover Discovery next - that should survive
10 years and 400,000 miles before being semi-retired - I'd buy it then!)

Incidentally no smiley here - I'm totally serious on this one.

/. Ian .\

    As I understand the rules, you can ask for a quote for whatever
    you like. If the delivery period is more than X months (X = 5, I
    think) then Fleet/PHH/Hertz have the right to do a requote.
    
    I think that the major problems that your proposed course of action
    would be;
    
    1	keeping a lease Discovery for 4 years (the longest that they'll sign
    is 30 months) and
    2	organising another lease car while the Morgan is being built
    as you can't have more than one lease at a time.

    slight mental aberration in the last reply delete 4 years for Discovery
    lease and insert 10 years......
    
    P.S. Who or what or when or why is Tsingtao Dhum?

� Tsingtao Dhum

= "Black Lion" (in Thai) - it's what my in-laws call me.

/. Ian .\

    re: .27 and Tsingtao Dhum

    As A wild guess, I'd say beer. Well ???

 

    
    I didn't see this programme, but what has prompted me into writing this
    reply after such a long period of dormancy for the note is that I saw
    a Morgan race at Thruxton yesterday.
    
    I saw a similar race last year and there were about a dozen cars, this
    year there was about twice that number and all of the cars were in at
    least presentable condition, some were a real mess last year.
    
    The drivers varied from men in their early 20s with bright shiny
    new(ish) Plus 8s with 3.9 litre V8s to men in their 70s with Plus 4s
    on their original pre-suffix plates. 
    
    What really attracted the attention though was that the vast majority
    of the (not insignificant) crowd not only knew what these quaint old
    cars were, but also seemed to await their race with anticipation.
    
    Make no mistake, the Morgan is a tradition and changing it would
    affect it's allure. Ok make a few more a week, but expand beyond
    that? Forget it. As someone said Morgan are too small to compete
    with the big boys and to expand they would obviously have to.
    
    Advancements cost money, so you'd end up with a Morgan which cost
    a lot more money (taking it into Porsche territory) and trying to
    find a bigger market (attempting to appeal to a wider group of 
    people). At present the market for Morgan's is very specialised,
    you have to love this kind of car to really want one and so most 
    people who buy a new one have owned one before, but that's not to
    say that demand is dropping, the old ones are snapped up by eager
    new owners at high prices and the demand continues.
    
    Dave mentioned that there was a demand for MGs when they were stopped 
    being made. Ok there was a lot of outcry in the press, but not many
    people were actually wandering into their BL dealer and handing over
    hard-cash, certainly not enough to keep a large scale production line
    going, and that is something which many small scale car producers have
    attempted to do. They thrive on their small scale success and believe
    that they must expand. When they do so their cars are judged by the
    standards of more mainstream vehicles and in many cases just do not 
    stand up and the company folds.
    
    While not being against constant improvement I agree with the person
    who said that change for change's sake (especially in Morgan's case)
    is a recipe for disaster.
    
    Mark

For those who missed it, the "Trouble Shooter" series is being repeated.

BBC2 Sundays at 18:35

jb

    The episode of the 'Troubleshooter' and the Morgan motor company is on
    BBC2 again next Sunday, the 7th of October, at about 6.30
    
    Rich