On all cylinders

On all cylinders

Don’t tell Geoff Turnbull you can’t grow a company in recession. He has a £50m contract that shows you can. And there’s plenty of scope for others, he tells Brian Nicholls.

They whistle while they work on the shopfloor. Office smiles greet visitors too. Things must be good. We’re at headquarters of GT Group, an extraordinary North East family firm of manufacturers, whose “grasshopper” minded chairman Geoff Turnbull shuns norms of business cheerfully as he takes his organisation onward and upward in a global top five rating.

Often this firm that sposors Peterlee’s brass band is slow to blow its own trumpet. Yet its worldwide customer base and versatility in manufacturing are both remarkable and enviable. Ex-apprentice Turnbull, 65, and just back at his desk from Russia, was a wise choice in prime minister David Cameron’s accompanying delegation from British business – 24 representatives from the likes of Rolls Royce, Royal Dutch Shell, BP, British Airways and the London Stock Exchange.

Turnbull already had, after all, a £50m contract from Russia agreed earlier. And while GT’s turnover at £30m-plus looks modest in that line-up he can safely expect that figure to double within two-and-ahalf years. How many other firms, conglomerate or SME, feel that confident? Turnbull has now advised two prime ministers, John Major being first in 1991.

Five reasons besides his expertise distinguish him: • GT exports up to 95% to 60 countries – with no sales staff • He operates five divisions on separate sites rather than centralise • He’s had not one industrial dispute in GT’s 30 years-plus existence • His customers include many multinationals • And Turnbull, even today, can praise his banks for their support.

With that £50m deal already sealed, his company didn’t expect immediate further gain from the Moscow trip. “We were supporting the prime minister’s bid to open foreign markets,” he explains. The PM had complex political issues to discuss separately.

“We helped discuss with the Russians problems in general that industrialists meet in trying to do business with them. We want an easier path for others besides ourselves that wish to benefit from one of the world’s fastest growing economies.” The North East, a distinguished exporter, was indeed doubly represented.

Present also was Richard Cotter, brand president of Berghaus, the Sunderland manufacturer of outdoor clothing and equipment, which opened the first of 10 stores planned for Russia over the next decade in Moscow on September 25. Russian practices of payment differ from the West’s.

Turnbull explains: “Their economy is based on their natural resources. When prices are right for their oil and gas you can negotiate quite lucrative terms. When those prices are low you must be very flexible in how you expect payment. Sometimes I’ve been paid months in advance, other times not for three months. We raised this. Getting in’s a problem too, then there may be difficulties over English and Russian law being different. “Russia for GT Group is a small market among about 60 countries we serve. But what we are doing there enhances our growth, so it’s significant.” GT’s great success currently is its low-carbon engineering – pro-environmental assemblies that burn off harmful hydrocarbons that otherwise would escape into the atmosphere from engines of heavy goods and off-road vehicles.

This “green” breakthrough secured the six-year contract with Gaz Group, Russia’s biggest automotives manufacturer.

At peak, 100,000 systems a year will be fitted onto Gaz Activ trucks, off-road vehicles, buses and other commercial vehicles.

There being no pollutant regulations in Russia yet, the country can neither improve the air its people breathe, nor export vehicles to parts of Europe and America where such legislation does apply. “We have Euro 3, Euro 4 and Euro 5 with Euro 6 coming in 2012,” Turnbull explains. “These reduce emissions permitted. Our systems will go to a new state-of-the-art factory the Russian company is building, and there it’ll turn out engines conforming to European standards.” This will improve the atmosphere also of countries where the vehicles are sold.

It will even reduce pollution in Russia that drifts into the Western Hemisphere. But GT, like others, has hurt in recession.

“Turnover fell from £25m to £16m,” Turnbull admits. “But we’ve come back fantastically – 100% growth this year. Turnover’s now £30m plus and, over the next two-and-a-half years, will reach £60m. We’ve an order book of about £250m already for five to six years.

We’re among the top in the West for making products for heavy goods emission systems.” Its other customers include Renault, Volvo, Scania, John Dear, Dentz, Cummins, Mack, GM, JCB, Alexander Dennis, Caterpillar, Nissan and Nissan Diesel, Mentor Wabco, and Volvo powertrains and construction equipment.

Business with John Dear, the US manufacturer of advanced tractors and other off-road vehicles, is “massive” in the five-litre engine range. “Also,” says Turnbull, “every Scania vehicle in the world will not only have our engine brake fitted, but now also our engine emission systems where used.

We’re also about to sign the world contract with Volvo.” Technology has been patented for engines of four to 16 litres and in conjunction with Caterpillar chassis it works for Ground Force, on vehicles perhaps 10 times bigger than anything rolling on British roads.

“Our contracts with Ground Force cover manufacturing of their vehicles for Europe and the rest of the world outside the US,” says Turnbull.

“So that too is massive.” Ron Nilson, Ground Force’s chief executive, says: “It was very easy to award the work to GT Group above other companies.” And from next year, all JCB diggers for export will carry GT emission systems.

However, GT is also diversified. Who provided hydraulic mechanisms for the Millennium Bridge over the Tyne, structural and associated work on The Sage Gateshead, transit pipework on Sunderland’s Queen Alexandra Bridge, and contributed to Hong Kong’s Airport Bridge? Yes, GT. The company’s demo room – “Geoff’s cave” – displays hundreds of sample products.

Turnbull muses: “Some have been ideas which I’ve said, ‘right, that’s needed’. We’ve designed and made them but they’ve never gone to market. I mightn’t have had the money to take them there, or I’ve been so interested in the next product that I’ve never had the resources available.

“Perhaps I haven’t been the world’s best businessman in that respect. I’ve got a grasshopper mind. My concentration lasts about 0.1 of a second – I was the same at school.“ Hence the diversity of products that do make it. One of Its smaller businesses, Alpha Process Controls, provides couplings and valves to transfer volatile liquids in offshore and petrochemical work – potential indeed, as demand for liquefied natural gas grows.

Alpha’s customers include Exxon, Shell, BP, Air Products, Linde, Saudi Aramco, Air Liquide, Conoco-Phillips, Total, Proxaid, India Oil, Repsor, Calor and BOC. GT designed and developed the first system to feed liquid hydrogen safely into hydrogen cars on garage forecourts.

Behind the prototype vehicles were Air Products, Shell, and GM. “They developed the cars but lacked a safe way to transfer liquid at -250°,” says Turnbull. “We found the answer. We were then asked to commission the product in Washington DC.” He then proudly produces a commemorative plaque. Take-off began in 1975.

Shell wanted a breakaway coupling, a “weak link” in a hose system simulating a weak link in an electrical system.

“Rather than risk another Bhopal disaster because of a disastrous leak, you must design safety into all systems of transfer,” Turnbull explains and amplifies...

“LPG escaping in transfer would go into vapour 150 times the size and be catastrophic if ignited. You build on one product, then develop another and so on. Disaster comes not from one thing but numerous things going wrong within a system. BP’s recent disaster in the Mexican oilfields stemmed from many things going wrong.

Preventative measures in the chain of events would have stopped it.

That’s how you stop disasters happening.” Alpha was formed in 1976 when ICI wanted a coupling developed to transfer liquid benzene safely. Orders for other couplings followed, also valves and pneumatic and hydraulic seals with metal bondings.

When John Major asked Turnbull onto his advisory committee on business and the environment in 1991 he saw potentials for environmental manufacturing. He was on the team, he was told, because he made things happen.

He worked alongside blue chip bosses then, too.

“The lesson over three years,” he recalls, ”was that legislation would be needed on numerous issues to guard the environment – not just particle emissions and nitrous oxide from diesels, but many other areas, including vehicles powered by natural gas, biodiesel, liquid hydrogen – everything coming out now. I set out on a journey then knowing the road would be long.

But it was something I wanted to research.” This word “research” crops up repeatedly.

“R&D’s my passion,” he admits. “Every month we consider what can we can do next year and the year after. Every day we talk on the phone to designers and technicians of big companies, learning what they’re looking for. We say we’d like to work with them in overcoming that problem. We look for opportunities with products we think we can help. I now like to think we’re an environmental engineering company.” Things don’t happen overnight. They’re presently considering where renewables will be 10 years hence. They started on engine emissions 10 years ago and worked with Gaz for four years before its deal came up.

“Success has come with lots of hard work, and lots of research and development,” Turnbull says. About 20 staff engage in R&D. Many have come up through the company; apprentices perhaps honed by further education and university graduates. Continuous improvement programmes run throughout the business. GT Project Engineering at Sunderland and Consett is a project specialist, fabricating for heavy automotive, subsea, marine and defence sectors.

Dramatic growth is expected through manufacture of truck engines, chassis and bodies. Newton Aycliffe provides powder coating, wet paint, shot-blasting and other treatments. Peterlee (where the group recently switched from a 40,000sq ft factory on North West Industrial State to one of 50,000sq ft on neighbouring Whitehouse Business Park) has plastics, rubber and automotive divisions. There’s also a lighting division providing polymer and specialist exterior housings for street, car park and offshore lighting.

Seals and moulding work ranges from food industry needs to housing for lighting, and customers here include Thorn, Philips, Hubbell Lighting Inc, Caterpillar, Bowes and Wilkins, and Thorlux Lighting.

GT, under eight directors led by Turnbull, will remain disparate because, he maintains: “I’ve never believed in closing acquisitions. I believe in keeping the people you have gone in there to work with. So companies remain where they were when we acquired them. We may have expanded into another area with them, though. We’ve a fantastic workforce. I wouldn’t want to work anywhere else. Not one day’s industrial dispute in 30-odd years...

I’ll support my workforce, come hell or high water, anywhere.” The only pullout was at Jarrow when foundries were closing everywhere. Now, though, the workforce could grow from 300 to 500. Opportunities look good already for platers, welders, technicians, machinists and designers. China is the only major country yet to be penetrated. “Soon we’ll look there, along with others we already do business with. If they open divisions there we can support with our design of emission systems. “Some others in business think in recession there’s no growth to be had. My philosophy is that there’s a marketplace somewhere.” He instances economies in the world growing at 8% per annum. “Us growing at 1% is no reason for British industry to be in recession. Partly it has been held back through lack of finance and banks not releasing cash.” However, GT’s relations with Barclays, HSBC and GE are superb, he says, appreciative also of support from Durham County Council and One North East. Part of a £10m investment from its own coffers will fund “green” research and development at Leeds University. “We’re very liquid. We’ve no problems in our growth plans,” Turnbull says. Good news, that, for the region.