A business that refused to die

A business that refused to die

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.”

Griffin ArticleBy 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.”

A new rule was also introduced to avoid a repeat of the drop in business suffered when MG Rover collapsed – Automotive Insulations will never again do more than 30% of its business with just one company.

“Our big breakthrough came with Jaguar Land Rover,” explains Griffin. “We won a large amount of work on the Jaguar XJ. Working with their engineers, we were able to devise a flexible component at a fraction of the cost they were paying their suppliers. I call it origami-style – it allowed the component to fit a variety of shapes. It was also lighter which again helped save massively on costs.”

Automotive Insulations specialise in the design and manufacture of innovative noise reduction systems and thermal management solutions for the automotive and marine industries. The company now has an extensive portfolio of international clients, including Bentley 3M and, as already mentioned, Jaguar Land Rover.

It currently employs 120 people, a figure that has shot up from the workforce of 40 in January 2012. With further rapid expansion on the cards, Automotive Insulations is moving to new premises in Rugby next year, with turnover expected to double to £24m in the next 18 months.

While its roots are firmly in the West Midlands, the company is also expanding overseas. Last year they opened a joint venture in Sweden called Scandins, turning over £2m with 10 employees, and last month opened a wholly owned subsidiary in Germany with a projected first year turnover of at least £3.5m.
“There are 5.5m cars being built in Germany so I think if we can do £20m in the UK with a market of 2.2m cars what can I do with 5.5m in Germany?”
says Griffin.

He is also passionate about training and helping SMEs to develop their own workers to tackle the impending skills gap as older workers retire, which is why he accepted the position as chairman of Semta’s West Midlands regional council.

Semta is the employer-led body engineering skills for the future and Griffin says it has a vital role. “I think Semta is showing fantastic vision,” he says. “What we really need is for local business to engage and pass comment – it is no good us providing just what we think is needed but to provide solutions which work.

“People are waking up to the fact a little bit too late that skills are obviously essential to future success. The big companies have been very good at sharing their expertise but we need to engage with more SMEs.”

While the message was getting through, he admits it is often difficult for SMEs like his where the focus is keeping the business going and on the customer. Automotive Insulations have recruited one trainer with another in the pipeline and it’s Griffin’s hope, working with Semta, to recruit five or six graduates – one for every department.

The senior team also underwent leadership and management training which helped “bring greater focus, empowerment and enthusiasm” to those running the company, enabling them to pass their learning down through their teams to deliver market, product and geographical diversification.

Griffin’s work-life balance is assisted by the fact that his wife of 25 years, Linda, also works in the business as his PA. But while they both spend a lot of time at work, they also love spending time with their daughters: Natalie, aged 23, who has started her first ‘proper’ job since graduating as a graphic illustrator, and Bex, 20, who after returning from a spell in Australia is working in a bar while she considers her options.

“We also have a seven-month-old puppy, Jenny, who likes to take us on lots of beautiful walks which sometimes end up in the pub,” says Griffin.

“Business-wise, it has been a long haul but we have listened, listened and listened then acted upon what we have heard rather than what we thought we heard.

“You have to take risks to reap the rewards. I have yet to make money out of the business because we are continually re-investing, but we are in this for the long game and have a highly skilled and committed workforce helping us to create and secure employment in the West Midlands, winning us lots of new customers and making us many new friends.”