A wheel over the edge
Reliant, maker of the famous three-wheel Robin, is looking for a rescue r - and not for the first time. But it could be a mistake to write it off compl etely, warns David Bowen. In 60 remarkable years it has blazed an innovative tr ail in the UK motor industry despite erratic driving, abrupt detours and costly mishaps
Sunday 27 November 1994
A number of the pieces had an ''R'' stamped on them, and the nameplates had space for seven letters - so he consulted a dictionary for a suitable substitute for Raleigh. On 1 January, 1935, 44-year-old Mr Williams licensed his first van: he called it a Reliant.
But this story is no fairy-tale. Last Tuesday, KPMG Peat Marwick advertised the Reliant Motor Group for sale. It had gone into receivership for the second time in three years, and it is difficult, at first sight, to see why it should be rescued. The current model, the Robin, is a descendant of the Tom Williams van, and is recognisably related to the Regal launched in 1953. Not only does it have a tiny engine, uncertain roadholding and limited carrying capacity, it is also - at pounds 7,000 - more expensive than many four-wheelers.
But it would be a mistake to write Reliant off now. Beans Engineering, its owner, was brought down not by poor sales but by bad debts. It has been making - and selling - 15 Robins a week, as well as five Sabre sports cars.
And Reliant's story, one of the more eccentric in British corporate history, is one of survival. It has been into receivership twice and out once. It has been floated and taken private twice. It has been a subsidiary of the Standard Chartered Bank. And it has come close to emigrating to Russia.
It has also, despite its apparently antediluvian technology, produced more new ideas than most companies many times its size, and has built some strikingly original vehicles, including the world-beating Scimitar GTE sports car.
Mark Hopson, the receiver, believes a buyer could well emerge from the woodwork. The three-wheeler could have a future, he says, ''because there is always a contingent who will remain loyal to the cause''.
For a man who did not become an entrepreneur until he was in his mid-forties, Tom Williams, who died in 1964, was remarkably successful. According to Ray Wiggin, who joined the company in 1959 and was managing director for 15 years, he was ''a lovable person, but nervous. He could be a bit of a bully with people he didn't know. But he had a great heart, and he was a fighter.''
Reliant started producing its own engines and gearboxes before the war, which gave it useful self-sufficiency. In 1953, Williams launched his first car, the Regal, equipped with such modernities as a steering-wheel instead of a handle. In 1956, Reliant became the first company to switch to glass fibre body construction, which it has used ever since.
It did not try to compete with the big companies, but found a niche that kept its factories busy. Its targets were motorbike owners who did not want to take a car test or pay car road tax: because of its three wheels and low weight, it was taxed as a motorcycle.
When Wiggin joined in 1959, Reliant turned over pounds 600,000 and employed about 175 people. The company was growing rapidly, but in 1962 Williams - then over 70 - decided to sell out. The buyer was Julian Hodge, a tax expert who had specialised in bringing small companies to the stock market.
Mr Wiggin was made managing director and removed many of the constraints Mr Williams had insisted on - such as a ban on internal telephones. He pushed ahead with the development of an aluminium engine, the first by a British company, and constructed a new factory to build it.
Mr Hodge floated Reliant by ''reversing it'' into a quoted Manchester company, Hodgkinson Denis, which was then renamed the Reliant Motor Group. Although Mr Hodge (who became Sir Julian in 1970) had his share of detractors, he allowed Mr Wiggin to follow his instincts, which pushed Reliant along two parallel courses. First, as a producer of low-volume specialist cars - glass fibre bodies could be produced cheaply in small numbers, because the process was hardly mechanised; secondly, as a developer of car factories in developing countries: Reliant would design the cars, which would be made of glass fibre, and supply the expertise.
It was this that moved Reliant, almost by accident, into sports cars. An Israeli company, Autocars, had asked it to design a four-wheel sports car which, it hoped, could be sold in the United States. The car, launched in 1961, was called Sabra, meaning a native Israeli. The American market did not take to it, but Mr Wiggin decided it might do well in Britain: Reliant started producing its own version, now anglicised to Sabre.
The unlovely car still did not sell well, so Reliant asked the only British car studio, Ogle Design, to come up with new ideas. The result was the elegant, Ford-engined Scimitar GT, launched in 1964. Suddenly, the little three-wheeler company was producing a much-admired four-wheel sports car, given a royal imprimatur when the Duke of Edinburgh bought a special glass-roofed version.
In 1967 Wiggin asked Tom Karen of Ogle to look at ways of developing the shape. ''I had this wild idea of doing a sporty estate, and Ray instantly chose it,'' Karen says. This was the Scimitar GTE, a car way ahead of its time that has been much imitated. Princess Anne had seven (including the last one, built in 1986) and was caught speeding in one. That, Mr Karen says, ''did no harm at all''.
Meanwhile Mr Wiggin continued with his plan to set up production lines abroad. Ogle was commissioned to design a saloon and estate car, with the unlikely name Anadol, for the Otosan Company in Istanbul. It was launched in 1966, became the best-selling car in Turkey, and formed the basis for a new motor industry.
He also looked for niches that Reliant could fill. From the sublime Scimitar, he moved to the Bond Bug - a bright orange, wedge-shaped two-seater based on Robin mechanicals. It was aimed at swinging youngsters and, says Mr Karen, who designed it, ''attracted as much attention on the street as a Lamborghini''. But it had more than its share of problems. Strikes limited production, it was not well made, and it was sold through Reliant dealerships, which were used to selling to more genteel customers. But its fatal weakness was that it could not be sold at a price that would attract young customers.
Although the Bug died in 1975, the mid-Seventies were the high point in Reliant's history. It turned over more than pounds 30m and employed 3,700 people in seven factories, making it the second biggest British-owned car company. The three-wheelers, which had been repeatedly facelifted, were being produced at 330 a week, taking a remarkable 1.25 per cent of the UK car market, thanks to clever marketing based on the simple fact that they were cheap to run.
A four-wheel version of the Robin, the Kitten, was launched, while other niche cars were being planned. These included an up-market medium-sized car built in collaboration with BL; a new Scimitar, a smaller sports car, a taxi, and a ''people-carrier''. This last, designed by Tom Karen, had most of the features of the Renault Espace, the first European people-carrier, which was not launched until the mid-Eighties. ''The company was developing very nicely,'' Mr Wiggin says.
Most of these plans were scrapped, however, when Reliant was sold in 1977. Sir Julian Hodge, now 73, had sold his group to the Standard Chartered Bank, which decided it did not want to make cars. A consortium of businessmen, including John Barber of BL and Donald Healey (as in Austin-Healey) offered 2p a share for Hodge's 76 per cent stake in Reliant, but Sir Julian chose a 1 1/2 p offer from John Nash, who like Hodge had specialised in bringing companies to the stock market.
Sales of the now-dated Scimitar were slipping, and Mr Nash demanded fierce cutbacks. ''He didn't want to run Reliant as a high-risk business,'' Mr Wiggin says. ''He cut out a lot of the policies I was pursuing.'' New model development was slashed, as were warranty and marketing programmes. Ray Wiggin left after six months, and was replaced by Ritchie Spencer, the personnel director, who immediately announced a thousand redundancies.
Mr Wiggin admits that his plans were risky, and might not have survived the recession of 1980-81. Reliant suffered from the same sort of problems as the rest of the motor industry, and attempts to introduce such ideas as Japanese-style quality circles had foundered in the face of union opposition. ''We weren't as efficient as we'd have liked,'' Mr Wiggin concedes. But he is sad that his ideas were not given a chance.
Strangely, some of the designs Wiggin commissioned have resurfaced elsewhere. The replacement for the Scimitar, styled by Bertone, was sold to Honda and used as the Aerodeck, while another Bertone design, destined for the executive car, re-emerged as Citroen's BX.
Scimitar output continued to fall, from 1,600 in 1977 to a tenth of that five years later. A new soft-top model did little to revive sales. Three-wheeler sales continued to drop too - by the end of the Eighties, they were at only 30 a week. What development there was concentrated on a small sports car which, it was hoped, would be welcomed as a replacement for the now-defunct MG. When the SS1 was launched in October 1984, the company said it expected to build sales up to at least 2,000 a year. Two years later, they were barely 300. The problem was simple: the car, styled by Michelotti of Italy, was plain ugly.
Efforts to turn this ugly duckling into a swan continued, restyling the car and bringing back the old Scimitar name to appeal to nostalgics. Cyril Burton, who took over as managing director, set up a deal to develop the car for the US market, but it came to nothing.
Mr Nash had floated Reliant in 1981, in mid-recession. But as other manufacturers revived with the economy, it continued to wallow. In 1985, it lost pounds 645,000 after tax, followed by pounds 476,000. It was kept alive partly by selling off its sites one by one, and partly by subcontracting: it made the bodies for Metrocab London taxis, for example.
Mr Nash did his best to rid himself of his charge. In 1985 he tried to persuade Lotus, owned by General Motors, to buy it. The next year a rescue attempt by a consortium of US car importers failed. He finally managed to sell Reliant in 1989. Like Mr Nash, the new owners knew more about financial than real engineering.
Carl Turpin was a dapper, moustachioed accountant from London who, with his partner Chris Johnson, had set up two property companies, Wiseoak and Belmont, in 1983 and had started building houses. They hoped to make money by floating them in 1988, but as the housing market started to dip, they realised property companies would be received with horror on the stock market. The answer, they decided, was to reverse into a manufacturer, and don its more respectable clothing.
In February 1990, it was announced that Reliant had bought two property companies for pounds 16.5m. In fact, the opposite had happened: Turpin and Johnson ended up with 37 per cent of a company that made cars and built houses. They made no secret of their desire to run down three-wheeler production, and subcontracted much of the Robin's construction - a company called Beans took over the manufacture of the engine, gearbox and suspension. But they also declared that they wanted to increase the industrial rather than the property side of the operation. They bought Metrocab from Laird; and when a designer approached them with a plan to waterproof the Reliant engine, they set up Reliant Marine. This moved them into motorised surfboards and jet skis.
Mr Turpin said he wanted Reliant to become a specialist glass fibre constructor - which seemed a logical way of making use of the company's long-nurtured skills. But their plans outreached their financial abilities, and in October 1990, as the new recession swept in, the company was put into receivership with debts of pounds 4m.
Andrew Peters, the receiver from Touche Ross, thought he had sold Reliant three times before it was finally rescued. Three serious buyers emerged. One was a management team headed by Cyril Dixon, but this failed to raise the funds - hardly surprising in mid-recession. The next was a consortium of Indian businessmen, who signed a contract and paid a pounds 200,000 deposit. They could not raise the money either, and the receivers kept the deposit.
A Russian group called Autokam then arrived. It was not interested in the three-wheelers, but did want to build a van derivative of the four-wheel Kitten. Its plan was to transfer the entire production line to Russia. Mr Peters had detailed discussions with the group before it too pulled out, having failed to transfer the hard currency it needed out to the UK. Autokam must rue that day, because it then set up a pounds 3m deal with three British businessmen to send kit cars to Russia. Only 47 of the 100,000 promised cars were supplied, and in May this year the Britons were found guilty of fraud.
Eventually, in August 1991, Reliant's biggest creditor, Beans Industries, agreed to take Reliant on. Lou O'Toole, a down-to-earth Black Country engineer, stood to lose a lot of business if it collapsed. ''He didn't want to buy it,'' Mr Peters says. ''He stepped in to protect his own business.''
Mr O'Toole put a more positive face on it at the time. ''My research shows a market for 30 Robins a week is still there,'' he said. He also said he wanted to revive the Bean marque, which was last used in the Thirties. One old Bean, the Thunderbolt, had once held the world speed record.
As it turned out, this optimism was justified. He found a waiting list of 234 for the Robin, which had stopped production, and declared that Del Boy Trotter was largely reponsible. A Reliant van was the company car of Trotters Independent Trading in the television series Only Fools and Horses. David Jones-Percival, Beans finance director, pointed out that road tax was still half that of other cars, and that if you wanted a three-wheeler, you had to buy a Reliant. ''It's the best in its class and the worst.''
But there was never an attempt to build up production of the three-wheelers beyond a modest 15 a week. Once again, the company tried to revive a small sports car, now renamed the Sabre. Once again, it failed to catch the public's imagination. As a result, Reliant is a shadow of its former self. Only 90 people build cars at Tamworth, though another 250 work at Beans, where the mechanical bits are still made. Will Reliant be rescued again? Rob Golding, analyst at Warburg, says that it has survived ''in the face of industrial logic''. Perhaps it will continue to do so.
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