Green Flag breaks down the barriers

Identity: once known only for vehicle recovery. the private company is expanding rapidly into other services under a new banner
Click to follow
THIS IS a busy time for Green Flag. Not only is the start of the holiday season a key period for both its car and medical assistance services, it has also had special events to contend with.

The company formerly known as National Breakdown Recovery Club has an important and longstanding membership deal with the Caravan Club of Great Britain, which spent much of the week since the recent bank holiday encamped in the splendid grounds of Knebworth Park, Hertfordshire, for its annual rally. The company always has a presence at the event - partly as a good source of members, and partly because the arrival of a thousand-odd vehicles creates a need for its assistance.

It has been getting used to being in the limelight around the time of England football matches, because it has been the side's sponsor since the Uruguay game in March. Although a few have remarked how appropriate it is for the national under-achievers to be backed by a breakdown service, the deal is designed to raise the profile of a company that increasingly sees itself as much more than that.

Since the late 1980s, acquisitions and launches have enabled what started as a breakdown and recovery service drawing most of its members from the North of England to transform itself into a group of six businesses operating in the vehicle, home and medical assistance markets in Britain, mainland Europe and the United States.

Turnover of the unquoted company, largely owned by National Car Parks, is now more than pounds 100m, and there are more than 1,000 employees. Unlike most of its rivals, it does not employ service engineers, but subcontracts the work to a network of garages - 1,500 in Britain and 6,000 on the Continent.

Managing such large numbers of people not directly controlled by you is a significant problem, its chief executive, Ernest Smith, acknowledges. But he insists that constant and careful monitoring keeps the "cowboys" that plague this trade to a minimum. Garages are paid per job and, while their mechanics do not wear a Green Flag uniform, they are given substantial management information and other forms of support. The result, Mr Smith insists, is service levels constantly ahead of those of better-known rivals.

It was, however, the sudden branching out into other, albeit related, areas of medical assistance and the innovative domestic breakdown service that brought about the need for a change of name. One important reason was the desire to lose the negative connotations of the word "breakdown". The organisation settled on Green Flag, because it translates well abroad. "Green is the symbol of health in Europe," he adds.

The continental connection is yet another call on Mr Smith's time, but the company appears now to be getting it right after dealing with cultural differences that have troubled many an expansionist British operation. French drivers, for example, do not expect the levels of cover that British drivers do, and have lower service expectations. On the other hand, US operations based on the acquisition in 1989 of the Louisiana-based National Breakdown USA have been going "very well" from the start. In business throughout North America, the company has as its main clients truck operators, including fleets of such well-known names as Wal-Mart, Toys `R' Us and Budget Truck Rentals. Last year, it acquired the rival Driver Central, which is being merged with the existing business in an attempt to capitalise on the truck recovery market, estimated to be worth $17bn.

It has recently won a contract with Ryder Truck, another rental company, which operates more vehicles than some European manufacturers produce in a year. Progress has been so good that Mr Smith believes the time has come to move offices from the rather sleepy town of Lafayette to bustling Dallas, Texas.

Arrangements of this kind have played a crucial role in the development of the company. The Caravan Club deal was signed only a few years after the setting up of National Breakdown in 1971. And the deals with manufacturers in Britain range, as Mr Smith says, from Rolls-Royce at one end to Lada at the other, with Suzuki and Citroen in between, and also include such truck makers as Iveco Ford and Scania. He feels the change of name will help the company achieve its aim of 3 million members by the end of the year.

Mr Smith was brought into the company by the founders two years after the start, largely on the strength of his experience of transporting vintage cars. If he has something of a missionary zeal about development since then, it is understandable, since he owns the small but valuable part of the company not held by NCP. The money no doubt helps keep up the fleet of half a dozen vintage cars he owns outright or with friends. He insists he has never had to call on the service - which is more than can be said for Green Flag members. They make about a million calls a year.