Mackay ousted at Inchcape
Monday 25 March 1996
He will be replaced by Philip Cushing, who was promoted to managing director last year, a shift that marginalised Mr Mackay's position.
Mr Mackay, 56, has been chief executive since 1991 and will be in line for compensation of around pounds 750,000. He also owns shares worth pounds 147,000 and options worth pounds 150,000.
Sir Colin will make the announcement alongside a slump in the company's full-year profits from pounds 228m to pounds 140m and a possible cut in the dividend. He is also expected to announce a timetable for the flotation of Bain Hogg, Inchcape's insurance subisidary. The company yesterday declined to comment on any of the changes.
Mr Mackay's departure has been seen as inevitable given the company's woeful performance. As the world's largest distributor of Japanese cars, including Toyota and Mazda, the company has been hit by the recession and the rise of the yen. It has issued a string of profits warnings in the last three years during which the shares have plunged from more than 600p in 1993 to 262p. In December the company was demoted from the FT- SE 100 index of leading shares.
This followed surveys which showed that fund managers were beginning to voice discontent about the way the company was being run. It was criticised for an unclear strategy and poor communication with the City.
The decision to remove Mr Mackay will have been made more difficult for Sir Colin, the former British Airways chief executive, as the two are good friends. Sir Colin invited Mr Mackay on to the BA board in 1993. Both are non-executives of HSBC, the banking group.
Mr Mackay is the third director to leave the board in the last seven months. Last July, David John, the head of Inchcape's world-wide Toyota business, quit to join BOC, the gases group. A month later chairman Sir David Plaistow stepped down earlier than expected. It was thought that institutional shareholders were putting pressure on the company to shake up its management.
Mr Cushing, 45, joined Inchcape in 1990 after spells with Norcros, Lego and Norton Opax, where he was chief executive. He was initially responsible for Inchcape's Singapore operations and was promoted to the board in 1992.
His subsequent promotion to managing director a year ago made him responsible for the day-to-day running of the pounds 1.4bn company while Mr Mackay was put in charge of strategy.
Mr Cushing was educated at Highgate School in London and later at Cambridge where he gained a first in economics.
In September Inchcape reported that operating profits for the half-year were 42 per cent down.
It has since announced a series of cost-cutting measures. Around 2,000 jobs have gone and the company decided to move out of its swish central London head office to a cheaper West London location.
The company is also reducing its exposure to the Japanese economy by building up its distribution network of non-Japanese cars such as Volvo and Jaguar. The flotation of the Bain Hogg subsidiary is expected to raise around pounds 250m-pounds 260m. Earlier reports had suggested that Inchcape was keen to sell Bain Hogg but was unable to find a buyer willing to meet its pounds 400m valuation.
If the company does cut the dividend the City will be looking for details on how the board intends to use the additional funds. The full-year figures are expected to show lower margins in the all-important motors division, with Hong Kong and the UK well down on 1994.
- 1 Al Pacino on suffering from depression: 'It can last and it's terrifying'
- 2 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 3 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Perez Hilton apologises for publishing Jennifer Lawrence naked photo leak
Jennifer Lawrence 'nude photo hacker' claims there are hundreds more celebrity images to come
Victoria Justice on naked photo leak: 'Let me nip this in the bud right now – pun intended'
Saudis risk new Muslim division with proposal to move Mohamed’s tomb
Ariana Grande nude photos leak: Pictures are completely fake, say singer's representatives
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...
£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...
£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...
£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...