Profile: Social-hearted industrialist: Robert Bischof, boss chairman talks to David Bowen about balancing the interests of labour and capital

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THE photographer wanted sugar in his coffee. Robert Bischof, searching in his rented London flat, could not find any. The photographer suggested honey instead. Bischof was delighted. 'A German would panic if he could not find sugar; a Briton would use honey]'

But if German-born Bischof is entranced by the British ability to improvise, he is appalled by other habits. And the way we run industry is top of his hit list.

Bischof is chairman of Boss Group - formerly Lancer Boss - the forklift truck company bought by Jungheinrich after a messy receivership in May. He has spent most of his career with the Hamburg company, almost all of it in Britain. As a result, he has a perspective from somewhere in the middle of the North Sea.

Next week, he will be announcing his plans for Boss. Though the events that led up to its purchase do not, many people believe, throw much credit on Jungheinrich, the workforce and managers are happy enough with the result.

Bischof was born on the Baltic Sea island of Rugen in 1941. Trapped in the Russian sector, his family was smuggled back to Hamburg in 1950. At 19, he became an apprentice merchant banker, then took an economics degree at the university before joining Jungheinrich, a steadily growing engineering company. After five months, he was packed off to be finance director of a new distribution subsidiary in Manchester.

That was in 1967. Foreign companies had 11 per cent of the British forklift truck market. Bischof stayed on, moving from finance to sales before becoming managing director. He watched as the foreign share grew until - with the takeover of Lancer Boss - Britain lost its last independent forklift truck manufacturer of any size.

When he was 50, he fulfilled a promise to himself and went off 'to do something different'. He spent two years rationalising the former East Germany construction equipment conglomerate, cutting 17,000 of the 20,000 employees. Then, last October, his former bosses asked if he would come back to run Lancer Boss if they bought it. He said he would.

Bischof stayed in Britain for so long because he liked it. 'The quality of life for those on the right side of the fence is higher in Britain than Germany. The state intrudes more in Germany. You have to register and deregister when you move house . . . If the police here enforced drink-driving laws as they do in Germany, there would be no pubs left.'

'That goes for company life as well. In Germany, our company is so organised that if something goes wrong, there's panic. The British have a talent for improvisation.'

People without qualifications can also make it to the top in Britain, he says. In Jungheinrich GB, where he tried to meld the best of both cultures, two of his directors began as service engineers. 'That would be impossible in Germany,' he says. The British can also elect a prime minister with no qualifications; the Germans could not.

That, unfortunately, is where the good news ends. 'Managers in Britain have such a hard job compared with those abroad,' he says. 'They have hostility on both sides - labour and capital - and have to look over the abyss of recession every few years. Why do the British make it so tough on themselves?'

Most of his criticisms are familiar, and are echoed in leftish circles. The power of his arguments lies in the fact that they come from a businessman.

One of the first things Bischof did on taking over Lancer Boss was to declare that the Leighton Buzzard plant would 'opt in' to the Social Chapter. This was his way of sticking two fingers up both at the Government and at much of British business which, he says, is driven by its own narrow interests.

He says Germany's higher costs are a result of its success, not a cause of future failure, because they have come from a stronger currency, not higher inflation. 'If it was just a question of social costs, there shouldn't be anyone working in Germany,' he says.

He is scathing about short- termism and regularly crosses swords with clever young men from the City. 'I've never found one who could out-argue me, because they are not conversant with other systems,' he says. To him, the facts are obvious. 'If you have to have a payback of 18 months, you will not invest as much as someone who has a three- to five- year pay back.'

Behind his ideas lie two main themes. One is that the British operate on a basis of competing interest groups, which is destructive. The other is that this mentality, and the other faults in British industry, can be mended only by a wholesale revamp of the system.

Germany is a country of consensus. 'It is the job of managers to serve both workers and shareholders equally,' Bischof says. 'A good company has to be at ease with both.'

He praises British companies such as Marks & Spencer and J Sainsbury, which try to steer a line between these interests. 'The question is, can you leave it to the intellect of far-sighted managers?' The answer is no. The Government should lay down the principles, 'and they should start with a clear statement that industry is not just for increasing shareholder value.'

The problem is that some companies do too well out of the current system to countenance change. 'There are deep-seated cultural interests that do not want the British system to change,' he says. 'Companies like Hanson thrive on casino capitalism.'

He favours dividend controls and laws discouraging takeovers. But he says the best way of reducing reliance on the casino is to offer an alternative. He suggests that a German-style state investment bank, which offers 20-year fixed finance at 6.5 to 7.5 per cent, would deter managers from floating on the stock market and would thus allow private companies to grow. 'Why would companies lose control to outside shareholders when they can get the funds they need at those rates?' he asks.

But once you start changing, you have to keep on - or rather you have to change everything at the same time. 'Just setting a minimum wage or putting in the Social Chapter is useless unless other things are done at the same time,' he says. And here he admits it becomes tricky. 'It was very easy for Germany or Japan, because they had a watershed after the war,' he says. 'But changing in bits, as Britain would have to, would be dangerous and difficult.'

Bischof believes the union restrictions introduced during the Thatcher years were positive but, he warns, 'there is no longer an equilibrium of pressure'. Capital should be regulated to bring back the balance. 'One can definitely see progress on labour relations and manufacturing quality, but I still feel the fundamentals have not been addressed,' he says. 'While Germany has understood it is over-regulated, Britain is under-regulated and is moving in the wrong direction. If that continues, I see very little hope for British industry.'