THE SATURDAY INTERVIEW / Survival, revival and a pumping good success story: Ron Garrick

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The Independent Online
This month the Government publishes its White Paper on competitiveness, probably the most important document on manufacturing since the Conservatives took power. Few people know more about industrial turnaround than Ron Garrick, chief executive of Weir Group, one of Scotland's leading engineers and a great survivor of the recession. Mr Garrick, 53, is a Glaswegian who has spent his entire career with the company. He talks to David Bowen about the transformation of Weir from lame duck to high-flyer.

'It was sheer luck that I was given the top job,' Ron Garrick says. 'If I'd have been in charge of our pump company 18 months earlier, I'd have been fired because the company was on the rocks. When I became head man, everything started to go right.'

Mr Garrick was one of many managers to find themselves in the right place at the right time - at the top just as the manufacturing recession of 1980-81 was burning itself out. Five years ago most of them were still in place, and able to point to a history of rising profits as evidence of their good stewardship.

But precious few can still do the same. True, Weir Group's profits were trimmed by a couple of million last year, to pounds 37.5m, but this came after a continuous stream of 10 years of profit rises. The City is convinced that the dip was no more than a blip, and that Weir remains one of the few wonder companies in the manufacturing sector.

It is unlikely that any accounting skeletons will be found in Weir's cupboard to cast doubt on its performance. Mr Garrick keeps a close eye on his subsidiaries' figures - particularly return on capital - and he has been careful not to alienate City folk with barbed comments about their pin-striped ways. But he is above all a Scottish engineer, and Scottish engineers do not like funny business. The story of Mr Garrick's success, and Weir's, is a simple one of common sense.

Mr Garrick says he has a terrible CV. What he means is that he joined Weir when he left university and has stayed there ever since. He has not jumped from job to job; he does not paraglide or collect butterflies. That does not, however, make him boring. He combines his somewhat cadaverous Tebbit-like looks with a nice dry sense of humour. His claim that he smiles once a day, to get it over with, is an example.

His grandparents converged on Glasgow from opposite ends of Scotland at the end of the last century. His father was an engineer, and at school he preferred numbers to words, so he became one too. In the last 15 years he has tried to make up for this by devouring the classics and heavy non-fiction as he whizzes around the world. He has just finished a biography of Oscar Wilde, and feels enlightened. 'He had a lifestyle a Glasgow engineer could never imagine existed,' he says.

His brightness with numbers brought him a first in mechanical engineering at Glasgow University. He intended to work for a few companies before settling down, but Weir - where he went first - moved him around sufficiently to keep up his interest. He was good at the job too, and by the time he was 29 was in charge of a Clydeside factory with 800 workers.

In the Seventies, he found himself fighting militants as production director of the Cathcart pump plant. 'It was absolute hell: we were dealing with a bunch of people whose aim was to overthrow the capitalist system,' he says. 'I was told we couldn't afford to have any strikes. It was very frustrating.'

He considered escaping to a joint venture factory Weir had in the US, and took his family over to have a look. 'It was a great temptation to get the hell out of it, but I kept thinking, Scotland should be better, we've got to do something about it.'

Like so many other manufacturers, Weir was in no state to cope with the brutal downturn of 1980. 'We were doing a number of cheap and nasty things,' he says. 'We were making 400 tonnes of castings a week, mainly for the UK, and we were being attacked by cheap imports from China and Portugal.' When the pound and interest rates shot up, customers cancelled their orders and foreign suppliers swept away what business there was. By 1981 Weir was on the point of bankruptcy, and only a rescue package organised by the Scottish Development Association saved it from collapse.

As the top managers were stripped out - along with a fifth of the workforce - Mr Garrick found himself in charge. He sat down with Lord Weir, the chairman, and the finance director, and started to ponder what had gone wrong, and how a repeat could be avoided. The militants had been fired ('We got a lot of marks from the employees for doing that'), and the workforce was dragged on side. 'One shop steward said I'd like to believe you, but it's ingrained that we can't believe management,' he says. This attitude was cured by increasing the information flowing through the company, to banish distrust and increase transparency. 'If a division made a mess of an estimate, everyone would know. There were no escape routes or surprises.'

Next, the new management decided to remodel the company. 'We were of the view that Britain wasn't very good at making things in bulk because we had bad industrial relations and couldn't get the quality right,' Mr Garrick says. 'What we did have was mental and engineering skills. Especially in Scotland, there was a tremendous number of graduate and apprentice engineers.

'We decided we should concentrate on things that were difficult to make. That gave us the best chance of competing.' The company decided it should concentrate on specialist pumps and valves, and spent two or three years getting out of the businesses it did not want, before starting to build up the business it did want, organically and by acquisition. Once again, Mr Garrick says, he was lucky. 'The whole situation was conducive; our share price went up by 50 times so we could buy companies more easily.'

Many companies followed a similar path in the Eighties, moving into specialist high-value products that were less vulnerable to competition. But few of them chose as wisely as Weir. Its products were generically similar - pumps and valves of one sort or another - but it had five very different markets: electricity, oil, water and sewage, naval and general industrial. 'Only the general industrial market is linked to the UK economy,' Mr Garrick says. 'The others have their own momentum.' The recent recession has had a marginal effect on Weir - and it is difficult to see how it could ever be hit as hard as it was in 1980.

While his company is a great success story, Mr Garrick is aware that a concentration on niches does nothing to counter the fundamental problem of the British manufacturing base - that it is too small. Coming out of the 1980 recession, he says, he had no choice but to specialise. Britain could not produce consistently high-quality goods and so compete with the Japanese and Germans at the volume end of the business. Now he says he would be much more confident about beating them, but still finds the specialist work more profitable. Nevertheless Weir has just started making a small standard pump - an encouraging sign in an industrial world that has become terrified of volume.

So far, Mr Garrick is unworried about low-cost competition. 'There is no way the products we're making could be made to the quality needed in Czechoslovakia,' he says.

He is aware of the danger that these countries could pose - the former Czechoslovakia was famous for its engineering before the Second World War - but has resisted ventures to tap their low wages. 'The Czechs are desperately keen to make things for you,' Mr Garrick says. 'The problem is, so are we.'

Now Mr Garrick is one of the great and the good. Last year he was voted the most successful businessman in Scotland, and his directorships include Shell UK and Scottish Power.

But success brings its own problems, he says. 'It's much more difficult to make changes if you've had 10 years of success. We are in the top two or three companies of our sort in the world, but the problem is, what do we do next?'

(Photograph omitted)

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