Keith Ludeman: Getting Britain moving
The Business Interview: After a lifetime working in public transport, the Go-Ahead chief executive feels that the moment towards which he has been speeding has finally come
Thursday 25 June 2009
Recession, recession, recession: it's all anyone seems to talk about. But not Go-Ahead chief executive Keith Ludeman. While some of his competitors are struggling with boom-time franchise agreements now looking worryingly unserviceable, Go-Ahead has just re-won its Southern rail contract, and unveiled the long-awaited High Speed One, which blasts from London to Ashford at 140mph.
For Mr Ludeman – a tall, rather well-groomed, public transport lifer – it is a dream come true. "I love speed, anything that goes fast," says the Porsche Turbo-owning son of a Second World War pilot. "I love any form of transport – ships, planes, lorries, anything that moves." He is rapt on the subject of High Speed One. "It is fantastic, surreal," he gushes, as much a fan as a salesman. "It's an entirely different experience, different views of the Kent countryside, everything."
Unlike rivals Stagecoach and National Express, Go-Ahead is far from a household name. Despite being the UK's fourth-largest transport company, with a dizzying array of brands – four train franchises, six bus companies, and aviation businesses including car parking and ground handling – most people have not heard of it. "Go-Ahead as a brand is invisible," says Mr Ludeman. "At parties people ask if it's a slimming biscuit. Or sometimes a cat food."
But 900 million passengers a year travel on Go-Ahead trains, under the Southern, Southeastern, London Midland or Gatwick Express brands, and the six bus services, including 20 per cent of London buses, carry a whopping 1.6 million every day. But the company has a highly-devolved structure, inherited from Martin Ballinger, its founder. One of Mr Ludeman's main initiatives since taking the top job three years ago has been to make better use of central purchasing power. "If I had an ego the size of a planet I would get rid of the local brands," Mr Ludeman says. "But I'm not going to do that – they are brands people recognise locally and transport is a local business. Equally, the local managing director has to feel he is the boss."
Individual MDs may have considerable power, but the chief executive is no pushover. Famed for battling the trade unions at both the Burnley & Pendle and London General bus companies in the Eighties and Nineties, Mr Ludeman's reputation is for toughness. "To get to the top you have to be aggressive and persistent," he admits ruefully. "Along the way there is wreckage, there just is. If you ask people what I was like when I took over the London bus company they would say I was fairly harsh, but then they were a lazy lot of b*****ds."
He must be doing something right: staff turnover is low and the atmosphere good. It helps to have come up through the ranks. Within 15 years of taking a random job as a bus conductor in a gap year from college, Mr Ludeman was managing director of London General Transport – one of the capital's post-privatisation bus companies. He kept the role when the business was bought by Go-Ahead, and went on to run first the group's rail division, and ultimately the whole empire in 2006.
Public transport is not the most glamorous of industries – "It's just not sexy," shrugs Mr Ludeman – but the environmental agenda is reinventing it, breathing life back in after decades of under-investment, the upheavals of privatisation, and losing out to the convenience of the car. Lord Adonis, the newly-appointed Transport Secretary's enthusiastic testimony to High Speed One last week is just the latest round of political flag-waving.
"In 40 years of being around public transport, I can't remember a time when there was this complete, cross-party support for public transport, with ministers fighting to say something positive," Mr Ludeman says. The developments in London alone are unprecedented, with the East London Line to be running by 2010, a ThamesLink upgrade by 2015 and Crossrail by 2017. "There hasn't been this level of investment in living memory."
But it is buses that Mr Ludeman has his eye on. "Now the Southern rail franchise is secure, we will obviously focus on that and the high speed service, but we are also looking at taking the bus strategy forward," he says. Pushed for details he is coy. "I'm interested in expanding our bus work." A pause. "I'll leave it at that for now."
The strategy is not simply a reversion to type for a man bitten by the bus bug as a student. It stems from a certain view of how people use public transport, and how that is changing. "My vision is that public transport will get more and more important in people's lives, particularly in cities," Mr Ludeman says.
It is an approach that has borne fruit. Despite the recession, the group is on track for revenue growth in line with forecasts in both its bus and rail divisions (although the aviation business and Gatwick Express have been dragged down by the airlines' troubles). Go-Ahead has been highly selective about its rail franchises, eschewing the high-profile bidding wars for intercity routes and sticking to "boring" commuter services. Although Southeastern made 300 redundancies last year due largely to job losses in financial services, the rest are holding up well and nowhere are the contracts in danger.
In part, revenues have been insulated by fare rises – thanks to last July's high retail price index, which is used to regulate the annual changes. But the relative strength is also down to the nature of the market. Where intercity services are suffering from customers trading down from first-class, commuter routes are more reliable, particularly with the masses of government workers employed around Victoria and the fast-growing Birmingham to Liverpool service.
Expanding bus services is a natural evolution, too. The green agenda will be the clincher. "Some 55 per cent of all carbon in the UK comes from road transport, and a lot of that is from private cars," Mr Ludeman says. It is a compelling point – and only partly undermined by the fact it's coming from the boss of a bus company whose second car is a Range Rover Sport.
On the buses: A life in public transport
* Appointed group chief executive of Go-Ahead Group in 2006, having previously served as an executive director at the company, and the chief executive of its rail division.
* Rejoined Go-Ahead in 2000 having previously worked as managing director of Thameslink Rail & Thames Trains.
* Served for three years as managing director of the Go-Ahead Group's London Bus Division.
* Worked for eight years as managing director, London General Transport, from 1988 onwards, the privatised public transport provider.
* From 1986 to 1988 Mr Ludeman worked as managing director of Burnley & Pendle Transport.
* Was previously a senior consultant at MVA Consultancy and a senior transport officer with the Hong Kong Government.
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