On his visit to the Morgan Motor Company in 1991, television’s original troubleshooter, the late Sir John Harvey Jones, had harsh advice for the family-owned business: update production methods or face the prospect of going into administration.
For Charles Morgan, grandson of the founder and son of the then managing director Peter, it was a grim moment. Despite a passion for cars, he spent 10 years pursuing a different career, working as a cameraman for ITN before entering the family business in 1985, and he was keen to make his mark.
Related Articles“Sir John was tough, very tough,” says Mr Morgan, who is now managing director. “I had invited him in and my father never let me forget it.”
Former ICI chairman Sir John was shocked by the company’s antiquated production line and its long waiting list – customers had up to three years’ delay between ordering and receiving their cars.
“It took three months to make each car,” recalls Mr Morgan. “And if a worker went on holiday, nothing was done on his part of the process until his return.”
The Morgan Motor Company was producing 400 cars a year. Sir John advised Mr Morgan to raise prices, thereby boosting profits and slashing the waiting list. His advice was initially ignored; indeed the ensuing publicity actually generated hundreds of new orders – thereby lengthening the waiting list further.
“Well we didn’t go bust within five years, as he predicted,” laughs Mr Morgan, who kept in regular touch with Sir John, occasionally seeking his counsel.
Sir John’s initial appraisal of the Malvern-based business also prompted Mr Morgan “to go back to university and get an MBA”. Learning how to run a business “polarised issues”, and prompted Mr Morgan to re-evaluate the need to employ qualified engineers – a move that he credits with revitalising the business and improving the models on offer.
The engineers recognised that the aerodynamics of the Morgan models were hindering their success, particularly as racing cars. In 1997 the models were extensively overhauled, with the introduction of a standardised aluminium base, longer doors and improved materials throughout.
A Morgan Aero SuperSports recently won the 2009 FIA GT3 European Championship at Silverstone, competing against other world-class racing marques, such as Ferrari. “We are the fastest sports car in the world at the moment,” says Mr Morgan, who believes such an achievement would not have been possible without the input of talented engineers.
Many of Sir John’s recommendations were later implemented. “We were terribly cautious before he arrived; we spent very little on design,” says Mr Morgan.
The business has always funded itself, which had meant minimal investment on research and development. Mr Morgan looked at using other car engines in his models, paying a licensing fee, which also freed up financial resources.
“We reduced production time to 15 days,” he says. “And we did put the prices up a bit. We began to develop new models, and the efficiencies in the processes really started to come through.”
When Sir John paid his visit, Morgan Motor Company earned margins of between 2pc and 3pc. Implementing the changes pushed the figure closer to 12pc, which Mr Morgan claims is a better profit margin than that of rivals such as Mercedes.
Today the company turns over £26m and produces 700 cars every year. It has no external shareholders or debtors, which is both a positive and negative factor.
“It is a considerable burden that introduces a clearheadedness to your decisions. We have a much longer time frame than the big car manufacturers, and we need to get it right at the very start. Failures don’t pay you back.”
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