A lean Jaguar pounces on car market
| Coventry, England
Tall, thin, dark, and quiet, Ted Anderton bends over a table on a factory floor here, keeping a minute-by-minute watch for the telltale menace of the warble fly.
He is alert, too, for the tiniest sign of wire or burr marks, and he wishes cattle would avoid them more assiduously.
But Ted is no farm worker. He cuts out top-grade cattle hides (from Sweden, where they have fewer wire fences) for the seats and doors of Jaguar cars. Warble flies - which lay eggs between the layers of a cow's skin - wire, and burrs create marks that he instantly rejects as unacceptable to Jaguar owners.
He works with a new sense of purpose and gusto these days - one way in which he, a Jaguar employee of 23 years, is helping to create an astonishingly successful new chapter in the British car industry.
Other companies in the industry - Ford and the big state-owned BL Ltd. (formerly British Leyland) - have been suffering from a spate of highly publicized and costly strikes. Relations between bosses and workers in Ford's Halewood plant and in BL's Cowley factory near Oxford remain corroded with class prejudice and mutual distrust.
Recession and last year's strong pound sterling against the dollar have forced even the most famous British car of them all, the Rolls-Royce, to cut prices and offer discreet discounts.
In Britain, company executives prefer less ostentatious cars at a time when 3 million British workers are out of a job. In the United States, Rolls-Royce sales fell more than 20 percent last year, to 908.
For much of last year, a Rolls was four times as expensive as a Cadillac and twice as much as a Mercedes (which sold more than 62,000 cars in the US in 1982 ). Rolls has cut its Silver Spirit limousine from $110,000 to a modest $93,000 in the US. (The price drop alone would be enough to buy three Honda Civics.)
Jaguar, however, has not only pulled out of a slump that threatened its very existence three years ago, but also is leaping ahead in a way that is impressing buyers, the government, and motoring correspondents alike.
Figures just out show that Jaguar sales have shot up 25 percent worldwide in the first quarter of 1983 alone. This is on top of a 40 percent rise last year. Production has jumped 41 percent to an annual rate of 28,000, compared with only 14,000 in 1980.
Sales in the US are up 60 percent; at 2,958 cars, Americans bought almost one-third more than the 2,009 sold in Britain itself in the same period. Sales in Western Europe are still small (867 for the quarter), but are up 58 percent.
All this is being handled by a work force pruned by one-third, from 10,500 in 1980 to 7,500 today. The Coventry plant is now turning out 3.5 cars per worker, compared with only 1.2 cars in 1980.
A loss of $:20 million (about $31 million) a year has been turned into a profit (Jaguar says BL will not let it say how much) and an annual turnover of more than $:300 million ($465 million).
Jaguar's rebound has come just at the moment when it can benefit from a weaker pound relative to the dollar, which lowers its dollar prices and makes British exports more attractive to US consumers. And at a time when Prime Minister Margaret Thatcher stresses that Britain must export goods other countries want to buy, Jaguar is exporting almost 70 percent of its output.
After two years of effort to tempt American buyers, Jaguar has now set its sights on West Germany, which accounts for 75 percent of all luxury-car sales in Western Europe. By allowing individual West German buyers to virtually custom-design their cars by specifying a long list of extras and accessories, as they do with Mercedes, Jaguar has pushed sales up 93 percent in the first quarter of this year, from 138 to 266 cars.
Jaguar, in fact, is the talk of British industry, with each new sales record greeted with headlines in the national press.
Just what is going on? Why the big Jaguar leap?
Is there a specific blueprint for success which can conquer class strife, sink strikes, dismiss discord? Are there lessons here for the rest of British industry as it, along with the rest of the Western industrial world, battles to emerge from the worst recession since the 1930s?
Jaguar - and outside commentators - believe that the answer to both questions is yes. They also agree that the reason lies very largely in the drive and imagination of just one man: a vigorous Lancastrian who mixes bluntness with diplomacy: John Egan.
A visit to the main plant the other day showed the outward signs of success: workers solidly pleased with progress, a sense of achievement in the air, a notably clean and well-kept assembly area.
A long talk with Egan himself, who left BL to work in Canada in the mid-1970s because he objected to government policies, and cross-checks with outside observers like the motoring correspondent of the Financial Times, Kenneth Gooding, indicate the new blueprint contains more than just improving the quality of the cars.
One move was to split off the Jaguar company from BL's mass-production approach and give it back its own identity. It is now independent from BL, and a delighted Margaret Thatcher is talking about turning it back to private industry if she can find a buyer.
(The Bavarian Motor Works Company has run a tape measure over the company but decided not to buy. There is still considerable progress to be made.)
''First,'' Egan said, ''we contacted 100 Jaguar owners, 100 Mercedes owners, and 100 BMW owners. We counted all the Jaguar faults in the first year of warranty. We tore down a Mercedes 280 S and a BMW 700 series. We set up groups to work on the problems, and the board of directors itself worked on the worst 12, including how to paint the cars better.''
A number of parts suppliers have been fired and standards tightened. Ironically, fewer parts come from Britain and more from West Germany and the US today.
More striking, in a land beset by union strife, is how Egan has reached out to the individual members of the staff itself.
One idea: ''quality circles,'' originally an American idea, then picked up and developed in Japan. Between 50 and 60 separate groups of workers now meet regularly to study better ways of making seats, spraying paint, tidying up, and many other individual aspects of company work.
Information ''cascades'' down through the staff from weekly management meetings, Egan says. By every Monday afternoon, sales and other figures for the previous week are tabulated and presented to foremen. They report back to their own workers.
''Then they run their own shops,'' Egan says. ''They know I am utterly resolved to save this company. I must be proud of what we're doing: I'd rather close down than compromise on quality.''
Another idea: a consciously nonabrasive approach to union shop stewards.
''Egan won't run into the same disputes as BL has [encountered] in Cowley,'' says Kenneth Gooding of the Financial Times. ''He has not pushed people around. . . . It's a question of whether the employees believe that management is trying to do something beneficial.
''It's obvious that so far, at least, Egan is doing all the right things. . . . Besides, the shop stewards are traditionally not as militant at Jaguar.''
Other ideas include:
* Eliminating four separate cafeterias (top management, senior management, white collar, and blue collar) and replacing them with just one.
* Trying to ''develop the potential of every individual as far as we can,'' as Egan himself puts it, ''and to push decisionmaking lower and lower into the company.''
* Creating a new system of substantial wage bonuses, paid retroactively to discourage strikes.
Blue-collar workers receive a bonus averaged over five weeks and paid five weeks later. White-collar workers are on monthly bonuses, paid quarterly. Top managers start to receive annual bonuses only after the company begins to earn back 10 percent on capital.
Comments auto correspondent Gooding: ''Of course, [Egan] had a good product, with a lot of goodwill. The name of Jaguar was still held in affection despite the bad years of the late 1970s. The idea of splitting Jaguar off from BL was also a good one, and BL has followed it with Sherpa vans by making its Freightrover operation separate.''Everything is going well just now. If oil prices jump and petrol [gasoline] is more expensive, Jaguar's 4.2 liter engines would be in trouble, and if the pound strengthens a lot, dollar prices will rise. But so far, so good.''
Says Jaguar employee Ted Anderton as he smoothes another leather hide on his worktable: ''I'd say there's been a big improvement in the last three years.'' And back he goes, looking for the signs of the warble fly.''