Des, Give us an idea of your background and why you decided to pursue HR as a career?
I joined Ford in the UK in 1987, as a graduate trainee in what was then called industrial relations, now human resources. I’d done a degree in politics and economics at Newcastle University, got quite involved in politics, stood for the student union, and got elected to look after all the finances. This actually meant running the bars on campus, and so that involved looking after the bar staff and security staff. Newcastle University is big, so I got involved with unions, and that got me interested in personnel issues. I did a one year IPD course at Doncaster College and I graduated and applied for a dozen or so companies. Ford was the one I really wanted, because it had a very good reputation for training people in HR.
I got a job at Ford and I did a very generalised HR role. Starting off at the Dagenham engine plant as a training officer, I then went into employee relations, which was my first exposure to unions. Ford was completely unionised, and it was all about maintaining relationships, as the union was very powerful. I progressed through Ford, managing the sponsored students schemes and graduate recruitment. I spent some time with Ford Credit, managing compensation and benefits, and gave me my first exposure to overseas markets. At that time, Eastern Europe was opening up and so it was quite a challenge to maintain equality and parity across boundaries. Poland, for example, had rampant inflation, and they weren’t interested in forward- planning, they just wanted money there and then, and they wanted dollars not Polish money. I went on to manage Ford’s European sales and marketing and, from an HR point of view, I really enjoyed the experience, visited the lovely cities in Eastern Europe, and discovered that dealing with sales and marketing people was totally different to managing manufacturing people. I then went to manage HR at the Dagenham assembly plant, which sadly no longer exists. This was definitely the job to do at the time, in terms of taking on a challenge and earning your stripes.
Dealing with the very powerful unions must have been hugely challenging and intimidating.
It was very tough and very confrontational and there was a lot of external politics in the union. It was the kind of job where you could never have a drink and relax during the week, because you were always on call. You could be called in four or five times during the night, which was what they expected the HR manager to do, to resolve any issues that flared up, and it could be anything, usually petty issues. I then went to look after the South Wales plants for Ford in Bridgend and Swansea, and this gave me an understanding of how, a hundred miles along the M4, cultures can be very different. In South Wales, there is a very Celtic sense of community, so they’re either all with you or all against you – thankfully they were very much all with us.
You say the culture was very different, in what way?
They had a very different outlook about the future, and their big concern was much more to do with the community, future employment and prosperity, so looking for investment from us and the longer term view. A job with Ford in south Wales was highly valued, compared to East London, where there were plenty of jobs at the time. There was high absence and high turnover, with people going off to jobs in Canary Wharf. So it was a different raft of challenges that made for some very useful learning. Then out of the blue, March 2000, I got a call from the then Ford HR Director saying that Ford had bought Land Rover and would I take a grip of the incoming HR issues. We had very little information to go on and we didn’t know how many people were in the equation, so I set off for Land Rover and worked on the Ford due diligence team, which was a big challenge, as it was bang in the middle of the implosion of the Rover Group. BMW had left the scene, there were some people that were going off to MG Rover, but what was becoming clear, thankfully, was that a lot of people wanted to stay.
I remember going to Detroit and meeting the Head of HR at Ford, David Murphy, and he said we needed to put in place, as soon as possible, the Ford grading system covering benefits, bonus plans etc. So it was a shock and awe approach, as we didn’t want to carry on with reams of terms and conditions, we had to uniform and simplify the employment terms across the board. So my job was to bed in the HR, and run the management set up of the business. They had an HR Director, who provided invaluable information and the unions were with us, as they saw Ford as being a route forward. So, having set up the Land Rover side of the business, I was then seconded to Jaguar, as HR Director – Ford having bought Jaguar in 1989, and run as a separate unit at the time. This was my first experience of heading up pay negotiations, and when you’re out there on your own, it’s quite a lonely place to be, because if you don’t get a settlement and end up with a strike, everyone thinks you’re a fool. If you get a 90 percent vote in favour of your offer, everyone thinks you’re too generous. So you need to judge the key issues and play your cards as best you can.
I recall that this was a period of great uncertainty, how did you handle it from an HR perspective?
It was quite a character-forming experience! The first person I negotiated with was Tony Woodley, who at that time was the leader of the automotive section of the TMG – later to go on to be General Secretary of Unite. As you can imagine, he was no pushover and it was tough times. We had to close Browns Lane which was a very emotional time, as it had been a Jaguar plant for many years. But the business was in trouble. Then Ford moved me to Germany to look after all of the manufacturing staff across Europe, and to look after salary activities over Europe. I was based in Cologne, and I was covering; France, Spain, Belgium, Russia and Turkey where Ford had plants. I was enjoying the job and then my HR Director suddenly quit, and I got the call to come back to the UK and be HR Director for Jaguar and Land Rover. I remember saying at the time it was my dream job and it still is.
At this time, there was a lot of change in the car manufacturing sector and for the UK, none of it particularly good.
I knew at the time Ford was looking to sell the Jaguar and Land Rover businesses and, a strategic study was being carried out, so it was bad news. But I came into the job with my eyes open, knowing we would be sold. I was in the thick of it, meeting and negotiating with the last round of bidders, and we made presentations to each prospective buyer before they made their final bids to Ford. We made a point of getting our unions to meet the last shortlist of potential buyers, to get their opinion of their favoured owner, and thankfully, like us, the Unions chose Tata as the best fit, taking into consideration ethical standards and long term projections. That all went through in June 2008 and Tata has maintained a light, but very supportive touch on the business to the present day.
What effect did the economic crash have on the plans for JLR?
Timing could not have been worse! Within three months of us getting the ball rolling, Lehman Brothers collapsed and the meltdown was not far behind. Overnight, orders were cancelled, and sales started to dry up, bills were coming in and revenue was drastically reduced. Overnight, we had to go into survival mode, we had to cut costs in all parts of the business, but we were determined that we were going to be here for the long term, so we had to make some tough decisions. The obvious thing would have been to stop investing in development and talent, but that would have been entirely wrong. So we bit the bullet and carried on investing in development. We sat down with all the unions and said that we were really struggling to survive and were running out of cash. Banks didn’t want to lend to anyone, especially the automotive sector, and we had no credit record, as we were a new business and didn’t even have any accounts record, so the timing was awful.
So with your backs to the wall, how did you broker a deal with the union?
We said we could make very tough decisions and you could go on strike and that would be that! We said we needed them onside and we had a target to save £70 million by making cuts, and it was tough all the way. But we worked together, we were in it together and the implications of not collaborating and supporting each other was dire. We weren’t interested in talking to the media and politicians about it, this was about the team and how we were going to survive. We agreed a pay freeze and an increase in working hours for our salaried staff, and a decrease in production staff and we had great support from Tata Motors throughout. We cancelled bonuses, lost 2500 jobs in the UK, and sadly, we had to do our first compulsory redundancies. In the end we came up with savings of 67 million pounds, given the target of 70 million, this was a fantastic effort. Thankfully, the unions were batting on our side. It is strange that facing terrible odds creates alliances. If we had tried to achieve in the 1980s what we had to do more recently, we would have been closed, so we did many tough things.
And at the same time, you were developing the new products that were crucial to competing in the global market.
Our new product had to be launched on time and on quality, and they were. The new Land Rover models were met with critical acclaim and were becoming increasingly well received by consumers, and quality and production was not effected, despite a backdrop of continued cuts and freezes, and closing our pension scheme to new members. In 2010 to 2011, our business started to respond, as the true value of the brand was realised. For example, in China, Land Rover is the third biggest brand in the market.
So suddenly you had to respond to this significant turn of fortunes, presumably increase the ranks, get talent in and retain existing talent.
As quickly as we could, we introduced a 6.1 percent pay increase and last year we hired 4000 people and this year we will probably hire another 4000 people. We’re looking to build plants overseas, we have a fantastic cycle plan of 40 new products in the next five years. Three years ago, nobody would have wanted my job, but today everyone would want it. When it was really bad, that’s when you ask yourself, what is in your heart and soul? For me and the HR team, it was to treat people with dignity and look after people and that meant taking difficult decisions with real thought and consideration. I was thinking, if this collapses so does a pension plan for 20,000 employees and the impact on the communities would be devastating, our suppliers, the local economy, and so on.
You have been very open and honest in this interview, and I guess being totally up-front with people wins respect, however tough the decision that you take are.
Yes, we have been fortunate to have people that understood the situation and I cannot emphasise how important it has been to have the unions onside. In many ways, it taught us to be very professional in our communications and be very open with them. Our people have seen the ups and downs and can sniff a rat at a hundred yards, they know if things aren’t going well, so what was really important was very open communication, even if that led to confrontation. But when the chips were down and we needed people onside, honesty and clear communication won the day.
Many people will be surprised that unions played such an important part in the turnaround of Jaguar Land Rover.
I think people have the wrong perception of unions, they imagine them to be like they were in the 1970s. In my view, people don’t like to go on strike, and strikes don’t get you anywhere – you never recover the lost wages, it just hardens attitudes on both sides and can drag on and cause irreparable damage to the organisation, its product and brand. I think everyone thought that when the recession came, unemployment would go through the roof. But the private sector is showing innovation and agility in responding to the economic challenges.
Has the role of shop steward altered much in comparison to the good old bad old days?
Being a shop steward has always been a hard role. Management think you’re useless and slow and the membership think you’re a sell-out. Our shop steward has to be changed all the time and it’s not a popular role anymore. They do a good job, they stop management doing silly things, but they’ve shown in the bad times that they’re prepared to do the difficult stuff if it’s in the best long-term interest. We always want to do some things which they would never want us to do, and occasionally we can but they push us back. We have pay negotiations every year in the UK, I’m starting to put my wish list together and hopefully it’s moving in the right direction.
And JLR is a vital good news story at the moment, creating jobs in the UK and with a strong export performance.
Yes, we’re hiring lots of people here in the UK, which is great, and 80 percent of our product is sold overseas. The UK economy may be struggling, but Britain is still iconic as a brand. Globally we’re looking to expand into emerging market territories, for example China and there is a real HR challenge with the different labour laws. But China is one of the booming new economies where British product is highly regarded, so of course, we have to be there.
From an HR point of view, what achievement would you prize above all others?
The brands, Jaguar and Land Rover, don’t need an introduction. If I achieve one thing in my HR tenure, it will be to bring the employer brand in line with that highly-respected profile. Also, I have really appreciated what I learned from our engaged and loyal people. When our people complain, or point out shortcomings from upper management, they’re doing it from a position of caring about the business. They don’t pull punches and we encourage transparency.
What do you see as the major challenges as you progress with the business plans?
The threats and opportunities, in equal measures, is the global economy. In the next few years we will be investing billions in new product, and we need a stable foundation for that to happen. We know Europe is going to be flat-out at best, US is coming back, and everyone is worried about China and that won’t change. We do need to keep an eye on the global economic picture, and what is fundamental is product quality and delivery. So we need the skills! We started out last year looking for a thousand engineers, and people said we wouldn’t find them but we did. We’re fortunate, being a big name that pays well, and we’ve managed to attract some great engineers. The UK has a lot of engineering talent, but we’re starting to see skill shortages in engine technology, hybrid engines, and software systems. We’re moving up the various “employer of choice” league tables like The Times Top 100. So our brand is being noticed as an employer and we have no problem hiring bright young things, graduates – we’re sponsoring students in the UK with a view for them to work for us, but if we need to go out and hire real experienced people then that would pose a problem. So far, we’re okay, but when you keep hiring you drain the reservoir and it gets harder.
Presumably, apprenticeships being in vogue will be a positive for this sector.
Apprenticeships are becoming a great route to developing talent. It is a real shame that apprenticeships were seen as a failure option for so long, in comparison to a University education, but thankfully things have changed now, people are talking more positively about apprenticeships and we’ve tripled our numbers. Most of our apprentices do a proper three year apprenticeship and then go on to do a degree, and we sponsor them – for us they’re the ideal graduate, they’re very grounded and know a trade and they’ve already been in the company for several years and once they’re in they’re treated as anyone else in the company. We all have a responsibility to promote engineering in the UK. If we don’t, other economies will definitely continue to have the march on us. Government must incentivise apprenticeships.
And what about the challenges of motor manufacturing?
There are no bad cars anymore, the challenge for our business is around internationalisation. We must continue to manufacture overseas, but we absolutely intend to design and engineer in the UK and this country will always be a major part of production. Building plants in say China or Brazil is about achieving a good balance of local recruitment and sending our people from the UK. Ironically, although globalisation is the big way forward, people are reluctant to take international opportunities and it is a stumbling block to getting the right people in the right places – employees have partners, kids in school, or are looking after elderly relatives, so to go overseas is difficult. We’re continuing to invest in the UK, building an engine plant, hiring like mad and launching lots of products. All of that is better than the alternative, but with it, there are lots of strains, particularly the challenge for us not to relax – we just don’t know what they’re doing in Munich or Detroit to challenge our products. They will be working just as hard to knock us off our perch. We need to keep moving forward, but we are doing well and that’s down to everyone pulling together.
And you Des, do you ever wish that you had diversified into other sectors?
The car industry is huge and diverse, so there is a lot to get involved in – I’ve had 16 different jobs! I still don’t fully understand cars and I’m not a petrol head, but it’s been a huge privilege, massively challenging and, without a shadow of a doubt, I’ve never had a dull moment!