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JCB is fit for future

In uncertain times for the plant industry, JCB’s CEO Matthew Taylor says the company is is good shape with it’s headcount matching its production

“It’s been a really horrible 12 months really, but in relative terms we are in pretty good shape,” says JCB chief executive officer Matthew Taylor. “We ended the year with less stock than we started it which I don’t think many people can say.

“Our first quarter of 2008 was better than the last quarter of 2007. But in March to April last year we had our first cuts of machines. We cut very hard and early and continued to cut almost every month.”

He points to a period of level trading that, he believes, allows some prediction of the future. “Our sales have been really stable at the moment. Excluding India [where things are taking off], we have been doing the same for the last five months. Last year we sold about 57,000 machines [globally] and we’ll do about 30,000 this year. That’s based on 15,000 in the first half.”

The period of stability, which gives confidence to such predictions, also means Mr Taylor is happy with headcount for the time being at least. “In terms of people, we are where we need to be,” he says. “A lot of companies around the world
have cut production but have not cut people and I think this will cause problems.”

Returning sectors

“I still see infrastructure being okay this year, but house building will not be coming back any time soon,” he says. “Waste and recycling should return faster than construction in general. But mining and quarrying, which came into the recession later, will be coming back later.”

A tale of two countries

Matthew Taylor believes Germany’s attitude towards apprentices puts the UK in a bad light. He says when JCB bought German plant firm Vibromax it had an obligation to employ a certain number of people. But when he looked through the records there was a shortfall. “I was thinking ‘why are we six people short in honouring our agreement’ but it was pointed out to me that apprentices count double,” he says. “If we are not being positive and giving status to apprentices in the UK, then why would people want to become one?”

Mr Taylor’s country breakdown for sales:

“Of the BRIC countries, it’s only really Russia that stands out as being in trouble.

The UK is performing better than most major Euro-economies. We have grown our market share and so maybe that affects things. A weak pound has helped and people have been able to sell machines second hand to Europe.

The USA - I’d say it’s still going down and there are no green shoots. House prices are still falling. There may have been talk of things improving but that’s going from nothing to nothing.

China is growing steadily. We have changed focus from mini/midi-excavators to excavators as the world market is moving away from minis. Currently these are built mostly in the UK but we will do more and more sourcing in China and see how far we can take it. We are mostly selling 20 tonne machines but are looking for growth in the 36 tonne range.

India is picking up and the election result was good as there was support for infrastructure. It’s accounting for about one third in global volume, a little bit less in profit.

Russia has just turned the taps off, which I suppose you can do with a centralised government.

Brazil stopped [ordering] just like Russia last year. But unlike Russia, [the market] started again and has really wandered through this quite easily. We wonder how they can do this.”

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