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With a mixture of public and private sector money two ex-TDG men have bought their own transport company and are learning to drive trucks for the first time.
1[)ddy Tulloch and Archie Brownlee Khave reversed a depressing trend. Tired of witnessing the breakup of Scottish transport companies by their former employer, the giant TDG group, they have bought their own transport company, Finlay Guy at Haddington, near Edinburgh, and plan to double its size in two years.
Their confidence in the venture persuaded development bodies Scottish Enterprise and Lothian Enterprise Board to put up £300,000 of the investment capital needed for their ambitious expansion plan. Both bodies admit they rarely fund transport companies, but they were impressed by Finlay Guy's professionalism and the expertise of its new owners.
"It's good to be able to run a company the way you want to and not have to report to someone else," says Tu[loch, who was employed by TDG from 1988 until he and Brownlee bought Finlay Guy last October.
Redundant
Brownlee joined TDG in 1974 and was made redundant a year ago from TDG's whisky distribution specialist, McPherson. As executive director he was number two to the managing director. He had moved to McPherson in 1992 from John Russell (Grangemouth) after John Russell was closed as part of TDG's restructure of its Transport Division.
Tulloch's TDG years began with the holding company in Edinburgh. He moved to Connal Highland at Maryhill as financial controller just before TDG chief executive Alan Cole began his restructuring programme. Connal Highland was closed in December 1990; its business was transferred to InterCity at Cumbernauld while Tulloch was moved to John Russell as financial controller.
Here he met Brownlee. The axe continued to swing and in summer 1992 the closure of John Russell led to the two men being decanted to Mcpherson, along with John Russell's whisky distribution business. McPherson was itself created by the dismantling of two other companies, McPherson (Aberlour) and Thomas Smith at Broxburn. Other John Russell business was split between TDG's tanker operation, Nexus, and its general distribution arm, InterCity.
Tulloch and Brownlee decided they had had enough of TDG's musical chairs and began looking for their own business in January last year, just before Brownlee was made redundant.
"Our goal was a medium-sized transport company with national connections, similar to John Russell," says Tulloch, who remains an admirer of the Grangemouth operation. "John Russell was a very flexible company with lots of strings to its bow," he explains." It was also the first haulage firm to win BS5750, so we were looking for a total quality company"
Shortlist
Eventually Finlay Guy topped a shortlist of four. The prospective buyers noted a loyal workforce married to a high level of customer service. "You get the impression the drivers are very conscientious," says Tulloch. The drivers' enthusiasm feeds through in a willingness to report business opportunities spotted out on the road.
The company was run by Finlay Guy, son of the founder who set up the business in the 1930s to distribute coal and agricultural produce. But far from being stuck in his ways, Finlay Guy Junior had a progressive streak. He moved out of bulk tipping into general distribution and invested in the latest technology, installing computer systems for traffic routeing, sales and accounts. A well-equipped maintenance workshop was built in 1988, significantly reducing overheads. Clients range from consumer goods to forestry and food packaging.
Brownlee, freed from his obligations at MG, joined the company to audit the books before the transfer of ownership last October. The final deal involved money raised from the Bank of Scotland and other investors as well as the two enterprise bodies.
The new directors have secured finance to double the fleet to 50 Volvos. They plan to open other UK depots to increase southernbound volumes and expansion targets include warehousing, tanker work and contract hire.
A lot of borrowed money is involved. Does Tulloch see the enterprise as high risk? "No, it is a calculated risk," he says. "We both have experience of expanding businesses. When Archie began at John Russell it turned over £3m a year and grew to £18m before it was closed. I started at Connal Highland with a Dim turnover and grew it to £12m."
Their scaled down circumstances require more flexibility than within TDG's corporate structure. Tulloch has adopted the role of Finlay Guy's finance director but also helps transport manager Ralph Hughes in the traffic office. Brownlee is out on the road meeting customers with Finlay Guy, who has been retained as consultant for up to a year.
At this stage courting existing customers is important—a change of ownership often tempts customers to review their contracts. Both directors are taking LGV tests. "It's vital in a company this size to be able to muck in with the drivers," says Tulloch.
With all this investment of money and energy are Tulloch and Brownlee not tempted to put their names on the trucks? "We're keeping the name Finlay Guy," says Tulloch firmly. "It's very well known in this area and nationally."
Despite the shake-ups Tulloch regards the years at TDG as invaluable for gaining the experience to launch his own business. He is not alone in thinking so: "If you look round Scotland," he says, "there are about 12 exTDG directors with their own companies."
CI by Patric Cttnnane