Will ERF end the firsi 50 years on a Hindi
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As speculation rages over the Japanese tie up, Graham Montgomerie talks to the company's sales and marketing director about hopes for the future
THIS YEAR ERF celebrates its golden jubilee following the split with Fodens when opinions differed over whether steam or diesel power was the way forward.
Time has given us the answer to that particular question and it is nice to be able to report that both ERF and Foden still continue, but with one very important difference: ERF is now the only independent UK manufacturer of heavy commercial vehicles.
John Bailey is now group sales and marketing director at Sun Works, after working at Perkins and Daf, and I talked to him recently about the ERF performance through the recession and its hopes for the future.
The obvious starting point was the well-publicised "connection" with Nino. John was quick to explain just how things stand at present.
There is no secret about the fact that ERF and Hino have been talking together but the subject of these talks has tended to get distorted.
If — and it is still is "if" — ERF and Hino co-operate, it will be on the basis of customer and supplier just as ERF currently buys, say, from Gardner, Cummins and Rolls-Royce.
The idea started because Peter Foden and John Bailey recognised that the level of business had shrunk at the heavy end of the market. It is sensible to admit that it might never get back to pre-1979 levels, and it would therefore be logical for ERF to extend its range downwards.
There has never been any question of ERF pulling out of the heavy market. The lighter vehicles would be additional to the current range.
As John Bailey explained, it has always been the philosophy at ERF to "buy the best bits available and engineer them."
In the proposed range of 12 to 15 tonnes, most of the European manufacturers are already tied in with one another in a variety of co-operative ventures, so ERF looked further afield. The ot vious place was Japan ERF has explored the possibil ties and is confident that it cal produce an attractive product a an attractive price, with this lal ter consideration assuming in creasing importance the furthe one moves down the weigh scale.
Assuming that any such ar rangement goes ahead, ERF not yet saying which compo nents it will buy from Hino but i does not need any great inspira tion to assume they will be corn ponents with high tooling costs.
A crucial factor in any ERF Hino relationship is that of loca content. The SMMT/JAMA "understanding" prohibits thE import in the UK of any Japa nese commercial vehicle ovei 31/2 tons gross so there wil never be any question of havinc a Hino chassis with an ERF badge on the front.
The SMMT is insisting on a local content (by cost) of at least 60 per cent to start with, which would have a planned growth to 80 per cent in the future.
So, will such a deal take place? At the time of writing, no firm decision had been reached, tly because of variations in rency. When the talking ted in September of last -, the exchange rate stood at yen to the E. It is now at yid the 345 level, which is a significant difference ind.
s John Bailey explained: "I A emphasise that there is no I at this stage. There has n a lot of talking and we have ie some progress."
he decision — "yes" or "no" viii have to be made within next three months to avoid ig up ERF design-time. "We st draw the line somewhere." RF received a great deal of dicity from the "Top Gear" 3vision programme when er Foden firmly denied any gestions that the proposed I was the start of a Hino taver — "the thin end of a Jaiese wedge."
ertainly the ebullient chairn is emphasising strongly the t that any such deal will put be on a component supply ;is.
-1 all the publicity surrounding Hino speculation it should : be forgotten that ERF has vived for 50 years without help from the Japanese and, Peter Foden says with some terness, "Without any Govment aid" either.
['his is not to say that ERF has t been without its problems. r from it. At the start of the imp the company employed out 1,400 people. The payroll w stands at less than half this ure.
The planned expansion proamine thus took something of )asting. The proposed producin site at Wrexham (to be built th a contribution from EEC nds) was killed off. "It was fornate we could stop it in time" id John Bailey.
The other area which was lopped — at least in part — as the site at Middlewich, a few iles from Sandbach.
Part of the Middlewich facility mtains the service training :hool and the cab repair shop. the latter, ERF strips smashed ibs and rebuilds them while nding the operator a service lb. Day cabs can also be )nverted to sleeper specificaon.
The parts computer is based at liddlewich which, claims John alley, "gives 91/92 per cent rst-pick availability with the wentory going through the )of."
On the debit side, the research epartment was pulled out of liddlewich and returned to Sun works. This was only possible in ractice because the department had been slimmed down anyway which meant there was just about room at Sanbach.
ERF still retains the premises however, and will move the research section back again if the market, and thus the company profitability, improve.
ERF has been consistently strong in the UK market with the last SMMT registration figures showing the company to have 13.6 per cent of the over-28 ton (tractive unit and eight wheeler) sector.
Because of the smallness of the factory when compared with something like the Daimler-Benz plant at Worth, ERF can get a bad month in the UK because of an export order taking up the capacity.
Such a situation occurred because of the superb order picked up by ERF for 6 x 4 tractive units for the Saudi-based company of Taseco-TMS. This was originally for 130 but was almost immediately increased to 140. A further 30 were then added with the local distributor taking another 50 which brought the total order up to 220.
The specification called for a day cab (unusual for an export order) and a drive line consisting of a Cummins 290 (again unusual where the 350 is normally requested), Fuller 11609 and Rockwell R180.
This particular contract was awarded to ERF by the UK management group of the Saudi operation. It has been John Bailey's experience that more and more Middle East companies are
turning to professional management from Europe (particularly the UK and Holland) to run the major fleets.
Still on the export side, ERF is supplying bus chassis to Kenya in ckd form featuring the turbo charged Gardner 6LXCT engine. The first batch of 12 is due to be supplied during the next two weeks for bodywork to be added by local companies.
In Zimbabwe a good start has been made with 6x4 ckd tractive units again featuring the ubiquitous Cummins, Fuller, Rockwell. drive line.
As far as exports to Europe are concerned the picture is less bright as ERF is not currently ex porting there at all. John Bailey explained: "To go into Europe properly would require a whollyowned subsidiary and there is just not the volume there to justify such a move for us."
John is justifiably very proud of the ERF performance in ob taining Type Approval for his vehicles. Or as he put it: "We got approval within the required time (before April and so we didn't get caught) which meant that we held no "clearance sale" at the end of March."
For the future of the company both John Bailey and Peter Fo den would like to see a broader range of vehicles to help the distributors. ERF has a good col lection of loyal distributorships, most of which are family concerns. "We have close relationships" said John," and transport is a business of close relationships and personalities."