Business Interview: Ian Malcolm, managing director Elringklinger GB

Coreena Ford meets the driving force behind Elringklinger - the only North East automotive manufacturer which grew sales during the recession Ian Malcolm, managing director of ElringKlinger (GB)
Ian Malcolm, managing director of ElringKlinger (GB)

Ian Malcolm wanted to be James Bond when he went to university.

And his ambition was certainly more fleshed out than a 12-year-old’s obsession with Ian Fleming novels and 007-inspired spy movies.

Aberdeen born and Aberystwyth University-trained, Ian had studied to be an accountant but was actually poised to join the Diplomatic Service.

Thankfully for North East manufacturing he was much better at number crunching and was targeted by a number of firms “doing the milk rounds” at university.

And while he may not have become 008 acting on Her Majesty’s Service, Ian’s vocation has taken him on a varied and interesting route he probably didn’t envisage as a graduate.

A direct yet relaxed executive who clearly relishes an opportunity, Ian’s pragmatic attitude and flexible skill, tempered by a keen sense of humour – “I’m here as a missionary, to teach the Northerners how to be hard-nosed Scotsmen” – has seen him deliver results that those in the industry would say are nothing short of heroic.

He’s the only accountant in the German-headquartered Elringklinger’s global network of 40 firms to have risen to become managing director, at Redcar-based Elringklinger GB.

Every last one of the others is an engineer. James Bond would be proud.

His numerical skills have come to the fore on more than occasion in his 19 years at the Redcar business and it could be argued that, inspiring confidence in the loyal workforce, they saved the business.

The firm produces sealing and shielding modules for brands including Ford, Jaguar Landrover, BMW and Honda and is probably the only business that grew sales during the economic downturn.

Now marking its 50th year on Teesside, the firm is positively flourishing. It’s recruiting, expanding and even exploring ways to lower its carbon footprint.

But the journey hasn’t been an easy one.

“There have been times as MD when I came close to leaving but then I would think ‘I’ll prove them wrong’,” he said.

Ian first joined the firm in the 1990s after a spell working as an accountant in the New Zealand health service and, back in the UK, in the NHS. He’d already made the North East his home, having moved here in 1997 to be with his girlfriend, who would later become his wife.

In 1995 the then managing director at Elringklinger UK – an audit client of Ian’s at the time – offered him the financial controller post, and seven years later, when that MD retired, he took up the helm himself.

The business had been ticking over nicely, but then group directors delivered his first big challenge.

He said: “The group took the decision to rationalise production facilities and relocated about a third of our business back into Germany. That was a third of the turnover and about 80% of our profit.”

The bombshell decision took the workforce down from 200 to 140 – and it was the first time Ian had had to make redundancies.

“That was hard,” he recalled, “Hard because nothing we had done as a business had caused that. I could understand the group decision, it was the right decision and I don’t regret it now, but it was a difficult one to manage on the people side because I was saying goodbye to people who’d been there 20, 30 years.

“I remember I did an announcement on the factory floor, saying ‘this is the decision, it’s group’s strategy and not because of anything we’ve done but a huge chunk of our business will be disappearing’.”

“The technical side was fairly straightforward – working out the numbers and so on. The emotional side is very much harder.”

An even bigger challenge was awaiting the company – and indeed, the global economy – three years later.

He said: “We were back on an even keel, back into profitability and doing just under £1m of product sales a month – and then the economic crisis hit us.

“Within two months we went from taking in £1.1m in sales each month to around £200,000. I thought the first one was hard, but this one was harder.

“In 2009 if you had asked me if we’d be there at Christmas, I don’t think I’d have given a very confident answer.”

Yet again, the workforce was downsized as demand dramatically fell away.

The redundancies could have been higher, but for a strategy compiled by Ian and the senior team that took more than £300,000 of costs out of the business, by improving efficiencies.

“When I joined in 1995 there had been 280 workers. In 2009 we started with 130 and went down to 80,” he said.

“We were doing short-term working, some were working for four, five days and being paid for three, banking hours. That they would get those hours back was a risk we were taking as a business.

“That was all about communication and determination to keep the business going.

“I remember one lady I was making redundant coming into the office and saying ‘you’ve got a really hard job but one thing you’ve got to promise me is that you’ll keep the business open’ – and she was going. That hits you a little bit.”

Ian and the workforce stuck to their plan and by July 2009 the firm was breaking even. A loss of £500,000 at the start of the year was turned to £500,000 profit by year end – a phenomenal achievement for any business in the recession, let alone a manufacturer involved in the car industry, which was hit hardest and very fast.

Ian Malcolm
Ian Malcolm

The following year the Redcar factory marked a record year, with profit topping £2.3m on product sales of £13m, up from 2009’s £8.7m in sales.

In 2011 he expected the numbers to level off, but the firm posted another record set of figures with profit reaching £2.8m in turnover of £14m.

“I have always said I’m not a pessimistic but I try to keep a cap on things.

“It didn’t make sense for this business to be booming when you didn’t see growth in new registrations and you didn’t see lots of people going out buying cars.

“But then the car industry was hit hardest and fast, but it recovered quickest.

“Our customers were having a very cold shower and realised quickly that they had been incredibly inefficient so had to turn the taps off. They had warehouses full of stock and had to do something about it.”

In 2012, with growth proving to be sustainable, Ian set his team the target of doubling the size of the business by 2016.

That required a change in mindset for the whole team who, until that point, had been primed for cutback after cutback, the only objective being survival.

He also changed his management style to help the team leaders think in more broader terms, rather than follow his direction.

“I can’t remember when but I there was a point in time when my style changed,” Ian said.

“I was managing and directing. Now I say ‘go and do it, tell me what you need to do it and I will back you’.

“That was incredibly hard as a choice. My fate is in their hands and yes, there have been some cheek-clenching moments when you think have you got right or wrong.”

To drive the expansion plans more staff are needed and the workforce has so far grown to around 190, with plans to grow to 200 by the end of the year.

The last two years has seen the business win a number of contracts off the back of production of new speciality products – model-specific gaskets and underbody heatshields – which it now supplies to the likes of BMW Mini, General Motors, Honda and Jaguar Landrover.

The new work requires more space, hence the expansion into a new manufacturing facility.

The new extension to its 4,000sqm Kirkleatham Business Park extends its capacity by 50% and the new building is fully operational early this year.

Yet the lift in capacity and demand for the firm’s services presents a major problem in itself, and one number-crunching can’t solve – where to find the skilled workers to fulfil the contracts?

“It’s a real issue, where do they come from? The skills shortage is a real hobby horse of mine,” said Ian.

“Our location isn’t in the main corridor of the North East automotive industry, which is south of Nissan, and that’s a challenge, to recruit and to retain.

“There is always the risk that if a job comes up more locally to our operators they will take it.

“We are taking staff from other automotive suppliers and they are taking some of our staff.

“But I like to think we have a very loyal staff – and despite all the redundancies we’ve still got 15 or more staff members who have been there more than 25 years.”

Apprenticeships could help fill roles, but Ian says the issue needs deeper-level scrutiny, at top level.

“We need some really joined-up thinking, right at a basic level,” he said.

“We are going into schools, with Year 2 and Year 3 pupils, so seven and eight-year-olds, getting them interested in engineering.

“We are going to career events for Years 9 and 10 and doing programmes with Year 11s, and there are lots of businesses that are doing the same thing, but it’s time that government woke up.

“I was at a skills event today and there was someone from the Department of Business, Innovation and Skills, but there was no one from education. Those two departments need to wake up and work together.

“If we go to schools and talk about apprenticeships the door is almost closed in our face because schools are about getting good grades at GCSE and A Level and until that changes we’re going to have a problem.

“There needs to be some joined-up thinking at government level to get a strategy, to get education working for the country because it’s not at the moment.

“That’s a very damning statement but pupils are trained to pass exams, not skills.

“That’s not a criticism of teachers but a criticism of the system and I’m sure teachers are incredibly frustrated at the fact that they are forced down this route of teaching people to pass exams, not skills, when we actually need to be teaching skills the country needs.”

While the skills shortage may take longer to resolve, Ian has the backing of a strong senior team to oversee local level issues and every day presents a different challenge.

All staff are kept abreast of all developments, however, and every week he meets with a different group of five workers, from across all departments, to talk through progress and issues. It’s system that means he gets to meet and speak with all of his staff throughout the working year.

He has also always maintained an open-door policy, which is probably why he knows the majority of workers by name.

He also tries not to take his work home, and adheres to a “family first” policy with all his staff.

Big customers may well call and email out of office hours but the rest of the time is for playing golf, for scouting (he’s group scout leader for the 26th Darlington Scouts), seeing his teenage sons and playing five-a-side football or spending time with his new partner, who lives in London.

Elringklinger reached its 50 year milestone this year – and so did Ian, a birthday he says was “pretty good actually.

“It was slightly tempered by the fact my wife and I separated last year. We’d been married 25 years. That’s proving a little challenging to resolve.”

Having achieved a personal milestone alongside his firm’s own half-century he’s now looking further ahead to his next challenge. Where next for the business?

“If we’re doubling by 2016 what about 2020?

“I reckon there is a five-year churn in business. So we’ll have a contract at good volumes for five years, so every year we’ve got to generate 20% of our turnover just to stand still.

“That’s the challenge because, with our customers, in terms of engines, there aren’t that many opportunities every year.

“Engines are lasting longer, designs are carrying over to lots of models, so it’s physically not as easy to do.

“Heat shields are, however, more model specific, and that’s where growth in the business will come.”

With his own and the firm’s big 5-0 successfully achieved, Ian is more than allowed to reflect on his position, having steered the firm through two major challenges.

“I took the opportunity and grasped it with both hands,” he added.

“Some might say the figures we achieved in 2011 were astonishing. I say it’s just my job.”

The Questionnaire

What car do you drive?

Volvo V70 Estate – with three teenage boys I need the space.

What’s your favourite restaurant?

I am spoilt for choice in and around Darlington. The Oak Tree at Hutton Magna is fab, small intimate and stunning food. Ochi’s in Darlington is another favourite, mixing Caribbean and Mediterranean flavours.

Who or what makes you laugh?

I like the old sitcoms such as Only Fools and Horses and also listen to some of the comedy shows on the radio.

What’s your favourite book?

The White Tiger, by Aravind Adiga.

Having travelled around India, as well as having experienced some of the things the book talks about, in my view it gives such as accurate depiction of what has happened in that country

What was the last album you bought?

I tend to download most of my music now but thinking back I would say the last full album purchased was either Alchemy by Dire Straits or Pink Floyd’s The Wall, both digitally remastered. I guess this says something about my age!

What’s your ideal job, other than the one you’ve got?

I would like to own and run a restaurant/wine bar. I would have to employ the chef but it has always been a dream of mine to play the role of ‘Mein Host’.

If you had a talking parrot, what’s the first thing you would teach it to say?

‘Today is going to be a fantastic day’. There is no point starting the day with any other attitude.

What’s your greatest fear?

Heights, even when I am tied on and secure. This is something that I have had to combat, doing various activities with Scouts.

What’s the best piece of business advice you have ever received?

Believe in what you are doing and do it to the best of your ability – if that is not good enough, then you have no control of that.

And the worst?

If at first you don’t succeed, try again. This is almost right but if you didn’t succeed then you probably need to do something differently next time round. If you always do what you have always done you will always get what you always got.

What’s your poison?

I love a glass of wine, of which there are only two types, wine you like and wine you don’t, but my passion is Malt Whisky. I would add only the Scottish variety but having said that nobody else makes it, do they?

What newspapers do you read? I try to keep up-to-date with news on the internet but get the Saturday Times each week. The Sunday papers can be just too bulky and quite off-putting.

How much was your first pay packet and what was it for?

I started work when I was 14 as a butcher’s assistant in a local supermarket in Inverness, earning the princely sum of £0.45 per hour.

How do you keep fit?
I still manage to play five-a-side football once or twice a week. If the weather is fair, I cycle, and I love walking.

What’s your most irritating habit?

I don’t like to admit it but I am still a nail biter. I have tried all sorts to stop but to no avail.

What’s your biggest extravagance?

Other than property or a car then it is probably an abstract painting by a local County Durham artist, Paul Denham.

Which historical or fictional character do you most identify with or admire?

Alexander Fleming – the inventor and discoverer of Penicillin - life-changing for the world.

Which four famous people would you most like to dine with?

Malala Yousafzai, Dame Tanni Grey Thompson, Ewan McGregor, and Billy Connolly. An eclectic mix but what a great conversation we would have.

How would you like to be remembered? As someone who was always positive, always doing what he thought was right and prepared to acknowledge if he made mistakes, and as doing something different.

Timeline of My Working Day

6.00am: The alarm goes off. Up and on the go, checking emails and what to expect when I get into work.

7.00am: On the road driving from Darlington through to the factory in Redcar with normally not too much difficulty and in the office around 7.30am.

7.30am: I start work at ElringKlinger, immediately distributing and clearing emails – I like to work with an almost empty Inbox – before making sure I know what has slotted into the diary for the day ahead.

8.30am – 1.00pm: I can be doing almost anything from customer issues, group issues, internal meetings with various line managers, meetings with staff at all levels – I see every member of staff one-on-one a minimum of once a year.

1.00pm: I grab lunch at my desk before carrying on with the day.

1.00pm – 5.30pm: Variation on a theme really, making sure that the team have what they need and we are working towards what our customers need. I always try and make things better, do things differently and make a positive difference to both the people who work for me and the business as a whole. We could not achieve what we are without the people we have.

5.30pm: Usually the latest time that I head for home. Traffic can usually be a lot worse back to Darlington but that still means only 45 minutes, which is a great time simply to unwind from the day. I rarely work at home, only dealing with any calls that might come in from other parts of the group in other parts of the world. I value and ensure my team values their downtime. Relaxing in front of a film or the television with a glass of wine, dinner with friends – all great ways to unwind at the end of the day.


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