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SPECIAL REPORT


The Hewden story of the last 20 years is a sorry tale of a fall from grace.


Hewden: best to bust


Robert Aplin provides his personal assessment of the decline of Hewden Stuart over the last 20 years, which resulted in its collapse into administration in late November.


As I joined the hire industry back in 1974, Hewden Stuart was the benchmark plant hire company against which every other hirer was judged. The undisputed industry leader, Hewden Stuart was simply the best. As I prepare to wind down my career, Hewden Stuart is bust, having fallen into administration in late November. Since that date, five competitor hirers have purchased various depots and fleet assets. During the first week of January, having failed to attract further buyers, the administrators appointed auctioneers for a major fire sale of Hewden’s extensive crane fleet and thousands of other items of construction plant, which they couldn’t sell ‘tagged’ to a depot sale. Adding insult to injury, as we go to press, it has just been reported that Hewden’s debt could be up to a staggering £240m.


Founded in 1961 in Glasgow as Hewden (Plant Hire) by the late, great Sir Matthew Goodwin – our industry’s leading and most respected figure – it merged with Ronnie Stuart’s R G Stuart (Plant) in 1968 to form Hewden Stuart. When I interviewed Sir Matthew in June 1995 on his retirement, Hewden Stuart operated from 350 depots, achieved a pre-tax profit of £34.8m on turnover of £260m, and generated gross cash flow in excess of £75m. Sir Matthew built Hewden Stuart on a rock of Scottish granite. The wisdom of his emphasis on cash generation ensured the company not only rode out the early 1990s recession, but used it to assert and expand its market leadership.


The second half of the 1990s, however, were much less kind to Hewden Stuart. As the plant hire industry consolidated, the City grew impatient with its reluctance to bid for other hire companies known to be for sale. By May 2000, Hewden Stuart parted company with its then Chief Executive, who had joined in early 1997.


In October 2000, after a succession of profit warnings, Hewden announced that it was considering various takeover approaches. This led, in January 2001, to its acquisition by the Vancouver, Canada-based Caterpillar dealer, Finning International Inc, for £322m. Why the company was not re-branded as Cat Rental Stores at this point remains a mystery to many.


When interviewing Hewden’s senior management team in June 2003 - by this time the Stuart name was taking a back seat before being dropped altogether - I was struck by its statement “to go from good to great by elevating the company to the next level of performance.” Imagine my surprise when I realised that much of what I was told at that interview came from a book entitled ‘Good to Great’. Incidentally, the same author also wrote ‘How the Mighty Fall’.


In response to this article, I received a hand-written letter from Sir Matthew. In it, he was critical of Hewden’s management strategy. He wrote, “They appear to indicate that standards have slipped. I find it hardly surprising when it is openly stated that under Finning ‘45% of people in management roles across the board from depot to senior management’ have been made redundant, dismissed or moved, with all the misery that has caused. This decimation of experienced and dedicated, loyal people must inevitably have led to a collapse in morale as people feared for their livelihoods. A collapse in morale must inevitably have affected standards.”


“Wholesale destruction of management team”


Sir Matthew continued, “For many years, there was a slogan in my office that read ‘the only thing that matters is people.’ It is the people in the depots who run the machines, know their customers and the problems associated with a breakdown in the middle of a December night on a Welsh mountain. I find it difficult to accept that the wholesale destruction of an experienced management team makes for a successful hire company.” In my opinion, these two sentences accurately pinpoint the principal reason for Hewden’s demise.


Hewden’s buying spree last year failed to stop its collapse into administration. 17


In June 2007, Speedy acquired Hewden’s 188 tool hire outlets for £115m in cash and thus set in motion its own series of problems when the severe recession hit the world 12 months later. Timing is, indeed, everything. After this disposal, we heard nothing from Hewden for two years. Then came the infamous ‘Return 2 Sender’ promotion, which our late, much-missed Crosshire column discussed in September 2009.


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