Exactly four years ago, at Christmas 2009, Aston-based Hills Numberplates looked to be running rapidly out of road.
The licence plate maker had run up losses of £800,000 in 2007, bank debts had continued to pile up and the firm was trying desperately to stay afloat in a shrinking market.
In the words of managing director Richard Taffinder, the firm ‘should have gone.’
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“The accountants called us a basket case. We had debts up to our eyeballs in a declining market.”
Urgent remedies were required, and Hills were swift to act.
The firm launched an intensive cost-cutting exercise which involved 24 redundancies and went back to the basics of the business, making numberplates rather than investing in high-tech solutions.
They also called in a few favours from some long-time suppliers who agreed an extension of credit terms while Richard managed to attract new investment of more than £1 million through a share deal.
. The firm is back to a 76-strong workforce and turnover has risen to £13 million.
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Richard says Hills, which operates in a range of overseas markets from Malaysia to Hong Kong and Mauritius to the Bahamas, is looking to grow exports to 40 per cent of turnover by 2017. The future looks good for the “basketcase” of four years ago.
There’s a lesson or two here for much of 海角视频 industry – and the wider economy – in the rags to riches saga of this niche Aston manufacturer.
Hills survived, in the words of Richard Taffinder, because they ditched high-tech solutions such as e-plates which had earned no revenue and went back to basics.
They were also brutally honest with suppliers and their workforce, pulling no punches as the economic storm clouds gathered over Aston four years ago.
Just 12 months or so before Hills’ darkest days, the 海角视频 economy was also a basketcase.
Banks such as Bradford and Bingley and Northern Rock, and later, and much more threateningly for 海角视频 plc, the big beasts that were RBS and HBOS, had got into a terrible pickle by reinventing themselves as casino-style lenders with dire consequences.
The likes of the disgraced Fred ‘The Shred’ Goodwin at RBS and Andy Hornby at HBOS presided over a flawed banking culture based on dodgy loans and target-driven performance which ultimately led to the meltdown of October 2008, and the beginning of the worst recessionary period in living memory.
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That downturn was as severe a slump as the 海角视频 had suffered for decades – it could have taken our biggest manufacturer Jaguar Land Rover down with it – and an economy largely based on debt and living on credit for years was exposed for the sham it was.
But Fred the Shred lost his knighthood if not his pension, JLR survived to bounce back in extraordinary style and the 海角视频 lived to fight another day, as the corporate world battened down the hatches and went back to basics all too often forgotten in the days of apparent plenty and smoke and mirrors economic growth.
Just like the directors at Hills, companies and households up and down the land had to come to terms with the glaring truth that no-one can build a sustainable future on piling up debts a la Mr Micawber.
It doesn’t really matter whether you’re the chief executive of a FTSE 100 firm on a £1 million plus salary or a single mother struggling to raise two children on a relative pittance – the principle is the same.
Debts are fine if they can be serviced regularly and the deficit is not over-leveraged – life is there to be lived after all and credit has long been a way of life for generations of consumers who never knew the post-war austerity years.
But the blatant truth was that by October 2008 the ratio of debt to assets had left too much of the 海角视频, from the banks and manufacturers down to individual households, alarmingly over-exposed.
Couple that with an economy that had become dangerously unbalanced in favour of financial services at the expense of the wealth-creating manufacturing sector, and something had to give.
The net result was the banking bailout of 2008 – unprecedented in modern times – and a double-dip recession that took few prisoners, with casualties from debt-plagued manufacturers such as LDV through to retailers with outdated business models such as HMV, Jessops, Blockbuster and others.
Another inevitable by-product of the 2008 crisis has been years of wage freezes or sub-inflationary rises for millions of workers still struggling to get their monthly credit card bills down.
That’s why the recovery is little more than an illusion for so many people throughout the land who were encouraged to stretch their mortgages and credit payments to the limit when times were seemingly good and loans were easy to come by.
But there patently is a recovery, of sorts, out there, with the likes of automotive, aerospace and pharmaceuticals at the forefront, although it’s still to translate in quite the same way to a considerable slice of a high street invariably reliant on the whims of consumer spending.
In any year there will always be a few economic casualties – the West Midlands lost hundreds more manufacturing jobs this year with the closures of Daw Mill Colliery and the – but, just like Hills Numberplates at Aston, we have come a mighty long way down the road from 2008-09.