Oh dear - what a tale of woe for much of this digest. Joe
Curry delves into the reveries of parts prices from 30 +
years back and then a number of people throw in their few
cents worth on the TRF situation. I have no axe to grind for
or against Charles Runyan and his team because I doubt he
stocks the parts for my car anyway and Rimmers are
geographically a little closer.
Whatever the wrongs, whys and wherefores about TRF, it seems
a few people have overlooked some critical historical issues
that may partly explain some of the TRF dilemma
1. There can't be many (if any) of us who cannot say hand on
heart that in our own lives we haven't ever been guilty of
making a mistake and when things go wrong, we start talking
about the benefits of hindsight.
It seems there is serious doubt as to whether Charles Runyan
should or shouldn't have opened his pub. On the basis that
he is a businessman - and likely a reasonably successful one
(because he wouldn't have survived this long if he wasn't?)
he presumably made a commercial decision based on trends and
information available to him at the time. Given the fact
that the English pub concept is held in some esteem around
the world and TRF sells parts for British cars, Runyan could
reasonably argue that he was complementing his business
activity with novel value added - even if the decision was a
VERY lateral one.
Personally, I would doubt the rationale of opening an
English pub in the United States (or anywhere else for that
matter) because it makes about as much sense as opening a
genuine French restaurant in London. It might *look* the
part but would probably lack the essential ambiance and
substance that is an integral part of the real thing in its
home country. Too often, the finished result can only be a
shadow of the genuine version. I suspect he overlooked this
one critical point and as in many other things in life, if
you can't do it properly don't do it at all.
2. We then come to the nub of the issue - parts and
backorders. The vehicle parc in TRF's focus (together with
all the others who compete for that business) has both
significantly aged and dwindled. It will never increase in
size and eventually there will be just a very few firms
committed to this type of business and some of them will be
able to exert considerable control of the market.
While I have no opinion on how TRF or any other parts
suppliers run their affairs, this list and a few others are
clearly demonstrating problems on present supply and
availability of critical components. There are rumbles
coming back to us in the UK off-list that one or two other
people are in financial hot water as well, so the problem
may not be just at TRF's front door. All of them at some
time or another are alleged to have had lean times with
associated cash flow difficulties.
At the risk of bandwidth, I'm wondering whether some of
TRF's problem (and others?) might not be of very long term
in their origins. Casting my mind back more than twelve
years to when I was last involved in classic parts supply
from the UK to the US, components of QUALITY were available
but they had their price. We used to supply substantial
shipments to Beck Arnley, Parts
Industries Corporation, Meinecke Mufflers and others, until
the bean counters took the decision the components were
becoming too costly. They didn't help themselves by buying
components in vastly varying quantities from one order to
the next and this played hell with production scheduling and
volume related pricing. US based importers had a neurosis
that they had to keep prices at the lowest possible level to
maintain their business throughput.
While that is a self-evident argument to a reasonable
extent, many failed to recognise that the exchange rate
between two different currencies is potentially highly
volatile - and the GBP/US$ scenario is no exception. While
there are techniques to smooth fluctuations by advance
buying on forex this was completely ignored and the buy
price HAD to be US retail divided by eight and then
converted into sterling. If the required dollar buy price in
sterling was lower than the supplier's sterling price, then
the buyer was convinced the supplier was ripping him off.
The people buying from us made the dollar end-user price
their God. Often, we were selling to companies who competed
with one another. "We can't sell it for more than 'x'" was a
typical wail - and we replied "tough." In the end, there was
no way we were prepared or willing to sell at below rock
bottom cost price on a diminishing volume, so many of these
firms started to look to Pacific rim countries for supply.
Okay, the prices were lower but the offset was higher
minimal order quantities and significantly longer lead
times. It seems that quality then began to slip. After a
while, some of our customers came back and said "Okay, you
were right, we want to buy from you again." By then it was
too late. Many of our own suppliers had decided in the
interim to de-tool and turn their attention to more
profitable and less erratic avenues. Some who were still
around were willing to play ball, but on their terms - and
we began to get back into the loop of price.
There was one exception to this rule as far as we were
concerned and this was a 'little guy' who always bucked the
trend. He prided himself on what he called "the zig zag of
supply." When the big boys zigged, he zagged. He bent over
backwards to help his customers and there were many times
when people bought elsewhere because of cost even though
there was a wait and he always claimed he was by no means
the cheapest around. In fact, he was proud of his higher
prices and in spite of all the cost savings he knew his
competitors could offer, his loyal core of customers always
knew they could trust him absolutely and came back time and
again - to pay a higher price. What they received in return
was optimum service, a quality product, a no-quibble
warranty wherever he could offer it - but at a higher price.
We also benefitted from his philosophy because we received
regular orders, our suppliers were never unable to schedule
his requirements and we all enjoyed regular, stable and
profitable business - even if the volumes weren't
inter-planetary. He paid his bills on time and he
demonstrated to supplier and customer alike that he cared.
He was also ruthless in his inventory management and was
absolutely focussed on his core business. When he died in
1988 as a too young middle-aged man in a car crash at the
wheel of his beloved MG Twin Cam, the business was taken
over by his son. His first move was to expand inventory and
cut prices. He went bust in early 1991.
My view of TRF as a 3000 miles away bystander is that Messrs
Runyan and Schwarger together with Moss, VB and all the
others should have said (among other things) "to hell with
what the others are doing, these are our prices." Such an
initiative takes guts when competitors may be cutting prices
but like so many other things, when it comes to the crunch,
availability usually wins over price - especially if backed
up with prompt service.
When it comes to international resourcing, you can't buck
the currency market and you can't buck inventory holding and
associated marketing costs. If there is a market for a
product that has to be sourced from another country for
whatever reason, the selling price has to be partly supplier
rather than buyer driven. To ignore those three precepts is
the kiss of death.
3. I'm really sorry if TRF are in difficulties and I also
feel profoundly for its customers. The bottom line however
is that if those in the sourcing roles in days gone by
hadn't been so neurotic about retail price fright and tried
to exist on miniscule margins in the hope the volume would
hold up, suppliers would have been more like partners
because they needed the business as well, de-tooling
wouldn't have taken place to the extent that it has and
supply continuity throughout the chain would be far better
than it now appears to be.
The pub aspect, while presumably seen as a logical (?) step
to expanding the business, seems to be a critical hindsight
issue. Hopefully all is not lost. When BMW Mobile Tradition
gets its act into gear and starts re-producing critical NLS
parts under the
British Motor Heritage label from the original drawings as
is its declared intention, this hiccup may only be fairly
transitory. One thing that will change however, will be
price - and it certainly won't be going down. Be prepared to
be stuffed. Too many have enjoyed unreasonably low prices
for too long and its likely BMW might be highly selective in
who they choose as parts dealers.
Jonmac
Book site: http://www.toolbox.ndirect.co.uk/triumphbook
BMIHT: http://www.heritage.org.uk
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