Manufacturing giant powers on through the tough times
David Elliott talks to FG Wilson’s Mark Sweeney to discover how one of our oldest companies is weathering the storm
It must be very frustrating for successful companies in some of Northern Ireland’s more traditional industries, when the new breed of hi-tech companies are lauded as the saviour of the local economy. Once upon a time, not that very long ago, it was manufacturing and engineering firms which were the poster children of economic success everywhere from Belfast to Londonderry to Enniskillen. Now, a combination of globalisation and recession has relegated them to the second division in some minds but, as with everything in the business world, the cycle only needs time to come full circle.
One such company which has been through the mill in terms of success over the past couple of years is FG Wilson, the Larne-based manufacturer of generators.
When the global recession arrived in 2008 and 2009, its business was hit hard and the company was forced to take a long, hard look at how it was going to survive some of the toughest economic conditions for the engineering sector most of us can remember. The obvious answer was to cut costs.
“In the second half of 2009 we reduced costs across the board,” Mark Sweeney, managing director of FG Wilson, told Business Month at the company’s headquarters.
That meant laying off up to 700 workers, but Mr Sweeney points out there were no forced redundancies at the plant.
“We let all agency workers go and offered voluntary redundancy,” he said. “Our goal was to take actions to cut costs to ensure the company survived in the face of falling orders so we cut where we could.”
Battening down the hatches will be a familiar theme for companies up and down the country over the past few years, but FG Wilson, with its global reach, may be the barometer which can report good news.
Since the second half of 2010 orders have picked up, not everywhere, but in areas such as the Middle East, which has benefited from relatively high oil prices and Africa and South America which hadn’t enjoyed the success experienced in other regions in the years before the recession and therefore didn’t feel the downturn quite as badly.
Mr Sweeney concedes the economies of Europe and the US are still struggling but pointed out there are encouraging signs of recovery in both.
In terms of power generators, the uses in developed and developing countries are also different. In the developing world the generators are used as primary power sources while in the developed world they’re used more as back-up in cases where a break in power supply can interrupt a company’s processes.
Whatever the requirement, the result is that orders are up and FG Wilson has been able to hire nearly 800 agency workers since the start of the year to meet the reinvigorated demand.
Good news but recent worries over the strength of the eurozone — particularly our nearest neighbours in the Republic — mean the prospect of a fall back into recession has been raised more than once.
Mr Sweeney quotes FG Wilson parent company head Doug Oberhelman for this one.
“Caterpillar doesn’t believe in a double dip,” he said. “That’s not to say we won’t have bumps but we’re pretty positive.”
On a more local basis, how does one of the biggest foreign investors in Northern Ireland view the process of doing business here?
“That’s evidence by how much investment Caterpillar has put into Northern Ireland,” Mr Sweeney said. “We have shared services in our Springvale facility providing for other parts of the group, while accounts payable and the European IT helpdesk is based in Larne.”
Encouragingly, he believes the quality of the workforce is the biggest draw for investors. “If you have the people then the companies will come,” he said.
Training those people is also a priority for FG Wilson, as was evidenced by a tour of the factory and a quick glance into the hectic mock-up assembly line. Working on moving wooden trucks instead of generators, trainees are introduced to the environment of the factory floor. This is no place for the faint-hearted with sirens and lights constantly going off in simulated emergencies. When you’re used to the Business Month office, it’s a relief to get back to the relative calm of the real factory.
Here, more investment has been poured into a new £5m assembly line designed to improve efficiency at the plant.
On a visit to Larne to open the line, Caterpillar president Gerard Vittecoq praised the staff and the competitiveness of FG Wilson.
“We are in the right market at the right time and we’re here for a long time,” he said. “We have the right people in the right place here in Larne.”