UK: LINFIELD'S SELF SUFFICIENCY HAS HELPED TO KEEP THEM AFLOAT.

UK: LINFIELD'S SELF SUFFICIENCY HAS HELPED TO KEEP THEM AFLOAT. - You get a better class of production-line pin-up girl in Ulster. On mainland shopfloors, the favoured icon is the gibbous Samantha Fox. In the Belfast weaving sheds of Ulster Weavers, by c

by Charles Darwent.
Last Updated: 31 Aug 2010

You get a better class of production-line pin-up girl in Ulster. On mainland shopfloors, the favoured icon is the gibbous Samantha Fox. In the Belfast weaving sheds of Ulster Weavers, by contrast, this year's model is Elizabeth: getting on a bit, 65, and ample bosom demurely covered, but striking nonetheless in full length white kid gloves, tiara and Order of the Garter. Even Elizabeth's headline seems classier than Samantha's. Not a Phew! or a Cor! in sight: instead, the straightforward sentiment, God Save Our Gracious Queen.

Old ways die hard in Belfast, and it would be easy enough to read the pictures sellotaped to Ulster Weavers' walls as evidence of this fact. The company, a division of textile manufacturers, the Linfield Group, is, moreover, in that most traditional of Northern Irish businesses, the weaving and design of Irish linen. The group is still owned by the families - the Larmors and the Hollands - that founded it a century or so ago.

All these facts do not add up to the whole story of the group, however. If evidence is needed that the firm is something out of the ordinary in Northern Irish textile circles, one fact should do nicely: it is still in existence. The last 50 years have not been kind to Irish linen. Buoyed up for years by government grants against the attack of foreign competition and the encroachment of easy-care textiles, it was finally left to sink or swim in 1955. By and large, it sank. No flax has been grown in the province since that date (most is now imported from Belgium), and the hundreds of pre-War linen houses have now been reduce perhaps a dozen.

That Linfield remains one of them during what are perilous times for the entire worldwide textile industry may, ironically, be due at least in part to a corporate structure that itself seems distinctly unfashionable. 'We are,' notes Ian Webb, ('a far-out Larmor' and acting non-executive group chairman) 'the only what they call "vertically integrated" linen company in Ireland, and, I suspect, in Europe. We spin yarn, weave, bleach, finish, design, market - whatever.' Sir Graham Larmor, founder of what was then the Ulster Weaving Company, was clearly a vertical integrationalist avant le lettre. While other linen houses concentrated on one aspect of the production process, Sir Graham's quietly acquired them all: a bleacher's (Murland), a spinner's (Killyleagh) and so on. It is a philosophy that his descendants have upheld, adding, for example, a stitching plant and a print and design unit in the last decade, calmly flying in the face of fashionable corporate orthodoxy.

'The strength of this philosophy,' reasons Paul Larmor, single largest shareholder and manager of Ulster Weavers' Linfield Road weaving sheds, 'is that one division has always been able to help out another when times have been particularly hard in a particular area. Larmor's words have been vividly borne out during the present recession. Close your eyes, murmur the words 'Irish linen', and images of wedding presents will probably drift before your eyes: damask table napkins, say, a tablecloth or two, all tied up in tastefully Hibernian green ribbon. In fact, household goods (for such, prosaically, are these known) now form a relatively small part of Linfield's output, which is just as well: with a brace of linen sheets weighing in at an improbable £380 in the Burlington Arcade, the '90s have not been good for household goods. On the other hand, apparel - that is to say, cloth sold in bales to be made into clothes was, Larmor points out, a comparatively small part of Linfield's business until recently. Thanks to some light-footed marketing by Italian couturiers (notably Sgr Armani), who have pulled off the ultimate fashion heist in convincing style victims that linen actually looks nice crushed, demand for apparel has burgeoned. Ulster Weavers, which would be facing penury had it stayed simply in household goods, is managing, says managing director John Robinson, to weather the storm, contributing £13 million to the group's £18 million turnover in the last financial year.

Sir Graham's unfashionable bequest has also yielded more direct returns for Ian Webb and his quartet of managing directors (the three self- governing production divisions and a New York outfit). Down at Killyleagh, MD Derek Hutchinson, too, is finding the going rough, though for rather different reasons from those of Robinson. Thanks to some concerted stockpiling, largely by the Japanese ('It has been suggested that they have been trying to corner the market to protect their own industry,' suggests Hutchinson, darkly), there is a world oversupply of spun linen yarn, Killyleagh Yarn's chief product. Like the other divisions, Killyleagh has, until recently, sold some 30% of its output outside the group, a pastime encouraged by head office. The remainder, stresses Hutchinson, was sold internally 'but at market prices', any potential conflicts of interest being overcome by 'linen Chinese walls'. Now, much of the once-outsold Killyleagh yarn has been diverted to Ulster Weavers' weaving sheds, stockpiled apparel fabric being easier to shift than stockpiled yarn. 'Charity,' as Derek Bailie managing director of bleaching and finishing division, Dunmurry Print, tersely notes, 'begins at home.

All three on-site MDs are insistent that verticality is more than simply a useful backstop when times are hard, however. Hutchinson, scrutinising ropes of spun flax the colour and consistency of Brunhilde's plaits, points out that Linfield's triumvirate is unusual in having experience of all levels of linen production, a talent 'that comes in useful at trade fairs, having a weaver who can talk about spinning or a spinner who knows about bleaching'. ('It works quite nicely as a marketing bluff as well,' confides a deadpan John Robinson.). Moreover, says Robinson, having dedicated downline suppliers is especially useful in an increasingly volatile market, allowing Ulster Weavers, as end-suppliers, the luxury 'of being able to pull rabbits out of hats from time to time'.

As to those obvious potential disadvantages of vertical integration that have made the word unbundling' such a vogueish addition to contemporary CE-speak, Linfield's bosses are concertedly adamant that they do not apply in their own cases. Paul Larmor hazards that, 'You can't easily claim against your supplier if he gives you substandard raw materials,' but then adds that this happens so seldom as to be negligible. Group-wide total quality management (TQM) ideals and BS5750 standardisation over the last two years, has, say the divisional MDs, allayed any fear of this happening in the future.

Over at Broadway, in the heart of Protestant Belfast (murals of King Billy crossing the Boyne, red-hand flags and crop-haired children eyeing your correspondent's Budget rent-a-car with experienced appraisal), Austin McClay, manager of the group's stitching and finishing plant, describes his own experience of the last two years as 'let's just say, interesting'. Surrounded by shelves full of PVC shopping bags (a PVC coating plant is another recent Linfield acquisition) labelled Harrods, Baa-baa and, alarmingly, given the locale, Paisley, McClay points out that turning his ornamentors (packers, in traditional Linenese) into 5,750 inspectors has left him with a 100% inspection rate, and pretty well a nil downline failure rate. With understandable malice, given his competitors' allegedly uncricket like behaviour, Killyleagh's Hutchinson sniffs that 'we adhere to good management practice rather than to Japanese titles', but does allow that 'these titles may be necessary to capture the imagination of the workforce.' He, too, speaks of improved vertical through flow, even hinting at that most resolutely Japanese of management grails, JIT.

The upshot is that Linfield's divisional MDs seem more than pleased with a corporate structure that affords them flexibility. Though times are clearly hard, McClay points with pleasure to his workforce producing linen tray-covers for Concorde. British Airways, says Ulster Weavers' Robinson, is an account that the group lost a few years ago when on-time completion rate was running at a woeful 55%. Now, Robinson suggests, the figure is 96%. Like Ian Webb, Robinson is himself 'not a died-in-the-wool (sorry) linen man', Linfield's diversification being matched by a catholic attitude to management skills.

Readers might decipher a curious correlation between the Linfield Group's products and its corporate structure. In Ulster Weavers' humid weaving sheds, Hutchinson's various yarns, dry and wet spun, tow and line, shoot from their beams (huge bobbins) into Larmor's sectional warpers. One sign of quality in the cloth that emerges is the tightness of the weave applied. So, too, with the history of the group itself. Divisionalised and re-named in 1985, it has experimented with various warps and wefts of management weave. With numerous recent historical problems to deal with, Ian Webb ('unpolluted by any experience in linen') has to fine-tune the relationship between the group's various divisions and present a scheme to the board by the end of this year.

His predecessor's tendency was, he says, 'expansionist', and clearly centre-led. Webb's own view is 'that our business is so diverse that there well may not be a need for a chief executive at all. I certainly have no intention of becoming it.' Reactions among the three MDs to this prospect are more or less sanguine. 'When all the divisions fell under Ulster Weaving's head office,' says Derek Bailie, 'the management style was autocratic, and not always happy. Now I can say to John Robinson "Don't be bloody stupid" if I think he's being bloody stupid, and he me.' Robinson, too, entertains no doubts about the various managing directors' abilities 'to paddle our own canoes'. 'There is,' he adds, 'a time for verticality and a time for unbundling. Ian can see our little vagaries. It's up to him to decide.' Hutchinson alone recalls a time when the various divisions seemed 'more concerned with personal profitability than with group performance'. Webb has other ghosts to lay, too: a disastrous over-investment in plant at Castlewellan (the factory is shortly to be closed) has left Linfield a £2 million overdraft on its £18 million turnover, for example, and Webb sighs at the pitfalls of having to satisfy 40 familial (and thus often acrimonious) shareholders, even hinting at the desirability of future flotation. But, the Linfield Group's linked diversity remains, in Webb's view, its strength, 'and certainly, will remain unchanged.'

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today