UK: Vickers' valuables. (3 of 4)

UK: Vickers' valuables. (3 of 4) - While marketing cross-fertilisation is the most obvious link between Riva and Rolls-Royce, other exchanges could prove useful too: a veneer specialist from Crewe has visited Riva to advise on interiors, while Rolls-Royc

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Last Updated: 31 Aug 2010

While marketing cross-fertilisation is the most obvious link between Riva and Rolls-Royce, other exchanges could prove useful too: a veneer specialist from Crewe has visited Riva to advise on interiors, while Rolls-Royce engineers have done work on silencer design for the boats. Sir David is also considering a link between Riva and Vickers' Swedish-based marine engineering business, KaMeWa, the world leader in marine propulsion technology: "With Riva making bigger boats, there may be a link with KaMeWa water jets."

KaMeWa is one of the star performers in Vickers Marine's engineering division, which turned in some £6.9 million profit on a £94 million turnover in 1990. Yet a few years ago it seemed to be a business heading for the knackers' yard. An aggressive diversification policy, coupled with close co-operation across its international operating companies, has restored its lustre. Take Michell Bearings, a specialist bearing company that now exports some 70% of its output and counts Japan as one of its best markets. "Toshiba has told us that it is going to standardise on our industrial bearings because they are cheaper than in Japan," says John Crook, the marine division chairman.

Again, the marine business is busy spreading its expertise round other parts of Vickers. A Michell bearings expert has been helping solve problems at racing and road engine specialist Cosworth (cost £163 million), Vickers' second 1990 acquisition. Cosworth has been pushing forward the technological frontiers in high performance engines since 1958. In the 1980s it became involved in the design, development and manufacture of engine assemblies for road cars. Ford accounts for two thirds of road engine turnover; its engines power the new Sierra RS Cosworth and soon-to-be launched Scorpio 24-valve, for example. But Cosworth also produces engines for other car makers and cylinder head assemblies for Opel and Mercedes.

With sales of the new Ford cars doing well, Cosworth expects profits to grow nicely this year. Meanwhile it has great hopes for a comeback in the racing car business. Last year the Cosworth-powered Benetton Ford team took first place in the Australian and Japanese Grand Prix, the first victories for a Cosworth car since 1983. Chairman Dr Peter Nevitt believes that both sides of the business are crucial.

While Nevitt is optimistic about Cosworth's Formula One chances, he sees significant prospects for growth on the road side. The two Wellingborough factories currently turn out some 5,000 to 10,000 engine assemblies a year. "I can see road engines for OEMs (original equipment manufacturers) expanding into the 20-30,000 units-a-year category in the next five to 10 years," says Nevitt. There is also enthusiasm about the concept of cross-fertilising expertise across Vickers' divisional boundaries in other parts of the group.

If Vickers is to make money on the Challenger 2 tanks, whether for the British Army or in the export market, then Bill McGawley, operations director at the Newcastle tank factory, will play a key role. A lean and youthful Midlander of just 42, McGawley was tempered in GEC management. "My father spent 46 years at GEC Rugby and I felt that unless I did something I would spend 46 bloody years there too." He escaped to TI and then, despite some initial reservations ("the cloth cap and clogs image"), to Vickers.

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