Sir David Plastow, who directed the Rolls-Royce/Vickers merger, makes an odd choice. By Chris Blackhurst.
It must be tough pleasing Sir David Plastow. "If anyone blames City short-termism in Vickers they're in trouble," he says. "There's no such thing. It's just an excuse for poor management."
On other matters Sir David, Vickers' chairman and chief executive, is equally demanding. "It's a principle in the group that we must be seen to succeed in Japan. It's fundamental: nobody who runs one of our companies can claim to be a success until they've been successful there."
Aged 58, Sir David has enjoyed a career all too rare in Britain. The son of a car salesman, he began his working life as an apprentice fitter for Vauxhall at Luton. Today he heads the company which owns Rolls-Royce Motor Cars, is deputy chairman of Guinness, chairman of the Medical Research Council, a patron of the Samaritans and Fellow of the Royal Society of Arts.
We were talking over breakfast in the dining room at Vickers' Millbank headquarters. Tall, immaculately dressed and unfailingly courteous, his self-deprecating charm and natural ability to get on with people are obvious. They have served him well: first at Vauxhall, where he started out on the shopfloor and left as a salesman; then at the car division of Rolls-Royce, where he joined as sales manager for Scotland and became managing director.
It has not been as easy as it sounds, though. Five weeks after securing the top job at Rolls-Royce, the aero engine and car maker collapsed. Receivers were called in and while they tried to sort out the mess, Plastow was left to run the car division, eventually returning it to the stock market as an independent concern.
In 1980 Plastow, by now a non-executive director of Vickers, made his big move. He masterminded the merger of Vickers with Rolls-Royce. It was a marriage made out of weakness - like "two dukes falling upstairs out of Annabel's, propping each other up", as Sir Patrick Sargeant, then Daily Mail City editor, memorably put it.
Vickers, a disparate collection of 35 businesses, had lost its shipbuilding and aircraft divisions to the state. Rolls-Royce was healthier but only just. As soon as the recession began to bite, it too was plunged into crisis.
Ten years later the rot is history. Twenty three businesses have been sold and 11 bought. Vickers, which in 1979 made profits of £7 million from sales of £399 million, now makes £100 million from sales of £700 million.
Sir David has a rich vein of deals to choose from, but his public relations man thought that he would pick the merger with Rolls-Royce as his best. Instead he chose the sale of Howson-Algraphy to Du Pont in 1989. The Leeds-based printing plate manufacturer had been with Vickers since its creation in the 1950s. Still run by its founder, Ron Taylor, Howson was the second largest contributor to Vickers' profits and among the world's top three printing plate makers.
But, says Sir David, both men recognised that the business had peaked. Howson's much bigger overseas competitors were investing heavily. As a result, their margins and prices were coming down. Taylor drew up a list of six likely purchasers and presented it to Lazards, Vickers' adviser.
Sir David, who had previously sold Rolls-Royce's diesel engine business after developing a close affection for its people and products, knew what his colleague was going through. "To sell a company you have created is pretty strong stuff." Du Pont, the first company on Taylor's list, came up trumps. Although surprised, the City approved. "The seal on the deal came when one of our senior advisers said that we were the first company in his experience to have ever sold anything at the top."
Sir David was acutely aware that what makes a good deal is not the price that you obtain but what you do with the money. His strategy was clear. "When Vickers and Rolls-Royce Motors merged in 1980 I said that if we were going to stay in manufacturing we had to be a world player." He did not save a penny ("even with high interest rates, I was not going to sit on the capital"). In six months Vickers made three acquisitions: superalloys manufacturer Ross Catherall (£190 million); high performance engine maker Cosworth (£163.5 million); and luxury powerboat builder Cantieri Riva (£11 million). Already, he claims, each company purchased "has done better than we thought" and all three offer "real, genuine prospects for steady growth".
Looking ahead, he will not be like so many of his peers and stay on beyond the normal retirement age. "I want to try and improve my golf," he smiles. But then the smile fades: "I'd like to leave the company in such a shape that my successor doesn't have to do the things I did. There is no worse job than looking someone in the eye and saying 'I'm sorry, but you've got to go'."
Just as quickly, the smile returns. "Hopefully, he won't have to do things like that and he will have a clutch of strong brands to work with." On the way out he makes a detour to thank the cook. He really is a charming man.
(Chris Blackhurst is City editor of the Sunday Express.)