UK: PROFILE - NEVILLE SIMMS, OF TARMAC. - Tarmac's chief, undaunted by huge losses, political slurs and 'rent-a-mob' eco-protestors, has put the company on the road to recovery.

by Andrew Davidson.
Last Updated: 31 Aug 2010

Tarmac's chief, undaunted by huge losses, political slurs and 'rent-a-mob' eco-protestors, has put the company on the road to recovery.

Hilton Hall, Tarmac's Staffordshire stately home headquarters, is something of a Blofeld's lair: the tall front gates, the sweep down a long drive past walled gardens and a palatial refurbished stable block, the sculpted shrubs round the imposing main entrance. Inside the 18th century pile, offices bristle with technology and sharp-suited executives walk purposefully past the Old Masters on the carved oak staircase. Somehow, it is not quite what you expect from a £2.5 billion construction, quarrying and building-materials group.

Appearances can be deceptive, however. These are tough times for Britain's biggest road builder, which slumped to losses of £350 million last year and has been dogged by controversy. For Tarmac, of course, is the company eco-protestors love to hate, pilloried for its involvement in extending the M3 at Twyford Down, and the subject of all sorts of accusations after it took over the Government's Property Services Agency (PSA) last year. Demonstrators at the company's 1993 AGM handed out leaflets detailing a number of cases in which Tarmac has been successfully prosecuted for environmental pollution - part of the 'wholesale, wanton destruction of our landscape', they claimed. For some, Neville Simms, Tarmac's chief executive, really is running an Evil Empire.

All of which makes the boss's job at Tarmac one of the hottest in British industry. Simms, 49, a tall Scot with thick, grey hair and a firm manner, has wasted little time making his mark since being plucked from Tarmac's construction arm to take the top job two years ago. Nearly £1 billion has been knocked off Tarmac's turnover, seven divisions have been shrunk to five and 21 businesses have been sold, floated or hived off. Some debut. Yet the City likes what it sees - restructured management, refocused business and reduced debt - and the share price, which at one stage had plummeted to 51p, has responded positively.

The change in style is more than just structural. Simms is a very different character to his high-profile predecessor, Sir Eric Pountain. It was Pountain, a loyal Thatcherite and renowned risk-taker - Hilton Hall is a typical Pountain flourish - who tumbled Tarmac into the housing market in the '80s boom but got burned by the downturn. In contrast, Simms is the epitome of the cautious, '90s-style free marketer and has introduced a greyer, lower-key regime at Tarmac, more in keeping with the crisis facing the company and, perhaps, John Major's Britain.

Horses for courses? Certainly, agrees Simms. There are cycles going through society and the economy, and it is natural that companies should follow the same patterns. Tarmac had enormous growth in the '80s, and now has had to get rid of 'peripheral activities' - most recently, the waste and roofing subsidiaries. At last, he says, he has got the company in the shape he wants 'for the medium term'.

For those in Tarmac brought up under Sir Eric's gung-ho leadership - and that includes Simms - the new boss's initial attempts to 'downsize' the company and haul authority back to central office came as a shock, to say the least. Directors complained and left. 'Advisers' told the press that Simms was having 'problems' with subsidiaries that had evolved into personal fiefdoms.

Simms agrees it wasn't easy but it was not just Tarmac's crisis, he points out - the whole industry was in turmoil, with 40% of its workforce out of work by last year.

A measure of how he overcame the internal opposition is the number of new faces he brought in at Hilton Hall: corporate communications, investor relations, and human resources are all now Simms's appointments, and a new right-hand man, John Lovering, has been lured from Sears to the newly created post of chief operating officer.

Most believe the balance is about right. Tarmac is too big and construction and quarrying too complicated for an outsider to have taken the top slot, but fresh ideas were clearly needed. Simms appears to be providing them - if you poll City analysts about his qualities the adjectives tend to be admiring: 'tough' and 'clever' predominate. All also note with wonder that since he has taken over as 'team leader' at TML, the grouping of construction companies building the Channel Tunnel, relations between it and Eurotunnel have eased after notable friction in the past. Indeed, Simms now seems almost chummy with Eurotunnel's Sir Alastair Morton, and happily sits with him on a new Government think-tank looking into private-finance alternatives for public schemes.

Again, a change in style from his TML predecessor, Joe Dwyer at Wimpey? Simms waves it away. 'It is always to do with need. I don't believe in rudeness about anybody and we must never forget that we are a service and Alastair Morton is our client, and the client has to pay the bill. It is not a question of personalities, just a question of timing.' That quiet determination has stood him in good stead in his career. The son of a naval officer, brought up by his parents 'to work hard and to aspire', Simms trained as a civil engineer at Newcastle University, then at Ove Arup, before joining Tarmac 24 years ago after the building company he had worked for went bust and Tarmac picked up one of its contracts. He is not, as the stereotype demands, a typical 'hairy-arsed builder' (his words) but he points out that in construction you do mature quickly.

'As a young engineer on site, you sit in a dirty little hut, and if the other workers are kind they will make you a cup of tea; if not, they won't. And if the setting up's wrong and they lose their bonus, you can bet your life you will hear about it in quads. So you come from this educated, middle-class background into a working-class environment, and it knocks all the edges off you.' It is not a matter of making you tougher skinned as an executive, he says, it simply makes you more pragmatic and philosophical. 'If it rains and you don't get the work done what do you do? Cry? Get upset? You do the first few times but you get used to it. You become more determined not to let the things you can't control stop you from reaching your objective.' Like, of course, protesters. Some have estimated that the problems surrounding Tarmac's Twyford Down site have cost the company an extra £1.7 million in security, and probably more in terms of PR damage. Has it? 'I don't know,' says Simms. 'Twyford Down will cost a lot more to build than if the objectors had not caused so much trouble, but how much is not determined yet.' More intriguing is the psychological effect of the protests on Tarmac. Before Christmas the battle turned decidedly nasty. Included on the same leaflets distributed at the AGM were the home addresses of the main Tarmac directors. There have been office break-ins, files stolen, and all manner of intimidation. Simms will not allow the details to be publicised and is clearly exasperated by the attention the Twyford Down demonstrators have received - now there is even an Anti-Tarmac Coalition. He does not think they represent the majority and points out that the only letters he has got at Hilton Hall are from those saying they are glad about M3 link. Yet it has all taken its toll: 'I have got a wife and family and I am buggered if I want them threatened for these things,' he says.

It has also had an effect. Tarmac, Simms admits, will think twice before taking on anything similarly controversial. 'Of course it will affect our decision-making,' he says. 'We are an intelligent company. We would be fools if we didn't stop and say "is this worth the candle?".' After 10 minutes of discussing Twyford Down it is fair to say that Simms's manner has become uncharacteristically heated, detectable by the number of interrogative 'hmms?' with which he ends his sentences. 'Don't get it into your article's head that these people are doing a good job, hmm?' he says of the protesters. 'They are violent, they are rent-a-mob, and they are not doing this country a good turn.' Later, when I press him on the links protesters have made between Twyford Down, the PSA and the company's political donations, he finally loses his temper. 'Look, I have done lots of interviews and nobody else has pushed on either of these two issues and I won't allow them to become central to the discussion!' Perhaps the biggest surprise is that Tarmac didn't see it all coming. It has no mechanism for gauging the level of 'protest potential' in work it tenders for - a gap in expertise it may now fill, says Simms. 'But you won't see me shy away, because I think that road is needed,' he adds. 'This country is under-roaded, if we don't get goods to market efficiently the nation will suffer. Then we won't be able to afford the social programmes. It's all very well a minority protesting but the fact remains we need the roads.' Simms is adamant about that - at one point, when I put the counter-argument, he says: 'Fly over the South East, have a look, it's not overbuilt' - and he contends forcefully that roads are far more environmentally friendly than railways if you take capacity into account. He would like to see a system of privately run, tolled motorways set up, with none of the constant interchanges that clog up the present motorway system, but admits it is politically unattractive. Any kind of coherent transport policy would be better than nothing, he adds.

None of the above views, of course, or any amount of space given over to environmental 'good works' in the annual report (three pages last year), is going to make Tarmac any more popular with environmentalists. Sir Eric Pountain's enthusiastic financial support of the Conservative Party (£388,500 in donations from Tarmac between 1979 to 1992) is now a rod for the company's own back. There had been a whisper that Simms wanted to end the support. He vigorously denies it. 'In PR terms it's a 3% issue whether we do or we don't give,' he says. 'As for which government we would like to see in power, there is no question it would be a free-market, capitalist Conservative one. Why should we stop the donations?' One reason for stopping would be that it might prevent Labour MPs claiming the company receives special favours. Tarmac's takeover of the PSA, Whitehall's estate managers, was clouded by accusations that the handover would cost the taxpayer up to £250 million. 'Rubbish,' says Simms. 'The Government gave us £55 million, £15 million of which was for bills working their way through the system.' The figures being circulated by Labour MPs had no foundation at all, he adds.

The Pountain legacy clearly continues at Tarmac, but recast in a different form. Simms acknowledges that some of the packaging may be different, yet the drive is the same. 'There was an enormous growth phase for the group in the '80s, which required the entrepreneurial style that Sir Eric brought to it. My initial job is to choose what is the core of the business and build on that.' The key question, of course, is that, having convinced the City, can Simms revive the old-style Tarmac when times change again? 'I don't know the answer to that,' he says candidly. 'You will have to wait and see.' He does know, though, that if he cannot lead the group into a new growth phase, shareholders will demand someone else who can. That, after all, is another of the market's laws.

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