As the WR business is broken up, the last fortnight’s events should give us pause for thought as to what the cooling industry needs to do to survive into the future
As predicted, the administrator PwC elected to move quickly. Now there is a new major name in supermarket contracting in the shape of Integral, although of course many of the personnel will be the same, since a third of WR’s staff were taken over to service the contracts of the likes of Tesco and Waitrose, along with the Lokold display case business.
I said in the magazine that the cooling industry needs a company like WR up and running for three reasons; to service the contracts and to pay the suppliers; to keep a large number of engineers employed; and to continue its work in supporting the whole culture of training, apprenticeships and engineering careers. Now that WR is broken up, we can only hope that all three of these elements come to pass.
Sadly, in the apparent absence of other white knights, PwC moved almost as quickly to make the vast majority of remaining WR engineers redundant. One would like to think that since all these folk were busy on contracts only two weeks ago, that the same amount of work still needs to be undertaken and therefore whichever company is taking on the additional work will be taking on the equivalent amount of engineers, rather than seeing an opportunity to seek ‘efficiencies.’ That is what we all hope anyway.
Given the large number of suppliers that have supplied equipment and services, the payment issues are perhaps the most serious concern and so again, for the future health of the industry, we would all hope that goodwill and good sense will prevail. We all know that cooling is a tight-knit industry but it is only in crises like this that we realise how closely linked the fortunes of many companies are. Sadly it also emphasises the value of credit protection insurance in the current economic climate
Of course, the very fact that WR was crowned Contractor of the Year just weeks before calling in the administrators will no doubt prove a talking point.
For my part – and as I say, it is too early to know all the financial detail - I think it again highlights the perilous financial landscape that this industry has to negotiate. I would add that it shows the speed with which WR’s financial crisis took hold – certainly when the competition was judged back in July, there was no hint of the impending crisis amongst the judges – and as you know we have a lot of judges.
But this situation certainly gives an added poignancy to the article in this magazine by WR’s Mike Nicholas on the impact of the extreme summer temperatures on the service sector. The article highlights the way that the retailer-contractor relationship was stretched in the summer, and in conclusion, Mr Nicholas calls for a debate on the way contracts are awarded and paid.
The recent past has been studded with big cooling contractors falling – Peak, Denman, Project First – so at a time when everyone has austerity budgets to deal with, perhaps the cooling supply chain needs to come together to look afresh at its economic fundamentals. With the real possibility that the new F-gas regulations will bring more cost into the industry, the timing may be crucial.
It will certainly be a talking point at our Retail Question Time next week.