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'We as an industry are weak'

The recent article regarding the collapse of WR Refrigeration by Kelvin Lord was well written but to me lacked the venom that we should be feeling about the collapse of another major refrigeration company.

To me, it is quite clear, we as an industry are weak, feeble and greedy and the major retailers know this and use it time and time again to play us off against one another. I have spent the last 48 years in this industry, starting as an apprentice and rising up through the ranks thereafter and have seen massive changes in that time.

However, the one constant that I have not seen change is the ability of refrigeration and air conditioning companies to go beyond common sense in contract bidding and negotiation and allow themselves to be involved in one “Dutch Auction” after another. Senior management in refrigeration and air conditioning businesses need to “wake up and smell the coffee”, turnover is vanity profit is sanity.

Most of the companies that have gone to the wall have turned their backs on work from smaller businesses to chase the golden carrot offered by large retailers.

For many of them, they have had to make significant investment in additional staff, service vans, tools and so on to be told a few years in to lower their prices or face losing the contract to someone else.

Companies that I have worked for have had to have an “open book” policy when dealing with certain large retailers which as far as I am concerned is a damned cheek. Do we (as food customers) get to see their books – of course we do!!!

Come on RAC industry, you really need to “grow a pair”.

Lucan Lord

Readers' comments (9)

  • Lord Lucan you have hit the nail on the head. Its about time al stopped chasing the golden egg , IT DOES NOT EXIST.
    Good things come in small packages, not all that is big is beautiful.
    The smaller wholesalers, contractors and suppliers are the ones who suffer.
    The way in which contracts are won needs to be more transparent.
    Did no one learn the lessons of the Gateway days and the disclosures of what was going on behind closed doors.
    The tendering process has to be changed.
    W R had won major contracts with the big boys in the supermarket sector, they go bump and the contracts are automatically sold to Integral.
    Surely they should have gone out for re-tender to established contractors who have a history in the business of refrigeration.
    W R subcontracted their installation work , and retained the service work for their own engineers.
    The directors of the failed W R find themselves repositioned in Integral. These were the very people who put W R into administration.
    Whose to say that these same directors are going to do any better now that they are with Integral.
    2 years down the road will we see the same thing happening all over again.
    Good luck to all the engineers, suppliers who have suffered at the hands of W R.
    If you can have a Good Xmas and a better 2014.

    J Frost

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  • Dear Lord Lucan, I thought that you had disappeared long ago. It would have been better if you had remained hidden or at least silent instead of writing nonsense that you hope will be popular with a certain moaning segment of this industry. You should write for one of the rag mags that is the popular UK press not a serious magazine like RAC.
    You think the RAC industry is weak? No it is not. It faces the same competitive world as any other industry, and what is more it does it well. We in the RAC industry really like to beat ourselves up and generalise when something goes wrong. Hell, we beat ourselves up when nothing goes wrong and we are not even at fault.
    You have been in the industry for 48 years and here you are bashing it. You should be ashamed of yourself. The industry that has put food on your table and clothed you and your family is weak is it?
    If you feel that way, the only person that needs to ‘grow a pair’ is you, because you should have got out of the industry that you so despise long ago. Have you boycotted all the supermarkets from your weekly shop in protest? I don’t suppose you have done that either.
    As for the rest of us, we will roll our sleeves up and get on with things and stop moaning.
    Have the owners and managers of the companies that have failed recently made mistakes? Yes, of course they have. They have probably made a pile of cash for themselves along the way but mistakes, yes. Does that mean that everyone else is doing the same? No.
    There is no doubt that we are trading in difficult times. Yes, the industry is different to that which you knew 48 years ago. Which one isn’t?
    There are many companies trading successfully in this industry. There are many individuals doing well and succeeding. Margins may be tighter but that is a sign of the times, not a weak industry.
    There are lessons to be learned from the demise of WR for all concerned, but if we take this as a sign of a weak industry we are mistaken. Look around and celebrate all the successes that are out there in the RAC industry.
    Come on RAC Magazine. You can do better than this, or can we expect a page three girl soon?

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  • Jason,
    We are only publishing what readers tell us! Granted that by no means everyone in the industry thinks like that, but we need to hear all sides - which is why we put the opinions up online for debate.
    You yourself have done a good job of setting Lucan Lord straight and others will no doubt join in, creating a healthy, if quite robust discussion.
    Of course what we want is for the lessons to be learned so that we stop seeing big contractors going under, and we dont see suppliers losing serious amounts of money in the process.

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  • Andrew,
    I agree that you should present the options of the industry and that Lord Lucan is entitled to his opinion, just as others are.
    It always seems that when there is anything negative to say about this industry hoards jump say so. Very few go out of their way to describe all the good that we are actually doing and that the industry is really quite healthy and has given us an income for many years.
    I also agree with you that there are lessons to be learned but we will not hear them simply by slating what has gone off.
    I think it is criminal that so many suppliers have been left being owed such huge amounts. I am sure these same suppliers supported WR in good faith and look where it got them.
    I must say the overall RAC do report a balanced view of the industry with both good and bad news, but I wish I read more 'well dones, and congratulations' that I do 'I told you so, and I knew this all along'.

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  • Jason,

    I don't know how long you have been in the industry or in what positions. Assuming Lucan Lord was 15 when he started and is 63 now, it's a fair bet that he's probably been in it longer than you and has more experience. I for one think he's right and the names on the senetaph such as Keynon, WM Allen, Botts and others lay testamant to that fact. Personnally I have had a number of years involved at senior level in supermarket contracts and negotiation
    and fully understand where he's coming from. I too have had "food on the table" from this industry but it doesn't mean that I'm blind to the idiotic business behaviour that can go on within it. If you are currently working as a contractor in the refrigeration industry to one or more of the supermarket chains, it may be that if they ulitimately pull the rug from under your feet, that you will end up with a slightly more cynical view than you have at the moment. Or are you working for the "other side"???

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  • Dear Anonymous,

    Nice of you to disagree.

    You are quite right. Lord Lucas has been in the industry longer than I have but I have no idea what experience he has. He sounds like a ‘frog in a well’.

    Perhaps you know this idiom:
    ‘There was a frog that lives in a well. He has no idea what’s outside of that well. One day a turtle comes along and tells him about the great wide world, and the beautiful blue ocean. The frog has no understanding of what the frog is talking about because he has never been outside of the small sheltered world of the well.’

    All the companies that you list sound like the perfect definition of ‘insanity’: ‘doing the same thing over and over again and expecting different results.’ Look outside the ‘well’ and you will find some inspiring examples of businesses and industry segments doing remarkably well.

    I can understand people being cynical if they have lost their jobs after working hard all their lives, but that doesn’t make their view right or well-rounded. I genuinely have a lot of sympathy for all those WR staff who suffered because of their management’s mismanagement. I also have sympathy for all the suppliers who will continue to suffer for some time to come.

    Actually, I am by nature a very cynical person, often described as an ‘old toad’, but I have never yet been called a ‘frog in a well’. As for working for the ‘other side’ – well I am intrigued as to what you mean. I have been accused of working for the ‘dark-side’ before but never the other-side.

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  • Dear Jason,

    Where I think Lucan Lord is bang on is in his assessment of the way that refrigeration businesses then and now are sucked in by the "golden carrot" dangled in front of them by supermarkets. I've seen and experienced this myself first hand. You start doing a limited number of stores for them at a reasonable return and everything is wonderful. They offer you more stores and you have to invest more outlay in personnel, vans, stock and so on. Inevitably, this also has an impact on your previous customer base because of the attention that the supermarkets require. Then, the reductions start. Reduced maintenance fees, unrealistic breakdown response times and so on. Ultimately, when you are run ragged, earning a pittence, carrying a massive overdraft they decide that you are no longer of any use to them because another company is prepared to offer them a better deal at £1.00 per hour cheaper, or a gross margin of 5% instead of 7%. This, whether you like it or not is the reality in dealing with supermarkets. I dont know the name of your company (my use of the term "other side" was made because I felt that you appeared so supportive of supermarkets that perhaps you worked for one) and if you are indeed a supermarket refrigeration contractor then don't think you will be there forever! The likes of "Botts" did (with a particularly ruthless retailer) and disappeared virtually overnight. If that makes me a "frog in a hole" too, then I'm happy with that!

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  • Dear Anon, may I call you that for short?

    What you say is fair enough; contractors have been sucked in with promises or maybe false hopes ( I don't know which) and then things have not worked out as they planned. It has happened time and time again as you rightly say.

    But, and this is perhaps where we disagree (or not agree at least) is that what happens with the supermarkets and their contractors is not necessarily representative of the whole RAC industry. I personally believe that to be true that it is.
    In the industrial sector for example, how many J&E Hall, or Star Refrigeration's have we seen go bust in the same time frame?
    My main gripe with Lord Lucan's comments is that they generalise and make the broad sweeping statement that the RAC industry is weak. In pockets that may be true, but across the whole industry I think that is incorrect, and what is more, saying that it is true doesn't help us.
    I do work for a contractor, and previously worked for one that did supermarket work.
    I assure you that I am on the same side and don't like at all what happened to WR, but I don't lay the blame for that solely in the hands of the supermarkets either.
    Poor management facing any customer in any segment of the industry will lead to the same result.

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  • Dear Jason,

    I too think we're singing off the same hymn sheet here. I think that if Lucan Lord were in further discussion with us, he would also be singing off the same sheet too. I have reviewed his original statement and (reading between the lines) I think he feels the same as us. His statement. on the outset, does read as a generalisation but when you read it a couple of times, it's basically trying to say what we are saying I think. It is a joint effort between blinkered refrigeration management and greedy uncaring supermarkets (in particular) which create ultimate job loss and a thinning of our already depleted industry. There are equally a large number of well managed refrigeration businesses as well as "loyal" customers out there. However, in most of the high street supermarket chains, loyalty is a forgotten word. Blinkered refrigeration businesses that have entered into alleged partnerships with the supermarkets at the expense of their other customers have been creamed! Multiple eggs in multiple baskets is the best way forward. It's been really good talking to you Jason may you grow and prosper in this industry.

    Kindest regards Anon

    (alias Lucan Lord)

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