Companies who stick to sound financial principles survive the recession
29th January 2010
Margot James visited Arbil Ltd in Lye and met Operations and Finance Director, Simon Hart and Chairman Tim Bills.
The company was founded by Ray Bills in 1963 and has since grown to be a quality provider of industrial lifting equipment. Sales topped £9m in 2008 but the recession has taken its toll and wiped 25% off the top line during 2009. The company is in good shape though given the difficult times, it has a diverse and international customer base and has three main areas of activity: equipment leasing, sales and servicing. Also the company has been well managed over the years and entered the recession with zero debt.
The directors expect a year of consolidation this year. This is in line with a survey of local companies carried out by Margot and her counterpart in the constituency of Halesowen & Rowley Regis, James Morris at the end of last year in which more than 50% of companies reported a downturn last year but an even greater per centage expected static sales during the so-called recovery year of 2010.
Most of the workforce have survived and the company have done their best to preserve employment. Staff have taken a 5% pay cut and leavers have not been replaced. This is in stark contrast to the public sector where pay is actually increasing.
Margot took a tour around the plant and was very impressed by the state of the art processes and the positive attitude of staff, many of whom have served the company for many years.
Margot said “I am tremendously impressed by the management and operation of Arbil, they have taken decisions that were difficult, right and timely in order to survive the recession. If only the country had been run as well. But we cannot go on with this unfair and damaging divide between the public and private sectors”
A Chartered Institute of Personnel & Development (CIPD) survey conducted by YouGov in Dec 2009 found that 41% of employees have had a pay freeze. The vast majority of these employees have been in the private sector. In general, pay increases in the public sector have been far higher than in the private sector. The average annual pay increase in the public sector was nearly triple that of the private sector; 2.8% compared to 1.1%.
