Transcript: Tim Whitworth – Finance Director at Morgan Cars (Max#25)

Welcome to the latest transcript of the inspiring interview with Tim Whitworth, Finance Director at Morgan Cars. Tim draws on his responsibility for the finances at the Company and he talks about his clear passion for the brand.

Enjoy.

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Kevin: Welcome to Maximise Potential the podcast to educate and motivate through a range of original interviews designed to help you maximise your potential. Brought to you in association with the award winning recruitment group Jenrick.

Hello and welcome to episode 25 of the Maximise Potential Podcast and our third instalment from Morgan Cars. Tim Whitworth, Finance Director of Morgan has the unenviable task of making the numbers balance within the last remaining marquee of British motoring history yet Tim views this responsibility as one of the best challenges he could ever be faced with especially due to his clear passion and genuine attachment to the brand. He considers himself to be an unconventional finance director who takes as much interest in the human aspects of the company as well as the numbers citing Morgan’s collaborative working culture as key to so much of the company’s success. This is a great opportunity to go behind the scenes of Morgan and also the man responsible for its finances in this very informative and candid interview.

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Tim thanks for having a bit of time with us today for the Podcast.

Tim: Not a problem Kevin.

Kevin: I think we will kick straight off with probably what I see as the biggest challenge for you managing all the finances of Morgan Motor Company which is this constant juggling balancing act that you have to go through where you dealing with by all intensive purposes a company that when you analyse the elements it actually shouldn’t be here. But I am very intrigued to understand how you do manage to find that balance between this wonderful craft orientated industry and yet still making it prosper commercially.

Tim: It is great having two sides to your personality I think. On the one side you have to part the passion I suppose and the love of your product and the company and put the accountants head on and go back to basics and that is what it is always about pounds, shillings and pence. If the numbers don’t stack up you fight your corner. At the end of the day what is behind all of the brand and the growth and our perception the balance sheet is the one thing that we have to maintain. It is a balance but it is a balance with personality I suppose because everybody would love to go out and buy a Ferrari tomorrow but not everybody can afford it and it is very similar that we would love to do lots of different models whether you can afford to do them or not is another matter. It is going back to basics is the easy answer to that. You look at everything in isolation and see if it brings something to the party or not.

Kevin: I imagine for your role for Steve’s role as well it must be difficult for you both because obviously you both exactly as you said you both are incredibly passionate about the product and yet the two of you in particular Steve from an Ops perspective you from a Finance perspective really have to actually say detached yourselves and become very clinical with your decision making, very almost distant and completely objective with it. It must be quite, it must be a difficult balance.

Tim: It is but obviously what is behind every decision is the passion still is there really. And you try and get round things the best that you can so the ultimate of what you want to happen gets done. We all know the brand is far bigger than the balance sheet at Morgan. That is down to a lot of passionate owners, a lot of people that love their vehicles and at the end of the day it is the product which we are lucky enough to be able to be associated with. So I think you have to detach yourself at times but the passion never goes away 100% in those circumstances. Working with Steve is an issue of knowing that we can actually bounce ideas off one another without any sort of recrimination. We work well together as a team and that is a big part of making sense of an issue whatever issue comes up. I always say from every sort of challenge there is an opportunity there and it is just spotting it. It is just spotting the opportunity homing in on it and exploiting it.

Kevin: That is a very good approach to take and Steve also spoke about the need to be creative due to the size that you as a company are and by creative I mean if I use a different example the big automotive companies have the resource base there in front of them. They haven’t got to be creative all time looking at other way that they can stretch their pound so to speak, stretch.

Tim: I think that is probably the reason why they have boom and bust that they don’t home in on that element. With size creates complacency I think. At the end of the day I mean I think Steve would say to you that he spends Morgan’s pound like his own pound and that is a philosophy I like. Just because you are working or you are spending on behalf of a corporate entity doesn’t mean to say that you should be blaze about it any shape of form. So you know creative or not stingy or anything like that but you have to make sure you get your value for money on anything and we are testament to that. We are still here, we are creating great products, we are creating a great future but it’s done on a very, very sound financial basis that we don’t spend money just for the sake of it.

Kevin: Do you think this is one of the major plus points of still being privately/independently owned?

Tim: Absolutely. I think working for a family company has its own challenges but it also has its own benefits. The challenge for us is to maintain the belief of where we are going and communicating that to the family who are quite close to the company. We have got a 30% shareholder in Charles actually working here day to day so you have to maintain that closeness with the shareholders. So we are answerable day in day out far more than probably a plc to individuals anyway. Obviously the share price you are always answerable to the plc. Yeah I think the opportunities are that they share the passion, they share the belief therefore you can go down different routes and so as a consequence.

Kevin: You touched on Charles and obviously the impact that Charles has had within his leadership of the company. How closely do the group of you all operate in order to achieve the result? How does that?

Tim: Well I guess the three of us are quite close Charles, Steve and myself we have to be. We sort of govern the body Morgan as a partnership more than anything else there is no real structure here. Titles are for people who want to put something on a business card. I don’t know it doesn’t interest me; we have got so many different areas and responsibility we would have to have a business card three miles long you know. At the end of the day you come to work, you enjoy work, you enjoy the people you work with, it has to be a team effort. That is not to say that we are always saying yes to one another I think it is very healthy to have a bloody great big argument sometimes and really get it out in the open. It is the only way forward really for everybody to see each others point of view and the three of us do that. And together we go forward in the best way that we think at the time. If it is wrong at least we have made a decision.

Kevin: And it is collective and you all take responsibility.

Tim: And it is collective and we buy in to most things together yeah.

Kevin: Would that be, if you were going to bottle up a little bit of business advice for SMEs do you think that would be the one thing that you would do just to say look get rid of any hierarchy and lets all just much in and take responsibility, share it but enjoy it at the same time?

Tim: Absolutely, absolutely. I mean somebody would say that without a leader there is no direction – well I would say that is a point of view – it is one I don’t share. I think a collective direction means that everybody buys into that direction that you are going. Everybody believes in it, everybody thinks passionately about it and therefore you are going to get far more results out of it. If there is one person that is being persuaded to go along with something or is being told to do it because the owner of the firm wants to carry out an ego trip of whatever then it becomes very hard then. I think definitely working as a team is the big issue here. And we have got a great extended team here. We operate a big team philosophy here I think involving as many people in the success of Morgan. Being open and honest I think is a real key to that. If you can actually be open and honest to both your customer and supplier almost open book policy then it actually goes a long way.

Kevin: Talk more about that because I think a lot of people are still scared to be transparent and yet you are citing it as one of your strengths.

Tim: Everybody admits and should realise you are hear to make a profit why bother otherwise you are just a busy idiot. With that in mind the suppliers know that you are going to make a profit out of the goods they are supplying to you. You know they have got to make a profit from wherever they are getting the raw materials from. That is business that is the way the world goes round. Accept it, park it.

Kevin: Get over it.

Tim: And get over it exactly. And lets just move forward where the supplier is making a margin that is acceptable to him and it is acceptable to us to be able to use the supplier in order for us to make our acceptable margin and the customer at the end of the day is the biggest judge of it because at the end of the day if the retail price is too high they are not going to buy the product.

Kevin: And again it is interesting hearing an FD talking in this vein because there will be a lot of FD that would be purely talking about the numbers when we are talking here yet you are so entwined with all aspects.

Tim: Well that is a typical accountant. No disrespect to accountants but sometimes I don’t actually own up to being one. Whatever position you are in a company you have got to realise what is paying your mortgage at the end of the day and it is the product. You have got to believe in your product, you have got to know about your product. I can give a tour with anybody around the factory today and give them the history of the company how the vehicle is manufactured, where the components come from, how some of those components are manufactured. So to get that knowledge you can’t just be a numbers man you have got to be an all round business person I think. And that is the key to my way of working you have got to believe in what you do and enjoy it. I love coming to work. I spend enough hours here so you have to really I suppose.

Kevin: I was going to come on to ask you a bit more about what drives you. I think you are beginning to touch on this now so let’s just go into it. Talk to me a bit more about that. What drives you?

Tim: Profit. That is the accountant coming back.

Kevin: Someone is answering with honesty.

Tim: Yeah you have got to make a profit and do a deal and at the end of the day let’s not be greedy about things that is just a sure way the great times, yeah you can make a great profit and then the bad times come along and it is bust. So we tend to see everything as a long term decision. Profit comes eventually. As long as the cash flow is there behind it to sustain that period then you are fine. But what drives me is yeah I own a Morgan I love driving it but I have got a four wheel race car which to see that racing is brilliant there is just something in me. I have always been interested in motor sport so working in a car factory is like working in a sweet shop I suppose. So it is not a hard job for me I just enjoy coming to work. But from a business point of view to get to where I am and to have a real impact in the day to day running of the business then you have got to be an all rounder, you have got to enjoy it. So if there are any FDs listening who just sit behind their computers for eight or nine hours a day just go out and have a look what’s in the office next door to you, just understand what they do, it may help you in your job really.

Kevin: And do you think that has really helped you because you can see the realism of what you are doing you don’t feel, as we said earlier you have to sometimes try and detach yourself when you have got to make those real strict decision but by actually understanding the physical aspect as much as you can about what goes into it does that help you make, come to those decisions?

Tim: Absolutely, absolutely yeah. You have to know the engineering side of things and what our constraints are as far as the chassis we use, the engines that we use, even the craftsmanship what we can and we can’t do. That helps all of the decisions that you want to make at Board level. So without that knowledge I don’t know how you can actually put anything across in a conversation when you are looking at project appraisal if you like. The numbers are one thing but I guess if you look at a company – is the company making money, what is it doing. Fine you can look at the balance sheet, you can look at the P&L, what about the people running it, what about their CVs, what about the workforce, what about the length of service of that workforce you know all of these things have to go in the melting pot when you are making a decision about something so just looking at one thing in isolation it is not enough.

Kevin: That makes a lot of sense.

Tim: I am opinionated aren’t I as well I suppose.

Kevin: This is why you are on the Podcast. This is the great thing about it. If you weren’t opinionated then would you necessarily be an FD of a company?

Tim: Well probably not.

Kevin: You can be in a role that you thoroughly love. I mean you have to be willing to stand up and be counted.

Tim: And be shot at.

Kevin: And be shot at exactly.

Tim: Yeah you have just got to take the good with the bad and if you believe in something and you can argue your case for something then yeah that’s where your inner passion comes out I guess. I have always had an issue that you must always listen as well. Try and listen to the other person’s point of view and then dismiss it.

Kevin: While we are on the subject of you and passion and everything else. Where have you got your passion from is there anything in your life that has really sort of sparked something at a particular stage whether as a kid or growing up or whatever?

Tim: I don’t know where I got the passion for Morgan from. I fell into the job really by accident so I was very lucky. But yeah it is a lovely product and being in the motor industry as I said I have always wanted to go towards that side of things as a career path being the competitive person I probably am I have been able to get there.

Kevin: Pulling you back a bit to Morgan and make up of the company and particularly the make up of your market share something that intrigues me is the fact that 70% of your business comes from abroad from a whole spectrum of countries. From a financial perspective how do you manage that?

Tim: Without being complacent I guess. We do invoice in sterling it has been the case for many years therefore the gains or the risk are passed over to the dealer in the local country. When it is against them it is really tough for them to sell vehicles so you have to be aware of what constraints they are working under and possibly do something to help them. When it is in their favour you are giving profit away effectively. So it is a balance like everything else. At the moment we have a pricing structure that is comfortable for us to be able to sell into Europe at the exchange rate it is at the moment. For the dealers to be able to make a profit and maintain the second hand values of vehicles out in the European network there is a big correlation between the perceived value of a new car against the second hand market. If we go further into that Morgan depreciation two words that don’t go together. And that is down to demand and supply historically. So if it is a scarce product people pay more for something on the second hand market great. If suddenly that becomes a lot cheaper when it is new it devalues the second hand product because they will go for a new car it is common sense. So the dealers have been instead of pricing in pounds they are pricing in their local currency and maintain that so they have taken on the hedging themselves. And that has actually worked because in the good days of â?¬1.40/£1 with euro a car cost â?¬45,000 in Germany it still cost â?¬45,000 in Germany – the perceived value hasn’t gone away that is why a German customer pays for the vehicle. Okay what the dealer is paying is a lot less in perceived value to us today because the depreciation of the pound against the euro.

Kevin: So pretty much what you are saying is that the customer value side of it is protected and it is very much, if you like all the jiggling the profit and opportunity cost and various other things that all gets just deal with almost behind closed doors it doesn’t affect them.

Tim: It does and it is not just a simple fact of just giving it to the dealer and say you manage it obviously there are other things to consider so if they are making extra margin perhaps we are not helping them so much in other areas of marketing because they can afford to do more marketing with that margin. So it is a way of if you have extra profit in vehicle we have just sold you we have got our money what we wanted sterling the price of a new vehicle has been maintained in the local market, the dealer has got a bit of extra money he can spend it on a motor show attendance or extra brochures or a new showroom whatever it is but that means we don’t have an absolute correlation between his marketing budget and what we are doing. It is a partnership and being open and honest about it with the dealer is the way to do it. You know we know how much he is making out of the car at any one point in time and then again when we are making more money and he is having a problem then we can actually say well okay we will support you with the motor show we will do a bit of advertising for you in that market because we know you are suffering on the exchange rate at the moment. So it is a two way thing.

Kevin: And again we come back to this whole partnership approach and long term strategy.

Tim: Absolutely. Long term strategy, a partnership, open, honesty and passion surrounding all of it if you like.

Kevin: Yeah just come back to that time and time again. And one final question for you Tim and it’s going to be one very close to home for you. What is a Morgan like?

Tim: Oh it is um it is a great ego booster actually because when you are driving the vehicle everybody will look at you. So you are in a very affordable vehicle but you feel a million dollars. It is a living breathing experience I guess. It involves all the senses. You can hear the engine; you can feel the vibration of the engine and the road because there is a great driving experience we call about it actually driving the vehicle by the seat of your pants if you like. You can feel it from all parts of your body. It is a great sensory sort of kick if you like much better than alcohol. So yeah it, if you are into driving and you are into your cars get behind the wheel and have a go in one because it really is something different. It is a very gregarious car. As I said before you can turn up most places and you will have the people say yeah wow what a great car lovely looking or they don’t make them like they used to do they. And you say actually it is brand new and that is a bit of a surprise for people. I have never seen one vandalised. I think I have only every heard of one or two vehicles ever being stolen so yeah it is just lovely. And I have got a race car and it packs a big punch, it is a 1.6l but it is really, really quick. It has been engineered and it performs amazingly. A lot of people are quite surprised how quick Morgan’s go on track and it is another part of the Morgan world if you like.

Kevin: I was going to say people forget that that is where the heritage came from they have always been leading motor sports.

Tim: Yeah we won the Grand Pries in 1913 people don’t know that. You know. Brooklands in the late 20s we were going round Brooklands over 100 miles an hour in these three wheelers. We have got a great racing pedigree and obviously Le Mont in the 60s we won the 2l class. That has got to be the heart of any sports car manufacturer that we have proven it on track. I think that is one of the main things that I believe in. If you are going to buy a sports car it has got to be able to perform it cant just look pretty it has to be something that will actually go. The need for speed if you like – that is the boy racer in me that comes out I don’t know.

Kevin: Tim thanks very much for meeting me.

Tim: No problem Kevin thank you.

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Kevin: I would like to extend my thanks to Tim for providing such an open, honest and insightful interview regarding his challenges in Morgan and his approach to his own career. I was particularly interested in Tim’s comments regarding the enjoyment of driving Morgan’s so I have researched a couple of links and posted them on the show notes. The first is to a page where you can actually hire Morgan’s for a day, for a weekend or for a special occasion. And the second is a link to the GT race series where you will get a chance to see Morgan’s tree pedigree as a racing car.

That about covers it for this episode. Next up on Maximise Potential is an interview with Sports Journalist of the Year Matthew Syed where we discuss his excellent new book called ‘Bounce’ which casts a very interesting perspective on how people excel in their chosen disciplines dispelling the belief that success is based round talent. Before I finish I would just like to recommend another link on the show notes this time to a new resource article on Jenrick website which will assist anyone with their search for a new job. This article actually formed the basis of a recent career talk given by Philip Fanthom one of the companies MDs at a Daily Telegraph careers event.

So thanks again for tuning in and remember to pop back next week to listen to Matthew Syed’s intriguing interview. Here is ‘Sugar Sweet’ from Xerxes to finish off bye bye.

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We hope you enjoyed this very insightful interview with Tim as he shares the challenges he faces at Morgan Cars and the approach he takes to succeed in his own career.

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About the Author

Hi, I'm Tom Burkinshaw, I co-produce the Maximise Your Potential Podcast and Website and my goal is to help as many people as possible be successful in life, careers and business, by offering free coaching and mentoring through a series of unique interviews from inspiring people who all display exceptional self-belief, mental toughness and desire to achieve. Thank you for taking the time to visit Maximise Your Potential!