Robert Lea, July 17 2017
Skilled craftsmen at the Morgan Motor Company, the last of Britain’s family-controlled carmakers (MORGAN MOTOR COMPANY)
Of all Britain’s great heritage motoring marques founded a century or more ago, you will not find many where the founding family remains involved.
Where are the descendants of Rolls and Royce and Bentley, or Herbert Austin or William Morris or William Lyons of Jaguar or Lionel Martin who took his cars up Aston Hill?
In fact, there is just the one: founded 108 years ago and still wholly in the hands of the family, the Morgan Motor Company, whose factory nestles in the lee of the Malvern Hills, is still building retro classic sports cars with frames fashioned from the wood of the ash. That family ownership is looking a little more assured after an extraordinary bust-up with Charles Morgan, grandson of the founder HFS Morgan, was finally settled after more than three years of bitter wrangling.
The Morgan board, albeit with none of the family in an executive position, is now hoping for a period of stability so it can begin production of electric versions of its famous bullet-shaped three-wheelers by the end of the year.
The 2016 accounts just published by Morgan reveal a business employing 200 people, many of them highly skilled craftsmen, making 800 cars a year with a turnover of £30 million and a profit of £700,000. The plan is that this year will bring in £35 million of revenues and £1.3 million of profit, throwing off cash that can be invested in its electric dream, and to start paying the family again after a dividend drought.
Just last month it bought back its historic Malvern factory in a £7.2 million deal, reversing a transaction ten years ago that was used to fund the development of its top of the range all-aluminium Aero 8 cars, which start at £92,000 apiece and sales of which are fueling larger revenues and better margins.
As important is the end of the feud that threatened to tear the company — and the family — apart. Charles Morgan was relieved of his executive duties in late 2013 amid a war of words in the press and on social media. The nature of his alleged misdemeanors has never been disclosed. In an outbreak of peace, however, an embarrassing date at the employment tribunal has been averted and Mr Morgan, a 30 per cent shareholder, is back in the fold. “The family is now tightly aligned,” according to Dominic Riley, who was brought in last year as Morgan chairman.
The rest of the company is owned by Charles Morgan’s sister Jill Price, with 11 per cent; a family trust set up by their late father, Peter, which holds 48 per cent; and a further 11 per cent split between Craig Hamilton-Smith (son of Charles’s late sister Sonia and her husband, the Tory peer Lord Colwyn) and his sister Jacqui, married to the actor Sean Pertwee. It means that Mr Riley and Steve Morris, a former company apprentice who worked his way up to become Morgan’s managing director, can get on with what happens next. “We are saying ‘make it better then make it great’,” Mr Riley said. “We have been at only break-even for several years.”
That means Morgan will not be going anywhere near the mainstream soon. Production rates may reach 1,000 a year but no more. In 1991 the company was producing 400 a year when Sir John Harvey-Jones’s Troubleshooter programme visited and the Morgan family famously rejected his “change or die” advice.
The company produces 800 cars a year including the Plus 8 (MORGAN MOTOR COMPANY)
“We want to retain the exclusivity,” Mr Riley said. “We have a waiting list of six to nine months with which we are comfortable. We build to order.”
Those orders are increasingly for the Aero 8 range with its top of the range BMW engines. More than half the production remains the classic ash-framed Morgans which use Ford engines and start from £39,000. About a fifth of production is the £35,000 Morgan three-wheeler which uses a Harley-Davidson derivative motorcycle engine with a feisty Mazda MX5 powertrain.
The company’s ambitions are focused on making electric versions of the Morgan 3 in a project with Frazer-Nash, the engineering consultancy. The promise is that the new Morgan 3 will sound less like Peter Fonda in Easy Rider and more like Anakin Skywalker pod-racing in Star Wars. Mr Morris said the family was keen to avoid the mistakes of other heritage brands that have been on more than nodding acquaintance with the insolvency accountants over the years — marques such as Aston Martin, which has gone bust seven times, and Lotus, which has long been stuck in the slow lane.
“We need to build a sustainable business,” Mr Morris said. “If we are making money building 800 cars a year, that’s fine. Brilliant if we can do 1,000 a year and make money.”