Gefco is a company with a long and dynamic history as one of the global leaders in the automotive logistics industry. After its creation by Peugeot in 1949, “Les Groupages Express de Franches-Comté” had accumulated 25 members of staff in four locations by the end of 1950. Now, the group has 11,500 employees across 35 countries, 400 of whom work in the UK.
For most of its life Gefco has existed under the PSA Peugeot Citroën umbrella, sharing in its bumpy ride through the recession. Despite the sturdiness and steady growth of the automotive market in recent years, Gefco’s parent company struggled to keep itself afloat; just last year it announced a major recovery plan after recording a net loss of £5.9bn over two years.
PSA Peugeot Citroen sold 75% of Gefco to Russian Railways back in 2012. The £640m deal, while handing the car manufacturing giant a quick cash fix, unleashed the potential of Gefco onto the wider market.
Three years down the line, the usually quiet Gefco has been making moves to strengthen its offering both inside, and outside, of the automotive logistics market on a global scale, and has reached a point where it’s finally confident to stand alone and shout about what it can offer customers around the world.
Motortransport.co.uk spoke to Gefco UK MD Tristan Balayn at Multi-Modal earlier this year : “We had to work on the company before communicating much in the UK. Now, we know where we are going. We are confident about our strengths and understand what we can improve, so now we are ready to communicate.” Gefco UK’s key strength, he added, is the wealth of experience its relationship with Peugeot Citroen had granted the company, which has allowed it to prepare for other large clients and contracts.
Having joined the group straight out of his logistics operations management degree, Balayn is an authority on all things Gefco. He’s racked up more than twenty years with the company, and took up his current post in June 2011.
Profit and innovation
Gefco UK’s profitability was “not great” during the economic downturn, confesses Balayn, so the company had to focus on what it could do to turn that around. While simply waiting out the recession was a part of this, Balayn says Gefco had to find more innovative ways of keeping its turnover up - and part of that was a move into contract logistics to best utilise the fleet.
He says: “In 2007, I think the capacity of the number of cars to transport and deliver was about 500 trucks lower than in 2006, so obviously the company had to be quite innovative in how to use the fleet and find a solution to be able to meet market expectations.”
If innovation equals turnover for Gefco UK, then innovative it has been. The company’s results for the financial year ending 2013 saw a 1.5% increase in turnover, rising to £89m on the previous year’s £87.4m. Pre-tax profit rose from a loss of £344,000 at the end of 2012 to a profit of £1.4m just a year later.
Globally, Gefco saw a 1.5% increase in turnover for the year ending 2014, rising from the previous year’s £2.9bn to £3.03bn. Gefco says that within this figure, the year saw a 10% rise in turnover generated form contracts outside of its work with PSA. It us also two-and-a-half years into a seven-year contract with General Motors to manage inbound and outbound logistics for the US car maker across Europe. It remains to be seen how this has translated in the UK subsidary, as its filing for 2014 is yet to be published at Companies House.
Subtle changes
Gefco is changing the company slogan from “Logistics for manufacturers” to “Global logistics for manufacturers”.
“It’s not a massive change” says Balayn, “but we want to communicate about the fact that our aim is to manage the automotive supply chain on a global scale.”
Another element of changing the company’s image was moving away from the idea that Gefco was a subsidiary of PSA Peugeot Citroen. This was an obstacle for the business, Balayn explains, because Gefco had only ever been known as exactly that, whereas in fact it’s a large-scale logistics operation, capable of and looking to take on new large clients.
“We want to be seen more as a logistics provider on the market” he says, “able to deliver the best standards and show that we are an engineering company, a commercial company and a commercially driven company.”
That’s not to say, however, that Gefco UK is trying to disassociate itself with the company it sprouted from. The work the group does with PSA still makes up a large volume of its turnover; for the year ending December 2013 PSA accounted for £53m in revenue, which accounts for 60% of its annual turnover. PSA still owns 25% of Gefco, and Gefco UK’s latest results, for the year ending 31 December 2013, showed a 13.4% increase in volume of new vehicle deliveries for the group. According to Balayn, PSA will always remain intrinsic not only to Gefco’s operation, but to its identity.
“Our company has grown with, and around, PSA. It wasn’t a contract; it was and is our DNA. They gave us a great opportunity to develop our knowledge. They gave us the opportunity to be exposed and get competencies managing the global supply chain.”
The experience of the large scale PSA operation, says Balayn, gave Gefco the confidence to try and transform itself into the company it aims to be: “We know now that we can manage very complex situations, and whatever a situation is, we can handle it.”
Results orientated
Balayn has a clear picture of where he wants to take Gefco UK going forwards: “We want to develop our image, build on our supply chain solutions, become a market leader in the logistics automotive industry, become a measured player with road freight industry, and be recognised as a reliable service provider for multimodal business.”
Balayn is a firm believer in strengthening the team behind Gefco UK to push the company towards its goals. It recently appointed a new HR director, Emma-Louise Forsythe, who has a specialised background in talent development. Coming from Morrisons, where she held the role of senior HR business partner, Emma-Louise will take a “results-orientated” approach to staff development.
The group made another key staff appointment back in 2012, when John Stocker left Acumen Logistics Group to become sales and marketing director, until he became finished vehicles logistics (FVL) director last year. Stocker is now responsible for all elements of Gefco UK’s FVL business, including initiating, developing and implementing strategy to nurture the company’s commercial growth.
Balayn says: “We know that we can manage very complex situations, because we’ve been exposed to it, so have had to adapt and develop the skills of our people so they can face new challenges”.
Skill development is crucial, he explains, because simply hiring someone to fulfil a particular role isn’t always an option in the logistics sector, as most people with relevant skills to the sector are already in employment: “The unemployment rate is low in logistics, it’s 5% or 6%.”
But, with its revamped image and clear outlook on what it wants the future to contain, it seems Gefco UK is breaking free of its image as the “PSA subsidiary” and claiming its share of the automotive market. Balayn said: “I think our attitude and our ability to have this elliptical view on the supply chain market gives us very good opportunity to add value to any supply chain.”
