Ryder Europe vice-president and MD David Hunt’s claim that “Ryder is full of the joys of spring”, is not what MT expects to hear as we meet to discuss the integration of Hill Hire. But like the company he works for, Hunt can pull the occasional surprise.
Ryder’s big surprise last year was the £151m acquisition of Hill Hire, announced the day before its 40th birthday in the UK (MT 13 June 2011). This takeover created a rental and leasing giant with 10,000 vehicles and a 5,000-strong customer base.
Integration
Looking back to last summer, Hunt recalls: “We always said the integration would take about a year. It wasn’t a small acquisition – it doubled the size of our business. And we didn’t want to be one of those companies that changed the sign on the door and said the integration was completed. We wanted to make sure that we did things right.”
Cutting straight to the present, he reveals: “We’re now rebranding locations, putting new workwear into locations – so we’re now doing all those things that say we’re nearly complete. By June, we’ll be able to say the integration is complete.”
So other than the Hill Hire brand going, what else has changed?
“We now have 10,000 trailers where we had only 600 before,” Hunt states enthusiastically. He reveals that his phone rang a few times in the initial aftermath of the acquisition with parties interested in acquiring the trailer business. Given how softly spoken Hunt is, he is positively emphatic when he says: “We are in the trailer business. We have no interest in selling [the business]. We’ve sold about 250 trailers and taken on 250 new ones since the acquisition.”
So Ryder is now number one in the trailer rental market.
Hill Hire’s Bradford head office closed at the end of last year and there has been some consolidation, as Hunt explains: “We identified six sites that were in 10 miles of each other and we’ve consolidated those sites. And I think the word is ‘consolidated’ not ‘closed’. The sites affected are: Glasgow, Leeds, Avonmouth, Birmingham, Hull and north Manchester. And five out of those six are Ryder depots folding into Hill Hire depots. Again, this may not be what people would have initially expected.”
Redundancies
Inevitably with an acquisition of this size, there has been redundancies, but Hunt says: “We took on 300 extra staff as a result of the acquisition and we had to make just 30 people redundant.”
Among the significant staff retained (the entire Hill Hire account management team has stayed on) are Hill Hire’s senior management of John Rice (now sales director) and Adam Fairbotham (operations director). Reinforcing Ryder’s commitment to trailers, it has also taken on John Murray, the former MD of TIP, as sales director for trailers.
Surprises
Were there any surprises once you got your head under the bonnet? MT asks. “I hesitate to use the word ‘no’, but…” Hunt replies. He trails off before explaining that because of the amount of preparation Ryder put in, the surprises were minimal.
“The process reinforced for us some of the strengths we thought Ryder had,” he adds. “Our key partners – Hewlett Packard, Mercedes-Benz, SDC, Daf, Montracon, and Bridgestone – came to the party, saying they wanted to support Ryder in making something special.”
Business leaders all too frequently talk of a good fit, but the mix of Ryder and Hill Hire really is a fine example. According to Hunt, the two businesses had an overlap of only 22 major customers.
On reflection, it’s not that surprising is it? Ryder’s emphasis is on own account, while Hill Hire was much more third party-focused. And that combination of Ryder’s focus on light to medium trucks and Hill Hire’s focus on heavy trucks and trailers is a dream come true.
Adding value
Hunt says: “It gives us a great bedrock from which to build the business. There are opportunities for Ryder to add value to customers [its own and Hill Hire’s] and there are cross-selling opportunities, but Ryder has always sold on value and service – and just because we’re bigger, [it doesn’t mean] that is going to change.”
He highlights a slightly shocking fact: in 2007 Hill Hire had 10,000 vehicles and 22,000 trailers – twice the size it was when Ryder bought it nine months ago. So, there’s considerable scope for growth, and Hunt believes Ryder is best placed to help its customers overcome the hurdles before them.
“Major logistics companies face a real challenge; because of the contract lengths their customers are willing to commit to in this ever-changing world, large logistics companies are faced with a dilemma. How many assets do they purchase themselves, what life do they put those assets on, how much flexibility and homogeniality do they want in their fleet, and how do they deal with seasonality and the peaks that are caused by the natural cycle?
“Ryder is in a unique position with its re-
lationships with the OEMs; its market position across the range of assets; its portfolio of packages to suit all; and the size of its fleet, to provide those companies with the service levels and flexibility they require. Average isn’t good enough. Customers won’t accept average.”
So, Ryder can’t rest on its laurels. It’s already announced a £24.6m order for 530 vehicles, including about 200 Mercedes-Benz Axors, and there will be a second fleet order of about £25m later this year. Ryder’s fleet now stands at 86% Euro-5.
Staff rewards
But it’s not just about physical assets: Hunt is keen to stress the value of the people at Ryder. “Every single employee got a bonus of some description last year. Our staff performed and they were rewarded.
“A lot of our staff read Motor Transport and Commercial Motor: my message is that I’d like to thank all of them for their support. We couldn’t have asked for more and they could not have given more.” ■
Ryder’s integration of Hill Hire is nearly complete. Justin Stanton catches up with Ryder Europe vice-president David Hunt to find out how it went
Job done
Ryder has already been in contact with its major customers, asking them what their requirements are for the Olympics.
David Hunt says: “We don’t want to let people down – we stand for reliability, trust, high standards and service. If everybody delays their decisions, then at some point we’ve got to say we haven’t got any trucks. We’ve asked our major customers to give us some visibility of what they require for that period and commit now. If you give us that visibility, we will commit to providing the vehicles.
“One operator is talking to us about taking 200 new trucks and wrapping them in his livery just for those three months, then unwrapping and handing them back. That’s one approach to take!”
He thinks the industry could face a shortage of quality trucks come the Olympics. “Do you really want a five-year-old Euro-4 entering the Olympic village?” he asks. And he’s got a point!
The Olympic challenge
The transport and logistics industry has a history of integrations taking far too long or failing to gel. On the face of it, it appears Ryder and Hill Hire have bucked this trend. “You have to accept that it takes time to build trust; you can’t build it overnight. Everything you do affects that trust – so you have to do what you say you’re going to do and do it in the right way,” Hunt says. “We made a commitment to all the Hill Hire staff that they would be the first to know of any change and would be told about it as soon as we made the decision.”
Ryder is synonymous with a conservative and low-risk approach to all things, not just business, and this approach could have led Ryder to focus on systems integration first rather than people, but this was not the case. “It’s easy to focus on the rational (systems gap analysis, rebranding, etc), but if you put that ahead of the behavioural and cultural element, you’re in danger of falling flat on your face. We wanted to prioritise the cultural, and if that meant there was a delay on the rational, then so be it,” Hunt reveals.
“We knew Hill Hire staff might be nervous; we knew they would be looking for guidance, but we also focused on Ryder staff, as they would go through as much change as Hill staff.”
External consultants were brought in to assess the cultures of both companies; 40% of staff from both companies at all levels met to discuss the culture in “no-holds-barred” workshops.
The leadership had to walk the walk too: they had to focus on the behavioural/cultural and each benefited from a 360º review, a psychometric test and a behavioural assessment to ensure the roles they perform have as much effect as possible.
“It’s been a huge success,” says Hunt. “By focusing first on the cultural, it’s meant the rational has gone as well if not better.”
His key advice for integrating an acquisition? “You cannot communicate enough.”
