RV8 Spares Deal News of MG Rover unloading its RV8 spares operation broke in a week when the embattled Midlands car maker faced far more serious issues with greater press coverage - not least the controversy over its financial management and the launch of two V8 powered models! However for RV8 enthusiasts the announcement that Baldock based Brown & Gammons was taking over RV8 parts stockholding and distribution was far more interesting. But just what does the deal mean for the continued availability of RV8 spares, and of course the parts distribution service and prices? This article by Victor Smith follows a meeting with Malcolm Gammons at Baldock. (18.10.04) Brown & Gammons, a familiar sight facing the wide high street in the market town of Baldock. Considerable funds have been invested over the years with improvements to the showroom, well equipped workshops, parts stores, customer counter and reception, and offices of this well known MG specialist. (Photo: Victor Smith) The need to resolve how best to maintain the RV8 spares service has clearly been a concern for MG Rover for a while Whilst the formal line from MG Rover had been it "intended fully supporting the model", as the tenth anniversary of the launch of the RV8 passed, the burden of continuing the spares and service support for the model presented MG Rover with a dilemma. On the one hand the RV8 was seen as having played a crucial role in keeping the MG brand alive in the early and mid nineties but on the other, maintaining a full spares availability for only 2,000 RV8s, over half of which are still in Japan, was an unattractive management and financial burden. MG Rover's energies were necessarily focused on launching and upgrading a series of new models from the TF through the various Z series. In recent years, the MG Rover's investment in RV8 parts and spares had been modest and clearly the time was rapidly approaching when substantial investment decisions would arise as key parts became NLA with the consequent possibility that some RV8 owners might have their vehicles off the road. The likelihood of adverse comments in the marketplace over poor spares support for a previous model could easily knock the confidence of potential purchasers of current MGs, so MG Rover were well aware they would have to do something with the RV8 spares. They were also aware that RV8 owners can be fairly vocal and many are now of an age and with a background which means they know their way around the commercial world! It was also recognised that RV8 enthusiasts are a particularly well organised group with very nearly all owners in the UK, and many overseas, enthusiastic members of the V8 Register of the MG Car Club. Through that group they have access to the active V8 Website and bulletin board which provide regular news of spares availability and difficulties - so any adverse news with RV8 spares would hit the public domain before you could say "eight cylinders"! How best to unload the RV8 spares operation - that was the question? The character and strengths of the existing MG parts market suggested the solution. Whilst the MG brand had been in the wilderness for over a decade until the revival of the marque with the launch of the RV8, it had been the specialist groups supplying and re-manufacturing an extraordinary range of essential spares for post-war MGs together with the distribution chain of MG spares factors that had enabled enthusiasts to keep their MGBs and Midgets running at reasonable cost. It is unlikely that any large manufacturer or parts operator could have matched the ingenuity and entrepreneurial flair - and even the sheer enthusiasm for the models - of those small and medium sized parts firms. Even for low volume classics like the MGBGTV8 and MGC, the spares service provided by those specialists has been extraordinary too because, whilst many parts were common to the MGB, considerable investment in re-sourcing parts has been essential - for example V8 back axle and gearbox parts. The approach a well organised enthusiasts' groups like the V8 Register has taken for over 25 years is to support and encourage the specialist spares suppliers, so today, almost thirty years after production ended at Abingdon, the spares availability for the MGBGTV8 is very good. That experience clearly suggested a way for how the RV8 spares dilemma could be solved - pass the stockholding, distribution and re-supply operation to an MG specialist with capabilities and experience of handling RV8 spares and even better, one with practical day to day experience of servicing the model. What is the RV8 spares deal? The deal covers the transfer of the whole of MG Rover's stock of RV8 parts to Brown & Gammons who will take over the stockholding and distribution for the UK and overseas markets. The stocks are considerable covering some 752 part lines of which 521 are live lines. The stocks were transported in a series of articulated lorry loads from the CAT depot at Desford to a 12,000 sq ft warehouse B&G has purchased near Baldock for the expansion of its existing MG parts operation. MG Rover are also supplying B&G with all the RV8 technical data and the remaining tooling so that B&G will be able to consider priorities for re-manufacture as stock levels of essential parts become low or NLA. Whilst the deal has undertakings to maintain RV8 parts supply whenever parts run low, each project to re-manufacture will be subject to both need and viability considerations. This is inevitable for a low volume model which is characterised by many owners running their RV8s as second cars, often with low annual mileages and consequently low servicing and spares needs. Funding some projects could easily involve an investment of £20,000 or more, so no commitment to a 100% availability or "pick" for the next period was realistic but as Malcolm Gammons notes "the reality is if we can maintain a good supply of RV8 parts, we have happier customers - and that is what we are about". Brown & Gammons workshops and parts counter are tucked away in a quiet yard off the wide high street. (Photo: Victor Smith) So what are B&G's plans for RV8 spares? In the short term, Malcolm faced a daunting range of tasks. First the practicalities of receiving the RV8 parts stock from CAT amounting to five articulated truck loads, and then checking to see the stock that had come through was what they had agreed to buy! That stock is then being loaded into the B&G inventory control system and integrated with the substantial block of "end of production" RV8 parts they bought from Cowley some six years ago. In parallel, they are setting up an online RV8 parts system as a new subsection on the existing B&G website. In effect it will be an online shop for RV8 parts known as www.mgrv8parts.com with the useful context sensitive parts diagrams you can see already in use on their website. Malcolm sees this as taking "around 3 to 4 months to set up with all the copying from microfiche readers and scanning in to the webpages, but once up and running, RV8 enthusiasts will be able to look for parts by simply browsing the parts diagrams and then pointing and clicking to get the part number, availability and price". Prices will be in Sterling, Euros and US Dollars. UK delivery will be by UPS freight service, with similar arrangements overseas. The website will also have updated information on NLA parts, and an interactive section where RV8 enthusiasts can provide feedback and express interest in advance ordering where plans for re-manufacture are likely. That will help B&G decide priorities for re-manufacturing projects and investment. There will also be special deals on parts for RV8s but no dumping! Air-con kits might be an example. The online RV8 parts service will be backed by a telephone support line together with a counter service at Baldock. Malcolm feels the "response and delivery service standards we can achieve by adding the relatively low volume RV8 parts business to our existing successful online spares system makes a great deal of sense" and "enables us to make essential links with the physical stockholding using our computer based stock control systems". The parts distribution system to MG Dealers and other RV8 specialists has still to be decided but the aim is to make the internet online sales system the principal channel for RV8 parts distribution. Which parts are likely to be early projects for re-manufacture? Some 200 of the 752 RV8 parts have already gone NLA but Malcolm feels that "in the main this will mean no large inconvenience for RV8 owners". Some of those parts will not appear again as the tooling has gone. Some of the other RV8 parts have been difficult for a while - the alarm sensor in the arm rest for one. The challenge Malcolm faces is "we have between 20 and 60 lines to deal with in the next 18 months, and then over the next 10 to 15 years, we aim to keep as many lines live as commercial viability allows". One of the first projects Malcolm has already got underway is a programme to re-manufacture RV8 windscreen surrounds. When I met him less than a week after the RV8 parts deal was announced, he mentioned that "B&G has been replacing them since we first started to see rusted-out surrounds five or six years ago. So we are very familiar with the problem but now the stock of replacements is virtually out". Unlike the cast aluminium surround fitted to an MGB Roadster, the RV8 unit is in steel with two main stampings - front and rear - with seven or eight other pieces that have to be put on as the unit is assembled. They were retailing at £596 from MG Rover but the quality was poor and the paint finish not good. Malcolm commented "the new units will have far better rust protection both inside and out. B&G have the tooling but found it is in a horrendous condition so it needs substantial repair and refurbishment before renewed use is possible". In terms of the skills needed for re-manufacturing the surrounds, they have found the fellow who had been in charge of the windscreen surround assembly. Malcolm adds that "as this is the first RV8 re-manufacture project which meets both the need and viability test, B&G is offering a £100 discount to the first 25 orders with the likely price for the much improved unit is in the range £750 to £800". As the improvements include better rust protection, particularly on the inside which has been a major weakness in the original unit, the price will represent good value for what is often an essential replacement part. Future re-manufacturing projects? Other parts where stocks are running low are RV8 wings, particularly rear wings where there are none in the stocks coming from MG Rover, but fortunately B&G have a few in their existing stock at Baldock. MG Rover has the tooling for the wings in the Midlands but unfortunately it has not been looked after. It is fairly heavy stuff too - some 100 to 120 tons in the various tools! - and storing it is something MG Rover is keen to hand over to B&G! It is very lucky the tooling is available and that is down to David Bishop at the Heritage Body Plant at Witney who, on learning Abbey Panels was closing down, moved very quickly to encourage MG Rover to secure the tooling and protect it before it was scrapped. This was mentioned during the fascinating RV8 Talk he gave with John Yea at a V8 Register 25th Anniversary event in July 2003. In terms of logistics, Malcolm can see it will take probably five articulated trucks to move that tooling and he is already making preliminary plans for re-manufacturing RV8 wings. As we learned from David Bishop (BMH Body Plant director) during a V8 Register visit to the Witney Body Plant in 2003, stamping out RV8 wing panels needs a very heavy press - the ground literally shakes on each pressing! - and then the various pieces are spot welded for subsequent hand finishing. The economic run for stamping wing panels will probably mean an initial batch of a hundred, with the wings assembled and hand finished in batches of 25 to meet demand. The concern of course in commissioning a project of this type is that there is not a heavy demand for RV8 wings, so the size of the investment funding locked up in the re-manufacturing project and stocks will be large. The current price for RV8 wings is already £850 from MG Rover but that was for well written down stock without the burden of re-manufacturing costs. New wings will inevitably cost a little more because of the costs of getting existing tooling repaired and up to a usable standard, finding people who can do that type of work again, and commissioning and funding the re-manufacture of a practical sized batch. Relations with MG Dealers and RV8 specialists For most MG Dealers, RV8 spares are not a big business but for those who continue to service customers' RV8s, they will need good spares availability and access to an efficient delivery service. Ames MG Rover is one dealer with a significant volume of RV8 spares activity supplying retail and wholesale customers at home and abroad. Similarly Clive Wheatley mgv8parts, a well known and respected specialist, supplies both V8 and RV8 parts worldwide - they are both very interested to learn how the new wholesale arrangements will work. This is an area which B&G were working through when we met but what is clear is the RV8 spares distribution and discount system will change. The online RV8 parts service at B&G will be the principal distribution channel and one idea being considered is to create a dedicated area for MG Dealers, effectively a protected access sub-section for wholesale and dealer spares supply and distribution. The final form and terms of those arrangements will very much depend on how the scheme is developed by B&G. Assessment of the RV8 spares deal Shortly after meeting Malcolm Gammons, Peter Beadle called and in his characteristic style provided a realistic analysis of the RV8 spares deal. Now Peter is an acknowledged V8 parts expert who was formerly with Moss for many years directly involved in re-sourcing and re-manufacturing parts for both the volume MGB and the limited production MGBGTV8. Before that he was parts manager with what was then the well known MG dealer, University Motors. Peter's analysis was stark but logical. First MG Rover's survival is not certain as there appear to be doubts from the recent unsettling news of the complex corporate structure and allegations aired in a national newspaper of asset stripping since four directors bought the car manufacturer from BMW for a token sum a few years ago. Those accusations have been strongly denied by Kevin Howe, MG Rover's chief executive. Second there are concerns that the present product range might be seen as slim for the future with some of the models approaching the time when replacement is due. So even though most MGV8 enthusiasts will be very keen to see the latest crop of V8 powered MG and Rover models succeed and will clearly very much hope MG Rover thrives, looking at the narrow self interest of RV8 owners, any arrangement which puts the RV8 spares stocks outside the scope of the uncertainty and chaos that might arise should MG Rover run into financial difficulties has to be a good thing, particularly if continued spares availability is part of the deal. In any break up or receivership of MG Rover, the likelihood of the RV8 spares being sold off in lots would have been very high as the duty of the receiver would be to obtain the best price for the creditors. Inevitably the coherency of the RV8 parts stocks would have then been lost with no central stockholding and distribution, together with the likelihood of spares cherry-picking and short term dumping of RV8 parts, leading to chaos and uncertainty. Indeed some RV8 parts could have been lost through being scrapped or even the entire stock of RV8 parts might have left the UK! As for the selection of B&G to handle the RV8 parts stockholding and distribution, Peter Beadle acknowledged their capability and experience from their existing MG spares and servicing operation, their appointment as an MG Rover Approved Workshop, and their existing RV8 spares business. He also felt it was positive news that B&G had been prepared to take an investment risk and step forward to take on the RV8 spares role. Finally he felt "B&G were clearly MG enthusiasts with their heart in the marque - indeed Malcolm's initials are "MG"!" So what can we conclude? Well an RV8 spares deal which removes the parts supply responsibility from MG Rover to a financially sound MG specialist with capabilities and experience of both RV8 parts and servicing the cars plus a medium term assurance of continued parts availability and distribution service, has to be good news for RV8 enthusiasts! That strategic analysis is fine but at a personal level many RV8 enthusiasts will be wondering what does the RV8 spares deal mean for me in terms of continued RV8 spares availability, good parts delivery service and value for money? Well continued spares availability is likely to be good with new re-manufacturing projects subject to both a need and viability test. Of course there will be an incentive for B&G to keep RV8s running on the road as customers for their RV8 parts! It is also clear B&G are taking a long term view - you could never accuse the Gammons of being flighty - they are doggedly committed to their business. The quality of their operation at Baldock is a clear illustration of their attention to detail. In terms of the reliability and stability of B&G, both now and into the future, there are two important features - first this family owned business is already passing to the next generation and Malcolm is clearly intending to continue the B&G business for many years to come, and second B&G is financially very sound with its own properties (valued at around £2m), £1.5m of stocks and next to no debt. With efficient operations and a market which has grown to include current MG models like the TF and ZR, B&G's prospects as a viable business are very good. The principal source for RV8 spares will be the dedicated online sales service at the new website called mgrv8parts.com hosted as part of the present B&G website. This will mean easier access to RV8 spares information, spares availability and prices. Delivery service will rely on a freight carriage system, unless you live within range of the Baldock spares counter. Both Peter Beadle and I believe there will have to be a structure which will allow RV8 spares availability from MG Dealers and established RV8 specialists. That has still to be developed and agreed by Baldock with the leading trade players. Finally RV8 spares prices - an emotive subject for some but with a predominantly moderately well-heeled RV8 owner profile, availability and service often come higher up the wish list. Malcolm responded to my raising the prices issue with two reassuring comments: first "MG parts generally are a price sensitive market so there is no scope to take large profits out of this line of business" and second "the retail prices of RV8 parts will be broadly similar to current MG Rover prices" but clearly re-manufactured parts will have to reflect the sourcing costs and any quality improvements B&G are able to add to the product based on their experience of particular difficulties seen with parts in service. The substantially improved rust protection proposed for the new RV8 windscreen surround is an example which should result in far better product quality and service life. A realistic analysis of the facts of the RV8 spares deal and a balanced assessment of the benefits for RV8 enthusiasts suggests the RV8 spares position is likely to be more assured and with good spares availability at reasonable prices. It is important the outstanding concerns of MG Dealers and the handful of RV8 spares specialists are settled. A few RV8 owners will no doubt pick fault with the deal or the involvement of B&G, but on balance there is a great deal of potential benefit for all RV8 enthusiasts and much to be gained from being positive about the RV8 spares deal. The bulk of RV8 enthusiasts are mature and intelligent people who will make their own analysis based on the facts. It seems most RV8 enthusiasts will be happy with an RV8 spares deal which will enable them to keep their RV8s running so they can get on with enjoying the pleasures of open motoring with V8 power!