Jeremy Deering joined Torotrak in 2006, becoming CEO in August last year following his time as finance and commercial director and playing a key role in the company’s licensing agreements, as well as diversification strategy. He spoke to Simon Warburton at the company’s recent annual general meeting about the interest in Flybrid and government policy.
Deering has held senior executive positions in FTSE 100 groups including Tomkins and the United Utilities Group, where he was latterly a director of its energy division, Norweb and then managing director of the “Your Communications” telecommunications company through its intended IPO.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
He subsequently worked with companies in small to mid-sized sectors including, in an interim director capacity, System C Healthcare through its successful AIM flotation in 2005.
j-a: The UK government has been praised overseas for its approach to the British automotive sector – how does Torotrak view political involvement – particularly from Business Secretary Vince Cable and could more be done?
JD: So far so good. On the general philosophy, you have to survive on your own and stand on your own two feet. It is key the major players in the industry… put their money where their mouth is. I think Vince Cable seems to be putting his efforts into the right things.
j-a: Torotrak is one of the lead partners in The Proving Factory supply chain initiative at Tata Steel’s Brinsworth plant near Rotherham. How key is this sort of government-private enterprise partnership to component manufacturing in the UK?
JD: The Proving Factory is a very effective way of using government money – it [government] should be doing more of that sort of thing.
It is an arrangement which has the capability to work really well. What I would be really happy to see is some of the sponsors such as Jaguar or Land Rover, or others acting as customers for the product, that would be tremendous.
I have not had discussions about this yet, but I think customer confidence levels are critical.”
j-a: What sort of government financial incentives could be made available for companies specialising in new technology?
JD: I would like to see the government give more tax breaks to companies using new technology products. The government could be doing more in making some tax advantage schemes around new technology.
j-a: How do you view the emergence of electric vehicles and their associated technology? There has not been a huge uptake of EVs in the UK – is there something the UK administration could do better in that regard?
JD: From our point of view it is getting politicians off the hook, that electric is best. Politicians need to look more at the advice they are getting in terms of their own forecasts.
Is it electric – but a long way off – [or] do we need to look at near-term technology such as ours?
The whole battery issue is going to dominate. Electric is always going to be there [but] personally, I don’t think it is going to go anywhere near the forecasts.
j-a: You have previously mentioned downsizing could penetrate 80% of the market by 2020 – how realistic a prospect is that?
JD: Every company you visit and Tier 1 you visit [says] downsizing is the number [one] thing to do. To get to 2020 targets and 2025, there is only one way to do it, that is to reduce engine size.
How do you get performance levels to go with the downsized engine? That is why [Torotrak] variable boost does really well.
J-a: You mentioned those ever-more stringent CO2 targets, which are enthusiastically being embraced by the UK government and European Commission. To what extent is Torotrak driven by new legislation and can you anticipate it to a certain extent? Will there be a lessening of regulatory intensity?
JD: We can anticipate legislation – we can see some of these trends coming. Electric and electric boost system [s – for example] – there is a lot of confusion as to – is it a mass market solution? I don’t think so. Some car companies may not be as well ahead of the game as they think they are.
We don’t think they [legislators] will back off the targets as it would create an unfair playing field in the industry.
Of course one reason they cannot – is it sits in overall environmental targets – they have to get this stuff down. That is going to mean much more radical change.
I do think there will be some dramatic change in the marketing of what people should be driving.
j-a: There has been some comment concerning Torotrak’s share price – what’s your view?
JD: It is really difficult for anyone to put a value on this company – the company is almost silicon valley stuff. You have to take a view of what this technology will do in the market.
What is favourable for us is people have to make changes and some Tier 1s will make big, brave leaps.
j-a: You say you expect to acquire the remaining 80% of flywheel innovator, Flybrid, to supply supply turnkey development and manufacture of complete flywheel hybrid systems for buses, trucks, passenger cars, commercial and off-highway vehicles. When could this happen and why does Flybrid attract you so much?
JD: If we do this – realistically it is November/December. The timetable is complicated by the fact we have to get shareholder approval – it is a class 1 transaction – that all adds at least a couple of months administration time.
One of the things I genuinely felt Flybrid does for us is create a different looking company. They [Flybrid] are very motivated and very canny – the combination is going to be very powerful. Flybrid will be the branding for all mechanical KERS [energy recovery system] activities – it is a great name.
j-a: If the Flybrid acquisition goes through, what sort of staffing levels could you be looking at?
JD: With Flybrid we are [will be] around 75-80 people – we have got to be pushing into the 100s/200s in the next two to three years. It depends on how much manufacturing we do ourselves.
I would not be surprised to open a third facility in the Midlands in the next 12-18 months.
