The Russian attempt to save TVR sounds a complete muddle at first hearing, but let the man take you through it slowly and there is a thread of common sense, writes Rob Golding. Nikolai Smolenski may be 26, baby-faced, partly distracted by other interests and with a strong business background only in a savings bank, but he does inspire a certain amount of respect in those who encounter him.
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He has confronted the owner from 1980, Peter Wheeler, with a refusal to pay the rent. He has confronted Blackpool council officials with a refusal to be saddled with what he regards as unreasonable relocation costs and walked out of a meeting. And he told the dealers that he would improve quality of the snarling British sports cars and he did.
What most counterparties want to know however, is whether this feisty young Russian has the cash to back his business plan and the bottle to see it through to success.
The Pravda report of the sale of the family banking interest in Russia said that father Alexander sold OVK Bank two years ago for something short of GBP80m. In the two years since buying TVR from Peter Wheeler for GBP15m, he has buried a further GBP16m or so (company accounts for 2005 have yet to be filed) in operating losses. He has therefore dispersed getting on for half his gains already and all he has to show for it is an empty factory and no income.
Nigel Gordon-Stewart has a view on that one. He told us today: “In deciding to commit myself to working with Nikolai it is obviously a question I have asked myself. I am assured that the family pockets are far deeper than most people think.”
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By GlobalDataGordon-Stewart has had a leadership role in a number of sports car revivals – among them Lamborghini and McLaren. He was hired initially as MD by Nikolei. They fell out. Now he is back as advisor and consultant.
The closure of the factory and the search for a new facility started with the end of a lease agreement with Peter Wheeler for the Bristol Avenue site in Blackpool.
“It was organised chaos there, and the GBP500,000 annual rent was 50% above the going rate for the square footage,” he said.
After a good look at other sites and even at overseas facilities, it was decided that the existing skilled workforce of 320 was vital. The council has therefore been persuaded that it should offer the old Lancaster bomber factory at Squire’s Gate near Blackpool airport where the various parts of the operation can be relocated while the search for a location for purpose-built facility continues. It can handle 1,000 cars a year. Next year should see 500 produced. The eventual target is 5,000 (hence the need for another move) against a 1,750 record in 1997.
One of the difficulties is that the cars are midway through a technology change. The tubular steel chassis and grp body may have to be abandoned in favour of aluminium and carbon fibre and the need for new construction methods may redefine the best location and factory layout. “Nick has a plan for a new range. We have to look at how we update technically in terms of new materials,” said Gordon-Stewart.
Smolenski has not been very open with the Press about his intentions since taking over but he finally gave a lengthy interview to The Sun newspaper published today. In it he gives all the detail that Gordon-Stewart confirms and is quoted as saying: “Age and experience matter and I would be better with 25 years experience in the motor industry. But if I had it, I would probably not have attempted buying TVR.”
Too right. Who would? Maybe there is good logic in the nouveau riche designing products for the young bloods who rate fun and frolics higher than a dependable badge.
If Smolenski is for real, there is not a car enthusiast who would not wish him well.
Rob Golding
See also:
UK: Union says most TVR jobs saved
TVR press release: ‘TVR announces it’s to remain rooted in Britain’
The Sun’s interview with Nikolai Smolenski
