Case Study

North West Precast

Background

Pilling Precast, producing pre-cast concrete products for the building trade, was formed about 40 years ago. It flourished in the Fylde coast village of Pilling under its founder, went into liquidation under his son and was bought by Tayban Precast Ltd. It again flourished until the owner died and the business got into difficulties under his son! The proposed solution in summer 1984 was to relocate to Horwich, near Bolton. This was forty miles away and the relocation grants specified that local people had to be recruited. Against an uncertain future and likely redundancy, the works estimator and coster, Jim Stamper, proposed the Pilling workforce form a worker co-operative.

The options

Pilling is a relatively isolated village on the northern Fylde coast. Tayban Precast was the largest private sector employer in the area. There were few other local employment options. Tayban proposed keeping the site open with a skeleton workforce until the Horwich site came up to speed. After that there was the possibility (but no more) of some specialist work being done at Pilling.

The Process

Initially the workforce was suspicious of Jim Stamper's solution. However, the owner was willing to talk - perhaps he felt bad about leaving loyal employees in the lurch, perhaps he was interested in continued rental income from a highly unlettable site. Contact was made with the newly formed
Lancashire Co-operative Development Agency, who made a presentation to the workforce. They decided to press ahead - it was the only game in town.

With thirteen founder members, work began on a business plan. This was surprisingly robust, but cut little ice with banks in conservative rural Lancashire (even the local Parish Council was initially aghast at the emergence of a workers co-operative in their community). It took some time to find a bank willing to support the co-operative - once they had cleared it with their head office.

The co-operative was registered as an Industrial and Provident Society in November 1984 and started trading as North West Precast Ltd in January 1985 with the site having been closed for just one week.

The raising of the finance

Worker co-operatives were then a new and radical idea in Britain, let alone rural Lancashire. Even though the founder members were willing to put in £17,500, the banks were reluctant to get involved. There was little security (as Tayban owned the site) and there was no 'proper' management. Eventually a bank agreed to match the £17,500 and £25,000 was secured from Lancashire Enterprises Limited, an investment company created by Lancashire County Council.

After The Conversion

North West Precast rapidly proved that it was as good a business as its business plan had said. In its first year it turned over £400,000, grew to 24 employees and made a pre-bonus profit of £90,000. Meanwhile Tayban, who as a 'properly' managed business had little difficulty raising finance, again hit problems. By Easter 1995 it was again in liquidation. Tayban's collapse presented North West Precast with problems and opportunities. They were still associated in the trade with Tayban and some customers assumed that North West Precast had also gone into liquidation - turnover stagnated in 1985-6. However, there was also a chance to buy their site which they did for £120,000.

In 1987 the co-operative employed 37 people and had a turnover of £650,000. The future looked healthy, but Jim Stamper was in his sixties and two other key office staff were approaching retirement age. The co-operative was facing its own succession problem.

Jim Stamper retired in 1990. Bob Danson, the foreman joiner and a founder member, took over as Managing Director. He had many years of experience in the business, but Lancashire CDA provided him with additional training in business and management skills.

The co-operative has come through some difficult years during the recession in the early 1990s and now employs 40 people, with a turnover of £800 000. It is still the largest local employer in the small community of Pilling on the Fylde peninsula. Major new investment of £110,000 was undertaken in June 1996 with the introduction of a new computerised batching plant.