1993 and All That – Part 2

See part 1 here

There are uncanny parallels between United Bus of 1993 and Optare/Darwen/Jamesstan of 2008 …

1993 at last saw an upturn in bus manufacturing and we don’t mean in van conversions to minibuses. Registrations in 1993 were up 10 per cent when compared to 1992.

Yet, the manufacturing industry had suffered greatly in the previous years, so much so that the United Bus conglomerate that included Britain’s Optare floundered. United Bus formed in 1989 when DAF’s bus interests merged with neighbour Bova. United Bus bought Optare in 1990 plus shares in or complete control of three other (continental) manufacturing interests up to 1992. United Bus’ DAF was already collaborating well with Optare at the time f the deal, in the production of the Delta and Spectra models.

Why did United Bus collapse? At the time it was felt that rather than seek post-merger economies of scale and the cross-fertilisation of ideas, each subsidiary simply continued to do its own thing, serving their traditional markets without any plans to merge or move into new ones. Any business that remained static by treading water in a difficult economic climate like that between 1990 and 1993 was actually moving backwards.

Optare’s sales of its integral Metrorider were sound n 1993 and this above all others enabled Optare’s management to lead a buy-out… and not for the first time.

The parallels for 2008 are clear. Opatre is new in new hands, after the Darwen Group chairman Roy Stanley formed Jamesstan Investments to gain control of Optare. Modern manufacturing and design & research are increasingly expensive, especially with calls to move to hybrids and lighter buses of composite materials. We suggested on Thursday that the purchase will offer grater collaboration. The parallels between Opatre & United Bus and Optare & Jamesstan may not be identical but may be Jamesstan needs to remember the lessons Optare learnt from the United Bus experience to avoid the same thing today.