A fairly broad title for this update, but it makes sense to wrap all this up and publish it together. The first part of this piece is an interview with Dr. Robert Hentschel, the new CEO at Norton Motorcycles. He comes to Norton with a wealth of experience in senior positions in various engineering focused roles across the automotive industry. Like John Russell, I appreciated Robert’s no nonsense honesty and didn’t feel like I had to tread carefully with any of the subjects we covered. The second part of this piece is an update on a recent development with Simon Skinner and then some news on Stuart Garner. It’s long, but worth your time.
Robert this isn’t your first appointment in a senior role of a niche British brand, what did you learn in your time as Director of Engineering at Lotus that you intend to apply at Norton?
It was an important position for me to hold, within an iconic British brand. I think it’s important to maintain the core brand values. When you’re working with iconic or luxury brands, people want to share their ideas, their thoughts and have some influence on you. But, at some point you have to focus on bringing the right product for the brand to the market in order to maintain or elevate that premium position. In short, I learnt that I have to protect this iconic brand from outside influences.
What was the biggest challenge you faced on day one at Norton and what have you done since that day to bring about change?
The heritage of old Norton and the need to fix old problems. In parallel I have to understand where the business is right now in terms of the current processes and all the small details. Most importantly, we have to develop a plan looking forward. We’re already working on our plan with regards product development and we have a bunch of new products in the pipeline. My target is to have finalised the new product line up by September. I aim to have fixed the old problems and to have polished the processes put in place by my predecessor John Russell, who did a great job.
There’s a feeling on social media and the media in general that between Norton and the BDO that there is some cherry picking of customers going on, where some are offered bikes without any further cost to them and other customers are potentially being offered Gen 2 V4 bikes at a discounted rate. How did Norton define which customers get which deal?
We have not decided at the moment on the special price that will be offered to V4 SS customers who currently have a product with defects from the old era Norton. The liquidators of NMUL need to finish their work and at the minute I have no idea how that work will impact us commercially. At the end of the day, all customers have to be treated in the same way. At the minute there are boundary conditions and legal implications that we need to consider. The missing piece of the puzzle at the minute is the size of the claim on which the special price is based around. I’m keen to get this situation wrapped up, give us time to deal with it in the best way possible and we will do so.
I bet, so is it safe to assume in this situation that the special price offered on a gen 2 bike by Norton will tally exactly with the offer that BDO come up with following their investigation?
We’ll need to look at the overall number in order to understand the commercial impact, only then can we make a decision.
I’m standing behind one of my employees one hundred percent. I feel that people have formed a bad opinion of someone who is doing a brilliant job. If you want to see Nortons in the future with the DNA of the old Nortons, honestly I think Simon Skinner is key to that journey. This question is easy to answer in that, he was looking after design, not engineering. Quality is something that comes from an organisation that is correctly engineering product. Simon Skinner is looking after the visual elements of the bike, the initial package of the bike and the integration of the components. He then hands over to the engineering department who are at the end of the day responsible for the quality. This kind of set up didn’t exist in the old era Norton, where there was, I think, an assumption that everyone did as many jobs as possible in order to keep the company going. It’s my opinion that during a very difficult time, Simon Skinner protected the DNA of Norton. He is absolutely a key member of my team.
With that in mind and looking at the CV of your new CTO Vittorio Urciuoli, I can see he has spent time with Aprilia Racing and Ferrari among others. How far up the priority list is seeing Norton back at the Isle of Man for the TT, or lining up on the BSB grid?
For me it’s very clear that racing is part of the story of Norton. I can confirm today that I intend for Norton to go racing again. I echo John Russell’s thoughts here and we are completely aligned with regards which steps to take next.
I think it’s important to consider that the motorcycle industry typically follows the automotive industry by about five years. If we look at the four wheeled industry we can see that by 2025 almost half of the vehicles on sale will be electrified in some way. We cannot avoid looking at this kind of technology, especially when legislation dictates that we must look at these requirements. But I also think that motorcycles are an emotional product and the noise and feel of a petrol driven combustion engine is something special, so we have to look at both parts and find the right mixture within our legislation.
That’s fair. Given the fact the engine rights for the Commando were sold just weeks before Garner era Norton went into administration, coupled with the heritage and legacy that the name Norton Commando has, is it safe for me to carry on assuming that that the Norton Commando could be the halo EV product for Norton?
There are multiple options with regard a halo product. There’s also a Manx product we have in development. We still have to decide whether we’ll make a stand alone product line that is electric, or alternatively offer an electric powertrain option across all models. These are the kinds of questions we are asking our product planning department and that is very much a work in progress.
Changing the subject slightly. I’m assuming at this stage that in terms of developing the V4 you are having issues with third party suppliers, particularly when it comes to brakes and suspension. Are you able to discuss any changes you might have had to make to facilitate the Gen 2 V4 because of issues with previous preferred suppliers such as Brembo or Ohlins?
First of all we still haven’t finished the testing and evaluation of this product, so we still haven’t finished finding problems to solve. If you carry out an in depth testing programme then things can pop up that you didn’t expect. If you look at mature established suppliers like the two you’ve mentioned, there are no problems. Where we might have issues is when we look at the quality and scale of supply we’ll demand in the future, it’s possible that some of the smaller suppliers from the old era Norton might not be able to match those demands when it comes to the V4SS or the V4RR. This process is still under investigation and we are still working on how to solve this issue.
Sticking with volumes and the future, clearly TVS has the experience and scope to build massive volumes but if we instead look at Triumph as an obvious benchmark, we can see that they haven’t reported a profit since 2018. That pre tax profit was approximately £9.5m based on volumes of around 7000 units in the UK and approximately ten times that amount globally. If you take the initial £16m purchase price for Norton and then add investment made by TVS post purchase, surely you can forecast the path to profitability for Norton. When will Norton make that profit?
So at the minute we have the old era Norton products and we need to develop the new products and get them to market in order to counter the initial investment made by TVS. To develop a new vehicle or powertrain takes time. This isn’t an overnight thing, I expect it could take three years, depending on what we have in our toolbox. We are looking at different scenarios in our product plan and will seek approval from our shareholders in terms of which direction to go. The new facility in Solihull gives us the scale to produce five to eight thousand vehicles a year. If you look at the level of investment so far and the size of that facility, it should be capable of making a profit for the wider business.
Okay. I had a look at how long it took John Bloor from the time he purchased Triumph in 1984 until the time he was selling bikes and it was about seven years. Given the advances in rapid prototyping, CFD and CAD from then until now, how quickly can you turn things around and start making bikes to the scale you require
For a good quality bike you’re talking about 36-40 months. Sometimes you can accelerate that process but it’s not possible to get this time down to under a year. If you look at existing product like the V4SS, there’s the option to bring a derivative. If you get your re engineering programme right you can save time. It’s my intention to show a new derivative of the V4SS at Motorcycle Live in December
Ah okay, this sounds like an exciting development?
Yes it is, we’ve recognised a gap that we believe we can fill and that’s what we intend to do, using modern design and construction methods, but to come back to your original question I don’t believe it’s possible to develop an all new machine in less than two years.
Given your late arrival to the Norton party, what is your opinion of the relationship between the BDO and Norton, given that they’ve managed the administration and now the liquidation. If you were in the chair at the time, is there an element of the deal to buy Norton that you would have changed?
The whole deal is very complex, particularly when you’re stepping into the situation afterwards like I have. Obviously the liability for all the history lays with NMUL (the old company). It would be unfair of me to comment on that in respect of the shareholders, it’s my responsibility to follow up on the consequence, direction and activities of that.
Just sticking with that subject. A lot of the gen one V4 owners feel that the responsibility to deal with their issues is being passed between BDO and Norton. If I sit back and shut up and you take the floor, what is the message you have for those frustrated owners? Clearly communications haven’t been great.
Well I would love to be able to write back to them all individually because I can understand their frustrations and the position that they’re in. But if they could look at things from my perspective they would see that I have to deal with all customers in the same way, that is a principle I will not change because dealing with one customer that is shouting louder than another is not the right thing to do. The liability and process that’s in place remains with NMUL and the liquidators of NMUL. It’s not with us and I cannot intervene. I can only work on looking to find a solution to this problem in the future. We have investigated the bike at our cost and on our time. The solution is to provide something that works. If you look at the complexities of the problem you can see that repairing the old bikes doesn’t make sense and it’s easier to offer a new bike.
Okay. So given the scale of what it’s possible for Norton to build, which sector of the market do you imagine will financially contribute the most in the short term future for Norton?
To be honest, we’re still in the process of validating scale of production versus profit margin. There are clearly many sectors that Norton could have product in and our business plan will help us understand which will work the best for us, but at this time I don’t want to say anymore on this.
Robert you’ve already alluded to us seeing a new bike at the show in December, talk to me about the future beyond that. What will be the largest step Norton takes in the next 12 months and what does Norton look like in 2030?
I think I would like to achieve a sustainable future for Norton. If you look at the past there have been moments of success and then obviously moments of failure. It has been quite a rollercoaster over the last 120 years. I would like the management team to provide sustainability, which will come from having quality product and happy customers. In 2030 Norton is a technology driven and relevant player in the market. I see racing activity, I see different drivetrain options that include both internal combustion and electric. Looking at the next 12 months, I’d like to establish Norton as a professional business platform, I’d like to implement processes that create quality. Everything from working with certified suppliers to creating our own parts. When you’re starting from zero these things take time. These are things that aren’t currently visible to the press or to to customers but will have a huge impact on the quality of our products. To do this we’ll need to bring in an excellent management team who will manage which partners we work with and which work is outsourced.
Let’s take a look at the features and benefits offered on the Gen one or indeed the new Gen two V4 and how if you compare it to the rest of the road sports bike market, there has been significant steps made in terms of cornering traction control and ABS systems for example. Will the Gen two bike be comparable to its competition?
I don’t think it’s possible to engineer this kind of functionality in the short timeframe we’re working to. Obviously these features are being considered for future models but all of these things need to be calibrated and developed and these things take time. I would like for Norton to be cutting edge and lead the way when it comes to these systems but that doesn’t happen overnight.
In terms of Norton as it stands right now, what is the thing that is keeping you awake at night and what is the thing that makes you jump out of bed in the morning?
Well the good thing is I can always sleep. I have no problem with anything I’m dealing with that keeps me awake at night. The journey is the thing that I enjoy the most. We have a great brand and a great management team, we also have a very receptive audience who are excited about seeing what’s new from Norton. Clearly there are issues to deal with and I understand why people are being vocal about issues they’re having, but there’s a wider community looking at us and in general they’re looking forward to the future with us. I’m passionate about reviving this iconic British brand.
Robert, thank you for your time. I look forward to telling your Norton story.
In other news.
Yesterday the Insolvency Service announced that Simon Skinner has been disqualified from being able to hold the position of director of a limited company for the next five years. The reason for this was given as such:
Between 09 September and 2019 and 12 November 2019 Simon Peter Skinner caused and or allowed NMUL Realisations Limited to remove parts off at least six customers’ fully paid for and owned motorcycles which had been returned under warranty (“warranty customers”) with values totalling at least £123,000, for use on other customers’ motorcycles resulting in the motorcycles of the warranty customers remaining incomplete as at the date of administration.
How does that impact Simon’s current position as head of design at Norton?
At this time, I’m not sure it does. Both John Russell and Robert Hentschel have voiced their support of Simon in his current role. He isn’t currently employed in a capacity that requires him to be a director and it’s unlikely that he ever will be. It’s likely that there’ll be a statement from Norton in the coming days, if there is we’ll update this part of this piece with the relevant update.
What about Stuart Garner, he was a director too?
Yes he was, but as of today I couldn’t find any information on the Insolvency Service website relating to Stuart Garner not being allowed to be the director of a limited company.
What did you find?
I found that on the 25th June the British Motorcycle Manufacturing Academy (BMMA) changed it’s company name to Care for Survivors Limited. The nature of this business according to Companies House is the manufacture of motor vehicles and technical and vocational secondary education. Care for Survivors Limited doesn’t currently hold charity status according to the register of charities – charities commission, but the BMMA still does.
The four trustees of the registered BMMA charity are listed as the same three directors of Care for Survivors Limited, with Stuart Garner being listed as the CEO and person of significant control holding 75% or more of the company shares. On the charities register, the BMMA’s associated and registered business number is 08425307, which is the same number associated with Care for Survivors Limited.
What does that mean?
At this stage, I’m not sure. I’d give the BMMA a ring but their registered phone number is the same number that Norton Motorcycles are currently giving as their head office contact number (01332 811988).
I know that there are certain benefits afforded to a company when it holds charity status, corporation tax relief on profits and relief on stamp duty for any freehold property purchased for example. There are also grants and funding that can be applied for if a company holds charity status. Maybe Stuart intends to start doing charity work for the ex-services community. As a former soldier myself, this is a subject close to my heart and I’m keen to get involved and help out however I can. Stuart, if you’re reading this, get in touch. I’d love to help…
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