Hewden reorganises as revenues fall

14 November 2008

Hewden is restructuring it operations in the UK, replacing the current five-region and five product divisions with a simple, three-region structure that will rent all products.

This means Hewden will no longer have separate divisions for construction equipment, powered access, cranes, portable accommodation and power.

Hewden said as well as the new regional structure, it was looking at ways to improve efficiency, a process that will lead to "consolidation and ultimately closure of some locations" by the end of the first quarter in 2009. Hewden did not say what impact the restructuring would have on jobs at the company.

The reoganisation comes as Hewden reported revenues around 10% down for the latest quarter.

The reorganisation is being led by Kevin Parkes, formerly head of used equipment at Finning UK who was appointed as Hewden's general manager, operations six weeks ago.

Mr Parkes told IRN that costs savings were not the "direct driver" of the reorganisation, but that the "unprecedented economic conditions" had prompted the company to undertake changes that had been discussed for several years.

Mr Parkes said Hewden was acutely aware of the need to retain specialist product expertise at the hire desks and in the sales team, but that the new structure would bring benefits to customers, with just one point of contact for a wide range of products.

The new structure will have an impact on the depot network and on jobs at Hewden, but Mr Parkes would not comment on how many jobs would go or on the likely number of depot closures

Hewden's owner, Canadian-based Caterpillar dealer Finning Corp, this week announced third quarter revenues from UK rental operations - primarily Hewden - were 17% lower at C$92.2 million (€59.1 million), although this reduction is closer to 10% after accounting for exchange rate changes.

Finning said lower utilisation continued to affect Hewden and that its outlook for the "balance of 2008 is considerably lower than previously expected."

Kevin Parkes told IRN than the market was "really tough right now. I think we are focusing on areas that are outperforming the current market". These include public works, industrial contracts, waste and recycling and power generation. "We're going to give our sales people more direction, to visit places that they wouldn't normally visit."

Mr Parkes also said that rental companies should work together to satisfy the needs of customers. For example, instead of investing in new equipment or forming new rental divisions, he said rental companies should seek out alliances with other rental suppliers. He would not be drawn on any particular arrangements that Hewden is discussing.

Hewden's three new regional operations will be heading by Andrew Swallow (Scotland and the North), Mark Hogg (Central Region) and Simon Clothier (South Region).

Mr Parkes said of the depot review; "Reviewing the performance of our depots is part of business as usual for us and is what you would expect from any well organised business. Our focus rests upon ensuring that we are situated where our customers are and that we provide the breadth of products that they require, in the timescales that they need".

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