Following a 3rd profit warning in just 5 months Hornby’s chief executive, Richard Ames, has quit the ailing British firm. Is this the end for one of Britain’s best loved manufacturers and can anything be learnt from their current situation?
Hornby, which also makes Airfix kits, Corgi cars and Scalextric, have produced children’s toys since the early part of the 20th century. Until the 1999 they produced most of their product lines in the UK but subsequently moved all of their manufacturing to China. It would seem that, despite desperate attempts to move some production back in 2012, it is the unreliability of their Chinese manufactures that is set to toll the death knell for Hornby. The irony of this will be in the event that Hornby does go under, I would be willing to bet that it will be the Chinese that buy it!
Hornby have struggled to consistently get its products out of China and into European stores for the last few years, despite going to the length of changing Chinese factories in 2014. These stories of businesses struggling to get stock out of China are not new to us. We have heard from business owners of, start-ups specifically, that were lured to China by the promise of low unit prices only to be hit by low quality or delayed stock. Such delays can have devastating effects for fledgling businesses and, as we can see in the case of Hornby, more established companies too.
Another downfall to Chinese manufacturing, particularly, is the potential threats against intellectual property. Again, we have heard first-hand from businesses that have produced in China only to find knock-off’s being produced in the very same factory utilising their innovations. What is more, there is very little you can do about it.
We are not saying that anything produced in China is bad. In fact, it can, and does work very well for some businesses. But, if you are thinking about producing abroad, don’t say that you have not been warned of the dangers and made effort to protect yourself.
As for Hornby, James May, the Top Gear presenter, has recently attempted to encourage his followers to buy a Hornby train set to save the company. We would say that you perhaps opt for one of their Quickbuild kits made at the Plastech factory in Sussex instead.
With more automation and robots becoming more popular we can produce goods here at competitive prices and quality. We are being held back as well with all our large contracts having to be offered through out the EU. We are now having trains built in Spain when the steel could have come from our own foundries. We are not allowed to back our own firms so it makes a good case for a Britexit !
The trail of devastation left by dealing with Chinese factories is nothing new James which is why I moved my factory back to Scotland from Guangzhou, BUT when a Manchester component supplier ignores (for over a week) 2 emails and 3 phone-calls after receiving an official repeat PO and a request for a PI with a confirmed delivery date I am thinking it is not the Nationality or distance from my suppliers that is the problem.
Where has the professionalism and good customer service gone???
yours P****** O**
Eddie M
Read the book “Killing the Host”by Michael Hudson. It explains how the UK and US manufacturing has been rendered uncompetitive and unable to invest and survive by the pursuit of Rentier Economics. Rent seeking raises the cost of energy money everything and kills innovation.
Sounds like a good read!