26 Aug 2012

Interview with Norton CEO, Stuart Garner

Norton Motorcycles, purchased in 2008 by businessman Stuart Garner, is a British success story.  From their factory at the Donington Park circuit they produce iconic, yet modern, motorcycles and competed at this year's TT - winning the Motul Team Award for Technical Excellence in the process.  

As with any manufacturing business starting from nothing and growing into what it is today - a multimillion pound company that sells hundreds of motorcycles a year - Norton has faced its fair share of challenges. However, thanks to the dedication and determination of its CEO Stuart Garner, the company has turned the corner and the future for Norton looks brighter than ever.

In recent weeks Norton has been the subject of unbalanced negative articles in the specialist press. Unbalanced because Norton themselves were not given a fair opportunity to comment or contribute to those articles.  This is an interview with Stuart himself that addresses the concerns raised in that coverage*

Critics are saying Norton Motorcycles have consistently failed to fill orders on time and there have been problems with holding deposits.  Do these accusations have any basis in truth?

Stuart Garner: In the last two years we have delivered many hundreds of motorcycles into the UK. Due to great demand and a difficult UK supply chain, it has sometimes taken longer than we would have liked to deliver customer’s bikes. The supply chain issue is the primary reason. When our very first bike built left the factory, we had 200 suppliers.  Now we have less than 100 suppliers, which is an indicator of the challenges that we’ve had selecting the best suppliers. Suppliers that are able to both make quality parts and deliver on-time.  It is also an indicator of just how much work and investment we have done to bring a huge amount of manufacturing in-house at our factory at the Donington Park race circuit.
Any customer who does not want to wait for their new Norton can ask for a refund at any time.  I can also say that all refund requests have been settled in full. Customers’ deposit money is very safe. We should take a moment to look at the up-market car industry.  Those manufacturers regularly have long waiting times and routinely require a deposit from a potential customer up-front at the time of purchase. The reason they do this is to form a fair and transparent waiting list, which you join at the time of your deposit. This then gives the buyer a proper position for delivery and shows a clear commitment from them thereby ensuring they simply do not walk away leaving the manufacturer during the building process. At Norton, all bikes are hand-built to order in a similar way to a bespoke and up-market car. This is why we use a deposit style system for direct sales to UK customers only. This is the key differentiator between Norton and other motorcycle manufacturers that use traditional assembly line processes and build speculatively. The relatively small amount of deposit money held at any one time makes no difference to the funding of the company. When we do take an order the price for the motorcycle is fixed at the time of deposit. Some customers have placed orders at the fixed price and due to factory increases after ordering they have benefitted by well over £1,000 at delivery time.  Our website [www.nortonmotorcycles.com] carries regular news so you can follow the factory progress  

Is it true some customers have waited almost two years for a bike?
SG: The Commando 961 was launched at the NEC UK Motorcycle show in 2009.  We had a huge amount of interest and established a UK order book. All these bikes have now been built and delivered. We do have a small number of customers who have waited over a year.  We were overwhelmed by demand and we should have been much more cautious on delivery dates. Hindsight is of course a wonderful thing, but if we had to do it over again we would have advised much longer delivery times to customers. Generally the longer waiting bikes are dual seat models that have been ordered with specifications chosen by the customer around 18 months ago. The delay here has been for the tooling of the new seat moulding. This particular issue is the fault of Norton as we had tooling problems with the first design and had to redo the drawings which took a long period of drawing time to get right. I apologise to all of our customers who have had to wait beyond the period of time which they were quoted, and I thank them for their patience. 

Some people are saying Norton can't provide spare parts and that you're having difficulties dealing with suppliers. 
SG: Norton maintains a good stock of parts at the factory and this has not been an issue for some time. It has taken time to grow our parts stock as we were faced with having to choose between supplying our dealer network with spares or continuing to manufacturer new Norton motorcycles. This issue was again a standard issue facing a start-up manufacturing business.  Again, due to the increased manufacturing capability that we have in-house within the Norton factory, we are able to meet our part needs both for manufacturing and for our dealers. I have transparently tried to set out where Norton is right now. Turning to suppliers, I have a personal belief of keeping the Norton factory as British as possible. We have a mind-blowing choice of Japanese and other brands bikes out there. With Norton we have the chance to bring back a fabulous brand in an authentic way. Norton motorcycles are manufactured using quality British-made parts to assemble a truly hand-built bike. Unfortunately as we all know the halcyon days of the British motorcycle industry passed by many years ago.  This left the UK with only the bare bones of a suitable supply chain. It has taken a huge amount of effort to re-educate and engage the supply chain in the UK back to the requirements of a production motorcycle business. As stated earlier we started with some 200 suppliers and stand here today with less than 100.  Some suppliers just don’t want the work as the aerospace, oil industry or military markets keep them busy and pay top prices. Making parts to a limited volume and having the discipline of regular timely supply is not the demands some suppliers want or can actually achieve. Having worked hard at this for over two years now we have an amazing nucleus of UK suppliers emerging.  This is great news and bodes really well for the years ahead. Not just for Norton but the knock on effect of all the jobs being created at these suppliers with the Norton orders coming through to them.

Two of your most vocal critics - Fritz Egli and Nigel Gibson - are quite uncompromising in their criticisms of you and Norton. How did those relationships sour?
SG: I do not think it is polite or appropriate for me to comment too much on individuals who have or had vested commercial interests in Norton. However, I will say Norton respects Fritz and his business, you simply have to listen and respect someone who has been around forever and achieved as much as he has. We continue to work closely with his company and have been shipping bikes and parts recently.
I make no excuse or apology whatsoever for moving supply to more professional suppliers and am not surprised to learn that previous suppliers speak negatively of the company. Norton has a duty to its customers to supply a best quality hand built motorcycle on time; suppliers that do not help us achieve this let everyone down and must be replaced. There are over 1,000 components to our bike, and if just one supplier lets us down we cannot complete a bike. This in turn means we let the customer down by failing to deliver their bike on time and we let the rest of the supply chain down as our volume drops and we buy less parts from them – a vicious cycle. Ex-suppliers should look at themselves and ask why they failed, an element of honesty to themselves would help rather than blaming everyone else... 

Is Norton in a financially sound position?
SG: Norton is today in better financial health than it ever has been. It is a hugely expensive undertaking to simultaneously bring back an iconic brand and a manufacturing business. For sure we have had highs and lows in cash-flow. This is quite common in start-up manufacturing businesses. We have managed these highs and lows whilst continually investing for the long-term in the items that the company needs to make a quality motorcycle. Today the company is well-financed to take on both today’s challenges and those further ahead in the coming years.  

Why did you decide to compete in the Isle of Man TT and why do you think you are being criticised for elements of your participation?
SG: Norton has a huge history with the TT races.  We won the first race in 1907 and have won many since. Everyone at the factory wants to race, and it’s a great way to test new ideas and components while giving the brand a level of global awareness in a way that is unique. We know that some people questioned why we put an Aprilia V4 engine into the bike. This was done for both cost and reliability reasons. It takes a several years and a few million pounds to develop an engine that is capable of winning at the TT. As CEO I would be irresponsible to commit such funds to a racing effort when we are still investing and building up our road bike business. We felt we should go to the TT to begin the learning process of what is required both from a chassis perspective and of course to learn what is required from an engine. We need this knowledge in order to slowly develop our race platform at a rate that is viable. Racing also allows us to bring this knowledge in-house where we can develop new capability, wisely using the data we have captured. Currently our total race budget is made up from sponsorship, road bike suppliers and team clothing sales. No funding at all comes from the factory and, I am not prepared to gamble the future of Norton on racing. Only when it is financially viable will we spend funds on racing. We understand some of the different views of what constitutes a Norton, but we must balance them against some of the personally vested interests and passionate support for other brands. In other words, fans of competing brands will always have negative things to say about Norton. I would ask our Norton loyalists for the patience to let us develop at a pace that is suitable to the business we have today and the business we want to have in the future. I passionately want what we all want: a 100% built Norton on the Senior podium. We’ve started the journey...

You've taken on a major task in reviving Norton – a brand beloved by motorcyclists around the world. What do you see as the challenges and responsibilities of your company in this task?
SG: The challenge is to get a quality motorcycle to market that is fit for the brand and something that all stakeholders can be proud of. The responsibility is not to mess that up!

Have you read the opinions put forward by various sources online?
SG: I’m generally in the factory seven days a week and do not read forums or other types of posts. I do listen to credible advice and opinion of course, but I also take care not to get too distracted. If you’ve not had experience of operating a global production motorcycle brand and business then what qualifies your opinion? This is Britiain, the home of the doomsayer and the negative all-talk do-nothing attitude. Which of these sources have actually got their money out and had a go? As mentioned, reviving a brand of such iconic stature is a huge challenge, but we're doing it and succeeding.  We were told we would never buy the brand, we did. We were told we would never make a bike, we did. We were told we would never sell a bike, we did. We were told we would never Euro 3 the bike, we did. The doomsayers list of ‘you never will’ is endless.... Understandably there will always be many opinions. However there are reasons why former employees and former suppliers are no longer with Norton.  Their opinions remain their own and will not influence the forward direction of the brand or its strategy. We do listen carefully to experienced engineers within our supply chain as well as our knowledgeable and experienced staff. There are many reasons why Britain lost its entire famous bike manufacturing industry, it is no easy task keeping British supplied and hand built, simple as that. However both I and the Norton team are committed to working hard to put Norton back on the map.

In a perfect world, what characteristics should define a Norton Motorcycle and why would a rider want a new one?
SG: We believe our British heritage is key. We now have the opportunity to bring back an authentically hand-built British bike. We will never make tens of thousands of bikes or have hundreds of dealers globally. These factors will continue to make the bike an exclusive and sought-after machine, which in turn gives great pride of ownership. All these factors together then help the residual price stay very high, meaning that the bike will hold its value over the long-term. Here in the UK used bikes still command a premium over new.  

You're obviously a man of some wealth. Why did you take on the challenge of reviving one of the most iconic brands in the history of motorcycles?
SG: Ever since I was at Donington watching the JPS Norton’s winning the Super Cup, I’ve loved the brand. I had an opportunity to bring the brand back. Who on earth would turn that down!?

What kind of rider needs a Norton?
SG: Norton has a huge pedigree and over the years has built up an iconic status. For riders wanting huge speed and cheap performance, Norton motorcycles are not for you. If you want to enjoy real-world fun motorcycling and value the pride of ownership, we are the logical choice. We are looking to build exclusive beautiful bikes for the rider that enjoys all the things that motorcycling can bring. Our owners range from 24 to 82 years of age and from all walks of life. Motorcycling has a habit of leveling all the classes and when riding it brings us all together.

Given the difficulties you’ve faced, would you do it again?
SG: Not one day have I ever regretted doing this. The Norton factory has a very special buzz about it. The staff here are amazing and are dedicated and committed to building quality bikes. It has been a complete privilege to be involved. Very many of our customers have become personal friends as have suppliers and dealers.  In all an incredible experience. 

Looking back, what would you change in your efforts to re-define and revitalise Norton Motorcycles?
SG: My one and only regret is the time we have taken to deliver early customer bikes. I truly wish we could turn the clock back and do a better job setting expectations, communicating and meeting our delivery schedules. We are working hard and have now got on top of this, but we have let some people down and for that I’m sorry. The whole team is committed to building Norton back into a world-class manufacturing business.

What bikes are you riding now?
SG: Norton 961 Cafe Racer

What, in your opinion, is the greatest motorcycle ever made?
SG: Norton 30M

If you had one thing to say to anyone who's considering buying a new Norton Motorcycle, what would that be?
SG: You can trust both the factory and our dealers to support and look after you as one of the Norton family. This is not just for a new sale, but for many years after as you enjoy the pleasure of ownership that your Norton brings.

These are tough times for motorcycle manufacturers. Who do you see as the top players in your market segment?
SG: Norton are quite different in our market position and don’t really have direct competitors for the Commando 961. Generally I think the quality US and European brands will do well going forwards, while the Japanese segment is crowded both in brands and models. This segment is going to come under increasing attack from other Far East manufacturers. These bikes are sold on numbers, price, horsepower, and speed. It’s an ever decreasing circle and looks really difficult for the companies to make money in this economic environment.

*With thanks to Todd Halterman - http://www.motorcycleinsurance.com/interview-with-stuart-garner-on-the-reincarnation-of-norton-motorcycles-and-nortongate/