How Wrightbus took the wrong turn
Questions are already being asked about charitable donations
Workers at Wrightbus in Ballymena leave with personal tools on Wednesday. Wrights Group’s discussions with potential buyers all ended without a deal in place. Photograph: Colm Lenaghan/Pacemaker
How did Wrightbus, a winner of the Queen’s Award for exporting, one of the UK’s top industry accolades, take such a wrong turn?
Though Brexit has not yet come to pass, the company’s demise is rooted in the 2016 vote by the UK to leave the European Union. The referendum outcome triggered a combination of factors that created difficult market conditions for the Wrights Group.
The irony is, of course, that company founder William Wright had been one of Northern Ireland’s most vocal supporters for the Leave campaign – the first senior business figure in the North to do so.
That view appears to have been at odds with former chairman and chief executive Mark Nodder, who stepped down in March. He told The Irish Times back in 2017 that the Brexit decision had “caused a degree of uncertainty in the market place” and had made their customers think twice about investment plans.
“Our customers are private and state-owned public transport operators, some of whom have parent companies in Europe, so inevitably there are a lot of forces at work when considering whether to purchase a new fleet of buses,” Mr Nodder said.
Then there was also the impact of the Brexit vote on sterling which he acknowledged had increased the cost of raw materials.
“In the medium term we hope that exchange rates stabilise at a level which assists our competitive position in export markets,” he also said in 2017. They didn’t and the increasing uncertainty surrounding Brexit and the UK’s future relationship with the EU continued to impact on the Wrights Group day to day business.
In July it emerged that the Wrights Group had called in Deloitte to “bring on board an investor”. But discussions with potential buyers – including Northern Ireland businessman Darren Donnelly, Chinese groups Weichai and BYD and Jo Bamford, son of JCB chairman Anthony Bamford – all ended without a deal in place.
Now a very uncertain future awaits not just the company but its suppliers.
“Businesses in the supporting supply chain have been doing what they can to support the company over this past year in the hope the business can be saved,” said Stephen Kelly of Manufacturing NI. “They too face some very uncertain months as they try to secure the money they are owed and replace the trade they have done with the Wrightbus.
“That won’t be easy as there’s a significant cooling of demand across the UK economy as Brexit bites and buyers reluctant to make big capital purchases,” Mr Kelly said.
For the 1,200 former Wrights Group workers, there will be intense scrutiny of how both Wrights and its parent company, Cornerstone Group, could have ended up down a dead end.
Questions are already being asked about charitable donations made by the parent company. Latest accounts for the Cornerstone Group show that in 2017 – the most recent year for which accounts are available, it made charitable donations totalling more than £4.1 million to “fund the group’s commitment to Christian evangelical and other charitable activities”.
Those donations dragged a business that had been making profits of £10.86 million in the year of the Brexit vote to a loss of £1.7 million just 12 months later.