Can there be a middle-aged man in Britain whose heart did not beat a little faster last week at the news that Hornby has expressed an interest in acquiring Airfix? This would be a merger that might have been dreamed up in a 1960s toy cupboard. Ailing Airfix is owned by Humbrol, which makes the little pots of enamel paint we used to use on our Airfix model aeroplanes, and which also produces Plasticine. Hornby is the great model railway company that also happens to make Scalextric cars. To complete the set, all we need is a deal-structure modelled in Meccano (also originally a Hornby product) by a suave young investment banker called Action Man (b. 1966).
But can Airfix survive at all? Its fundamental problem is that so few of today’s small boys, reared on fast food and computer games, have the attention span or enthusiasm required to assemble a classic Airfix Spitfire kit. Perhaps even fewer know what Spitfires did, or have been encouraged by their parents to find out. Airfix survived as a specialist hobby business, but now the French supplier that actually made the kits has gone into receivership while refusing to hand over its plastic mouldings, leaving Airfix utterly unglued.
If any company can turn that situation around, however, it must be Hornby, which ten years ago was also almost moribund, serving a dwindling market of anorak-clad model railway hobbyists. But under the management of a brisk Mancunian called Frank Martin — who used to run Humbrol — Hornby revived itself so successfully that it was named Company of the Year at the 2002 UK PLC Awards. Martin’s strategy had three key elements to it. He outsourced production of model trains to Guangdong, reducing his costs and — to the anoraks’ surprise — improving quality. He jumped on the Harry Potter bandwagon with the best-selling Hogwarts Express train set, the magic of which allowed many thousands of dads to drag otherwise reluctant sons into the lost world of model railways. And he made a virtue of tradition, reintroducing genuine steam power into miniature locos with the slogan ‘The future is steam!’
A similar formula could surely work for Airfix, and there must be dozens of Chinese plastics factories capable of remaking the missing mouldings in next to no time. Let’s hope the deal goes through: if it does, there’ll be lashings of jelly and ginger pop for tea at my house.
My Barclays bid
I see I have been passed over for the chairmanship of Barclays. Perhaps the board felt I should have struck a more positive note in the book I wrote six years ago, partly about my own experiences working there, called Falling Eagle: the Decline of Barclays Bank — yours for £3.50 on Amazon Marketplace these days. Instead, they have given the job to Marcus Agius — the suavest Action Man of his City generation (b. 1946), with a long track record as a corporate financier at Lazards and a wife whose maiden name was de Rothschild. For captains of industry, to have retained Agius as your adviser in any takeover deal of the past 20 years was like being able to say ‘Henry Cecil is my trainer’ or (possibly) ‘David Linley makes my patio furniture’. A FTSE–100 chief who watched Agius at work in a succession of corporate dramas described him to me as ‘one of the most genuine professionals I’ve ever met’. So I’m not miffed that he has pipped me at the Barclays post, though I shall hope to make a better showing next time.
If there is a next time, that is. Some City pundits think Agius has been chosen so that his skills will be available when Barclays is bid for by — or decides the time is ripe to merge with — one of the giant US banks, Bank of America being the hot tip. But assuming there is still a Barclays chair to be filled when Agius reaches retirement age in five years’ time, the interesting question will be whether the present chief executive, John Varley, is disallowed from succeeding him. A few years ago Varley might have expected to slip seamlessly upwards in due time, without causing the mildest ripple of discontent. But the 2003 ‘Combined Code on Corporate Governance’, an amalgam of the Hampel and Higgs reports that preceded it, states baldly — and to the great irritation of the many sensible business leaders who disagree — that ‘a chief executive should not go on to be chairman of the same company’.
The code does allow for that possibility exceptionally, however, so long as major shareholders are consulted first and lesser ones offered an explanation afterwards. Well, John Varley (who, as it happens, once succeeded me in a middle-management job during my inglorious Barclays career) is widely regarded by his peers as a man of exceptional grip, gravitas and good manners, a chairman-in-waiting from his horn-rimmed specs to his highly polished lace-up shoes. It would be a crying shame if the governance police eventually forced him to go and be a chairman elsewhere. Perhaps if I keep noisily declaring my own candidacy for the ultimate Barclays job, it will help the board see the virtues of lining it up for John Varley.
Na zdrowie, lass!
Having observed here a couple of weeks ago that ‘migration works both ways’, I was intrigued to see that the new term’s adult-education syllabus at one of my local secondary schools, Lady Lumley’s in Pickering, has responded to demand by including evening classes in Polish.
Does this indicate that indigenous tractor mechanics and plumbers’ apprentices are preparing themselves to fill the vacancies left behind in Wroclaw and Gdansk by well-skilled Poles who have recently migrated to fill vacancies in North Yorkshire? Perhaps, but further inquiries suggest two other reasons for this upsurge of eagerness to learn such an unfamiliar tongue. The first is that local small business owners are struggling to communicate with newly-hired Polish employees who have yet to sign on for evening classes in English. The second is that local lads and lasses have noticed that many of the new arrivals are not only well skilled but, in modern parlance, well fit, and the locals are keen to acquire some potent chat-up lines. What’s the Polish for ‘Get your tool kit, you’ve pulled’?