Nailed to the stake

Profile: John Neill; David Bowen talks to the enlightened manager who has transformed Unipart

There are those who would say that John Neill is Britain's best businessman. Never heard of him? Maybe that is because the company he runs, Unipart, is not quoted.

But if you read about management, you will know him. His transformation of Unipart from one of Britain's worst companies to one of the best is textbook stuff. The company now drips with advanced techniques - it has its own "university", all the latest Japanese-style manufacturing techniques, and half the shares are owned by the employees. Neill is one of the few managers who has put the concept of stakeholding into practice. Shame for Mr Blair that he is a solid Tory.

Next week Unipart announces its interim profits. They will be up again, as they have been every year since the late 1980s. Pre-tax profit in 1991 was pounds 15.5m; last year it was pounds 32.6m. Not bad for a car parts supplier living through a fierce recession.

The company owes its success to plain good management and a limpet-like attachment to the Japanese car companies. There are few British managers the Japanese trust more than Neill - Honda, for example, has just set up two joint ventures with him.

He has his critics. Rover, with which Unipart has an exclusive supply contract until 2002, is less than chuffed that he is ploughing his own furrow rather than following its expansion into Asia and America. And while most employees admire him, former managers have complained that he is autocratic and obsessed with control. This may be one reason why he is determined that Unipart should not float - though its also fits his business philosophy. Neill does not believe that concentration on the single measure of profit is any way to run a whelk stall.

He was born 49 years ago in Johannesburg, where his father was a director of a building company. When he was 16 his father decided the family should leave - not out of abhorrence at apartheid but because he believed South Africa would become increasingly unstable. He had relatives in Scotland, so the family decamped to Edinburgh.

Mr Neill had sufficient capital to support his family modestly, and John went to Herriot's, the public school. He had decided when he was 12 that he wanted to be a businessman: "I wanted to make enough money to control my life." In South Africa, that was a respectable ambition; in Britain it was not, but Neill was not the sort to change his mind. Throughout his life, he has worked out strategies and stuck to them. He headed for Strathclyde University, which ran one of the few business courses. His plan was to work hard for a year, then diversify.

While other students were diversifying into drugs and political protest, Neill joined the Conservative Association ("I've hardly moved my position on the political spectrum") and ended up as president of the students' union. He also revived an exchange programme for economics students. Combined, these gave him his first management experience: the exchange programme taught him about organisation while the union gave him a taste of militants. At one rough meeting, he isolated them by identifying Militant members by name. "That stood me in good stead at British Leyland," he said.

His professor persuaded him to stay on for an MBA. He followed another work-minimising plan, but his tutors tumbled it and failed him. He had to retake all 13 exams. Despite this, he worked up a thesis that would prove useful. "I worked out how how to run an after-market strategy," he says.

General Motors had paid for him to take his MBA, and he followed another GM trainee, John Egan, into an informal training programme. At 25 he was the youngest executive in GM Overseas, but calculated that he was still 16 layers from the top; the highest non-American was at level eight. When Egan moved to BL he decided to follow, joining the parts division, Unipart.

It was 1974, BL was in a mess, and Neill soon discovered why. "People were listening to opinion formers who didn't know what they were doing." Even as the group crashed into the arms of the state, he set about selling his MBA strategy for an after-market operation. He succeeded, and in 1977 - in the middle of an 11-week strike - became Unipart's managing director. Here he applied his anti-militant plan, taking the unions on in a way no other BL division dared. "It was not an exercise in macho," he says. "We were cutting out a bunch of thugs."

In the recession of the early Eighties he persuaded BL to spend pounds 2m on a campaign based round the slogan "The answer's yes - now what's the slogan?". It achieved a certain celebrity but was risky, he admits, "because our quality was so bad only British Leyland would buy our parts". Unipart's factories - which made exhaust pipes and fuel tanks - were, he says, "third division".

When he led a management buyout in 1987, he found himself responsible for these factories. City advisers told him to close them, but he demurred. "We can't just be a nation of consumers," he said. He also fought the City's attempt to give shares only to a handful of top managers, insisting that the other employees should have 12 per cent.

His manufacturing strategy now was to copy everything from the Japanese. Rover, as BL was now called, was borrowing half-heartedly from its partner, Honda. Neill cosied right up to Honda and created some of the best factories in Britain.

Neill was closely involved in the study that developed "Tomorrow's Company", one of the tenets of which is "stakeholding", and Unipart comes as close as any to a stakeholder's model. He says he has mixed views on Tony Blair's espousal of the concept. "On the one hand, it's good that it's being discussed; on the other hand, when politicians reduce ideas to soundbites, they are in danger of being devalued."

He is also fiercely critical of another of Labour's sacred cows, the Social Chapter. "How are we going to compete if we have ideas imposed on us that are central to some European bureaucrat's notion about competitiveness, a model which is failing?" he asks. "They keep talking about the train leaving the station. Well, if the train is going to go off the cliff, I'd rather it left the station without us."