A place called Hope
“If we make £1 at the end of the year, it’s alright, isn’t it? I’ve had a wage, everybody’s had a wage. What’s wrong with that? But if there are shareholders, you’ve got to be growing, you’ve got to have a dividend. That’s the problem. That’s what people get wrapped up into: shareholders, massive growth. But you can actually make things if you keep things at a reasonable size.”
Few interviewees inspire in the interviewer the desire to stand up and applaud. The rarity of such occasions makes them memorable. Just once has your correspondent felt such a welling of pride listening to a countryman describe his vision for success and on that occasion the subject was Sir Bradley Wiggins and the topic was his readiness for the 2012 Tour de France, then only a week away. Listening to Hope Technology’s co-owner, Ian Weatherill, however, inspires a similar response.
Hope is likely to occupy a special place in the affections of almost every British cyclist; an emotional claim that perhaps only Raleigh can rival. The beautifully-machined components – everything from hydraulic disc brakes to high-powered lights – exude a distinctly British craftsmanship that anyone with a financial interest in cheap Chinese labour will tell you is no longer financially viable. Weatherill and his business partner, Simon Sharp, say differently.
From tiny acorns…
Hope and Barnoldswick go together like coffee and cake. Weatherill and Sharp were toolmakers at the Rolls Royce plant in this picturesque corner of Lancashire, 10 miles from Burnley but in a different universe. The famous RB inscription on the RAF engines used in WWII refers to “Rolls Barnoldswick”, Weatherill says with evident pride. He and Sharp worked as toolmakers for Rolls Royce for 10 years. Such formidable engineering pedigree bears repetition: Toolmakers. At Rolls Royce. For 10 years.
Frustrated by not having sufficient time to ride their motorcycle trials bikes, the pair struck out on their own, with the aim of downing tools at the precise point in the week at which they had earned enough to pay themselves a wage. The plan was a partial success. Clearly, setting up Hope, a business that now employs 100 people and has an annual turnover of £12m, was a good idea. Ten years of “insane work” – as much as 22 hours every day – to establish the business meant the free time to ride motorbikes never materialised.
Having set up in their previous line, the ratio of bicycle components to aerospace parts made soon reached a balance in which aerospace accounted for 10 per cent of orders and “90 per cent of the hassle”. Their decision to focus entirely on bicycle components was the point at which the business became recognisable as Hope, in about 1989. The first product was a hydraulic disc brake.
The former print works that is now Hope’s third home is testimony to a steady, but continued growth that has seen the business expand from premises of 30k square feet, to 60k square feet, and now to 90k square feet. Weatherill and Sharp moved their machines in four years ago and have not looked back.
Toolmakers and library books
For the cyclist, to be invited to tour Hope’s factory is like winning the golden ticket to Willy Wonka’s factory. To have Weatherill as a guide is like being escorted by Wonka himself (it would be necessary to reimagine Wonka as a plain speaking Yorkshireman with uncompromising views on much of British business, but you get the idea). His pronouncements are made with a glinting eye and wry smile, but without tongue in cheek. Most end with the telling phrase, “How hard can it be?” Given the surroundings – a huge and evidently thriving factory filled with millions of pounds of machinery, spotless despite the occasional and lazy ‘grim up north’ characterisations of a largely southern media – “not very” is the only sensible response.
Take the anodizing area as just one example. “Toolmakers think they can do anything,” Weatherill deadpans, sending up his former trade and walking in the direction of industrial-scale baths of coloured liquid into which raw aluminium components are dunked. “We got a book out of the library,” he continues, no longer joking, and gesturing at the giant plastic tanks, made in house, that hold the dyes that have become as much a signature of a Hope product as the exquisite machining. The process had been costing Hope as much as £30,000 a month when contracted out. Difficulties with the contractor convinced them to bring it in house, hence the library book. The success of the endeavour is obvious. It is difficult to imagine a Hope product not being available in a broad range of attractive colours.
An approach that keeps everything in-house underpins Hope’s success: what might be described as their own take on Sir Dave Brailsford’s famed aggregation of marginal gains. “We stock all our own raw material, we machine everything, we do all our own advertising, our own promotion,” Weatherill explains, “so you’re not making a lot of money – you’re making a little bit on everything.” Distribution is another part of the business now run from Barnoldswick, selling directly to shops in England, France, Germany, and the Benelux. “We make good money, but we’ve taken everybody’s profit out.” Hope can name 40 countries in a global customer base that means exports account for 60 per cent of business.
While the model clearly assists Hope in paying the bills, it is underpinned by a philosophy, what might almost be called a moral dimension, though the no-nonsense Weatherill would undoubtedly reject the characterisation. He believes that businesses who outsource services like cleaning and catering are not fit to be described as such. “If you can’t run a kitchen, you ought to give it up,” he argues. “If you can’t look after a cleaner, you’re not fit to be in business.”
Hope, by any measure, are fit to be in business, and while a healthy balance sheet tells its own story, more tangible evidence of a company at ease with itself is obvious to the factory visitor: company bikes. There are 250 in total and they are everywhere, dressed in Hope’s green and white livery and their components: carbon Giant road bikes, Orange Five mountain bikes, jump bikes and more. The bikes are owned by Hope, maintained by a full-time mechanic, and dressed in an array of Hope components – including some prototypes, offering valuable product testing. “There’s no excuse not to ride,” says Rachael Walker, Hope’s marketing lead, though she herself found one on the very morning of our visit by choosing to run the 12 miles from home to the factory (Walker is emblematic of Hope’s appeal – a former City lawyer who left her previous calling to work for Hope and pursue her passion for racing downhill mountain bikes).
Welcome to the velodrome
It is likely that track bikes will soon be added to the 250-strong fleet of company bikes: Weatherill and Sharp’s latest project is to build a velodrome in the backyard. Weatherill tells the story of its genesis with a mix of good humour and incredulity. His plan last year to tour the nation’s velodromes was soon set back. London’s Olympic Velodrome, he was told, was not due to open for another year. The National Cycling Centre at Manchester was fully booked for a similar period. The telephone number on the website for the Glasgow velodrome was unobtainable (Weatherill says he called Glasgow City Council in search of a working number only to be asked if he was referring to the place with the badminton courts).
Architect’s drawings show in impressive detail how a 200-metre track and an R&D centre will co-exist in a new, curved-roof, wood-clad structure at the rear of the mill. Local opposition, if it can be called such, is minimal, Weatherill claims, and amounts to no more than, ‘We like what you’re doing, but do you have to do it there?’ The answer, reluctantly one suspects from a business that prides itself on good relations with the local community, and employs many of its members, is ‘fraid so. An environmental study (“bats, newts and toads”) has been made, and an application for full planning permission submitted at a cost of £24.5k.
The project is another to which Hope’s idiosyncratic and entirely sensible economic model will be applied (more of which below). Weatherill highlights the cost of the recently completed velodromes in London and Glasgow, both of which exceeded £100m, but where the track amounted to a tiny percentage of the total budget. Scale back the ambition for the structure that contains the circuit, he argues, and the cost reduces dramatically.
Hope’s track will be housed above a new R&D centre in a single span building with pillars. The track will run to the edge of the building, but will be wide enough for four riders. A café will be housed in track centre. Bookings will be made online, and track time charged by the hour. Lap timing will be in the gift of users with an appropriate smartphone app. The proximity of Barnoldswick to Manchester means there will be little shortage of BC-accredited coaches. Weatherill envisages up to 30 riders on track every hour from 4.30pm to 9pm.
He estimates the total investment at £2.5m (“Where do you get £102m from?” he laughs, in a joking reference to the London Olympic Velodrome). Corners, however, will not be cut. The track will be made from Siberian spruce, and it will be built by a man who specializes in the endeavour: Walter von Luetcken. Weatherill will not countenance a plywood track “bodged together by engineers”. There is little that Hope cannot achieve, it seems, but Weatherill clearly believes that building a cycling track does not fall within their area of expertise.
The track will be built “when we can afford it”. The project will unfold progressively, with the site cleared, building erected, and the R&D centre established. When all of this has been achieved, the track will be installed, and finally the café. “We don’t do debt,” Weatherill says. “We’ll just do it nice and steady; sensibly.”
Carbon – the final frontier
We leave the vast, open plain of the factory floor and enter one of the numerous workrooms that lead from it. The room contains what might become Hope’s future: the facility for carbon manufacture. Its contents are quintessentially Hope. In the centre of the room is a £50,000 machine equipped with a laser guided, oscillating knife to cut sheets of pre-preg carbon. On the other side is a chest freezer, value £400. Weatherill and Sharp were told that the carbon sheets needed to be stored chilled. How cold? they asked. “A fancy cold?” No. Just cold. “What’s the point in spending £10,000 on a walk-in cold store?” Weatherill smiles, gesturing at the freezer. “There’s a £9,000 saving.” Significantly, he takes no more pride in the laser cutter, one that works in two axis rather than the five they are used to and which costs about a tenth of one of their many milling machines.
The application of Hope economics to carbon manufacture is an experiment that will intrigue any supporter of the British cycling industry who has ever questioned the orthodoxy that the vast majority of composite production takes place in China because that’s where the skills are. Weatherill snorts in derision at the very suggestion. “Absolute rubbish.” He considers aloud the likelihood of McLaren outsourcing the production of their FI cars to Taiwan. “I hate it when people say, ‘We had to go to the Far East to get the quality’,” he continues, his expression one of amused contempt. “I think, ‘You absolute…’
The truth of the cycle industry’s mass migration to the Far East has far more to do with cost of production, he believes. Significantly, he does not identify the reduced costs of labour in the Far East as the cause of this situation, nor repeat the mantra that British industry can’t be expected to compete on price. The blame, if that is the correct word, he believes lies with the economic model of some British manufacturing, specifically the aerospace industry. His argument can be summarised thus:
The greatest cost in producing carbon bicycle frames is in creating the moulds. The machinery required to do so costs in the region of £500k. The owners of such specialist equipment believe an hourly rate of around £150 is justified/necessary to recoup the cost of investment in the machinery. Carbon manufacture, as a result, is very expensive. “They’re saying it’s £150 an hour plus materials,” Weatherill says of his competitors. “We say it’s £15.”
“We’ve got half-a-million pound machines down there, but if it works for 15 years, and you have one person running five machines, you divide that half-a-million by 15, divide [again] by that person’s wage, it works out at about £15 or £17 an hour. If we were an aerospace machining company we’d say, ‘I’m not turning on my half-a-million quid machine unless I’m getting £150-an-hour.’” Pie-in-the-sky? Doubters might do well to visit the thriving and profitable factory in Barnoldswick. “We work like that on everything,” Weatherill continues. “That’s how we compete with China.”