AM Online

New ownership gives WH chief a fresh lease of life

Peter Head is enjoying business life much more again now Warranty Holdings is part of Ford Motor Company. Ford remains something of a family firm (chairman Bill is Henry's great grandson) and this is a major improvement over his company's previous period of ownership.

"The final few months with ONHC were really difficult," said Mr Head, who remains WH chief executive. "It took ages to get a decision about anything which was most frustrating."

In 1998, Middle East investor Oman National Holding Company paid £36.9m for Oriel Group (which then owned WH) after holding a 22% stake for five years, and Mr Head continued as chief executive.

"ONHC said it wanted to become a serious influence on the warranties market in Europe but it didn't deliver," he said.

Ford had a close relationship with WH and this year decided to go one stage further with an acquisition. Automotive Management revealed the pending deal (February 16) but confirmation did not come until May.

Peter Weber, a Ford of Europe customer service executive deeply involved in the purchase, is based at WH's headquarters in Waltham Cross, Greater London. "There's a totally different atmosphere in the building," said Mr Head. "We know the opportunities are enormous with Ford's resources behind us. But we'll have to earn it - Ford will give us nothing. That's fine, as I've always operated that way.

"To have a new owner which is involved in the motor industry is perhaps the most significant thing for me. "Equally, for me to stay, a new owner had to have a management committed to our company. I had to be part of the process, to provide comfort for our clients."

Ford wanted Mr Head to continue but he insisted on a lengthy commitment, so he definitely has four more years and from 2005 the two sides have agreed on a rolling 12-month contract. The company is successful - it wrote 800,000 'pure' warranties last year and sold another 300,000 other insurance-based products.

"We are beginning to see signs of growth in the sale of used cars through dealers," he said. "I'm optimistic."

The fit between Ford and WH is clear, following the manufacturer's purchase of Kwik-Fit and its strategy of becoming a 'a total personal transport solution provider".

WH provides warranties for many carmakers other than Ford and one of Mr Head's priorities has been to reassure other manufacturers.

There was a precedent. Rival Car Care Plan is a subsidiary of General Motors and has clients other than Vauxhall in this country. Even so, Mr Head was pleased by Peugeot's decision to enter into a new three-year agreement which should help in talks with other manufacturers.

In 1992 the company signed up with Honda and Daihatsu, its first carmaker customers, and since then has worked hard on relationships. Mr Head believes the level of trust developed with a number of competing motor manufacturers (including Peugeot and Renault) over nearly a decade ensures Ford ownership will not cause many difficulties.

Echoing Ford's mission statement, Mr Head said Warranty Holdings had tried to become a 'solution provider' and to provide a range of products. In addition to selling products around extended warranties and maintenance plans, it has added a range which includes MoT cover.

WH has extended to training and development - "showing people how to sell our products".

The internet is transforming the way dealers and WH communicate and was increasing both speed and accuracy. "We have tried to be visionary and to provide a total sales process for dealers," said Mr Head. "We want to make it easier for our customers to work in a market which we believe is going to experience great change."

The first challenge is the need for dealers to register with the General Insurance Standards Council by September 1 if they sell insurance and other products in the showroom. "Dealers should not worry about this but they need to know how the changes will affect them," said Mr Head.

Other changes are much more significant to Warranty Holdings, especially the move by most carmakers to a three-year warranty to cover new cars.

Weighed against the loss of a potential two years of extended warranty is a new source of potential business. By the summer of 2002, the UK is likely to have adopted EU legislation giving consumers more rights to return unsatisfactory cars. Mr Head sees potential for a product to provide suitable cover against this for dealers.

He still relishes all the challenges, and is more comfortable now he has a titanium ankle joint. Arthritis caused him a lot of pain and he had a major operation two years ago.

"It has transformed my life and I am working out four or five times a week," he said. Peter Head is in good form and ready for the next chapter of Warranty Holdings' development.



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