Sir James Dyson picks his moments. In October, with negotiations with the EU heating up, the company said it would build its whizzy new electric cars in Singapore. Now, with the Brexit temperature at maximum, Dyson has announced the head office will move to Singapore. Is one of the UK’s most successful entrepreneurs – a man who says British business should embark on its post-Brexit future with optimism – guilty of saying one thing and doing another?
Last year, one would have said no. The decision to build the cars in Singapore was understandable if Dyson judged that most of the customers would be in Asia, especially China. Moreover, Dyson’s love of Singapore, plus Malaysia and the Philippines, as a manufacturing base was not new. The company stopped building products in the UK a decade-and-a-half ago.
So one could sit back and take comfort that the biggest slug of Dyson’s research and development budget would still be spent in the UK. More cars built in Singapore should also mean more work for 4,500 smart-technology folk at two facilities in Wiltshire.
But the decision to shift the head office to Singapore, complete with legal incorporation, is different. The relocation “reflects the increasing importance of Asia to Dyson’s business”, says the company’s chief executive, Jim Rowan. But that’s not a full explanation. There are dozens of large UK companies that have most of their operations overseas but still keep their headquarters in the UK. If only a couple of senior Dyson executives are actually moving location, why bother?
One is left with the company’s ambiguous phrase that the shift of head office is about “future-proofing” the business. What does that mean? What future threats – real or possible – does Dyson feel the need to protect itself against? The founder should explain what he means.
No need to shed a Kier
Our rights issue was an embarrassing flop. Our big City investors were furious. So we’re ditching our chief executive to try to make peace with them.
That, or something like it, would have been an easy-to-understand account of why Haydn Mursell has left the construction company Kier Group with immediate effect. Instead, the chairman, Philip Cox, offered this puzzler: “The board believes that, following the completion of the recent rights issue, now is the time for a new leader to take Kier forward to the next stage of development.”
Hold on a minute, how does mere completion of a fundraising affect the calculation? If Cox and his non-executive colleagues thought Mursell was the wrong person for the job, surely the time to drop him was before shareholders were asked to dig deep for £264m, not afterwards.
The attempt to imply Mursell’s departure is somehow an everyday event, or a natural follow-on, is silly. The pre-Christmas fundraising was endorsed by the whole board as a way to strengthen the balance sheet at a time when lenders are in a panic about the entire construction sector. Plan A was surely to keep Mursell in post, since Kier keeps saying (as it did so again on Tuesday) that there’s nothing wrong with trading and this year’s profit forecasts will be met.
What’s changed, of course, is that only 38% of investors took up their rights and the underwriters got whacked. Brexit worries didn’t help, but the low level of take-up sent a clear message that City investors thought Kier could have found a better way to improve its finances. Neil Woodford, whose fund manages a 14% stake (much of it accumulated with poor timing, in retrospect), is the main name in the frame, but one suspects wider discontent.
One shouldn’t weep for Mursell. He’d been in post for eight years, so had time to make his mark. He’ll also get the usual handsome payoff, one assumes. Really, though, it should not be so hard for a company to concede it has been bounced into a boardroom shake-up it did not want to make.