Finning captures CAT franchise

In a surprise move last weekend it was announced that Finning UK is now the sole Caterpillar franchise-holder for the UK mainland.

Finning is also currently negotiating with Unilever to acquire the assets of its Leverton subsidiary which formerly held the Caterpillar franchise for regions of the country not covered by Finning.

To finance the deal, which will boost Finning's turnover from some œ850 million to more than œ1 billion, the Finning Group has surrendered its UK finance subsidiary and in future will only offer CAT Finance packages to its customers.

It has also given up its CAT franchise in Poland where it has had an established and profitable, though small, presence for some years.

Losing the CAT franchise could be construed by some as effectively making Leverton's UK operation almost worthless.

However, a Caterpillar spokes-man told CJ: "A Caterpillar franchise is awarded after taking into consideration many factors including ones like behaviour expected in a situation such as this. Although CAT has no part in the negotiations between Unilever and Finning there is confidence that the negotiations will be carried out in a friendly and ethical manner."

Leverton does hold an agricultural franchise in the UK and it has overseas dealerships in Africa, notably Nigeria and Ghana. These businesses are to be sold separately with the African franchises going to Mansour which is the CAT dealer in Egypt.

At present Finning UK has fifteen branches while Leverton has nine. Although the two franchises covered different parts of the UK territory in practice there maybe some overlapping of branch coverage.

That is likely to mean a review of branch operations. Close, but differently-owned branches, could be looking at closure or amalgamation. There must also be some degree of HQ duplication.

Sources close to the Cannock-based Finning UK told CJ: "Leverton employs some 900 people and around one-third of these will be superfluous to requirements.

"It is expected that the people affected will not be 'on the ground' types such as sales/support and service personnel."

Finning is known to have been carrying out strategic studies to determine its options when and if it was successful in obtaining the sole UK franchise.

A question mark must now hang over Leverton's BCP Plant Hire subsidiary which was the subject of much controversy when it was set up in 1995. Finning has stated that it is not interested in competing with its hire fleet customers.