Business Profile: Automotive specialist Eric Wallbank
Cars, says Eric Wallbank, can get into your blood.
His paternal grandfather worked in the toolroom at “the Austin” – as generations of Brummies called Longbridge – and his own love affair with the automobile began before he could drive when he took one to pieces and rebuilt it.
And it’s why he studied engineering at university.
Now, aged 55, he’s at the heart of the global car industry as head of business adviser Ernst & Young’s UK team of automotive specialists.
He is based at the firm’s Birmingham offices, but works throughout Europe with regular visits to emerging countries such as China thrown in.
Eric has worked for Ernst & Young since 1995 but recent years have produced some stern tests of his and his team’s skills as advisers and troubleshooters. That’s because carmakers have struggled to stay afloat through a recession that has sent sales plummeting while meeting the huge cost of the technological changes needed to meet the demand for cleaner engines and lighter, more practical vehicles.
“It is the first time in a hundred years that we are standing back and innovating the power trains that drive the vehicles that we put on the road,” Eric said.
“So we have people looking at hybrids and electric cars and companies are putting a lot of investment into those technologies with the uncertainty over which will be successful in the market.”
Eric Wallbank was born in Swindon into a family with its roots firmly embedded in Birmingham.
“My mother is from the city and she was one of a large family so I have a lot of relatives here.”
He and his family live in the village of Wilnecote in the heart of Shakespeare country, just three miles from where his great-grandmother was buried.
Eric joined Ernst & Young after taking an engineering degree at Nottingham University and working as a design engineer and a consultant for a number of companies, including a stint in Australia.
He soon found himself working for clients in a wide variety of automotive sectors – suppliers, manufacturers and dealers – which, he says, enabled him to “join the dots up across the whole value chain of the industry”.
The UK automotive team is plugged into a European base in Stuttgart and is part of an operation spanning Europe (including Russia), the Middle East, India and Africa. There are similar Ernst & Young teams working in Detroit and Shanghai.
“It is a global team, the industry is a very important one for Ernst & Young,” Eric said when we met at Ernst & Young’s Birmingham centre. The fact that his qualifications are in engineering rather than accounting mean he is able to understand the nuts and bolts of the companies he works with.
“There is a lot of technology in the sector and a lot of people, even at very senior levels, came from the research and development and product design part of a car company or component supplier.
“So it helps me understand the company. My personal view is that unless you understand the technology and can relate to its importance, it is hard to grasp what the company is doing.
“I am not unique in our firm, but I am a little bit unusual in that I don’t have a formal accounting qualification.”
So what role does Eric play with Ernst & Young’s automotive customers? “It depends on the company, and it also goes in cycles depending on the economy,” he said. “So a lot of the work in the last year or two has been helping companies in some degree of financial distress. That could be either helping them and the banks that support them understand the true situation of the business so that the banks might have more confidence to lend to the business.
“What we have found in the downturn is that a lot of banks are looking for that independent reassurance from a firm like ours that the company they are lending to is financially strong enough to repay the loan.
“Sometimes it is looking at companies in a much greater degree of distress, approaching insolvency.
“But on the other hand a lot of the work is helping companies improve their performance in some way, by taking cost out or if they have got a particular issue they are trying to address where they don’t have the expertise in-house.”
I asked Eric how he thought car makers and their suppliers are emerging from the recession?
“What is interesting,” he said, “is that when we sat looking at the industry about a year ago lots of people were expecting there to be a significant number of failures among suppliers and even manufacturers through the downturn.
“About this time a year ago, the US Senate had just rejected the turnaround plans for GM and Chrysler in North America and that created huge uncertainty there but similarly there was uncertainty in lots of other places too.
“What we have seen in the last 12 months has been much less in terms of failure than we had expected both among suppliers and manufacturers.
“Partly that is because of significant government support for manufacturers, the restructuring of GM and Chrysler going through Chapter 11 bankruptcy process. It was almost inconceivable a year ago that that would be the case.”
