Mike Baunton knows the value of crisis management. Just before we
met he had put himself through a gruelling crisis training session with
Regester Larkin. This interest is not so surprising. As head of an
industrial engineering group producing diesel engines - one of the
latest environmental hot potatoes - for over 4,000 distributors and
dealers in 160 countries, he feels it pays to be prepared.
Recently environmental campaigners have increasingly focused on diesel
as a potentially deadly fuel. Although it is more fuel efficient than
petrol, and therefore produces less carbon dioxide, there is growing
concern that particle emissions may damage the lining of the lung or
worsen existing illnesses such as asthma and bronchitis. Friends of the
Earth reckon that heavy diesel lorries produce more than 70,000 of
particulates a year with a resulting annual death toll of 10,000.
New worldwide off-highway emissions control regulations are
progressively coming into force. The US has already established emission
guidelines and the first tranche of new regulations will hit the
European market later this year. On 19 June, the European Council of
Environment ministers agreed to tighten the European Commission’s
proposed directive on fuel quality and vehicle emission limits to come
into force by the year 2000.
Meanwhile, more aggressive local legislation on fuel content is also in
the pipeline. Germany and Britain, for example, are currently trying to
persuade the EU to cut the amount of sulphur in diesel to 50 ppm.
’We want to keep ahead of legislation and public opinion,’ says
’We know we have to conform to environmental legislation, but customers
are not prepared to pay extra for environmental engines, so we have to
market the better efficiency and lower noise.’
The company has already launched the 1000 series, a quieter engine, with
lower running costs which exceed anticipated emissions regulations, and
is also developing natural gas engines as an environmentally-friendly
In February, several major players in the automotive diesel engineering
industry including VarityPerkin’s parent LucasVarity, Vauxhall and
Rover, formed The Diesel Industry Forum, an alliance designed to counter
what the industry perceives as ’misinformation’ about diesel. ’Vehicles
are a soft target because they’re visible but other forms of power, for
example electricity, require more power station generation, which
actually means more emissions,’ says Baunton.
With a global base of distributors and dealers, an equity stake in
manufacturing outputs in China, Mexico and Argentina, and plans to
expand VarityPerkins presence in India, Baunton is well aware of the
growing environmental awareness in developing economies.
’The question isn’t if, but when, countries such as China will follow
the example of the US and Europe in terms of legislation. As we move
into developing countries people are going to focus on emissions but
they forget about the emissions that come from power stations. When
people hear diesel they think dirtiness and forget about its thermal
efficiency,’ says Baunton.
Mike Baunton is no stranger to the vagaries of international industrial
markets. Formerly president of Walker Manufacturing based near Chicago
and European managing director of shock-absorber specialist Monroe,
Baunton worked in Australia and Brussels before taking the reins at
He is keen to point out that his international management experience has
taught him to be sensitive to different cultures. ’I am a strong
believer that industrial tourism isn’t good enough. It’s important to
learn other ways of doing things and being sensitive to different
attitudes and approaches.’
He is also keen to build on the strength of the VarityPerkins brand and
heritage. ’It’s not just about selling your products, its more about
selling the image of the company and giving potential customers the
chance to learn about you. While I am a strong believer in
above-the-line marketing, there’s also a need to establish trust - to
convince customers that we are in for the long haul.’
The company is already represented by Manning Selvage and Lee network
partner Genesis in India, and Edelman PR Worldwide in Korea, two of its
major targets for growth. And last year VarityPerkins received a
commendation in the PR Week Awards for its campaign to win over the
Chinese market following the signing of a joint venture with Tainjin
Engine Works. From a recognition level of next to zero, VarityPerkin’s
team working together with local agency China Global to make
VarityPerkins the most prominent diesel engine brand in China, netted
pounds 50 million of new contracts in two years.
Previous investment in PR has also paid off for VarityPerkins in the US,
its most developed market. Previously sold under Detroit Diesel
Corporation branding, VarityPerkins’ products have recently been
relaunched in the US through a new distribution network. ’We started our
PR activity three years ago and have gradually won over the US trade
media,’ says Baunton.
But, while the company had established good lines of communication with
the automotive and engineering press, it neglected to address the
Washington-based defence industry media, with potentially disastrous
When VarityPerkins won the contract to provide diesel engines to power
Crusader (the next generation of mobile artillery) 18 months ago, there
as an outcry about the choice of a UK supplier.
’We hadn’t oiled the wheels in PR terms and it became an issue,’ says
Baunton. The company kept the contract but forestalled any future
resistance by bringing in Detroit-based PR agency Stackig to focus on
the defence industry, supplementing the industrial sector work already
carried out by its Detroit agency National Editorial Services.
The company’s plans for world domination were significantly boosted by
last summer’s pounds 3.2 billion merger between its US parent company
Varity and the UK parts manufacturer Lucas, pushing the new LucasVarity
into the FTSE 100 index. Originally a family business, VarityPerkins has
grown into a global business with projected growth from dollars 1
billion to dollars 2 billion by the end of the decade.
Already, the communications department has felt the effect of the
merger, with an increasing decentralisation of responsibility to
LucasVarity’s seven business divisions and the departure of
VarityPerkins divisional communications director, Jon Chandler, to the
new post of group corporate relations manager at the parent company’s
head office. Chandler now reports to Nicholas Jones, who joined the
newly-merged LucasVarity as group communications director on 1 April,
and handles City relations and group corporate issues.
’Nick Jones will focus strongly on consistency of corporate message.
Perkins has not been listed in the UK since 1951 and there’s a lot of
work to be done in convincing people of the bright future that lies
ahead,’ says Baunton. In the meantime VarityPerkins is hunting for a new
head of communications to oversee its global communications team.
’Investment in PR is worth its weight in gold,’ says Baunton. ’It takes
a long time to build up trust and, if mishandled, can destroy you very
WORK PRACTICE: KEEPING EVERYONE HAPPY
Industrial engineering firm, VarityPerkins faces environmental pressure
on two fronts. In addition to the increasing scrutiny with regard to
diesel emissions, as one of the largest manufacturers in the
Peterborough region, VarityPerkins’s operating practices are also coming
under local scrutiny.
In 1995 the company published its environmental policy and has
subsequently invested in a variety of initiatives to improve the working
In 1996, for example, Baunton invested over pounds 700,000 to extract
dust from the working environment. At an internal communications level,
employees are encouraged to register ideas for improving the working
The in-house magazine Echo is used by the communications team to explain
VarityPerkins’ global and local environmental policies. Recent research
showed that 80 per cent of staff feel that the management do a good job
of keeping them informed about performance and 77 per cent of staff feel
they are kept up to speed in terms of plans and company objectives.
Last year, as part of a campaign to make the local community aware of
its good practice, VarityPerkins hosted a Business and Environmental
Conference in conjunction with Peterborough City Council, Cambridgeshire
Council and Greater Peterborough Partnership. To coincide with the
conference, the PR department also produced a publication entitled
VarityPerkins Business and Environment Review, featuring endorsements
from environmentalists such as Robert Swan of the company’s
environmental initiatives. As a direct result of this initiative,
representatives from 60 companies banded together last month to create
an as yet unnamed Peterborough environmental business partnership. ’It
has become a call for action, far beyond our original expectations,’