The co-founder of a classic car restoration company in Shropshire has given the business to its 60 staff.
Peter Neumark, who has owned and chaired Classic Motor Cars since it started in 1993, has turned it into an employee ownership trust, which means the staff own and run the business themselves. They will share profits, in a similar way to the John Lewis Partnership, which pays out annual bonuses as a percentage of salary to staff. Part of the bonus (the first £3,600) will be tax-free.
The Bridgnorth-based company, employs more than 60 people, including seven apprentices, and has restored many famous Jaguars, including an E-type Le Mans race car from 1961. Last year it turned over £5.2m. All employees will join the trust. Future apprentices – Classic Motors plans to take on four to six every year for the next three years – will join the trust after a certain period of time.
Neumark said he was “nearer 70 than 60” and his co-founder Nick Goldthorp was also approaching retirement age, “so we felt we had a duty to oversee a passing of responsibility, and who better than the workforce themselves”.
Luke Martin, 31, who joined the company as an apprentice 12 years ago and has become head panel beater in charge of body fabrication, said: “We are all a bit shocked, it took a while to sink it. We’ve got this amazing opportunity to put ideas on the table and shape a business. It gives everyone drive to work a little bit harder when it’s your business.”
The firm was set up mainly with Neumark’s investment. His majority shareholding has now been transferred into a new entity, the Classic Motor Cars Ltd Employee Shareholder Trust. The company made a small profit in the tens of thousands of pounds last year, which was affected by the cost of moving into new premises.
Neumark said: “This sort of structure best exemplified by the John Lewis Partnership was deemed to be the best home for the company to ensure its future.”
The day-to-day management of the business will be controlled by an operational board, which will report to a board of trustees, chaired by Neumark. Martin will become a trustee after a staff vote.
Tim Leese, managing director of the new operational board, said more than 300 businesses in the UK were owned by their employees and that it was a growing sector. He said the reaction from Classic Motors staff had been “unbelievable”, although they were sceptical when the plan was first aired 12 months ago, he said, with the “odd comment – is it a tax fiddle?”.
[Source:-The Guardian]
