Now that Austria`s ATB has taken control of Brook Crompton, can the UK`s leading motor-maker now put its troubles behind it and win back the customers who have deserted it in recent years? The company`s new owners certainly think so. Drives & Controls` editor Tony Sacks has been talking to them.

For several years, a ritual has taken place each Spring at the Hannover Fair in Germany. The ritual involved Christian Schmidt, chief executive of the acquisitive Austrian motor-maker ATB, and Lim Say Hui, chairman of the Singapore-based Lindeteves-Jacoberg. Each time they met, Schmidt would ask Mr Lim whether he was willing to sell his German-based high-voltage motors subsidiary, Schorch. On each occasion, Lim would politely decline.

This Viennese waltz was repeated at each Fair until last year. When Schmidt popped the usual question at the 2005 Hannover Fair, Lim still refused to sell Schorch - but he did say that he was prepared to talk about selling the whole of his company, which also included the British motor-maker Brook Crompton and the Australian motor company, Western Electric.

This set the wheels in motion for a drawn-out deal that saw ATB initially loaning Lindeteves-Jacoberg €12.5m last September, before converting this into a shareholding of just under 30% in February this year. ATB has since upped its stake to just below 50% and is now in the driving seat following the resignation of Lim Say Hui and the appointment of Heinz Grossmann as chief executive. There seems little doubt that ATB will soon own more than 50% of L-J. The photograph above shows Grossmann (left) with Lim Say Hui and L-J`s new chief operating officer and Grossmann`s deputy, Neil Stewardson.

ATB has wasted little time in starting to turn around Lindeteves-Jacoberg - and, in particular, Brook Crompton.

At one time, Brook dominated the UK motors scene with sales worth around £75m, and a market share of about 70%. But a combination of circumstances conspired to chip away at this apparently unassailable business.

After Brook was bought by Hawker Siddeley in 1968, it went through a succession of changes as a member of various conglomerates including BTR (which it joined in 1991) and Invensys (in 1999). At one stage, it was merged with BTR`s Hansen Transmissions gears business, only to be split apart again a few years later.

As these organisational upheavals were going on, the motors market was changing. Motors made in Asia, the Middle East and South America, were starting to enter the UK at prices that Brook, with its high cost base, could not match. What`s more, many of these imported motors demonstrated a high level of build quality - sufficient to convince many users that fears about the quality of motors from developing countries were unfounded.

In 1998, Invensys reacted to the challenge of the low-cost imports by buying the Polish motor-maker Tamel and started to move production of Brook motors from the UK to Tamel. But the transfer did not go smoothly and took much longer than anticipated. The result was that Brook`s UK customers found themselves having to wait months for orders to arrive - and not knowing when (or even if) their motors would be delivered.

Customers who had stuck loyally by Brook for decades, began to desert the company in droves. Many did so with a sense of regret, but they had to serve their own customers and could not afford to risk yet another missed delivery from Brook Crompton.

By 2002, Invensys was having problems of its own and sold the ailing motors business to a Singaporean entrepeneur, Lim Say Hui, whose Lindteves-Jacoberg group had already established itself as a powerful force in the motors market in Australia and Asia. The Brook Crompton acquisition would give Lindeteves-Jacoberg a bridgehead to establish itself in Europe.

But Mr Lim soon discovered that Brook`s problems were more severe and the business more complicated than he had anticipated. To add to his headaches, the prices of key materials, including copper and steel, were rocketing. The combination of rising prices, a haemorrhaging customer base, and the costs of establishing the Tamel operation, put enormous pressure on cash flow. Brook was not able to pay its suppliers, leading to further disruptions to deliveries, and accelerating the downward spiral. The problems even hit the previously profitable Schorch business where, despite a full order book, deliveries started to slip.

According to Heinz Grossman, Lindeteves-Jacoberg`s newly appointed chief executive, L-J`s "bold" strategy for restructuring the Brook Crompton business was correct, but "the execution could have been done better". The operation was "led by people with no idea of production," he adds, and was carried out too rapidly without paying attention to customers` needs.

At the same time, the rapidly changing market conditions were starving L-J of cash. "They ran out of cash half-way through the restructuring," Grossman reports. By the end of last year, the Lindeteves-Jacoberg group had incurred a net loss of S$156.5m (£55.3m) and its liabilities were exceeding its assets by S$209.4m (£74m). Its net liabilities on 31 December 2005 amounted to S$88.5m (£31.3m).

ATB`s arrival as a white knight last September, with a €12.5m loan, has helped to provide the working capital that L-J so badly needed, and is already bearing fruit, according to Grossmann.

The cash shortages are now "a thing of the past", he declares. Although ATB`s loan took longer to disperse than originally expected, he reports that L-J`s turnover is already increasing. "We are close to breaking even at a group level," he says.

At Schorch, customer confidence is already "back on track," he adds. Although the business urgently needs extra funding, "our budget at Schorch is almost supported already by the order book for the full year".

Jan Kurkiewicz, managing director of Brook`s Tamel operation, recalls that L-J`s cash shortage resulted in "terrible problems trying to deliver motors on time to customers". But he adds that during January and February of this year, the Tamel plant (shown above) produced twice as many motors as it had done during the latter months of 2005.

The Tamel factory, one of Poland`s largest, employs 1,340 people and has the capacity to build 35,000 motors a month. The 240,000m² site includes its own cast-iron foundry and produces a variety of IEC and NEMA motors - including high-efficiency, hazardous area and smoke extraction types - in frame sizes up to 315.

The Tamel plant is "central to our strategy," says Heinz Grossmann. "We`re working above capacity in our ATB plants, but Tamel still has some spare capacity." Recently, ATB placed an order for Tamel to produce 18,000 motors which it did not have sufficient capacity to make at its own plants.

ATB is also gaining capacity at a new Western Electric factory in Dalian, China, which is starting production this month. The site will employ 1,300 people and is expected to generate sales worth €30m a year.

Grossman describes ATB and Lindeteves-Jacoberg as "a perfect combination". Although ATB`s main interest was originally in buying Schorch, once negotiations started for the whole of the L-J group, "Brook Crompton became a primary driver". Brook`s attractions include its "very strong brand name", its Polish manufacturing capacity, and its strength in markets such as the UK and North America where ATB has previously not had much of a presence.

Another attraction is Brook`s W series of high-efficiency (Eff 1) motors - a technology in which ATB is weak. "Brook Crompton still has a superior product," says Grossmann. It is likely that the W motors (shown above) will be sold under the ATB name in Germany and Austria where the Brook name is less well known and where the motors have had to be sold at low margins. "That doesn`t make much sense," says Grossmann.

Although there are some overlaps between ATB`s and L-J`s ranges, especially for Eff2 machines, Grossmann does not expect that there will be any job losses as a result of the takeover. "We will probably look at reducing the number of different designs we have," he says. "But this doesn`t mean that we will need fewer people.

"We`re optimistic that we can recover some of Brook`s market share, and then the volumes should increase," he adds. "The whole exercise is about regaining Brook`s market share, and we`re well placed to succeed in that."

Grossmann is confident that the Brook Crompton business can be turned around. Compared to the £75m turnover that Brook used to enjoy in its heyday, the current figure of around £20m is "nothing," he says. "We definitely need figures close to £40m in 2-3 years` time".

Grossmann`s deputy, Neil Stewardson, has been talking to MDs at some of Brook`s former UK customers, who have told him that they left because Brook had let them down badly. But, he adds, they also say that if Brook Crompton can prove itself on deliveries and customer service, they will return. Moreover, some of the MDs admit that they are not particularly happy with their new suppliers which, they say, are not much better than Brook has been in recent years.

"There`s certainly an opportunity to take market share back again," Stewardson concludes. "I would like to think that within three years, we could have a third or more of the market again," he says, adding that by that stage ATB will have to repay its bank loans "so we need to make it pay before then.

"We`ve got ambitious plans to grow quickly," Stewardson emphasizes. "We won`t just be waiting for it to happen."

A key aspect of these plans is a need to revitalise Brook`s Huddersfield headquarters (shown above). "Going back three or four years," says Stewardson, "Brook`s sales organisation worked very well because it was all controlled centrally from Huddersfield - setting prices, and providing sales support and customer services.

"Over the past couple of years that`s become confused," he continues. "The different factories have been going off and doing their own thing. We intend to bring it all back to Huddersfield." Separate sales channels are likely to be established for build-to-order, engineered products, and for build-to-stock standard products.

Decisions still need to be taken on what will happen at Brook Crompton`s sole remaining manufacturing site in the UK - in Blackheath, Birmingham. L-J`s lease runs out at the end of the year, and the owner plans to redevelop the site. At present, Blackheath produces DC motors and customer-specific products. DC motors are also manufactured at L-J`s Dalian plant in China, so this work may be centralised there. The specialised manufacturing may be relocated to another site in the Blackheath area.

Heinz Grossmann is brimming with optimism about the future. "We`re confident that during 2006 we will see a return of customer confidence," he declares, "and we will succeed in turning around the group, with Brook Crompton once again being regarded as a reliable market player."

• The ATB group employs 4,000 people across nine sites, with plants in Germany, France, China, Serbia and the Czech Republic, as well as Austria and the UK. Its turnover last year was €224m, with more than half of this being clocked up in Germany.

Some 47% of ATB`s income comes from industrial motors, 36% from motors for appliances and garden equipment, and 13% from explosion-proof motors. The final 4% comes from its dedicated r&d operation, which also produces special motors (such as air- and water-cooled asynchronous machines, and permanent magnet and switched reluctance motors), as well as power electronics.

ATB claims to be the European market-leader for motors used in domestic and garden appliances (notably, lawnmowers), and for custom-built motors without housings. It is also the German market-leader in explosion-proof and pump motors, and is Germany`s second-largest supplier of industrial motors, after Siemens.

In November 2004, ATB bought the UK-based mining motors specialist, Morley (above). According to Neil Stewardson, the company`s commercial director (and now chief operating officer of Lindeteves-Jacoberg), ATB Morley has thrived under its new ownership. "They`ve let us get on with the company as it was before, and it has gone from strength to strength."

Lindeteves-Jacoberg CEO Heinz Grossman says that ATB is "very happy" with the way ATB Morley has been performing. The company produces just 500 machines a year, mainly built to order for specific projects, and 85% of its production is exported. "