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A Brief History

The First 60 Years Of Growth
The Decline Of The Early 1980's
The New TI Group And Its Strategy
Implementation Of The Strategy
Building World Leader Businesses
TI Group Today

The First 70 Years Of Growth

TI Group was formed in 1919 in Birmingham, England as Tube Investments Ltd by four manufacturers and users of steel tube. Over the next sixty years TI Group grew to be one of the UK's thirty largest companies and the country's second largest engineering concern, adding steel manufacture, aluminium smelting, machine tools and consumer products such as bicycles and domestic appliances to its interests.

Nevertheless low added value commodity tube-making still represented a substantial part of the business. Only about 15% of the Group's manufacturing was undertaken outside the UK and exports accounted for nearly 50% of its turnover. TI Group entered the 1980s with a workforce of 62,000, of whom 85% were employed in the UK.

The Decline Of The Early 1980s

Like much of British Industry at that time, TI Group had taken too little account of the significant changes that had taken place in world trade since 1945. A rebuilt Germany had emerged as the leading manufacturing force in Europe, Japan had become a major manufacturing and exporting nation and the developing countries had learned to exploit their cheaper labour costs to sell low added value products into Western Markets.

TI Group's failure to respond adequately to these changes eroded its ability to compete internationally and domestically. It suffered in the recession of the early 1980s when the appreciation of British sterling, driven by the discovery of North Sea oil, hurt UK businesses that depended on the export of commodity products. TI Group withdrew from primary and semi-finished, commodity-type products and adopted a new name, TI Group plc, in 1982 to replace Tube Investments. But it was clear that TI Group still lacked strategic focus and direction and was in serious decline.

The New TI Group And Its Strategy

Christopher Lewinton was appointed Chief Executive in July, 1986 with a brief to create a new strategic direction. His arrival led to the formulation of the strategy which, only slightly modified, has guided the Group ever since.

"TI Group's strategy is to become an international group concentrating on specialised engineering businesses, operating in selected niches on a global basis.

Key businesses must be able to command positions of sustainable technological and market share leadership.

They will have a high knowledge and service content (1993) and will be able to anticipate and meet customer's needs (1994)."

Implementation Of The Strategy

An early step was the closure of the Birmingham head office in November, 1986. A much slimmer headquarters operation established in London then moved rapidly to implement the new strategy.

The sale of the bicycle interests and of two domestic appliance businesses soon followed and before the end of 1988, all the 20 other businesses not consistent with the strategy had been sold and the proceeds re-invested to build the new TI Group's first two world leader businesses, John Crane and Bundy.

By the end of 1989, TI Group's operating margin had increased from 5.5% to 11.4% and over 80% of it's sales arose outside the UK. TI Group's culture had changed from that of a production orientated, UK-based, metal working business to that of a marketing-driven, global, specialised engineering company. The pace of change was such that in 1990 Harvard Business School published a case study "TI Group Restructuring and Globalization".

Acknowledgement of the part played in this renaissance by Christopher Lewinton, who had been appointed Chairman and Chief Executive in 1989, came at the end of 1992, when he was knighted for his services to the engineering industry.

Building World Leader Businesses

Some 40 disposals and 45 acquisitions, spread across over 20 countries, have transformed TI Group from the company which Christopher Lewinton joined in 1986. Although the seeds of the future John Crane, Bundy and Dowty businesses were already within TI Group at that time, 95% of TI Group is less than 10 years old. It is now focused on the Automotive, Industrial and Aerospace markets.

In 1986 TI Group owned 51% of Crane Packing, a UK business with sales of � million. Acquiring John Crane Houdaille in 1987 gave TI Group sole ownership of John Crane worldwide. After strong organic growth and further "bolt-on" acquisitions over the years, John Crane achieved sales of �6 million in 1999. John Crane is now a world leader in engineered sealing systems for the process, automotive and marine industries and a leader in integrated marine propulsion systems.

In 1986 TI Group also owned 51% of Fulton (TI), a UK business with sales of � million. In the following year it acquired the remaining 49% of this joint venture and Armco's European small diameter tube business. The acquisition of Bundy Corporation followed in 1988. TI Group had created a business which, driven by organic growth and further strategic "bolt-ons", now had proforma sales of �4 billion. In 1997 TI Group acquired S&H, which added automotive air conditioning to its leading position in brake and fuel line systems. Today Bundy is the world leader in fluid carrying systems for the automotive and refrigeration industries. In June 1999 TI Group bought Walbro, an automotive fuel storage business, and announced the formation of TI Group Automotive Systems. Walbro enabled TI Group Automotive Systems to offer integrated fuel and delivery systems, alongside Bundy's world leading brake and powertrain business. The outstanding 51% of fuel pump and module manufacturer, Marwal, held by Magneti Marelli, was acquired in October 1999.

TI Group took over Dowty Group PLC in 1992, merging Dowty's aerospace interests with TI Group's Reynolds aircraft engine rings business. A joint landing gear venture, Messier-Dowty, was formed with Snecma of France in 1994 and TI Group subsequently sold out to its partner in 1998. In that year TI Group acquired EIS, which not only provided John Crane with a broader range of seals, couplings and filtration products, but also, through Hamble, made Dowty a leader in aerostructures. In March 1999, TI Group bought Tri-Manufacturing, a unit of General Electric that makes components for jet engines, now renamed Tri-Industries.
A world leader in aerospace systems, Dowty has proforma sales of �0 million.

The acquisition of Dowty Group brought a polymer engineering business with sales of �0 million. This business was enhanced by the acquisition of Forsheda, a leading European elastomer seals sealing group, in late 1996. A year later, TI Group combined its polymer engineering interests into a stand-alone business under the Forsheda name. In August 1999 TI Group announced the acquisition of Busak + Shamban, a polymer specialist, and formed TI Group Specialty Polymer Products. The new division combined the activities of Forsheda and Busak + Shamban and created a world leader in specialty polymer products with proforma sales of �0 million.

TI Group Today

In 1986, 55% of TI Group's turnover came from the UK. Following the introduction of a strategy of operating on a global basis and supplying customers from within their domestic marketplace, by the end of 1999 the UK accounted for only 20% of TI Group's sales by origin, North America accounted for 46%, Continental Europe 27% and the rest of the world 7%. TI Group today is one of the world's leading specialised engineering companies, employing over 40, 000 people at more than 450 manufacturing and service facilities in over 45 countries.

TI Group's stock is quoted on the London Stock Exchange and the company is traded in the US on the OTC market as TIGUY. TI Group today has a market capitalisation of some �billion compared with �0 million in 1986. The Group reported record profits for 1999. Sales revenue was up 26% at �728.8 million with profit before taxation �7.1 million.

In 1997 Sir Christopher Lewinton, who continues as Chairman of TI Group, announced the appointment of Bill Laule, an American citizen and formerly Chief Executive of Bundy, as Chief Executive of TI Group, with effect from the beginning of 1998.

In March, 1999, TI Group announced that Kohlberg Kravis Roberts & Co had subscribed for a 4.9% share placing in the Group, with Mr Henry Kravis joining the Main Board.

Brief History - Updated May 2000.