Gough and Gilmour: the end of an era

Immediately after Easter, Gough and Gilmour were replaced as the NSW and ACT dealer for Caterpillar, after just over a decade and a half in that capacity. It was the end of an era for the multi million dollar organisation. In that time it increased annual turnover from $108 million to $405 million. So last month co principal Harcourt Gough recapped with dyed in the dirt Caterpillar user Richard Belfield on the previous 15 years, and the events which led up to Gough and Gilmour's appointment as a major Caterpillar dealer.

On 17 November 1988, Caterpillar named Gough and Gilmour the new NSW and ACT Caterpillar dealer and on 20 February 1989, after extensive negotiations with the then owner, the Bond Corporation, Harcourt Gough and Tony Gilmour officially took over.

In Caterpillar's eyes, the Waugh and Josephson NSW/ACT dealership, was on the market when the Bond Corporation told the Australian Stock Exchange in October 1987 that W&J was a non core asset and would be sold.

Waugh & Josephson had become a well-respected company under the long-time leadership of David Hunter. A major downturn in the early 1980s, caused Waugh & Josephson to fall on hard times. This resulted in major cutbacks and redundancies. But W&J never recovered.

Cheap companies

Then along came Sir Ron Brierly of Industrial Equity Ltd, buying cheap companies. He invited Robert Holmes a' Court, who had already bought up Wigmores, the Cat dealer in Western Australia, to become a white knight.

So he also took a strategic stake in W&J, and liking what he saw, made an offer to buy 100% of the company. Waugh & Josephson accepted the offer and settlement was on a Monday in Oct 1987. However it was done on the previous Friday and the Monday was melt down Monday for the ASX when share prices plummeted.

This left Holmes A'Court strapped for cash and placed him in sell mode, and the only interested buyer left on the board was Allan Bond.

Bond then acquired Waugh & Josephson, Wigmores and Bell Resources, and rolled them into one package. After Bond made his announcement to the stock exchange late in 1987 about W&J and Wigmores being for sale, Caterpillar responded immediately saying that Bond's ASX announcement amounted to a public announcement. In effect “you have now advised Caterpillar that you are selling, so we will tell you the name of the new dealer.”

One-sided dealer agreement

Bond responded by saying, “No, I will tell you the name of the new buyer.” This caused more than a deal of “toeing and froing” according to Harcourt Gough. Nevertheless the might of Caterpillar prevailed, because the dealerships have a fairly one-sided dealer agreement favouring Caterpillar, according to Gough.

From this point Caterpillar called for expressions of interest and a Cat executive told Harcourt that something in the order of 100 people wanted to register an interest in acquiring the dealerships. Tony Gilmour and Harcourt Gough in the meantime, had kept in touch since the two become friends following Tony Gilmour's appointment as managing director of NZ Cat dealer and Gough family company, in the early 1980s.

Harcourt Gough's grandfather became involved with Caterpillar in 1932, as its New Zealand dealer. Early sales largely comprised Cat Two-Ton tractors with blades. These little machines, which also pulled scoops and towed rippers, were a far cry from the 100t plus CaterpillarD11Rs of today.

G, G&H also sold auto patrol graders, the forerunners of today's extensive grader fleet as well as wining the contract for Wellington and Nelson airport earthworks. The bonus was that they used these projects as display and demonstration areas for potential buyers.

Export awards

In the early to mid 1930s, the firm also won awards for three years for becoming Cat's largest export market and Gough, Gough and Hammer is still the New Zealand distributor for Cat.

Both Tony and Harcourt have had a lifetime of involvement with Cat and the earthmoving industry. Tony Gilmour left university and had to buy his way out of a bond with the Water Board to join Waugh & Josephson.

The two men met when Harcourt came back from Britain and became the managing director of Gough, Gough and Hammer in New Zealand. He needed a good product support manager, to pull the parts and service business together and advertised around the world. All sorts of people applied and he interviewed people like the maintenance manager from British Midland airways. But none actually clicked. Finally someone asked if he had talked to Tony Gilmour, then Waugh and Josephson's branch manager at Mount Thorley in the Hunter Valley, the new jewel in the company's crown.

Harcourt invited Tony over to New Zealand within the first ten minutes, they knew they would work well together. Harcourt made the comment to me that they instantly clicked. Tony came back to Australia, gave his notice, returned to New Zealand to work with Gough, Gough and Hammer.

Family rejection

By 1986 Harcourt was looking to spread his wings and he suggested he buy the family company out. The concept was simple: “I keep the company and you all get your money.” However internal politics intervened and the family declined his offer. Unsettled he then wandered the world for two years looking for business opportunities and ideas.

He spent a year in Europe and a year in North America, finally reaching the decision that Caterpillar equipment was in his blood. In America he visited Peoria, Illinois, the home of Cat, to find out if any dealerships were available. He was told they did not come up very often but was advised to stay in touch.

In any event he did not have to wait long. Following Bond Corporation's announcement, Harcourt and Tony were ready to talk seriously to Caterpillar, about the acquisition of the old W&J.

Harcourt bought a computer and the two men started work on a business plan. Then Caterpillar's long selection process began. They made it onto the long list of possible buyers, then the short list, and then they were among the last three on the list. Harcourt and Tony appreciated Caterpillar's support at this time, especially as they had the smallest cheque book of all the dealer applicants.

They had now reached the point where they had to start negotiations with Bond Corporation and demonstrate that a deal could be done.

Goughies named

Then on 17 November 1988, Caterpillar named them the new dealer, and they had three “long and interesting months” negotiating with the Bond Corporation. But there were days when Harcourt felt they would never do a deal. “It was a very interesting ride. However in the end the deal was reasonably fair,” Harcourt said.

In one aspect though, they were dudded by the Bond Corporation: there was a parcel of land at Unanderra in Wollongong, that had been pre-sold. They did not know this so paid for the land twice.

On 20 February 1989, Gough and Gilmour signed the deal, and passed a cheque over. They started work that night.

$400m turnover

Gough & Gilmour has been a successful company, increasing annual turnover from $108 million in 1988 too some $405 million for the 2003-2004 year.

With a staff of about 800 and branches all over NSW, this is one of Australia's larger companies.

The other achievement of which Gough is justifiably proud, is the 563 apprentices the company trained in a decade and a half.

And in house training of all employees is important with part of head office a purpose built section designed for continuing education.

Harcourt said: “In some Caterpillar dealerships the new sale carries all the glory and obviously sales people need to know the products well. But parts and service are very much second-class citizens.” But he was quite emphatic that the two sides were absolutely equal and employees needed to know their products inside out.

So it was perhaps not surprising to find that his own knowledge of Caterpillar machines is so detailed.