Reading the recent exclusive interview of Ibrahim Dutsinma Boyi, the CEO of PAN Automobile is like reading the biography of any of Sergio Marchionne of Fiat Motors of Italy; Lee Iacocca of Chrysler Motor, US; and Gordon Bethune of Continental Airlines. These are turnaround CEOs with success stories of how they saved struggling companies from debt and bankruptcy to creditworthiness and phenomenal growth.
Perhaps as an assessment of Boyi’s turnaround of PAN, this exercise is too early, because that’s work in progress. But for anyone committed to industrialization in Nigeria, there’s no harm in borrowing a leaf from Boyi when it concerns the automobile industry, even if his accomplishments in this industry are just the icing on the cake.
Indeed, Boyi has a knack for turning around waning companies. Take the case of Eternal PLC.
“I went into a company called Eterna Plc. Then that company was earning N200 million per annum as turnover, but when I left there, it was doing N13-14 billion as turnover,” says Boyi in the interview.
Before that, he was at Unipetrol, then a low-performing company, and rose to the position of executive director with responsibilities that included corporate strategic planning and performance management and pre- and post-merger planning and integration. From that vantage position, Boyi was able to meaningfully contribute to the revamping of Unipetrol.
“Unipetrol (which is now Oando) became a big success story today and I’m glad that I was part of its history,” he recalls with relish.
Two years ago, Boyi was appointed managing director/CEO of PAN Automobile with a clear mandate to turn it around. He had his career largely in oil and gas industry starting from Total in 1985 and moving on to Oando where he rose through the ranks to become an executive director and also managing director of Gaslink Nigeria Limited, a pioneer gas distribution company and a subsidiary of Oando Plc.
The 16 years he spent at Unipetrol, across several functions in strategic planning, business development and investments, financial management, accounting, internal control and audit, marketing and operations management really prepared him for the current position.
This is how he described what he met at PAN Automobile: “PAN was in a very challenging position when I got here. The partner, the Peugeot Automobile of France, had pulled out and PAN lost the technical and training supports it used to get from them. The link for servicing support was also broken; so the customers of the company who were in dire need of its services were not getting them as they didn’t get the right types of spare parts for their vehicles; so the grey market simply took over.”
And what is the situation today? The plant is back on stream producing vehicles. PAN has been assembling the new 301 and 508 cars since July last year and making progress with industrial activities into the CKD (completely knocked down) stage.
Looking ahead at PAN, Boyi says, “We do a lot of market assessment because Peugeot products give us coverage of certain segments in the market. For instance, we don’t have a Pickup van, we don’t have big massive mass transit bus, and we may not have some low segment called V1. These are areas we are discussing with Peugeot in case they have any product to station in those segments. If not, we would be looking into the area of partnership.”
Great minds think alike. I find the strategies Boyi is employing strikingly similar in some ways to the ones used by the saviour of Fiat Motor of Italy, Sergio Marchionne.
When Sergio Marchionne entered as CEO in June 2004, Fiat Motors was deep in debt and losing money. He closed factories, cut jobs, and replaced top management in a bid to increase market share and turn losses into profits. Marchionne also secured a deal with Chrysler and negotiated an end to a bitter partnership with General Motors that netted Fiat $ 2 billion.
Within two years, Marchionne saved the Italian company from collapse and expanded operations to India and China. After 17 consecutive quarters of losses, Fiat’s auto unit finally turned a profit in 2005. Marchionne’s turnaround continues with a revamped lineup of trucks and cars, including the Fiat 500 — a tiny, stylish 21st century version of a 52-year-old Italian icon once driven by movie stars such as Marcello Mastroianni and Sophia Loren.
Boyi might not have sacked top management – AMCON, the new shareholder of PAN, has already done that for him, as well as assembled a formidable board of directors with whom he was able to achieve the turnaround we have seen so far. But he has renegotiated with Peugeot of France and won back its technical support and partnership. And he has his eyes fixed, like Marchionne, on other brands that, through market assessment, might be introduced to boost the market share of PAN in the industry.
With the largest assembling plant in West Africa under his control and a strategic partnership with second leading car brand in Europe, Peugeot of France, surely Boyi has all infrastructure and technical wherewithal to succeed.
But the success of PAN Automobile will also depend on how well the Nigerian government implements the new automobile policy in the country, which works in favour of Nigerian manufacturers of automobile. Nigeria’s past succesfull attempts and good experience with assembly plants have not been sustained as has happened in Brazil, Mexico and Iran, which are today proud automobile manufacturers giving their countries industrial edge over other nations they export to.
With the new administration at Aso Rock clearly determined to change the fortunes of Nigeria, this is the time to look at the automobile industry with the seriousness it deserves. It is potentially the shortest route to our industrialisation. With the regime’s desire to create jobs, surely a well-oiled automobile industry will provide jobs through in-services, spare-parts chains, and skilled labour. So what needs to be done for Nigeria’s industrialisation is simple: evolve and implement good industrial policies backed by assiduous institutional building.
It is said that a turnaround boss needs to have a clear action plan and goals, realistic timelines and the support of the company’s board and senior managers. Boyi has got all these.
But it is also said that even the best strategy needs to be accompanied by financial results, whether it’s greater market share, larger profits, a higher stock price, or preferably all three. Where is Boyi as far as financial results are concerned?
“We have got all the pillars to make the business great. We’ve introduced attractive and very competitive products, rebuilt our networks, our after-sales structure has been completely rebuilt just as we have also improved on the supply situation of our spare parts at reliable and affordable prices. All the ingredients that we have set out to make this company great again are in place. We are advancing and now that we have the auto policy, which is to our favour, in five years, I see this company regaining its leadership position in the market.”
Contributed by Bashir Ibrahim Hassan