The guts in the machine

In 2002 Eugene Rose had been running his little engineering business, called Uniweld, for 30 years.

He was a boilermaker who decided to start his own metal cutting and fabrication shop in a shed in Boronia, an outer Melbourne suburb, and three decades later it was still going and turning over $1 million – 90 per cent of which was with one customer, Kenworth Trucks – and employing 11 staff. But Eugene was getting tired. Retirement beckoned.

The problem was that Eugene and his wife Marilyn had four girls, no boys, and they all had different futures mapped out than running a dark, smelly welding shop, so none of the second generation of Roses was interested in carrying on the family business. Eugene had come to a succession dead end. What to do?

For him, the answer was to put a small ad in The Age recruitment section: “Wanted: general manager for metal fabricating business with a view to buying the business.”

A young engineer named Adrian Egglestone saw the ad and the rest, as they say, is history. After working with Eugene for a year, he and his wife Sue, with brother Mark, bought the business for the value of stock and equipment – about $700,000. Eleven years further on, Uniweld turns over $8 million, employs 40 people, and is still a family business, except now it’s the Egglestone family, Adrian and Sue.

But what an eleven years it has been. The Egglestones have been through four things that each would have, and has, killed many businesses like theirs: the GFC cut sales by a third, the carbon tax increased electricity costs by a third, a devastating fire, and a nasty battle with the union tied him up in Fair Work Australia for 12 months.

When I rang Uniweld, Adrian answered the phone, and when I visited him at the factory in Croydon this week, he proudly showed me around a rather dark and smelly, but obviously sophisticated, factory with two big laser cutters, a plasma cutter, a row of metal lathes and a busy welding shop.

“These are my toys,” he exclaimed waving his arms excitedly. “Some blokes like cars; I go for metal machines.”

For the first five years, Adrian and Sue steadily grew the business, ploughing all profits back into new machines, leasing a second factory next door and gradually getting Kenworth down to less than 50 per cent of the output by expanding the customer base (Adrian is the sole salesman).

Then in the space of three years the GFC hit, the carbon tax increased costs and he found himself sitting across from two Amalgamated Manufacturing Workers Union organisers demanding that he sign their enterprise bargaining agreement, which included a 30 per cent pay rise for the staff.

The first two of those were like acts of God and just had to be dealt with. The third was the act of a worker who was being disciplined for bullying: he called the union and complained, and so Uniweld, a non-union shop, became a blip on the radar of the AMWU. Adrian decided to fight.

He says the dispute split his staff: half wanted to sign the EBA, half didn’t. Productivity collapsed and Adrian cut off overtime, which meant he was running the machines through the night himself. The business was haemorrhaging money and the Egglestones were tag-teaming the machines, working seven days, and nights, a week, no holidays.

He says some of the staff started tampering with the equipment and as a result a laser cutter caught fire. It resulted in 50 per cent lost production and took six months to rebuild. At the same time, Adrian was spending hours at Fair Work with his solicitor (meter whirring) fighting the AMWU.

At one stage the Australian Electoral Commission set up polling booths at the Uniweld factory to run the vote on the EBA, but only three turned up.

And then came a breakthrough: a camera caught the shop steward tampering with a machine and Adrian was able to sack him, although that meant another trip into Fair Work.

Oh, and Adrian was able to tell the union at one stage that he was the great great grandson of one of the founders of the ACTU and the Labor Party, William Spence, which didn’t hurt either.

He won the case, and with the failure of the EBA vote and the departure of its chief agitator, the union lost interest and moved its attention elsewhere.

That was a year ago. Uniweld and the Egglestones are now back on track and the business is “ticking along well”. They’re looking to get turnover back to the $12 million it was before the GFC hit them.

Tears welled up in Adrian’s eyes as he told me how much he owes to his wife Sue, without whose steadfastness the business would have failed, and to his bank, which also stood by him (it’s NAB, as it turns out – sponsor of our Family Business section, but I can assure you it’s not a set-up).

At 47 he can now start to think about his own succession, and unlike Eugene and Marilyn Rose, Adrian and Sue had boys, not girls. Both of them are interested in coming into the business after they finish school.

I drove back to the city feeling pretty optimistic about this country’s future. The stubborn, excitable Adrian Egglestone, with his passion for metal slicing and turning machines is the sort of bloke on which Germany has built a manufacturing powerhouse.

Maybe we can do it too.

To view the October issue of Family Business Magazine, click here.

And if you’re a family business and would like to get in touch, email familybusiness@businessspectator.com.au