THE chairman of Babcock, the support-services group, wants to make me tea.
“But I’m not sure where it is,” says Gordon Campbell, hobbling round the galley kitchen in his London flat. “I’m only here in the evening and I drink coffee first thing.”
Coffee it is, then. “It’ll have to be black, I don’t think there’s any milk,” he grins apologetically. With his thick grey hair, weathered face, toothy smile and distinctive limp — leg out sideways as he walks, the result of painful arthritis — Campbell, 59, looks like an old seadog nursing a war wound.
But right now he’s at the centre of a prospective bid battle that carries eerie echoes from his past. Ten years ago he rose to the top of Courtaulds, the paint-and-fibre giant, before being forced to sell it to Dutch rival Akzo-Nobel in 1998 for £2.2 billion. It was a good price for shareholders, but the end of a dream for Campbell, a chemical engineer turned manager and a 30-year Courtaulds man.
Two years later he joined Babcock, the former boiler-maker and engineering group, and helped to transform it into a support-services specialist, with sizeable defence contracts and a ship-refitting yard at Rosyth. Under Campbell, Babcock’s share price has quadrupled in value since 2001.
And what happens? A week ago BAE Systems and VT Group announced they were planning a joint bid for the company, keen to break up its dockyard and service arms. Others are circling. It must be bitterly frustrating for Campbell that, once again, he may be forced to console himself simply with getting best price.
He shrugs. “There’s been no bid or contact,” he says. “Today is the worst situation as we don’t know what’s happening. If there was a bid we could say it was good and we accept it, or we could say forget it.”
Instead Campbell has asked the Takeover Panel to get clarification of the prospective bidders’ positions. “We’ve been told it could take six weeks and, of course, it’s damaging to the business. The people in operations are thinking, who the hell is going to own us?” He shakes his head. But there are even more wrinkles in this than meet the eye. BAE’s boss, Mike Turner, sat on Babcock’s board for nine years before standing down in December. Nice timing? Campbell laughs but says nothing.
And what of the government’s position that it is eager for consolidation among Britain’s fragmented dockyard industry? Will Campbell get leant on to make a deal? “That would be amoral and illegal,” he says sharply. “And there are other ways of achieving consolidation, such as an alliance-type structure with different parties taking equity stakes in a new company.”
So could bits be split off Babcock to send the bidders away happy? “You could speculate that, but it’s not the preferred route.”
He looks tired but determined. Others say the possible bids for Babcock have been a jolt for Campbell, who was cutting down his involvement with the group but deeply proud of what he had achieved there.
He winces when I ask whether he has taken it personally. “I probably haven’t been long enough at Babcock to have the same emotional involvement as I had at Courtaulds. Having said that, because the business has changed so much and I have overseen it through that, it does become quite difficult. Babcock has so much potential . . .”
Those who know him well, like BAE’s Turner, will not be underestimating him. Campbell has a reputation as a quiet thinker, smart man-manager, and deft handler of politicians who reveals less than he shows.
Born near Liverpool, where his marine-engineer father worked on the Mersey ferries, he is a Wallasey boy who has kept the common touch but enjoys life’s luxuries. Ask him what he drives and he jokes a “very large Volkswagen” — in fact it’s a Bentley (VW now owns Bentley).
He is also far tougher and more calculating than his easy-going demeanour implies. Those skills make him popular with politicians who will want to keep Campbell onside. In addition to Babcock, he is chairman of BNFL, the government-owned nuclear body, where he is credited with delaying the sale of its Westinghouse division until he got a top-dollar price — $5.4 billion (just over £3 billion) from Toshiba last year.
Last week the government announced that BNFL would be selling its clean-up arm, the British Nuclear Group (BNG), too. That will be another key transaction for him to oversee.
“We think it will have a better chance of winning contracts if it’s not government-owned,” says Campbell. “We also recognise it needs skills which we don’t have in-house.”
Then there is the ever-escalating cost of Britain’s own nuclear clean-up to factor in. BNG operates 18 sites. “One of the criteria on the sale will be which partner will bring most to BNG to reduce the total cost of clean-up in Britain,” he says.
In short, it is highly sensitive politically. Add in the fact that Babcock’s Rosyth shipyard is adjacent to Gordon Brown’s Kirkcaldy and Cowdenbeath constituency, and you can see how complex a web Campbell sits in. It is not just the Ministry of Defence that has an interest in what happens to Babcock and its chairman.
Campbell, who has a spectacular view of the Houses of Parliament from his riverside flat, laughs off any suggestion of a “special skill” with politicians. “Ha! Who on earth told you that?” he snorts. But those who have seen him at work say his idiosyncratic style is effective.
“Gordon’s got vast experience and he’s a careful listener,” says Sir Graham Hearne, former chairman of Enterprise Oil and an old friend. “He gives people the chance to get their concerns out in the open, but he’s not soft.”
Another says that Campbell’s external “lack of polish” conceals a rigorous attention to detail and a forceful confidence. “He may shamble in and be quiet, but when he starts talking you realise he is the most confident man in the room.”
Campbell says simply that any manager has to be able to deal with people. “Different people require different ways of dealing with them. You have to recognise their characteristics and play to them. That doesn’t mean you don’t have principles, just that you have to present them in a different way.”
He learnt that working his way up at Courtaulds, which he joined straight from university. An only child, brilliant at chemistry, Campbell could have chosen a career in research, but his talent as a manager was spotted early. He was swiftly given experience as a salesman and accountant by Courtaulds before he got his first general-manager slot aged 27.
The company, with its mix of divisions producing paints, polymers, chemicals, fibres and more, was already developing a reputation as a fertile breeding ground for many of Britain’s top bosses.
“Very devolved responsibility, lot of freedom of action, very high cadre of management who went on to some pretty important jobs,” says Campbell. “People used to say, wonderful set of management, pity about the business.”
He laughs before explaining. “Running the textile and fibre business in this country from 1980 onwards was murder — it was subject to international competition and exchange rates, highly capital intensive and had a customer base moving to the Far East.”
Campbell was part of the generation of managers that tried to reshape the company. He followed the more extrovert Sipko Huismans as chief executive in 1996. But after two years at the top, with Courtaulds’ share price languishing and a likely takeover bid looming, he negotiated its sale.
“A chief executive of an American paint company made an appointment to see me at 9am on a Monday morning because he was ‘passing through’. I knew Americans didn’t ‘pass through’ on Monday mornings unless something was up. I told the board we had to do something proactively first. Akzo Nobel had always been a prospective white knight in a bid situation.”
He left after the sale when Akzo ignored his suggestion for rationalising its plants in the Netherlands and Germany. “They also realised they paid too much, so I wasn’t terribly popular.”
That experience of trying to turn round Courtaulds — 17,000 staff, 43 countries — made him more decisive at Babcock. The company, which he joined as chief executive and chairman, was trying to shed its “boiler-maker” image and move away from engineering, which accounted for 60% of turnover.
“The first thing I learnt at Courtaulds was that if you’re going to do something, go all out for it, and don’t change your mind unless what you’re doing is demonstrably wrong.
“Courtaulds had sold off businesses, then had been seduced back into fibres. I thought, I’m not going to do this at Babcock. We’re going to get out of engineering however painful it is. No way back.”
The pain involved most of Babcock’s senior management, who left. “The shake-up was too big for them to accept,” says Campbell. “Only one of the original team is left now.”
He also brought in two ex-Courtaulds colleagues, who now fill the chief executive and finance director slots.
Today Babcock trains pilots, maintains tanks, refits ships but also has a growing list of contracts outside defence with customers including National Grid Transco, Network Rail, Orange and Vodafone.
“We sold £240m of turnover out of £400m, and today’s turnover is £800m, so we’ve replaced it three times over with different businesses,” says Campbell proudly. After what happened at Courtaulds, you can sense that he is up for the fight. His painful arthritis gives him an impatient edge. But will he just be the man who always gets best price? He frowns. “Babcock still has enormous potential. So if someone offered us a price we couldn’t refuse, then fine. But if it’s just a so-so offer, then . . .” He grimaces. Enough said.
Vital statistics
Born: October 16, 1946
Marital status: married, two daughters
School: Oldershaw Grammar, Wallasey
University: Churchill College, Cambridge
First job: chemical engineer, Courtaulds
Combined salaries: £450,000
Homes: Lambeth and outside Reading
Car: green Bentley
Favourite author: Tom Clancy
Favourite music: the last movement of Beethoven’s Ninth symphony
Favourite gadget: electric gates
Last holiday: Antigua
Gordon Campbell's working day
THE Babcock chairman wakes before 7am at his flat overlooking the Thames in Lambeth. “If I’m going to BNFL they’ll send a car for me,” says Gordon Campbell. “If I’m going to Babcock’s office, I take the bus.”
At present much of his time is spent in meetings planning Babcock’s response to a likely takeover bid. “You’re assembling all the people you normally have for a bid defence: investment banks, PR advisers,” he says.
He lunches with contacts at Wiltons, and will frequently have evening events to attend as well.
Campbell doesn’t spend a lot of time touring either Babcock or BNFL. “That’s for the chief executives,” he says. “If I follow them round people will ask, ‘who’s the boss?’ They want to know that the chairman is interested, but you have to find a way to establish the gap.”
Downtime
“HOW do I spend my money? Mostly on my daughter’s wedding,” jokes Gordon Campbell. “The London flat was an investment, too, I guess. And we moved recently in Berkshire. But I downsized — I had more of a chief executive’s home, now it’s a chairman’s.”
To relax, Campbell watches sport. He has season tickets for London Irish rugby games in Reading. His arthritis is a hindrance to anything that keeps him on his feet a long time. “When people are kind enough to invite me to galleries and receptions, I make sure I don’t go for more than half an hour.”
He doesn’t expect special favours. “I had a cartilage operation while at Courtaulds, and when a union rep saw my leg in plaster he said: ‘If you think you’re going to get any bloody sympathy, you’re mistaken!’ So I’m used to it.”
