Prest on front line for Alvis

Nick Prest concentrates on Alvis and avoids speculation on UK industry rationalisation. George Paloczi-Horvath reports

A quotation from Hannibal – ‘We will either find a way or make one’ – adorns the wall of Nick Prest’s London office. Although herding elephants over the Alps is not quite Prest’s purpose in life, meeting customer requirements certainly is.

Nor does Prest’s demeanour conjure up images of an aggressive general. The 44-year old chief executive of Coventry-based armoured-vehicle builder Alvis appears relaxed and unassuming – a little surprising given that his company has been in the limelight recently for an unwelcome reason.

Alvis’s business with Indonesia has attracted fierce criticism from human rights groups because of that country’s 22-year occupation of East Timor. Alvis has two contracts with Indonesia for Scorpion light tanks and Stormer armoured personnel-carriers – together, these jobs are worth £150m. And Prest unashamedly says: ‘We have high hopes of doing further business with Indonesia.’

Prest stresses that the vehicles being sold are intended for external defence and not internal security – of the vehicles already supplied, none has left Java. But he admits that sales to Indonesia might be viewed as trickier than most. However, last week it was reported that Tony Blair told foreign secretary Robin Cook to ‘ease off blocking arms sales’.

Beyond Indonesia, major export hopes now lie in ‘the Gulf and Latin America’, Prest says, without specifying individual countries. In the past, Alvis has sold armoured vehicles to the United Arab Emirates, Chile and Venezuela, among others. All these countries could also be targets for an Alvis re-engining proposal for the Scorpion vehicle family.

‘We clearly recognise that defence exports need to be subject to political control,’ Prest says. But policy should be made in recognition of ‘facts’ – such as Britain’s security interests, international obligations and economic interests – as well as purely political issues. Consideration of all these factors is ‘not straightforward’.

Prest says that unpublicised means of checking if a particular export may be problematic are a reliable way of avoiding problems. He should know – he has long experience of arms sales, having worked for the Defence Export Sales Organisation (DESO), selling to the Middle East.

A more welcome reason for hogging the news was Alvis’s recent £75m takeover of Swedish armoured-vehicle maker Hegglunds, creating a £250m company with large orders for both the Scandinavian and British military.

Prest is happy with Alvis’s current position, despite losses in the last half-year. ‘This is a lumpy business,’ he says drily. The order book is full for the next two years and he feels prospects are good for the same over the following three years.

While exports are clearly a significant target, four major future business prospects for the British Army are of greater long-term importance.

The most immediate are the two halves of the Multi-Role Armoured Vehicle (MRAV) project. Alvis is a member of a consortium chasing work on the ‘medium-protection, medium-mobility’ MRAV. The consortium groups Alvis with Vickers, Germany’s Henschel and France’s Panhard.

This project is called M2 P2 (mobility 2, protection 2) and a decision on which of two international consortiums wins the development contract should be made next year. The team that includes Alvis faces a rival bid from GKN teamed with Germany’s Krauss Maffei and Rheinmetall.

The other half of MRAV is the ‘high mobility, high protection’ tracked vehicle, or M1 P1. This ‘will firm up as a programme in the course of 1998’, Prest hopes. Both projects potentially require more than 1,000 vehicles.

The position of French state-owned armoured-vehicle maker Giat in MRAV is unclear. This is not related to funding problems, Prest says. ‘They are formally a member of the project, but they’ve been, as it were, a semi-detached member. It’s a matter of a whole variety of things, including whether the collaborative project meets their requirements.’

The next project Alvis is chasing is the British Army’s Tracer reconnaissance vehicle – now an ambitious Anglo-American programme. Joint work links Alvis with BAe and Vickers, teamed with Lockheed Martin and General Dynamics. Prest couches his confidence in this project’s promise with the prediction that the Ministry of Defence will have ‘to balance its importance with other calls on its funding’. Tracer will replace the Scorpion and Scimitar family from 2007.

Beyond that, Alvis is chasing work on a new project to replace the army’s already-retired Ferret scout car. This is called the ‘future command and liaison vehicle’.

Prest is careful to appear neutral about the prospect of Alvis being engulfed in any future corporate reorganisation of Britain’s armoured-vehicle industry.

‘We at Alvis do not speculate on these worries about how the UK industry will rationalise,’ he says. ‘Our job is to run a decent company and make money for our shareholders.’

One favoured rationalisation scenario is a GKN-Vickers merger in which Alvis might be involved. But Prest says ‘another scenario is that there will be two companies, linking to large international groups’.

It would be wrong to assume this means Alvis will be taken over by a British stablemate. Prest says the enlarged Alvis with its Hagglunds operation might be one of the two surviving companies, apparently presupposing an eventual GKN-Vickers merger in which Alvis does not play a role.

Prest has been focused on the defence industry since leaving Oxford in 1974, when he joined the MoD and, later, DESO. In 1982 he joined United Scientific Holdings, whose chairman Peter Levene later became chief of defence procurement. Prest became USH marketing director in 1985 and chief executive in 1989. And in 1992 USH was renamed Alvis, after its most famous subsidiary.

Does Prest see a life after Alvis? ‘The defence business is one that I have been involved in all my working life. I have no plans to do anything else.’