Exclusive: Balfour Beatty’s construction boss reveals firm’s new structure, with business cut down to one operating company and eight brands dissolved
The UK’s largest contractor Balfour Beatty has revealed the detail of the major restructure of its UK construction business in a move that will see it slimmed down, with six operating companies reduced to just one and eight existing brands culled.
The contractor’s new structure, revealed exclusively to Building by Mike Peasland, Balfour Beatty Construction Services UK’s chief executive, will involve the £3.4bn turnover UK construction business being reshaped around three business streams and four regional hubs, with regional offices cut from 75 to 37.
For more on the restructure, see Building’s interview with Mike Peasland here
The restructure, which will bring £30m in annual cost savings - the greater share of the £50m in annual savings that the £11bn turnover Balfour Beatty Group has said it wants to achieve by 2015 - will lead to a maximum of 650 job losses, although these will be largely in back office roles and will not affect operational employees involved in project delivery.
Speaking to Building, Peasland said the restructure was the culmination of 12 months of work and was aimed at positioning the business for growth over the long term. “This is not a short-term slash-and-burn type fix - it’s not simply a cost-cutting exercise. It’s a whole new way of doing things, with a different culture and different behaviours,” he said.
The move brings to an end Balfour Beatty Construction Services’ six existing operating companies - Balfour Beatty Major Civil Engineering; Balfour Beatty Regional Civil Engineering; Balfour Beatty Construction Scottish & Southern; Balfour Beatty Construction Northern; Mansell; and Balfour Beatty Engineering Services.
However, Mansell and Balfour Beatty Engineering Services will be retained as customer-facing brands, along with four others: Birse Civils; Raynseway Construction; Balfour Beatty Ground Engineering and fit-out business Office Projects Ltd.
Other brands, including Cowlin, Dean & Dyball and Balvac will be dissolved (for full details on the brands, see below).
However, all six retained brands will now be incorporated into one company, Balfour Beatty Construction Services UK, which will be organised internally around three business streams: major projects - covering major building and civils projects, including transport, energy, commercial construction and education; regional - covering smaller building and civils projects across all sectors; and engineering services - which will solely cover building services.
Bob Clark, current managing director of Balfour Beatty Construction Scottish & Southern will head the major projects business stream; Dave Donaldson, current managing director of Balfour Beatty Construction Northern, will head engineering services; and Steve Waite, current managing director of Mansell will lead the regional business stream (for full details of the new senior team see here).
The business will be reshaped around four regions: Scotland; the North and Midlands; London and the South-east; and the South-west - with hub offices in Edinburgh, Manchester, London and Bristol, which will serve a network of 33 smaller regional offices, dubbed “delivery units”.
Balfour Beatty’s single ‘master brand’ comes to the fore as eight business brands go
Eight of Balfour Beatty’s 15 construction services brands are set to disappear as part of the contractor’s wide-ranging restructure, with the company moving towards a single Balfour Beatty “master brand”.
Of the contractor’s existing businesses, Mansell and Balfour Beatty Engineering Services will be retained as customer-facing brands, along with Birse Civils, Raynseway Construction and Balfour Beatty Ground Engineering.
Existing fit-out business Office Projects Ltd, bought by Balfour Beatty for £8m in 2011, will be branded as OPL and will become a specialist fit-out and refurbishment brand, incorporating the Multibuild business, which as Building revealed earlier this month is being dissolved, as well as refurbishment work undertaken by Mansell.
The move means the end of established brands including Balfour Beatty Major Civil Engineering; Balfour Beatty Regional Civil Engineering; Balfour Beatty Construction Scottish & Southern; Balfour Beatty Construction Northern; Cowlin, Dean & Dyball and Balvac.
All the six retained brands will now be incorporated into one company - Balfour Beatty Construction Services UK - rather than run as separate businesses.
Mike Peasland, Balfour Beatty Construction Services UK chief executive, said the decision on which brands were retained and which ones were dissolved emerged from extensive customer research.
He said Birse, Raynseway and Mansell were retained because they were valued by customers, while OPL, Balfour Beatty Ground Engineering and Balfour Beatty Engineering Services served niche markets and mainly operated as specialist subcontractors, where an individual brand was valuable.
He said that some of the brands that have been retained, such as Mansell, which will be incorporated into the regional business stream, could yet be phased out as the business moved towards working more and more through the Balfour Beatty “master brand”.
“More and more activities will be carried out under the Balfour Beatty brand but where Mansell is on an existing framework, or where a customer specifically has a relationship with Mansell, then we won’t change it,” he said.
“The view we’ve taken is: Does the brand have value? Do our customers want it and if they do, we keep it. But these are things that are constantly up for review. If it … doesn’t have any value then eventually we will lose that brand as well.
“We will retain the Mansell brand but how long for, there is a question mark. It is about how long is appropriate and how long does it continue to have value.
“But whatever happens we will retain Mansell Homes [as a brand] because the Balfour Beatty brand is not synonymous with housing.”
For more on the restructure click here