Jaguar leaps into the designer age

THE GUARDIAN
Andrew Cornelius visits the new £55 million design and engineering centre.

As City investment analysts advise investors to lighten their holdings of Jaguar shares , the company was yesterday showing off its new £55 million space-age design and engineering centre to the Trade and Industry Secretary, Lord Young.

The official opening of the centre at Whitley , on the outskirts of Coventry , which employs 1400 engineers and hourly-paid support staff , is perhaps the most striking achievement of the new energetic management team set in place by the chairman , Sir John Egan, when the company was privatised in July 1984. It replaces a tumbledown series of shacks and lean-tos at the Brown's Lane assembly factory a couple of miles away, which used to serve as the home for Jaguar's world-famous engineering skills, with the most modern automotive engineering facility in the world.

"It is quite simply the best that money can buy, " Sir John tells visitors as he shows them round the new centre where top-secret work is already under way to develop products for the 1990s, including a new Jaguar sportscar and a facelift for the luxury Jaguar XJ-S. The centre is jam-packed with screens for three-dimensional computer-aided design, which allows engineers to test their ideas with moving models on screen before building expensive prototypes.

Eventually, Jaguar hopes that the new technologies will help slice the time it takes to design and develop a new car from around eight years to between four and five years. In the meantime , the company is content to be able to continually upgrade and improve its existing models.

The most glamorous department is styling, where 43-year old Geoff Lawson , a Detroit trained former student at the Royal College of Art, dreams up new concepts, styles and colour schemes for Jaguar cars . His 30-strong team have old polished E-type and Jaguar soft-top cars on display to remind them of the Ja guar heritage and go to amazing lengths, including flying prototypes to the American desert in Nevada , to test their ideas.

In the test area at any one time, six, or seven brand new Jaguars , worth upwards of £20,000 each, can be found parked in a huge and rather spooky hall for five weeks at a time to test the boot and door slams and car central locking systems. A computer-controlled system of rods and pistons opens and shuts the doors 100,000 times and the boots 20,000 times before the cars are given the OK.

The new emission test chamber, complete with a rolling road and computer-test facility, is working on the latest problem Jaguar has encountered in the United States. Catalytic converters are , apparently, extracting pollutants from car exhaust systems , but in turn creating a "rotten eggs" smell which is not going down too well with wealthy customers.

Elsewhere , seat belts which automatically fix on passengers when they sit in the car are being tested at minus 40 Centigrade. Plastic panels are heated to plus 50 Centigrade and frozen to minus 50 Centigrade in seconds, and whole cars are shaken and buffeted on test beds to mimic a 1250-mile ride along the roughest test track imaginable.

There are also no qualms about renting, buying, or borrowing a car built by a competitor like BMW or Mercedes stripping out an engine, or gearbox and computer-testing its capabilities in the sophisticated test facilities. However , what should be viewed as a landmark in the company's history has come as the company's fortunes have hit their lowest ebb since the fanfare of publicity which greeted privatisation and its freedom from the shackles of the state-owned Rover Group . Jaguar shares are languishing at around 240p, £1 below their peak for the year. They are no longer rated highly because of Sir John's wizard management skills, or Jaguar 's design and marketing excellence.

The key factor which keeps the shares above the 165p privatisation offer price is the speculative prospect of Jaguar being taken over in 1990 when the golden share which protects its independence expires. Until then no amount of engineering excellence will dissuade the City from the view that Jaguar is anything other than a short-term bet on the relationship between the pound and dollar . The City view is that Jaguar sells nearly half its output in the US, which means that when the pound is weak Jaguar is a cash machine , when it rises and dollar income is translated back into fewer pounds the company hits trouble.

Sir John remains remarkably unperturbed at the City's treatment of companies such as Jaguar, which are showpiece businesses for British engineering. He admits that the next two years will be tough , that a movement rate from $1.60 to $1.90 wipes £100 million of the bottom line, and that this could mean that capital investment will have to be trimmed to keep in line with lower profits. But he argues that if the company can learn to survive at the current unfavourable exchange rate levels, then it will really begin to steamroller when things get better.

The debate over the rating which Jaguar shares should command in the stockmarket is a million miles removed from the engineering centre at Whitley, where young engineers have flooded in to take up jobs on offer at Jaguar. Since 1980, the number of engineers working there has quadrupled as Jaguar has mopped up some of the best talent in the industry and out of universities .

They are paid between £10,000 for a graduate engineer and £20,000 for a team leader , guided by a group of more experienced seniors and a databank of experience to help maintain the unique Jaguar design philsophy. And such is the commitment of Jaguar's "young turks" that in many areas there was zero staff wastage last year. This pool of engineering expertise is already the envy of Jaguar's competitors.

By the time the protection of the golden share expires in 1990, the company will be even more attractive to a predator like BMW, or Mercedes, which could easily shell out the £500 millon or so it would take to buy Jaguar and a huge chunk of Britain 's engineering expertise. And on past form , City investors in search of a fast buck would be keen to sell, having made a few bob along the way speculating about such a takeover and the vagaries of the currency markets.