Harman Technology plans for site redevelopment

[DREW WILEY]

Sal - being merely a tenant just gives one more layer of susceptibility. Depends on whether a lease is legally immune if the actual property is sold to
a new party, or if it is not. Of course I don't know either any specific details about this case or about UK land rules in general. But neither do you.
If it's anything like here in good ole CA, developers do damn near anything they please, legal or not. Rules can be bought.

 

[Sal Santamaura]

...I don't know either any specific details about this case or about UK land rules in general. But neither do you...

I've followed both of the landlord's (rejected) development applications to Cheshire East Council as well as its appeal of the first one to the Planning Inspectorate. Have you?

 

[DREW WILEY]

Following it off n' on. Nothing in life, much less in manufacturing, is ever certain. Seen just too many corporations come and go over the years for seemingly illogical reasons, including in Europe. I'm hardly in a state of panic, because Harman has a steady niche business with plenty of ongoing customers, of whom I am certainly one, and would quite disappointed if their capacity did somehow become crippled. But that's what insurance policies are for. And my insurance policy happens to be a paper and film freezer. It's what keeping me going during a temporary outage of a particular film I need this summer.

 

[Sal Santamaura]

Today the Planning Inspectorate denied HARMAN's landlord's appeal:

https://acp.planninginspectorate.gov.uk/ViewCase.aspx?CaseID=3027388&CoID=0​

Reading the linked decision document, it's apparent everything turned on aircraft noise. I get the sense that, except for noise, Cheshire East Council's rejection would have been overturned. Stock up on Ilford materials in around eight years. Unless other factors surface that warrant doing so sooner than that, which is shortly before HARMAN's site lease expires.

 

[Ricardo Miranda]

Stock up on Ilford materials in around eight years. Unless other factors surface that warrant doing so sooner than that, which is shortly before HARMAN's site lease expires.

The thing that would really help Harman Technology and its parent company is for all of us to make them a successful company.
That is to continually and often buy their products, not to do panic buying.

 

[paul_c5x4]

Before the lease expires, there will be negotiations between the land owners and Harman to extend the lease. Both parties have a mutual interest in continuing the lease agreement, so to suggest Harman will be out of a home in eight years is disingenuous at best.

 

[RattyMouse]

Today the Planning Inspectorate denied HARMAN's landlord's appeal:

https://acp.planninginspectorate.gov.uk/ViewCase.aspx?CaseID=3027388&CoID=0​

Reading the linked decision document, it's apparent everything turned on aircraft noise. I get the sense that, except for noise, Cheshire East Council's rejection would have been overturned. Stock up on Ilford materials in around eight years. Unless other factors surface that warrant doing so sooner than that, which is shortly before HARMAN's site lease expires.

Why the paranoid speculation?

 

[Ricardo Miranda]

Why the paranoid speculation?

Yeap, there's no need for speculation or to be alarmist.

 

[AgX]

Anyway; thank you Sal, for the update.

 

[MartinCrabtree]

Just buy and use their wonderful products. We'll see what happens later.

 

[Wallendo]

If the redevelopment plan had gone through, Harman would have had to move equipment to the new facility. Much of the hassle and expense of the move would be related to disassembling, loading, unloading and reassembling the equipment. Once that is done, does it really matter much whether the equipment is moved to a nearby or distant destination. Harman has an long time to find a new home. Surely some other community in England would appreciate a new manufacturing facility.

 

[AgX]

Surely some other community in England would appreciate a new manufacturing facility.

Who would pay the move?
And Harman likely would keep their few people.

Thus benefit for a another community would rather be small. Few new jobs, maybe few new inhabitants.
But some more tax income.
If the new holding company will not discover that licencing, tax evasion sheme which got so popular lately...

Well, Harman's profit is small anyway.

 

[Sal Santamaura]

Before the lease expires, there will be negotiations between the land owners and Harman to extend the lease. Both parties have a mutual interest in continuing the lease agreement, so to suggest Harman will be out of a home in eight years is disingenuous at best.

This is absolute speculation. Unless you're an insider (and, if you are, you're probably violating a nondisclosure agreement), you have no way of knowing what the interests of HARMAN and Argonaught Holdings Ltd. will be when the lease expires.

I know with absolute certainty that I don't know what will happen when HARMAN's 20-year lease ends. If Ilford products are still being offered eight years hence, my conservative tendency to be "over insured" will most likely lead me to fill a freezer with them. Others may agree, disagree, follow suit or ignore.

Why the paranoid speculation?

Paranoid? Nine years before the lease ends? More like reasoned analysis.

Yeap, there's no need for speculation or to be alarmist.

Alarmist? Nine years before the lease ends? More like thinking ahead.

If the redevelopment plan had gone through, Harman would have had to move equipment to the new facility. Much of the hassle and expense of the move would be related to disassembling, loading, unloading and reassembling the equipment. Once that is done, does it really matter much whether the equipment is moved to a nearby or distant destination. Harman has an long time to find a new home. Surely some other community in England would appreciate a new manufacturing facility.

The proposed site redevelopment plan had Argonaught Holdings Ltd., HARMAN's landlord, shouldering the cost of new facility construction as well as physical relocation of HARMAN's equipment. I do speculate that it could afford to do that because profits from simultaneous residential unit sales would have subsidized those expenses. Other business estates, whether nearby or distant, have no such incentive should they seek to attract HARMAN at the end of its lease. HARMAN's relocation costs would also increase with every additional mile.

I find it highly unlikely that a facility manufacturing coated light sensitive products will ever be disassembled, moved any substantial distance and reassembled in the future, given current and reasonably anticipated market conditions. Unless government subsidies are offered, the cost is just too high. In my opinion, the best possible scenario for HARMAN is that sales and profits remain strong enough so that, when its lease runs out, it can afford negotiating an extension and continuing to incur the extra expenses of a facility far too large for its needs. Being someone who hopes for the best and plans for the worst, my prudence will motivate stocking up as 2025 approaches.

 

[pdeeh]

given the distaste UK governments have had - over several decades - for anything to do with manufacturing industry,let alone that "subsidy" is considered a four-letter word ... I wonder if the Italian government would like to lend a hand?

 

[Wallendo]

given the distaste UK governments have had - over several decades - for anything to do with manufacturing industry,let alone that "subsidy" is considered a four-letter word ... I wonder if the Italian government would like to lend a hand?

That would be great as long as Harman doesn't require power or water for their business.

 

[Ricardo Miranda]

Sal,
You are forgetting one small detail: this is an UK company, not a USA one.
We always have a Plan B.

Besides, do you think that a 140 year old company will cease to exist without doing some fighting?

 

[Sal Santamaura]

Sal,
You are forgetting one small detail: this is an UK company, not a USA one.
We always have a Plan B.

Besides, do you think that a 140 year old company will cease to exist without doing some fighting?

I was a great admirer of the five executives who rescued HARMAN from Ilford's bankruptcy in 2005. They were long-time members of the photographic products industry and, while certainly in search (and deserving) of financial reward for their efforts, seemed to have a passion for their products that motivated them to strive mightily.

My impression of Pemberstone Ventures is somewhat different. As an investment company previously unrelated to photography, I'd expect it to approach situations with an absolute "bottom line" attitude. If things aren't working out financially in the future, especially should a factory lease termination mandate moving from Mobberley, Pemberstone would probably invoke the same "Plan B" that other US and UK corporate entities typically fall back on, namely, cut your losses. Forward looking market predictions balanced against the expense and risk of attempting a major factory move would be the critical calculation. I'm not confident that sales would support such an adventure. I could very well (and intensely hope to) be wrong about that.

There's very little difference between the motivations and behaviors of corporations around the world. Globalization has seen to that. Plan A, B, etc. is always to achieve the rate of return on investment (ROI) deemed minimally acceptable. Numbers drive everything. Only very, very rarely do we customers benefit from something like the former HARMAN owners' willingness to take a substantial risk so that the products they felt passionately about would live on. We're still reaping the rewards of their actions in 2005. I agree strongly with those who encourage continuing to support HARMAN by purchasing Ilford products. And I stand by my conservative, risk-averse suggestion that stocking up on those products in 2024 would be a good idea.

 

[railwayman3]

Just buy and use their wonderful products. We'll see what happens later.

Agreed....the one thing which we can be sure about is that we will, all, be able to enjoy taking and printing pictures for our lifetimes. Hopefully using analog products from Harman or someone else. If that fails, there are other ways, and we will adapt.

 

[pentaxuser]

What is the evidence that Pemberstone have a different motivation towards its film business than that of Harman executives? Can we really divide this into a "good guys v the bad guys" scenario?

If the owner of the site will not be able to build houses there then presumably it will not pay for Ilford's development but why will this be likely to result in Ilford's demise. What is the evidence that Ilford cannot carry on as it is with its existing facilities and on that basis do we know of reasons why its lease should not be renewed by the site owner?

Like several others here I have been part of two tours of the Ilford site and have to say I was not overly aware of aircraft noise compared to say what considerably more residents than live at Mobberley experience near say, Heathrow or probably Gatwick

The Inspector seems to base his rejection on noise pollution alone but given the desire of the government to establish "economic powerhouses" in the North of England with its concomitant need for air traffic and housing I have difficulty believing that this dismissal of the appeal by the Inspector is the end of the matter.

pentaxuser

 

[Sal Santamaura]

What is the evidence that Pemberstone have a different motivation towards its film business than that of Harman executives? Can we really divide this into a "good guys v the bad guys" scenario?...

There's no concrete evidence of anything, just a conclusion based upon circumstances. Please don't dramatize my words by extrapolating them into "good guys vs. bad guys" phrasing. I neither wrote nor implied that Pemberstone is owned/run by "bad guys."

...If the owner of the site will not be able to build houses there then presumably it will not pay for Ilford's development but why will this be likely to result in Ilford's demise...

Who claimed that would "likely" be the result?

...What is the evidence that Ilford cannot carry on as it is with its existing facilities and on that basis do we know of reasons why its lease should not be renewed by the site owner?...

Who claimed it could not? Neither I nor anyone without insider information know anything about the probability of HARMAN's site lease being renewed upon its expiration. Nor do we know what sensitized photographic product market conditions might be at that time or what lease renewal cost/terms might be offered by Argonaught.

In other words, we don't know "squat." In the face of uncertainty and risk, I opt for insurance. Thus, should conditions remain the same in 2024 as they are today, I'll stock up.

...The Inspector seems to base his rejection on noise pollution alone but given the desire of the government to establish "economic powerhouses" in the North of England with its concomitant need for air traffic and housing I have difficulty believing that this dismissal of the appeal by the Inspector is the end of the matter...

With limited to no insight into the workings of UK government, I'll happily defer to your opinion that the matter might not be closed. I can find nothing on line to suggest that further appeal of the appeal is possible, but hope there's an avenue open to Argonaught which might enable the redevelopment plan to be implemented. "Right sizing" HARMAN's facilities at Argonaught's expense seems like the best possible scenario to support future Ilford product availability.

 

[Chris Livsey]

I can find nothing on line to suggest that further appeal of the appeal is possible, but hope there's an avenue open to Argonaught which might enable the redevelopment plan to be implemented.

This appeal was against the rejection of the first planning application. Since then they have re-applied, that was also rejected locally, however they are able to now appeal against the rejection of the second application. Provided an application is deemed sufficiently different than one previously submitted and rejected the process can continue. The problem is the rejection on appeal of that first application was not on the plans submitted but the environment surrounding them, whilst plans can be modified to meet reasons for refusal it is hard to see how the environmental noise can be changed by the applicants.

 

[Rlibersky]

Today the Planning Inspectorate denied HARMAN's landlord's appeal:

Reading the linked decision document, it's apparent everything turned on aircraft noise. I get the sense that, except for noise, Cheshire East Council's rejection would have been overturned. Stock up on Ilford materials in around eight years. Unless other factors surface that warrant doing so sooner than that, which is shortly before HARMAN's site lease expires. ​

​

It seems that if the application is denied the existing buildings will stay. If that is the case and Harmon is profitable, wouldn't they just as likely stay in business where they are? Are you speculating that the air noise will change and the owners application will be approved?

 

[Sal Santamaura]

​

It seems that if the application is denied the existing buildings will stay. If that is the case and Harmon is profitable, wouldn't they just as likely stay in business where they are? Are you speculating that the air noise will change and the owners application will be approved?

The appeal was denied. The existing buildings will stay. In my opinion, and the opinion of the official who denied Argonaught's appeal, aircraft noise will likely only become worse in the future, making approval of any revised redevelopment plan that includes residential units unlikely.

There are approximately nine years left on HARMAN's site lease. Unless the photographic sensitized products market changes for the worse between now and then, it seems reasonable to assume HARMAN will continue in business there. When the lease expires, depending on what options might have been negotiated in 2005, if any, as well as what Argonaught's other tenant options are at that time, HARMAN will undoubtedly balance its future facility costs against reasonably expected photographic product revenue going forward and decide how to proceed. I have no idea what the result of that trade study will be. Nor, in my opinion, does anyone else without insider information. It's complete uncertainty for those of us on the outside with respect to Ilford products after 2025.

 

[RattyMouse]

The appeal was denied. The existing buildings will stay. In my opinion, and the opinion of the official who denied Argonaught's appeal, aircraft noise will likely only become worse in the future, making approval of any revised redevelopment plan that includes residential units unlikely.

There are approximately nine years left on HARMAN's site lease. Unless the photographic sensitized products market changes for the worse between now and then, it seems reasonable to assume HARMAN will continue in business there. When the lease expires, depending on what options might have been negotiated in 2005, if any, as well as what Argonaught's other tenant options are at that time, HARMAN will undoubtedly balance its future facility costs against reasonably expected photographic product revenue going forward and decide how to proceed. I have no idea what the result of that trade study will be. Nor, in my opinion, does anyone else without insider information. It's complete uncertainty for those of us on the outside with respect to Ilford products after 2025.

A few additional points.

* The previous owners of Ilford worked tirelessly to re-build the company into the success that it is today.
* When the time came to sell, the did so at a good price. The sale was not the result of a distressed company.
* The buyers of Ilford, having paid a good price, did due diligence and were aware of the leasing situation pre-purchase.
* The new owners of Ilford are fully aware of what their options are in any situation that arises in the near future and proceeded to make this purchase based on this information.

I refuse to believe that the new owners of Ilford bought into this company on a short term basis. Nor do I believe that the previous owners of Ilford would hand off their company who would not make every effort to keep it going.

That just doesnt add up, even in a corporate environment.

 

[Sal Santamaura]

A few additional points.

* The previous owners of Ilford worked tirelessly to re-build the company into the success that it is today.
* When the time came to sell, the did so at a good price. The sale was not the result of a distressed company.
* The buyers of Ilford, having paid a good price, did due diligence and were aware of the leasing situation pre-purchase.
* The new owners of Ilford are fully aware of what their options are in any situation that arises in the near future and proceeded to make this purchase based on this information...

Valid points.

...I refuse to believe that the new owners of Ilford bought into this company on a short term basis...

Ten years cannot be described as "short term" in the corporate world.

...Nor do I believe that the previous owners of Ilford would hand off their company who would not make every effort to keep it going.

That just doesnt add up, even in a corporate environment.

"Keeping it going" for even ten years was quite an accomplishment by the five former owners of HARMAN. Pemberstone's continuing the business for yet another ten years, through the end of its site lease, would be an even greater accomplishment in my opinion. Should Ilford products remain in production after 2025, I'd be ecstatic. But, given our lack of factual information, I'll not count on it.

Hope for the best and prepare for the worst. Hasn't failed me yet.