How Many is Too Many
At what point do we all agree that something is rotten at the core of the UK demolition business?
A few months ago, a random question started doing the rounds on social media. That question was: “How many owls would you need to see in a single day before you felt something was wrong?”
Most people said that one would be unusual; two might make them think they were close to a nest; but three would be enough to cause suspicion, concern and even alarm.
So, echoing that question, how many demolition companies need to collapse before the wider industry accepts that it is more than a blip or a glitch and that something far more serious is going on?
This week, yet another demolition company succumbed. (And yes, there is a bitter irony that companies so adept at causing structures to collapse seem powerless to prevent their own). That is SIX in just FOUR months.
Admittedly, this one - Type Ten - was smaller. And, as it sinks beneath the surface, it will cause a ripple rather than the massive wave created by the demise of Squibb and Rye Demolition. But, regardless of its size, it is another owl in a troublingly short space of time.
So, do we all just 1. go about our business? Should we 2. pause and reflect on precisely why so many demolition companies have just fallen off the industry radar screen? Or do we 3. strap in and prepare for the demolition version of The Rapture?
In spite of everything, option two seems the most sensible response to this near-apocalyptic situation.
Some have suggested that COVID-19 and the resulting lockdown is at least partially responsible for this unprecedented haemorrhaging of companies. But COVID hit all companies equally. If COVID were to blame, we would have lost 60 or more of the industry’s number, not six.
There has been much talk about the impact of wildly fluctuating scrap prices. But, once again, that would have impacted everyone. And like a rising tide raises all the boats, a negative swing in scrap prices is painful for all, not just some.
Sadly, it appears that the true cause of this spate of demolition company failures lies closer to those individual firms than it does to the industry as a whole.
There has been (and there continues to be) a willingness to work for virtually no margin whatsoever. That is unwise in any business sector. But in demolition where there is ALWAYS a danger that something will change, go wrong or be delayed, that lack of contingency is verging on the suicidal.
Couple that with the double-whammy of readily available finance and a desire for new equipment that is seemingly driven more by ego than actual need, and you have a recipe for disaster.
What is even more worrying is the shift in the industry’s response to this domino-like collapse.
Immediately after a firm goes into administration, there is a predictable backlash and an outpouring of sympathy for the innocent employees that just saw their job vanish, and the supply chain who just kissed goodbye to a chunk of cash they were rightfully owed and that they’re now unlikely to recoup.
But there is a new response in town. As each company is consumed into the dark depths of the deadpool, there is rumour and speculation that they will not be the last; that others are teetering on the brink; and that the End of Days is upon us.
We are living in unprecedented times and there is no playbook for handling the current crisis facing the sector. But shouldn’t there have been an emergency meeting by now? Shouldn’t the industry have set aside its rivalries and allegiances and formed a task force? Shouldn’t there be an advisory panel in operation, pulling troubled firms back from the precipice?
How many owls will it take?