JOHN LAING PLC - Company Profile, Information, Business Description, History, Background Information on JOHN LAING PLC

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Around 1800 a Scot named David Laing moved south to Cumberland, in England, and built a house for himself and his bride. With that simple construction project, Laing started in a business his family has stayed in for more than 180 years. Today Martin Laing, fifth-generation descendant of David Laing, presides over Britain's largest construction firm.

After building his first house, David Laing worked in the village repairing the church, digging wells and engaging in other small jobs to maintain his livelihood. His eldest son, James, born in 1816, joined him upon finishing school. It appears that James Laing would have been content to carry on as a repairman and minor builder like his father, but his marriage in 1841 to Ann Graham, who had her eyes on the future, changed James Laing's life. She convinced him to hire permanent employees and buy a plot of land for £20. In his spare time, Laing built a house on the plot; Ann helped by leading a team of their children in hauling rocks up the hill from a river bed. He finished the house in 1848 and sold it the same year, thus giving birth to the Laing construction firm.

The £150 proceeds from that first sale financed construction of two more houses on the same piece of land. James and Ann raised their family in one of the houses and sold the other. It is uncertain why in 1867 James sold everything and moved the family to Carlisle, where he worked as a laborer until he managed to start another business of his own. Again the eldest son joined his father in business; John Laing, born in 1842, worked as a stonecarver for his father.

When James Laing died in 1882, John Laing took over the business and began to procure larger contracts for public projects such as the Carlisle electricity works and repairs on the local castle. Under John Laing, the business began to produce its own building materials. Laborers dug clay, made bricks by hand, and fired them in a kiln on the construction site. The business remained relatively small and confined to the Carlisle area until the fourth Laing took over.

John Laing's son John William Laing, born in 1879, was active in the business before he was 20 years old, so active that the firm changed its name to John Laing and Son. Ann Laing, by now quite advanced in age and feeling that her family was suitably established, wanted her grandson to go into a more genteel field than construction. Unaware that the young man was a budding construction tycoon, she tried to keep him out of the business. In a peculiar reversal of the norm, John William Laing rebelled against his grandmother by staying in the family firm.

The construction industry in Great Britain experienced great growth in the first decade of this century. During this period Laing procured many contracts for public works, including the Uldale reservoir and the Barrow sewer.

By 1910 John William Laing was the sole proprietor of the firm and had begun to organize it into the successful international business it is today. He hired more employees and started accepting larger and more distant contracts, especially for factory construction. Laing was very concerned about preparing accurate cost estimates, maintaining strict control over the construction workers, and using scientific methods. He wanted to know about every aspect of construction, even at times living on building sites and learning such skills as bricklaying, masonry and how to inspect each laborer's work.

Laing devised his cost estimating technique with William Sirey, a clerk in the firm. It consisted of sending trained estimators to the site to prepare a detailed analysis of every phase of the job. As a result, Laing's quotes were more accurate than those of his competitors. The system additionally helped the firm reduce the builder's standard problem of surprise costs surfacing during construction. Estimators remain important in the company that was among the first to apply cost-control procedures systematically.

During World War I the company received a series of British government contracts for war works. Laing built naval armament testing stations, an armament factory and workers' accommodations in Gretna, an aerodrome, and a riveting school. By the end of the war, John Laing & Son was a substantially larger firm with an intricate and invaluable web of contacts in government departments.

In 1920 the firm became a limited company and opened offices in London. Two years later the headquarters moved from Carlisle to a 13-acre site in Northwest London at Mill Hill. Now in national competition for construction work, the company won contracts for the Middlesex County Hospital, the Federation of British Industries House, office blocks, pumping stations, power stations and an army camp.

The postwar housing shortage also brought significant profits. The company built many public housing blocks for the Local Authorities; it also built houses for sale to the public. A subsidiary company, Laing's Properties Ltd., owned and managed large blocks of Laing-built flats. Laing's largest source of work, however, was the Air Ministry, for which the company built aerodromes, airfields, equipment depots and the underground headquarters for the Bomber Command of World War II. The company began construction of three new aerodromes in October 1939, and on 14 more the next year. In the process Laing developed expertise in runway construction that would prove lucrative during the war years.

World War II brought contracts for a total of 54 aerodromes, including hangars, runways, offices and housing. Work on ordinance factories, power stations, coal mines and part of the floating harbor used in the D-Day invasion of France also made significant contributions to Laing profits during the war.

The fifth generation of Laings, William Kirby Laing and James Maurice Laing, joined the firm before World War II. In 1950 the company established its first regional center, in Bristol. Two years later the company went public and took the name John Laing & Sons (Holdings) Ltd. The family and its trusts and charities held the bulk of the shares. John Laing became the chairman, and his sons became joint managing directors. By this time, the number of employees was up to 10,000, and every site had a quality supervisor.

Postwar contracts included schools, the Prestwick and Glasgow airports, factories, the Windscale and Berkeley nuclear power stations, and more than 10,000 houses. The firm continued the coal mining it had begun during the war, extracting 12,555 tons in 1947. In 1953, net assets reached £6.6 million, and the company employed 15,000 people at its building sites and offices.

John Laing retired in 1957 and was knighted two years later. Paternalistic and devout, he served as president of the London Bible College, helped establish the Salisbury Bible House in what is now Harare, Zimbabwe, and had his company build the Coventry Cathedral and return the profits to the church. While he was known during his time at the helm of the firm for providing every construction site a welfare officer to look after meals, movies, whist drives and religious services for the laborers, it was reported that he could also be harsh. He once reportedly fined a man for going to the pub during lunch. He died in 1978 at age 98.

Under William Kirby Laing and James Maurice Laing, the company continued on the successful path the men's father had planned, winning contracts for more power stations and expanding into road construction while continuing to build houses. In 1985 Martin Laing, of the family's sixth generation in construction, became chairman. That year, the company won contracts totalling almost £27 million.

Martin Laing determined that the company, now Britain's largest construction firm, should begin to diversify. With an .l222b84 million cash reserve, Laing had room to experiment. Diversification projects included building supermarkets at airports and creating a new water treatment company, called Water Services, set up as a joint venture with the French company Lyonnaise des Eaux. Martin Laing believed the skills the company gained from the experience of installing its own elaborate computer system could be the basis of a profitable service. Consequently, in 1987 the company established its Energy, Technology and Environment division which offers high-technology services, from computer-aided road design to nuclear waste processing. The new division is expected to provide 10% of Laing's profits by 1990.

The company's other divisions continue to be successful as well. Profits have risen steadily in the 1980's, from £30.3 million in 1984 to £38.1 in 1986, with each subsidiary doing correspondingly well. Housebuilding in the United Kingdom, Saudi Arabia, Oman, the United Arab Emirates, Iraq, Spain and California is now one of the major sources of growth, though there have been some problems with non-payment by clients in Saudi Arabia. This has depressed share prices somewhat. Nevertheless, the company's participation in several major protects the British government plans for the late 1980's and early 1990's, as well as the lucrative new technology division, should preserve Laing's leadership of the Untied Kingdom construction industry for the next several years, at least.

Principal Subsidiaries: John Laing Construction Limited; Laing Industrial Engineering & Construction Limited; Laing Management Contracting Limited; Laing Management Contracting (Scotland) Limited; Laing-Loy Management Contracting Limited (50%); Holloway White Allom Limited; Degremont Laing Limited (50%); Water Services Limited (50%); John Laing Properties Limited; Scot Projects Limited; Laing Homes Limited; Super Homes Limited; Laing Land Limited; John Laing Developments Limited; Laing Teesland Limited (50%); SBD Construction Products Limited; OC Summers Limited; Esk Manufacturing Company Limited; Victoria Joinery Limited; Beechdale Engineering Limited; EPL International Limited; John Laing Services Limited; Elstree Computing Limited; JL Property Holdings Limited Overseas; John Laing International Limited; Laing Projects Limited (Jersey, CI); Laing Projects BV (Holland); Laing SA (Spain); Laing Wimpey Alireza Limited; Wimpey Laing Limited (50%); Laing Holdings Inc. (USA); John Laing Homes Inc. (USA)

Additional Details

Further Reference

Life and Belief in the Experience of John W. Laing CBE, by Godfrey Harrison, London, Hodder and Stoughton, 1954.The Biography of Sir John W. Laing, CBE, by Roy Coad, London, Hodder and Stoughton, 1979.

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