Morgan Motor Company - The Car Maker's Journey into the 21st Century
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Case Code: BSTR201 Case Length: 17 Pages Period: 1910-2005 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.400 Organization: Morgan Motor Company Industry: Auto and Ancillaries Countries: United Kingdom Themes: Family-Owned Business, Business Environment |
Abstract Case Intro 1 Case Intro 2 Excerpts
"From a Harvard Business School point of view, the company (Morgan) has done almost nothing right... It has for the most part failed to automate or expand, failed to diversify, failed to change its product line, failed to turn to the stock market for new capital... It has, in short failed to do everything but succeed."
- An extract from an Esquire magazine article, quoted by BBC in 2001
"Other cars are built to price. Ours are built to last."
- Charles Morgan, Managing Director of Morgan Motor Company in 2003
Morgan Announces 'Eco Car' Project
In mid-2005, Morgan Motor Company (Morgan), a British car manufacturer which had stuck to old fashioned hand crafted cars, announced that it was to start developing what it called the 'world's first environmentally friendly sports car'.
Morgan produced a range of sports cars. The new car, labeled 'LIFEcar,' was to be modeled on Morgan's successful Aero 8 sports car that was launched in 2000, but it would incorporate a fuel cell instead of the BMW V8 engine used in the Aero 8. The fuel cell would use hydrogen stored in a tank and draw air from the atmosphere to create electricity. This would be used to power the car's four motors (one for each wheel). The only emission the car produced would be water vapor. The car was also to have an ultra quiet engine - a departure from Morgan's traditional 'throaty' engine sounds. Motor experts were initially skeptical about the efficacy of using fuel cells in a sports car. Fuel cells had certain drawbacks.
They were capable of delivering high top speeds, but they did not generate the surges of power required for rapid acceleration. Morgan planned to overcome this shortcoming by using powerful capacitors (devices which store electricity and then release it rapidly).
These capacitors were to store energy generated from 'regenerative braking' to supplement the electrical supply during acceleration. The use of capacitors would also allow the LIFEcar to have a smaller than average fuel cell, thus making it lighter and improving its speed. A consortium of universities and engineering firms worked together with Morgan on the LIFEcar project. Qinetiq, a former British government defense research agency, was to develop the fuel cell for the car, and the BOC Group, an industrial gas company, was to produce the hydrogen refueling plant. The project was funded partly by the British government and partly by private sources. The British Department of Trade and Industry made a grant of ₤1.9 million towards the LIFEcar project.
"If it succeeds, the project could help to solve one of the most challenging tasks facing the modern motor industry: how to keep making cars that are fun and fast while also meeting rapidly growing concerns over damage to the environment," wrote Sunday London Times.
"We accept the problems of climate change and think that it would be irresponsible for any manufacturer not to act," said Charles Morgan, Managing Director of Morgan and project director of LIFEcar. Working on a path-breaking project like a new eco-car, required the trial of new, hitherto unexplored ways of working. This could generate a "quantum leap of technological development" for Morgan, which had a reputation of sticking to traditional car manufacturing systems. Morgan was the only car manufacturer in the early 21st century that had not been touched by automation and mass production. Even in the early 2000s, the company occupied the same building in which it was set up in the early 1900s and crafted its cars primarily by hand.
It employed just over 100 people and its annual production was between 500 and 1000 -an infinitesimal number compared to auto giants like General Motors....
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