The industrial stench of oil and grease gives no hint at the
true value of Peter Hobson's pile of old car parts as he throws the
doors open to a cavernous barn in a remote Lincolnshire
field.
I dispose of the MoD vehicles in accordance with EU rules, and
that's where I get many of my parts from
Peter Hobson, Hobson Industries
"I've got the largest Land Rover parts store outside Land Rover,"
the 60-year-old entrepreneur declares as he inspects tonnes of
scrapped components that he has amassed over the last two
decades.
Inside the dimly-lit barn, shelves and crates are stacked high to
the ceiling, each filled to the brim with filthy bits of axles and
alternators, clutch levers and steering pumps.
It is a collection that has been put to good use.
Not only has Mr Hobson become an important employer in an English
region hungry for jobs, he has also emerged as a small rival to
Land Rover, the company that is currently for sale by its US parent
Ford Motor.
Wheels and deals
"I've more than 100 Wolf engines, and they are £7,000 each," Mr
Hobson declares, rummaging around in his barn.
"I've got well over 1,000 V8 engines, and 700 diesel engines.
"And here, I have 1,100 transfer boxes at £450 each, and these
gearboxes - I've got 800 of them - are £2,000 each."
It all adds up.
Mr Hobson reckons the bits in his barn are worth at least £25m
($50m) - and conceivably more than twice that, depending on how
much his customers are willing to pay for them.
"If you simply take the parts and try to sell them, you're on a
hiding to nothing," he explains.
Even severely damaged Land Rovers like this one will have some 60%
of its parts reused.
So instead, he has set up a factory nearby, in Donington on Bain in
Lincolnshire. Here, Hobson Industries employs 48 workers who are
busy stripping down entire vehicles into their smallest components,
before reusing the bits to build major parts like engines or
gearboxes, or even entire vehicles.
"When you walk around here, you'll see that the company is a
mini-Land Rover," Mr Hobson observes.
Everything is built to military specifications, with many of the
Land Rovers being kitted out as armoured vehicles.
"I supply many armies around the world," Mr Hobson says - including
the armed forces in Turkey, Jordan, Australia and a string of
Middle-Eastern nations. But Hobson's main client is the UK Ministry
of Defence (MoD).
In a concrete-covered field behind Hobson Industries' rural
factory, some 300 scrapped Land Rovers are stacked high, waiting to
be stripped. Any day now, a further 300 MoD vehicles are due to
arrive. Many of them have seen action. Some are almost completely
wrecked.
And yet, Hobson Industries pays for them - though not very
much.
"I dispose of the MoD vehicles in accordance with European Union
rules, and that's where I get many of my parts from," explains Mr
Hobson. "But the MoD are not fools. It would cost them money to get
rid of them. Instead I buy the assets off them."
Hobson Industries then goes about the task of salvaging as much as
possible from each and every Land Rover.
Reusable or recoverable parts are sent through vast washing
machines before they are restored.
"You could not tell that from new," Mr Hobson declares as he holds
up a shiny, reconditioned alternator. "You can't tell the
difference and this is a fraction of the price."
And whereas the restoration process might seem laborious, "it's no
more labour intensive than building a new one," Mr Hobson explains.
"And you've got virtually no costs."
Hobson Industries sells the reconditioned parts at half the
official Land Rover list-price, regardless of costs, and the
components come with a two-year warranty, compared with a one-year
warranty on new parts.
Hence, some of the components sold by Hobson's might bring in the
bacon in a big way, while others might cost more than their sales
price.
Production equipment is acquired in a similar fashion. If Mr Hobson
wants it, he will buy it - without first considering the returns on
his investment.
Hobson Industries mix old and new parts to build entire 4x4s
"I am the only shareholder. I have no dividends to pay, so I choose
when to buy [component] stock or tools.
"If you can afford the tools and you buy the best you can afford,
then it's just like buying a good spanner," he says, gesticulating
towards his factory. "It's just a big box of spanners."
As it happens, Hobson's toolbox is bulging.
It includes a facility that strips down, cleans, modifies and
rebuilds old engines, and a facility to build Borg Warner transfer
boxes under licence on behalf of Land Rover, the company.
And there is an electroplating kit and a starter-motor
reconditioning unit, complete with a rotating electrics test
bed.
Over the years, Mr Hobson has even bought stacks of obsolete
tooling directly from Land Rover, much of which has been
upgraded.
"I've invested millions of pounds," Mr Hobson declares.
Good as new
As a consequence, he has acquired everything he needs to build
entire Land Rovers from scratch.
"I am supplying the MoD with a brand new Land Rover at the price it
was sold at 10 years ago, which is half what Land Rover charges for
a new one now," Mr Hobson says.
Mr Hobson's car parts are worth their weight in gold
"It is a massive saving for the MoD and it is saving the taxpayer
millions."
Besides, he adds, the process saves on resources - natural as well
as financial. "We're a first-world nation that thinks we can throw
everything away. From a society point of view, this is the way to
go with all vehicles."
New parts are added where required during assembly, at times from
external suppliers.
"Where we can't do it here, we go to the people who can," says Mr
Hobson, explaining how Hobson Industries has entered into strategic
alliances with parts suppliers, ranging from firms making towing
equipment and gearboxes to steelmakers and armoured protection
firms.
Take the seats, for example. They are sent to upholsterer Exmoor
Trim, which strips off the covering, then reuses the frame - the
most expensive part of a seat.
"He will make money, I will make money and we supply the seat to
the MoD at half the price of a new one," explains Mr Hobson.
Other parts - such as starter motors and turbo chargers - are
acquired directly from the same specialist suppliers that normally
sell parts to Land Rover.
On top of that, Hobson has even acquired an extensive stockpile of
obsolete, yet unused Land Rover parts - including engines - that
are much in demand from armies with ageing vehicle fleets. This is
causing Ford Motor a headache, since Hobson enables armies, and the
MoD in particular, to delay orders for new Land Rovers. Such issues
are undoubtedly being discussed with any potential buyers of Ford's
Land Rover business - and whatever the outcome, it seems likely
that Hobson Industries will play a part in Land Rover's
future.
http://news.bbc.co.uk/1/hi/business/7052340.stm
Something which we can do to extend the lives of our Land Rovers,
help cut costs and save the environment. 
