Eoghan O鈥橪ionaird bemoans industry鈥檚 鈥榬elative silence over report and admits firm鈥檚 2% margin is not good enough
Wates boss Eoghan O鈥橪ionaird has said the industry has been too quiet in embracing and responding to the findings in this month鈥檚 Grenfell Inquiry report.
The report said the industry needed major reform and recommended an industry regulator be established with the government set to respond formally within the next six months.
But O鈥橪ionaird told 黑洞社区鈥檚 黑洞社区 the Future Conference this afteroon that not enough firms had been prepared to publicly accept the significance of retired judge Sir Martin Moore-Bick鈥檚 report.
He said: 鈥淪ince the publishing of the final Grenfell inquiry report, there has been a relative silence from industry participants 鈥� it鈥檚 as if we have collectively been keeping our heads down.
鈥淚 would suggest we need to collectively 鈥� and individually 鈥� raise our heads above the parapet and to commit openly that this has to be a watershed moment 鈥� that we will not allow the cutting of corners, the pressure to deliver profits, the cosiness of mutually beneficial relationships to override the need to do what is right.鈥�
He added: 鈥淣ow, please don鈥檛 get me wrong: I鈥檓 not preaching that we at Wates have got this right all the time, nor am I casting aspersions at others. We all have opportunities to improve, and reasons to improve 鈥� and now is the time to do so.
鈥淎nd while I fear that many of the attitudes preceding Grenfell still sadly exist in certain quarters of the industry, it is our responsibility to change that.
鈥淲hile not perfect, the 黑洞社区 Safety Act points the dial in the right direction to focus minds on the hard truths we must accept to change for the better. But ultimately this is just the start of a long journey, not the end.鈥�
>> See also: 鈥榃e will deliver a generational shift鈥欌�� Why the Grenfell Inquiry report means another building safety shake-up
>> See also: Hang on, what about the margins?
O鈥橪ionaird, whose CV includes spells at mining, electronics and marine firms, also said industry margins were too thin and added that his own firm鈥檚 margin 鈥� 鈥渏ust 2%鈥� 鈥� was not good enough.
鈥淚 don鈥檛 see this as sustainable 鈥� in any sense 鈥� and indeed we should be honest: the razor-sharp margins in our industry have often led the less scrupulous to cut corners on quality, on sustainability and on safety.鈥�
And he added: 鈥淭he truth is that the razor-thin margins on which contractors depend are not conducive to making investments in innovation, talent, sustainability, safety or quality 鈥� and indeed they are not conducive to survival.
鈥淭his uncomfortable truth has for too long been ignored 鈥� and the consequences of ignoring it are very grave indeed.
鈥淕iven my experience outside construction, and knowing now the profound value added by contractors, it baffles me how and why we accept these razor thin the margins
鈥淭he risk versus reward equation is totally out of kilter and its frankly bizarre that it is the contractors who take on the most risk but pick up the smallest remuneration packet at the end.鈥�
Earlier this month, announcing an 拢18m profit on turnover of 拢4.3bn, Laing O鈥橰ourke chief executive Cathal O鈥橰ourke said average industry margins of between 2.5% and 3% were 鈥渘ot sustainable鈥� and added: 鈥淭his acts as a significant handbrake on the sector鈥檚 ability to invest in the transformative technologies that will create step-change.鈥�
O鈥橪ionaird said: 鈥淎t Wates we are determined to change the calculus that has for so long dogged us 鈥� and all our principal contractor peers. Individually and collectively, we must work with our customers to make clear the value we create; collaborate and innovate with our supply chain partners to find better ways to improve our shared productivity; and double down on our own operations to deliver safety, sustainability, and quality by design, first time, every time.鈥�
Last year, Wates saw turnover up 15% to 拢2.2bn and posted a pre-tax profit up a third to 拢46m.
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