Belgium’s last remaining vehicle manufacturer has seemingly spluttered to its final stop, engine wheezing.
In some ways, the Van Hool story is like any other recent narrative in the country's beleaguered automotive industry: a difficult post-pandemic recovery, disruption and upheaval from the transition to electric, the woes attached to a consistently competitive vehicle manufacturing sector.
But behind the usual market factors is a level of personal drama that would rival the hit American television drama Succession, and indeed revolves around the titular issue. And if you think automobile manufacturing can’t be as sexy as the global media and entertainment conglomerate Succession centres around, you’ve never seen the interior of a Van Hool touring coach.
Van Hool was (or is, depending on your perspective or shareholdings) the gold standard. ‘Efficiency and elegance’ are how they brand themselves, and ‘a modern concept for a streamlined experience’, in adherence to the company values of reliability, quality and functionality.
Beyond their beautiful coaches, Van Hool tackled public transport and industrial vehicles, too. They garnered admiration from the sort of professionals and experts that could delineate a liftgate and a slack adjuster, a genset and a gearbox, a kingpin from a coupler. Buses for bus people, in other words. And they embraced new technology, building slick, tailored, green, clean vehicles that could be double-deckers, airport buses and tram-buses – as well as zero emission, fuel-celled and hydrogen-powered, if demanded.
But having the best product is only one determining factor of success in the ruthless yet staid automotive industry.
“Everyone loves the story of the company that succeeds purely on the strength of its product, but that story is increasingly rare in vehicle manufacturing,” explains auto industry analyst and author Edward Niedermeyer, who adds that manufacturing is now a survivor’s game.
“Competition is so intense in many of these industries that products simply have no way to stand out in a sea of carefully benchmarked rivals. And even if your product is strong, it can be hard to break through the noise in today's fragmented, saturated media environment. We're seeing brands with strong products and legacies, from Jaguar to Alfa-Romeo, struggle with turnarounds like this,” he says.
Plenty of great shows are killed for ancillary reasons. And, spoiler alert: for Van Hool, despite season after season of success, quality alone couldn’t carry them through family drama and economic plot twists.
A solid debut
Van Hool was a family company. Founded in 1947 by patriarch Bernard Van Hool, six of its first 22 employees were relatives: Bernard himself, a brother-in-law, four sons. By 1954 its name was changed to Van Hool en Zonen (and sons). As the wealth and prestige attached to the family company grew, so too did the family: Bernard would go on to have 10 children in total: eight sons, two daughters.
Bernard had a lifelong fascination with machines and already had a few inventions under his belt before World War II. It was perhaps no surprise then that the company had a strong pilot, their first coachworks inspired by large American cars in terms of design and model. When the market dipped in the early 1950s, they found business in the Belgian Congo and shipped to Leopoldville (there’s always a season fans like to forget), later leveraging this to expand elsewhere in Africa: Nigeria, Angola, Tunisia and especially Algeria.
Next came a partnership with Fiat, then the start of manufacturing industrial vehicles, then a deal with CIÉ in Ireland, with some exports to the UK. The British were fond enough of the Belgian buses that they awarded them ‘Coach of the Year’ five times in the British Coach Rally’s ‘Concours d'Elegance’. Van Hool won over audiences in the Japanese market in the 1980s with double-decker buses via Meitetsu Group, then expanded back home in the 1990s by purchasing LAG Manufacturing in Bree, Belgium. By the mid-70s, their industrial vehicles were being sold in outlets from Europe to the Middle East, with high ratings in Asia and Africa, to boot.
Bernard himself was behind the figurative wheel at all times, shaping the company’s range of offerings around his own demands and even opening a welding school to ensure he’d have enough skilled workers to meet needs. But as business boomed despite multiple season-finale-worthy recessions, all was far from well within the growing Van Hool family empire.
Inheritance squabble
The family drama centres around the daughters, Ingrid and Simone, who’d been kept out of the shareholding right up until Bernard died unexpectedly while visiting a building fair in Brussels in 1974.
When the sisters saw that three of their eight brothers were being bought out of the company years later, the family feud spilled into the courts. The daughters secured a favourable ruling on their share of the inheritance, but this particular plotline was far from over.
As the company’s ranks swelled and the family dispute only further festered, 4,000 workers (with around 2,500 of those employees in Belgium) became potential collateral damage to infighting and legal battles – their jobs tied to family-run branches where said-family weren’t on speaking terms with one another.
Yet work went on and Van Hool secured a minority stake in ABC Bus Companies, further opening the door to the North American market and dazzling a new continent with luxury coaches. Trade journalists there dubbed Van Hool’s A330 Bus of the Year in 2003, and Americans swooned over their debut of the world’s most advanced hydrogen-powered bus in 2005. The company celebrated anniversaries and milestones, while the family behind it continued to bicker bitterly.
Then, Covid-19. And while still struggling to recover (the pandemic hit them a bit harder, perhaps, given their background in touristic coaches), disaster.
“Van Hool does not manage enough parts such as batteries to be competitive,” industry publication PVMagazine wrote at the start of this year. As a result, it lost a big contract at Flemish public transit company De Lijn.”
Lost contracts spelling doom are a manufacturing tale as old as time, perfect for a series finale. But even after a bankruptcy proceeding messier than a Rupert Murdoch divorce, there were still some companies interested in extending a hand and a lifeline to renew the show.
“Van Hool’s industrial heritage, its famous name, its international reach, the fact that they were really a player in the market internationally – there's always an investor for that,” says Piet Depuydt, a business journalist who followed the Van Hool story for 13 years.
“But if you’ve got a family dispute, with shares being held in custody as a result, a scenario wherein an external partner would invest in the company itself and become a shareholder who can profit in the future, is excluded.”
Depuydt, now with De Tijd, says the family dispute put off external partners from investing in the company. “That dispute hasn’t been able to be resolved in more than 25 years. That poses a big problem if you come into a situation where you need new or additional capital from external partners,” he says.
VDL Groep acquisition
Willing to take on the challenge was VDL Groep. The van der Leegtes behind VDL (its name an homage to their own) were no strangers to the Van Hools. Pieter van der Leegte founded his Dutch company across the border around the same time Bernard Van Hool founded his and entered the bus market in the 1990s when the company was under the care of his son, Wim. Wim and Bernard frequented the same trade fairs and industry events. They were competitors, but friendlier with one another than the Van Hools ever seem to be with each other.
In 2014, Willem van der Leegte (Pieter’s grandson) visited a Van Hool factory in Macedonia upon the invitation of Filip Van Hool (Bernard’s son). There was mutual respect, admiration even.
“Van Hool is Belgian cultural heritage,” VDL Groep’s Miel Timmers explains. VDL Groep purchased parts of Van Hool after the company filed for bankruptcy in April of this year, rescuing some 1,600 jobs with the stroke of a pen and keeping the doors of the historic Koningshooikt plant (located just outside of Lier) open for around 250 workers.
Aerial drone image shows the Van Hool bus assembly site, in Lier, Friday 8 March 2024. Credit: Belga / Tom Goyvaerts
Those parts include all intellectual property, design rights, software, product names, equipment and machines from Van Hool, but none of the warranty obligations for pre-agreement sales, which evaporated in the bankruptcy procedure.
However, VDL Groep did not bring in capital or even ally with the company itself. It effectively invested by buying several separate parts of Van Hool, a strategic move in terms of brand and identity. “They’re two family-owned businesses – they speak the same language,” Timmers says.
Indeed, while coaches represent just one part of the massive VDL Groep, it was the bus arm that Willem van der Leegte worked in before becoming CEO: “He was confronted by them as a competitor on a daily basis, he knows the brand well,” Timmers says.
An unlevel playing field
For the automotive industry, the pandemic is far from over. The supply chain disruptions, the radical demand shift, a battered tourism sector – these are all still pain points. It hardly feels the right time to introduce a new, disruptive character to this show, but China won’t wait in the wings.
“The Chinese learn fast,” Timmers explains. “The knowledge and quality gap is narrowing rapidly, and because of the lack of a level playing field, we’re not playing the game by the same rules.” Put simply: “We can’t sell buses in China. But they can, for free, bring their buses to Europe. That development always comes with a loss of employment in Europe.”
The De Lijn contract that Van Hool lost went to BYD Auto, a Chinese multinational manufacturing company whose offer came in 20% cheaper than every European bus maker competing for the order. With China knocking off a fifth of the price, none of the European competitors stood a chance and soon Flemish residents will be shuttled around their cities on Chinese buses.
While the contract with De Lijn was important, it wasn’t profitable. One expert even put the loss at €100,000 per bus delivered. But Van Hool sought a place in the city bus market segment to show it was still a player – so losing the bid to BYD was more a reputational than profit problem.
VDL Van Hool is now selling its coaches in North America, where the market seems promising and the ABC deal offers opportunities. But if a Belgian bus company’s lights are kept on by a Dutch caretaker so that they can manufacture predominantly in Macedonia and then export to North America…is it still Belgian cultural heritage?
And if it once was, why wasn’t it protected?
The question may seem moot given the economic onslaught from Chinese competitors, challenging Europe’s established vehicle manufacturing industries on cost, and increasingly on technology. They cannot compete on cost, especially those who manufacture in western Europe, so survivors tend to find viable niches serving higher-end markets.
Van Hool knows this storyline well. To compete with Chinese tenders, they had to lower their margins. But they sunk so low that their offer wasn’t profitable any more – and when the bankruptcy crisis manager came in, their first decision was to cut all the tenders with city buses.
So, what is in their future? North America, with Silicon Valley companies’ love of luxury coaches could be a solution - so long as China keeps out, that is, and American tastes don’t shift, or economic downturns don’t hit discretionary spending.
But it still leaves a hole in Belgian industry. Van Hool was the only automobile company left, and now they have all but left the scene. And while the Koningshooikt plant may keep going, the new owners have been clear that if it no longer proves to be necessary or profitable for them, they’ll leave.
Can what’s left of Van Hool – now VDL Van Hool – turn those needed profits? While the future is uncertain, it seems this drama has at least one more season left to try.
