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TWST: Can we begin with an introduction to Ricardo plc (London: RCDO.L)?

Mr. Goodburn: We were established in about 1915 by Sir Harry Ricardo, who was an eminent automotive engineer, and up until 1990 we focused on the design and development of the internal combustion engine for motorcars, both gasoline and diesel. Then in 1990, we acquired a transmission company, thereby entering into the design and development of transmissions and thus the complete powertrain. About three years ago, we set up another division, Ricardo Vehicle Engineering, which covers all the other clever bits of engineering apart from the powertrain that are beneath the skin of the vehicle, i.e. handling, braking, suspension, noise, vibration and harshness, and more importantly electronics and controls. As you are aware, electronics and controls is becoming a larger part of the cost of the vehicle.

TWST: Who are you main customers?

Mr. Goodburn: Our major customers are all of the major OEMs around the world -- GM, Ford, Daimler Chrysler, BMW, BW, Renault. They are all our customers.

TWST: Do your locations reflect where the customers are?

Mr. Goodburn: Very much so. We started off 90 years ago in the UK on the south coast of England at Shoreham, which is where we still have our main technical center and we employ about 700 people there. We also have another 400 engineers in the Midlands at Leamington, which is really the center of the English automotive industry. Then in Detroit we have a further 300 engineers based at Belleville to service our American customers. We also have a small operation in Chicago and some offices in Germany. In fact, we are just developing our German company right now.

TWST: What about the Asian market, Japan? Is that something further down the line?

Mr. Goodburn: We do have Japanese and Korean customers and we are looking at starting up in Japan. But we wouldn’t be doing that with any degree of urgency until we are happy that we've got our German operation on a firm footing. I think one of the key points to remember about Ricardo is we are not dependant on the volume of vehicles sold around the world. We are dependant on the number of new models and new variants that our customers wish to bring to market. That is a very important point therefore we base our technical centres where vehicles are developed.

TWST: Does that mean you don’t get caught up in the cyclicality of the industry?

Mr. Goodburn: Yes, because we are not dependent on the volume of vehicles sold, we don't boom in the boom times and we don't go bust when our customers are having a real downturn. With that said, we do tend to do a little bit better in the boom times and we probably stay on an even keel in times like the present.

TWST: Who are your competition and what is your edge?

Mr. Goodburn: Our main competition is the in-house capabilities of our customers, because they all have their own large research and development departments. So we spend a lot of our own money on our own research and development to build up our intellectual knowledge and as a result our customers have to come to that to us for that knowledge. But quite often they'll do a lot of these developments themselves in house. So I think our customers are our main competition. Now, we also have independent competitors. There two main independent competitors, both in mainland Europe. One is called AVL based in Austria; and the other is FEV based in German. They are both of a similar size to us but we have one real competitive advantage over them. They both tend to focus on just engine design and developments where as we've got the engine, the transmission and all the other clever bits of engineering in the vehicle. As far as other competitors, in the US there is a company called MSX, but they tend to be more about renting their engineers out to work on their customers premises. Our engineers are some of the best automotive engineers in the world. They don’t tend to work on a customer’s premises. They work on fixed-price projects on our premises using our own facilities and we take full responsibility for those projects.