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WestminsterResearch http://www.westminster.ac.uk/westminsterresearch Déjà vu all over again! :the reluctant rise and protracted demise of Scott Lithgow Limited Hugh Murphy School of Social Sciences, Humanities and Languages This is Volume One of an electronic version of a PhD thesis awarded by the University of Westminster. © The Author, 2001. This is a scanned reproduction of the paper copy held by the University of Westminster library. The WestminsterResearch online digital archive at the University of Westminster aims to make the research output of the University available to a wider audience. Copyright and Moral Rights remain with the authors and/or copyright owners. Users are permitted to download and/or print one copy for non-commercial private study or research. Further distribution and any use of material from within this archive for profit-making enterprises or for commercial gain is strictly forbidden. Whilst further distribution of specific materials from within this archive is forbidden, you may freely distribute the URL of WestminsterResearch: (http://westminsterresearch.wmin.ac.uk/). In case of abuse or copyright appearing without permission e-mail [email protected] IH5: PD Deja vu all over again! The Reluctant Rise and Protracted Demise of Scott Lithgow Limited Hugh Murphy A thesis submitted in partial fulfilment of the requirements of the University of Westminster for the degree of Doctor of Philosophy October 2001 Vc - ºý Abstract This thesis charts the growth and demise of the two largest shipbuilding firms on the Lower Clyde in Scotland, Scotts' Shipbuilding & Engineering Company Limited of Greenock, [established 1711] and Lithgows Limited of Port Glasgow [established as Russell & Company in 1874 and as Lithgows Limited in 1918]. The history of each firm is considered separately, with more emphasis on Lithgows, in order to give the reader a fuller perspective of their respective growth and internal and external dynamics. The bulk of the thesis, however, is concentrated in the post-1945 period with emphasis on the protracted merger of the shipbuilding interests of Scotts' and Lithgows to form Scott Lithgow Limited in 1970. Thereafter, the history of the merged firm is considered in detail, including its disastrous entry into the giant tanker market up to the nationalisation of the British shipbuilding industry in July 1977 when the firm was transferred to the control of the State Corporation, British Shipbuilders. From there, including an even more disastrous entry into the large offshore structures market, the period of nationalisation is then analysed up to March 1984 when Scott Lithgow became the first British Shipbuilders constituent shipyard to be privatised when it was controversially sold to the industrial conglomerate Trafalgar House plc. Trafalgar House, with no previous experience of building complex semi submersibles was unable to resurrect Scott Lithgow's tarnished reputation in the offshore market. Accordingly. the yard was put on a care and maintenance basis in 1988 from which it never recovered. In considering the complex history of Scotts' and Lithgows through what is in effect a micro study, it is hoped that this thesis will identify certain parallels in the demise of Scott Lithgow that will enhance our knowledge of cause and effect in the overall decline of the British shipbuilding industry. Table of Contents Introduction pp. I-VIII Chapter I Scotts' of Greenock 1711-1945 pp. 1-28 Chapter II Russell & Co., to Lithgows Ltd., 1874-1945 pp. ? 9-88 Chapter III Scotts' Shipbuilding & Engineering, 1945-1965 pp. 89-130 Chapter IV Lithgows Limited, 1945-1965 pp. 131-179 Chapter V The long march to merger, 1965-1970 pp. 180-241 Chapter VI The road to nationalisation, 1970-1977 pp. 242-299 Chapter VII Nationalisation to privatisation, 1977-1984 pp. 300-355 Chapter VIII Dejä vu all over again, Trafalgar House pp. 356-401 1984-1988 Conclusion Chanter-i IX pp. 402-418 Bibliography pp. 419-435 Ship List: Scott Lithgow Limited, 1970-1987 pp. 436-440 List of acronyms and abbreviations commonly used in the text, and note on punctuation BS British Shipbuilders BSRA British Ship Research Association CSA Clyde Shipbuilders Association DSIR Department of Industrial & Scientific Research Ferguson Ferguson Brothers Limited KFS Kingston Financial Services (Clyde) Limited KIC Kingston Investment Company Lithgows Lithgows Limited Mintech Ministry of Technology MoD (N) Ministry of Defence (Naval) Scotts' Scotts Shipbuilding & Engineering Company Limited SIB Shipbuilding Industry Board SIC Shipbuilding Inquiry Committee SEF Shipbuilding Employers Federation SRNA Shipbuilders and Repairers National Association UCS Upper Clyde Shipbuilders Throughout this text, the use of the apostrophe in the case of Scotts' Shipbuilding and Engineering Company Limited will be thus (Scotts'). Two versions, [Scott's and Scotts'] are used in historical accounts of the company, but I intend to persevere with the spelling convention used by the company in the last edition of its history, that is, Scotts' of Greenock. In contrast, no apostrophe has ever been used either in the letterhead of the firm, or in any historical account of Lithgows Limited. Thus it is referred to throughout the text as Lithgows. Acknowledgements The author assumes sole responsibility for any errors or omissions contained in the text and asserts that the views expressed within are entirely his own. Among the many people who provided me with invaluable help and assistance in the organisation and writing of this thesis are my Director of Studies, Dr Lewis Johnman who I thank for his unflinching enthusiasm and support, and my second supervisor, Professor Richard Harding. My present employer, Anthony Slav en. Professor of Business History at the Centre for Business History in Scotland, University of Glasgow for his inspiration and wise counsel. I thank David Williams and Ian Johnston for their friendship and support. And not least, all of the many people v ho helped me at the University Archives, including Professor Michael Moss, Lesley' Richmond, Moira and Frank Rankin, Kate Hutcheson, Alma Topen, George Gardner, Joanna King, Dorothy, Gemma, Archie Leitch, Simon Webster, and a fellow Greenockian, the late Jim Nixon. I am grateful to Hugh Hagan at the Scottish Record Office, all of the team at the reading room at the Public Record Office. and at the Bank of England and Bank of Scotland Archives. My thanks also extend to Liza Verity and Bernie Bryant at the National Maritime Museum, Greenwich, and the trustees there for awarding me a fellowship. Many thanks are also due to the late Dr Johnston Fraser Robb, Sir William & Lady Lithgow, Cameron Parker, Alan McNeilage, Jimmy McMillan, Duncan McNeil, Syd Fudge, Tom McAlpine, Hugh Macdonald, Jim McNeil, Jim and Harry Thompson, Owen Murphy, Robert Clocherty, Horse Harkins and the late Frank O'Neil. Finally I would like to thank my long-suffering family, my wife Portia to whom this is dedicated, daughter, Jenna, father- in-la« thesis my recently-born my mother and . Janet and Tulsie and my brother-in-law, Ravi, and my sisters, Mary and Rose. and brothers. James, John and Andrew. For Portia Deja vu all over again! The Reluctant Rise, and Protracted Demise of Scott Lithgow Limited. 1 Introduction The antecedents of modern British shipbuilding lie in an atomistic craft industry based on wood and sail, one dominated by small-scale family enterprises and partnerships typical of the eighteenth and nineteenth centuries. What shipbuilding that there was on the Clyde in the seventeenth and early eighteenth centuries was relatively insignificant in terms of total output, and was based mainly in and around the burgh of Greenock. By 1765, however, the Greenock firm of John Scott, established in 1711, had began to build its first square-rigged vessel for owners outside Scotland. Thereafter, Scotts' and other firms graduated steadily from wood and sail to steam and iron construction as the Clyde rose to become the centre of the Scottish shipbuilding industry. By 1850, the ascendancy of Clyde shipbuilders was apparent and had been enhanced and was to be further consolidated by local innovations in marine engineering. By this stage, however, in common with other major river centres of shipbuilding in Britain, iron was the metal of choice on the Clyde for the construction of sail and steam vessels. The pig iron industry had expanded rapidly in Scotland, particularly in Lanarkshire and Ayrshire after the invention, patented in 1828 by James Beaumont Neilson, of the hot-blast furnace. This process, and its rapid assimilation, transformed the industry when combined with the use of local deposits of black-band ironstone to produce pig iron of commercial quality. Scottish pig iron production was further improved by the substitution of hard Scottish splint coal for coke, which, vi'ith other technical improvements, cut coal consumption and increased the amount of pig iron produced. These improvements gave the industry in Scotland a comparative advantage in the costs of production, in yield and in price over other British producers. However, large-scale lagged behind Nevertheless, production of malleable iron that of pig . those malleable iron producers who stuck at it reaped the rewards with the rising demand for high quality ship plates and marine forgings from Clyde firms. BY IS -0, Clyde shipbuilders were building over two thirds of all the iron ships built in Britain, and iron producers alone took twenty per cent of Scottish coal output. A decade later, local malleable iron manufacturers already had sufficient impetus to respond to the growing demand from shipbuilders for the transition from iron to steel plates. This vertically integrated economy, confined mainly within a distinct area of the West of Scotland was not of itself sufficient to explain the seemingly inexorable rise of Clyde shipbuilding. Entrepreneurial talent, a ready supply of labour, a plethora of general and marine engineering shops and foundries, and good railway and other transport links were also important.