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 Two 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] 'HI5 D Chapter V: The long march to merger, 1965-1970 From February 1965 the SIC had begun to deliberate on how to re-invigorate the competitive ability of the British shipbuilding industry in relation to international competition. Thereafter, oral and written evidence was taken from the Shipbuilding Conference and Shipbuilding Employers Federation, the Chamber of Shipping, the Dry Dock Owners and Repairers Central Council, the National Association of Marine Engineers, and the Confederation of Shipbuilding and Engineering Unions. In addition to the SIC sponsor department, the Board of Trade, which also provided its Secretary, Victor Chapman, other departments, particularly the Admiralty's successor, the Ministry of Defence, Navy Department, MoD (N), and the Ministry of Labour were also consulted, as were a wide range of individual experts and sub- contracting firms. By a series of visits to shipyard and engineering establishments throughout the UK and abroad, the SIC, and the Secretary of State (Shipping) at the Board of Trade, Roy Mason, attempted to gauge both the extent and the prospects of 1 the industry relative to both internal and external competition. During three days in April 1965, with the exception of the Swan Hunter owned, Barclay Curle, the SIC visited all of the larger shipyards and marine engineering 2 establishments on Clydeside. Individual members were given specific briefs, but Geddes had already decided in advance to visit Scotts'. This was in all probability due to Michael Scott's position as Chairman of the Warship Group and as the 3 President elect of the Shipbuilding Conference. Recalling the Geddes visit to Greenock, it was noted that Scotts' investment in plant and equipment was not so much a programme as a continuous process with humps'. Although £2,250,000 had been spent since 1945, Scotts' Secretary and Director, John Lee advised Geddes that investment decisions had not been made on the basis of a return on capital employed, but as a result of the need to survive. Nor, in terms of overall profitability was a return on individual equipment calculated. However. Scotts' methods of' production had tended to minimise changes in tempo between civil and naval work. Welders, for example, were on time rates for naval work and lieu rates for civil work as different standards of inspection applied. Due possibly to their accent on close supervision, Scotts' found it possible to compete with Swan Hunter and Harland and Wolff at 20,000 tons, and could also compete with small builders because of modere methods of production. Although Scotts' could build up to 50,000 gross tons, the 180 firm preferred to build two 35,000-ton vessels instead; however. at the time of the Geddes visit they were also building a small coasting vessel. The firm's system of steelwork control although simple was nevertheless adequate. but the need to change the direction of steel throughput was accepted. On the labour front, the workforce would not accept the need to work on nightshift, and demarcation was more intense on naval work. Moreover, a recent quarrel over two weeks riveting work for two apprentices had resulted in a three-week stoppage involving sixty men. George Hilton, the President elect of the Shipbuilding Employers Federation, defined flexibility, `as a temporary arrangement whereby one man took over another's job on an ad hoc basis' with interchangeability being a permanent switch of occupation involving in due course a change in union card. To this, Geddes general impression was that Scotts' through, `its somewhat paternalistic management attitude [was] out of line with modern life and unlikely therefore to break through traditional demarcation barriers'. On the engineering side, he noted that Scotts' had superficially excellent housekeeping, and were proud of their production methods particularly the application of naval practice to civil use, which in the Engine Works, but not in the shipyard tended to reduce costs. Geddes noted that in particular, the 4 works production control system, `seemed very good'. Nevertheless, although this was not officially referred to, Scotts' claimed to have a maximum annual engineering capacity of 180,000 hp. Clearly, if the evidence of the past five years was any guide, the engine works had been severely under-utilised, as engines totalling only 70,470 hp had been produced, although modernisation was certainly a contributing factor. ' Geddes and most of his committee had visited Lithgows on the previous day and noted that the yard was crowded, but that plans were afoot to extend it by 400 feet 6 by diverting the route of the A8 motorway. It was also noted that the Kingston yard was the locus of more modern methods of production, whereas the, `conventional and unimpressive' East yard, appeared to have little spent on it, and that the former Glen yard of William Hamilton was being used, `virtually as a dump'. Nonetheless, Lithgows had spent £4,000,000 since the war, but mostly in the past five years on investment concentrated on the Kingston yard. The programme had began as an `orderly modernisation, but had been converted into a crash operation... but in 181 practice, [Lithgows] have had to decide on investment just to sure i%e". Although the firm had in some years exported seventy per cent of its output, it preferred to keep export work to around thirty per cent, but the firm had now to sell on credit w\ith financing of home orders remaining difficult. Budgets were worked out on a historical cost basis with the control of manpower being the main object of' cost control. At this stage Lithgows total labour force numbered 2.089 and the number of berths three with a maximum building capacity of 125,000 gross tons. Nevertheless, the firm believed that 500 to 600 men were the best manpower unit in a shipyard. ' which, it was noted, partly accounted for the two separate yards. At this stage, however, Lithgows still remained in control of Fairfield-Rowan, Fairfield, and Ferguson Brothers, and also held a thirty per cent stake in John Kincaid. Before Geddes had returned to London he had been asked by a fellow member of the SIC, Professor Lighthill, how he saw the effects of family control over so many of the yards visited in relation to the competitiveness of the industry as a whole" Geddes later noted that the longevity of the family firms had engendered a sense of trusteeship and the will to resist mergers, however, the visit had pushed him, 'a bit more in favour of specialisation and medium size, (whatever that is) than of a few giant corporations'. To him, Lithgows had, `a harder more competitive feel than John Brown', but overall on the Clyde in relation to labour the dominant strand was paternalism. Both Scotts' and John Brown had provided excellent canteen and welfare blocks, but according to Geddes it seemed that firms had missed the point, which was, the look in the donor's eye as much as the facility'. However. Geddes did praise Lithgows shop stewards, for, the natural and relaxed way in which they joined the lunch party [which] was an experience'. Through talking to them he gained the impression that they did not have the outlook of casual labour, and mused that there was perhaps an advantage in location outside Glasgow, but if there was 8 one, Scotts' had not found it'! Unlike ship repairing which, by its nature, was inherently casualised. shipbuilding labour by this stage could be more properly described as being prone to intermittent periods of unemployment as work on the hull or on the fitting out stage came to a halt. Firms strove to maintain an adequate balance between the trades and attempted 182 to plan their production accordingly. Nevertheless, by this stage, there was a general feeling from the trade union leadership, and from some of the more enlightened shipbuilders in the industry that employment had to be made more secure to attract and maintain an adequate supply of labour. Attempts by a Ministry of Labour Working Party to encourage this in part had been frustrated, but Geddes did note that Scotts' management would welcome its resurrection. On main engines, Geddes noted that neither family nor public firms were able, `to break out of the familiar pattern for diesels'. Scotts' like others were much influenced by installing engines of their own manufacture, `but had little sensethat engine costs could be improved by series production'. Nevertheless he noted that two family firms, Lithgows and Yarrows would like to widen their connections with land-based firms.