Saturday, July 18, 2015
Something Will Turn Up
Posted by David Smith at 03:45 PM
Category: Thoughts and responses

My new book, Something Will Turn Up, is about Britain's economy over recent decades, and into the future. This excerpt gives a flavour of where it and I started, in the industrial heartlands of the West Midlands.

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I was born at 24 Coronation Avenue, County Bridge, Staffordshire. The address sounds almost rural. It was, however, part of a small estate just off the busy Walsall Road, which then carried most of the traffic between Walsall and Wolverhampton. It was in the heart of the industrial West Midlands, the Black Country, the towns neighbouring Birmingham whose prosperity was built on coal, iron and every type of metalworking and manufacturing. Our back garden sloped upwards to a small rockery and fence, beyond which the land sloped down again to a canal, the Bentley Canal, built to carry coal barges to feed furnaces.

The Black Country, described by Samuel Sidney in the 19th century as a place where no birds are seen, and “furnaces continually smoke, steam engines thud and hiss, and long chains clank” had changed by my childhood but not by that much. The throb, hum and thud of industry were all around. The Clean Air Act had passed into law but its effects were yet to show through. The autumn and winter smogs were choking. You could get stranded a few miles from home. My school, Walsall Road, had two sources of distraction. One was that it was a spot where passing trolley buses regularly lost contact with the power supply, their poles becoming detached from the overhead wires. The other was the noise from the factory across the road. I never found out exactly what it did but its sound will stay with me forever. Think of a giant drum kit, a slow bass beat interspersed with a high-hat, at maximum volume, and you have something like it. Black dust and iron filings blew into the corners of the playground, from any number of nearby factories.

None of this is meant to suggest it was a grim existence, far from it. An industrial landscape was and is fascinating, from the smoke billowing out of giant chimneys to the fire and steam glimpsed through foundry gates. Industry was all around us, and we expected it to be. It was the source of prosperity. Manufacturing kept food on the table, and more.

In the 1950s Britain was a world leader in manufacturing; 40% of workers, 9m, were employed in manufacturing. A further 900,000 were coal-miners. Manufacturing contributed at least a third directly to Britain’s gross domestic product (GDP) and much more if its indirect contribution was taken into account. In 1950 Britain had a 25% share of world manufactured exports, more than war-ravaged Germany. France and Italy put together.

Britain’s manufacturers sold to the world, and mainly the world beyond Europe. Since the industrial revolution the country had run a manufacturing trade surplus. In the 1950s the manufacturing trade surplus was often as much as 10% of GDP. Britain was no longer the biggest economy in the world but it was still a manufacturing powerhouse. ‘Made in Britain’, or ‘Made in England’, were badges of quality. Britain’s manufacturers did not just dominate the economy, in many ways they were the economy. The big manufacturers, Guest Keen and Nettlefolds (GKN), ICI (Imperial Chemical Industries) and GEC (the General Electric Company) were household names.

Industrialists made the news. The 1950s and 1960s were the era of the industrial magnate, of Lord Nuffield and Leonard Lord of the British Motor Corporation (BMC) and Lord Rootes of the Rootes Group, another car industry giant. Sir Michael Sobell made a fortune with his Radio and Allied Industries, but was probably eclipsed by his son-in-law Arnold Weinstock, Lord Weinstock, for 33 years managing director of the General Electric Company (GEC). Sir Bernard Docker, chairman of BSA (Birmingham Small Arms) and Daimler, and his wife, former dance hostess Norah, Lady Docker, made the headlines during the austere 1950s for their extravagant and flamboyant behaviour.

Everybody I knew had a father who worked in manufacturing. Many worked for Rubery Owen, a privately-owned family firm which made components for cars and commercial vehicles and much more besides. The ‘Ro’ in Rostyle car wheels, once popular, stands for Rubery Owen. The firm employed 17,000 people across Britain, many at its nearby factory in Darlaston. It was paternalistic, providing its workers with benefits ahead of the norm, including sports facilities, subsidised canteens, day nurseries and retirement advice. The day nursery at Darlaston, supervised by a matron, provided for the children of the working mothers who worked at the factory. Rubery Owen owned and rented housing to its workers, including many on our estate.

The factory was close enough for its bull-horn signalling the end of a shift, “the Bull”, to be clearly heard. Minutes later a sea of men on bikes would arrive. Rubery Owen, run by the formidable Sir Alfred Owen, exuded power and permanence. Privately-owned, one of the largest such firms in Britain, it did not have to dance to the tune of stock market investors. It had an adventurous spirit, perfectly illustrated by its ownership of the BRM (British Racing Motors) Grand Prix team. At company open days, the racing-green BRM cars, driven at various times by Graham, Hill and Jackie Stewart, were a magnet for small boys.

Rubery Owen, with engineering interests extending well beyond the motor industry, made just about everything. It manufactured stands at Twickenham and Old Trafford. Its 20 constituent companies included Conveyancer fork lift trucks, Leabank office furniture and Easiclene, which made fridges, melamine kitchen units and other domestic equipment. Rubery Owen made equipment for the aerospace industry, as well as nuts, bolts, chains, agricultural tools and equipment. It made chassis for double-decker buses and Ferguson ploughs. It had a finger in just about every industrial pie.

Commonwealth markets were hugely important. As late as 1960, a third of Britain’s overseas trade was with the Commonwealth. British industry’s two big advantages; the damaged industrial base in continental Europe and an apparently captive market in the Commonwealth, were formidable. The threat from Asia was no threat at all. “Made in Hong Kong” was the pejorative term for anything cheap and plasticky. We believed in British, and we bought British.
There were just under 2m cars on Britain’s roads in 1950. The rise of car ownership, interrupted by the Second World War and its austere aftermath, was however in full swing. By 1960 there were 4.9m cars registered, and by 1970, 10m. The car began to replace the bicycle as the transport of choice. From 16bn vehicle miles in 1950, the number rose to 42bn in 1960 and 96bn by 1970.

Overwhelmingly, these miles were driven in British cars. Whether it was force of habit, restrictions on imports, or a genuine belief British was best, in the mid-1950s the proportion of cars imported was a fraction over 2%, compared with 85% now. Somebody in the area bought a Renault Dauphine, a 1950s’ vehicle later named by Time magazine as one of the 50 worst cars of all time. It was a brave choice but regarded as odd. Many foreign manufacturers did not bother to manufacture right-hand drive vehicles. British cars appeared to be at the forefront of new and exciting design. There were Fords, including the daring Anglia and the American-influenced Classic, Zephyr and Zodiac. There was the Austin A40 Farina, the world’s first hatchback, as well as solid Austin Cambridges and Morris Oxfords. There was the iconic Mini. There were Vauxhalls, Rileys, Wolseleys, Standards, Triumphs and Sunbeams. For bank managers there were Rovers. For business people who made it there was the Jaguar; for those who had really made it the Rolls-Royce and Bentley.

Growing up in the Black Country, surrounded by manufacturing, we knew by the 1960s things were changing. The industrial relations climate was deteriorating. Everybody was aware of Britain’s failed attempts to enter the European Economic Community, and the humiliating 1967 ‘pound in your pocket’ devaluation of sterling. Few, however, thought a large manufacturing sector was anything but the norm. The factories were solid and unyielding. They were, it seemed, permanent. What would workers do if they did not clock in to the factory? Where else would the mass employment of the future come from? Industry had been through ups and downs before, some of great severity, but had come through. Why should it be any different this time? Something, surely, would turn up.

Giving it all away

We were wrong. The 10 years from 1973 to 1983 marked the end of the post-war golden age for the world economy and the collapse of Britain’s manufacturing base. In the 10 years after 1973 manufacturing output fell by 16%. As recently as January 2010, manufacturing was only producing the same volume of output as in 1973. The dreadful decade of 1973-83 took its toll on manufacturing jobs, more than 4m of which disappeared. By 1983 manufacturing employment was barely a quarter of the numbers employed in services. The lights had gone out.

How did it happen? In those days – the mid-1970s – as a student it was surprisingly easy to get holiday jobs in factories, despite the economy’s woes. Firms always needed labourers, sweepers, packers, or in one case somebody who knew their way around a calculating machine to work out what should go into pay packets. Though these holiday jobs added up cumulatively to many months working in manufacturing, I would not pretend that they gave anything more than an impression. That impression, however, was that it was no surprise British industry was in trouble.

Jensen Motors, in West Bromwich, was a luxury car maker, established in the 1930s. It was known for big-engined sports saloons, most notably the Interceptor. It also made car bodies for other manufacturers, including the Austin Healey. The big Jensen cars, with beautiful bodywork and craftsman assembly, were collectors’ items. But by the time I came to work at Jensen Motors, on two or three separate occasions, things were already difficult. When BMC decided to discontinue production of the Austin Healey, Jensen lost the contract to build the bodies. It decided to build its own version of the car.

Unfortunately Jensen quickly ran into problems. The car industry veterans Jensen imported to man the production line, many from the Austin factory at Longbridge, brought with them industrial relations problems all too typical of the industry. Add to that the limited appeal in the wake of the oil crisis of the Interceptor, with its gas-guzzling 7-litre engine, and Jensen was in trouble. My abiding memory was of how little work was done. There was always a tea break, a union meeting or a shutdown. Production was a fraction of what it could have been. The business ceased trading in September 1976.

There were plenty of other examples. At Spear & Jackson, the toolmaker, I was employed to pack consignments of tools for export. Many were 18 months beyond their due delivery date even before they had left the factory.

In the dreadful decade from 1973 to 1983, export markets were lost to foreign competitors and buying British went out of fashion at home, because it increasingly meant late, unreliable and sub-standard products. British industry lost the loyalty of its customers.

Making everything no more

Rubery Owen, the diversified manufacturing firm that was such a presence during my childhood – ‘you name it, we made it’ – was one of the casualties of this grim period. The 1970s was, in every respect, a difficult time for Rubery Owen. Sir Alfred Owen died in 1975 while still chairman. By then it was clear Rubery Owen faced a battle for survival. The recession of 1974-75, triggered by the quadrupling of the oil price by the Organisation of Petroleum Exporting Countries, exposed the vulnerabilities of British manufacturing. Even Rubery Owen, with a reputation as a very good employer, was not immune from the poisonous industrial relations climate. In 1976 its workers at Darlaston went on a six-week strike. The writing was on the wall. Jobs were cut in an attempt to reduce costs as the company’s customer base struggled, but to no avail.

The ‘winter of discontent’ of 1978-9, which included a long national strike by engineering workers, left the firm badly weakened. Margaret Thatcher blamed the strike for the loss of sales and jobs. “We may never make up those sales and we shall lose some of the jobs which depended on them,” she said. ‘And who will send up a cheer? The Germans, the Japanese, the Swiss, the Americans.” The final blow was struck by the ‘industrial’ recession of 1980-81, under Thatcher, which saw a huge shakeout in Britain’s manufacturing capacity, a combination of an over-strong pound, high inflation and large pay settlements and a dramatic downturn in demand.

In 1981, the Darlaston factory, once the bustling centre of so much industrial activity, but by the end down to just over 1,000 workers, closed. Rubery Owen, big for a family firm, was in the end not big enough to survive as a manufacturing business. The world changed, in a way that even 10 years earlier would have been unthinkable.

David Owen, the eldest son of Sir Alfred Owen, was group chairman of Rubery Owen Holdings until 2010. When I spoke to him, it was clear though we were talking about events of more than three decades earlier, there was still sadness and regret, particularly the closure of the Darlaston factory. How had it happened? The fortunes of Rubery Owen were closely tied to those of its biggest customer, British Leyland, the car industry conglomerate formed from the merger of the BMC and Leyland Trucks. Suddenly, most of the marques Rubery Owen had supplied were under the same ownership and most were struggling. In the 1970s the import share of Britain’s car market rose from 14% to 57%.

Rubery Owen still exists but the firm that made everything no longer manufactures anything. “For a whole variety of reasons, what the company used to do is no longer done in this country anymore. Our fortunes, as a supplier of components and other assemblies under long term contracts to manufacturers of finished goods, were largely in the hands of others and in many ways our hands were tied,” it says in its own history. It sees itself, quite rightly, as a “microcosm” of the British economy, its manufacturing activities (the last of which were disposed of in 1993) replaced in a smaller company by property, investment and a series of independent operating companies outside manufacturing. It did what was best for the business. It is hard not to feel more than a tinge of sadness.

There is a story to be told about a later manufacturing revival in Britain and the country’s success in attracting inward investment, particularly from the Far East. Manufacturing in Britain did not come to an end in the 10 years from 1973 to 1983 but would never again play as important a role in the economy as before. No longer would ‘captains of industry’ bestride the national stage and lead the economic debate. It was the end of an era.