The death of British steelmaking 1967-1979
It has become a tactic of the sneering, left wing, youth movement of the Facecrook-Twatterati to belittle the decline of British manufacturing and to ascribe its causes to Thatcher, financial institutions, politicians generally, the unfair EU, ….
But what do they know of those times? Were they even alive in the 1970s and 1980s? Is their view based on a few lectures from leftie academics in our tired and defeated universities? Or maybe they suck up the lies of the Labour Movement and their ….. “nothing to do with me mate” rhetoric?
Contrary to many of those who would try to rewrite our history, Margaret Thatcher was NOT responsible for the demise of the steel industry in Britain. Nor did she cause the destruction of the motor bike industry, the car industry or the computer industry. In fact by 1986 British Steel was back in profit under a Thatcher government! Equal blame can be laid however at the feet of the Labour and Conservative governments for a lack of investment, the Trade Unions for their restrictive practices, and Japan for its aggressive but absolutely brilliant business strategies from the 1960s onwards. This is my own take on the sorry affair, I was there, through it all from 1963 to 1979!
1. Millom Ironworks
“I left school at the age of 16 and immediately went to work in the local ironworks in South Cumbria, following in my father and grandfathers footsteps, so quite truly both iron and ironmaking was in my blood. Blast furnaces, coke ovens, sinter plants, foundries, open hearth furnaces, slab mills, rolling mills were all highly dangerous places in the 1960s, but by god they were exciting places too.”
This is how I began my previous post on the steel industry in Britain; it was the start of a 16 year path with lessons about productivity, business strategy, organisation and human relations that opened my eyes to a much longer career journey. It has helped me to reflect a great deal on personal experience as opposed to what i read in the newspapers or heard on TV.
My first three years were spent at Millom Ironworks in the Laboratories whose function was to chemically analyse anything and everything used in or resulting from the making of Pig Iron. Iron ore, coke, limestone, molten pig iron direct from the blast furnace, foundry iron from the Tropenas Converters, gasses, waters, dust, you name it ….. after 3 years I could analyse everything for anything. Quite often in rapid time too, because a Blast Furnace has a short window of opportunity waiting to know if it’s done it’s job and can be tapped! I was taught well by the experienced chemists as well as going to the “local” technical college 30 miles away for one full day and two evenings per week, each of those days not getting home until 10pm. I also built fantastic relationships with many of the foremen and workers on each production unit and it was fascinating to discover the depth of knowledge these lowly educated men had about their operations and the technicalities of them. For example, the senior men at a blast furnace knew EXACTLY when to tap that furnace from the colour and movement of the molten iron and hardly needed to wait for my analysis of silicon and carbon to give them the go ahead. Sitting on a wooden box as a 19 year old with these dust covered men sharing experiences was an absolute privilege as well as a massive learning experience. Mutual interest and respect for each other’s roles …… Lesson #1!
2. Shotton Steelworks
My first week at John Summers & Sons steelworks in North Wales was an absolute nightmare!
My previous weekly pay packet at Millom Ironworks was £7 and I had stopped learning. The work had become routine and my college time was more interesting than my work time. Time to leave! My starting pay packet at John Summers was £13 but of course I had expenses …. I was no longer living at home, though I HAD been the main breadwinner. However the nightmare was due to the fact that although I had been recruited as a Chemical Laboratory Technician I was compelled to be “trained for a whole year” in how to analyse iron, steel, iron ore, coke, limestone, gases ….. you get the picture? Bloody hell, I was mixed in with a group of 16 year old school leavers who had never been in a laboratory in their life, and to make matters worse, some of them were classed as “senior” to me waiting for promotion because they had been recruited one week earlier. Trade Unions rule, time served trumps ability ….. Lesson #2!
John Summers & Sons was a classic example of a fully integrated steelworks. Founded in 1896 and nationalised in 1967, it was 6 miles from entry gate to exit gate and had 13,000 employees. Two blast furnaces, 12 open hearth furnaces, coke ovens, sinter plant, a slab mill, a rolling mill, two zinc to steel coating plants and a plastic to steel coating plant were the heart of production. But there were also machine shops, storage warehouses, offices, laboratories, reservoirs, apprentice schools, canteens, restaurants, a computer centre and …… a medical centre with full time nurses and a couple of doctors. Railway lines and roads everywhere ….. such excitement!
I was still going to college where I rubbed shoulders with some of the chemists in the steelworks research laboratories who were mortified at my plight. Soon I got a call to go and see the head of research Dr Bill Tickle, a Glaswegian who in looks and manner reminded me of Winston Churchill. A week later I was transferred out of the routine labs, into research, and started to work for The Doc who would completely transform my life, not just my career.
It was now that I started to understand just how much I had learned during those first 3 years at the tiny Millom Ironworks and the invaluable Lesson #1 as I paired off with a colleague in Research who was a young metallurgist. We began our troubleshooting role in the Slab Mill. What a place, the power and noise as a 12 ton ingot of steel is crushed and rolled into a longer slab only 1ft thick is overwhelming.
The manager of the mill was a 30 ‘ish year old who was a mechanical engineer by qualification, and he had a problem with the “storage” of the slabs after rolling in a temperature and atmosphere controlled “soaking pit”. Surface defects were occurring that caused problems when the slabs were rolled later into mm thin strips. It was a job for the team of Captain Chemistry and Captain Metallurgy! We solved it and it led to a very long working friendship with Eric the manager who guided and mentored me 8 years later through the machinations and stubbornness of trade unions! Everyone needs a mentor, someone more experienced than yourself …. Lesson #3
Time to move on faster …. two years later The Doc got me a full time, full pay sponsorship to university, Strathclyde in Glasgow to do an MSc and a PhD. On returning in 1974 I found massive changes as I worked in research, then production management, then into personnel management. Across these 5 years I had a unique insight into many different facets of business life to add to my previous technical understanding of a steelworks. I started to see how a steelworks was a massive system, organised chaos with interconnecting physical units that were dependent on each other (obvious!), but also how the intangible elements of labour relations, procurement, job evaluation and reward, recruitment, community interface, sales & marketing, investment, education and training, team working and pride, productivity, quality ALL played a significant part in success. An organisation is a “system” like an ecosystem and ALL parts must be cared for ….. Lesson #4.
3. A Japanese Invasion
The demise of the British steelmaking industry began under the Labour government of Harold Wilson.
“The rot arguably set in when, in 1967, Harold Wilson’s Labour government nationalised the UK’s 14 largest steelmakers to form British Steel, an organisation employing more than 200,000 people in an industry employing more than 350,000. They took the odd decision to increase production in the face of falling global demand and, later, a recession sparked by the 1973 oil shock.” Madness!
But, the biggest drop in employment in the sector came between 1978 and 1981, a period marked by countless industrial disputes, when the number of workers fell from 271,000 to 167,000.
Everyone with a single brain cell could see that the British Steel Corporation had four problems:
1. Outmoded equipment and machinery resulting from low investment
2. Outdated restrictive practices created by Trade Unions
3. Low quality and productivity partly caused by 1& 2
4. Massive overmanning partly caused by 2
In the middle of all this, in 1976, a group of us found a document describing the Japanese business strategy aimed at Japan dominating the global manufacturing sector generally. It described their strategy for the motor cycle industry, (now complete), the car industry, (almost complete), the steel industry, (well underway), and the computer/technology industry, (just starting). Some key words have stuck with me, though I have long since lost the document:
“Understand quality of product, protect home market, penetrate target country market, undercut price, increase quality of product, infiltrate, colonise”.
They had a clear plan for example to obliterate the British car industry and insert (colonise) the U.K. with their own (Honda & Toyota) factories inside Britain. Red Robbo of British Leyland was a naive pussycat compared to these guys!
The entire situation could be summed up by comparing the labour required to change a blast furnace plug; electrician plus mate arrive to isolate system electrics, fitter plus mate arrive to unscrew bolts etc, rigger plus mate arrive with block & tackle to dismantle, labourers arrive to clean out system and position new plug, all repeated again in reverse up to electricians switching back on the power. That’s 8 workers times 2, so the equivalent of 16 workers! Contrast this where a multiskilled team of 3 workers could do the same job in less than half the time in a German steelworks. How could we compete with that? Restrictive working practices and jobs for life were impossible to overcome despite extra investment in new Basic Oxygen Furnaces for example.
In reality, the demand for steel globally was dropping dramatically with both Germany and Japan reducing output accordingly. However survival of the fittest is not just a Darwinian law of biological systems, the quality, reliability and price of steel from our main rivals carried them through and it was time for me to move on ….. and into the computer industry with ICL manufacturing division, another organisation being attacked by Japan’s relentless strategy. But this time I knew what I was walking into!
Three articles with more detail: