Kenneth Warren

A Managerial Team

William Armstrong, the technical partner of the five who set the construction of the Elswick works in train in 1847, remained for over half a century directly and actively involved in the company which carried his name. However in the years around 1860 major changes were made in the top management; they were to have a significance through to the company’s last years over six decades later. In 1861 William Cruddas was made a partner. For many years to come he was financial secretary. At about the same time Percy Westmacott, who had joined as a draughtsman in 1848, became a partner. The Deed of Partnership specified that he was to devote the whole of his attention to the Elswick Engine Works. He ran it for many years. The most critical appointments were in armaments. They involved entry to the firm of the two families which, apart from Armstrong himself, were to play the most central role in its growth - the Rendels and the Nobles.

Armstrongs and Beardmores

Vickers usually represented their attempts to involve Armstrongs as a means of increasing their power to control and contain William Beardmore’s apparently boundless ambitions and therefore as being of mutual benefit to the established firms. (In fact, although they suggested to Armstrongs that one of their motives in taking a share of Beardmore was to prevent him from laying down a gun plant, the evidence suggests that they encouraged him in that step.1) Armstrongs’ board was divided in its attitude. Falkner was usually sympathetic, though he did not always accept the suggested form of association. Even Sir Andrew Noble seems to have been willing to agree. The implacable enemy was Stuart Rendel. The fact that he was the largest shareholder in Armstrongs, combined with the peculiar deference with which all his fellow directors treated him, help to explain why, in the end, though narrowly, his opposition carried the day; Vickers were left to bear the burden alone. Trebilcock has put a favourable interpretation on this outcome, ‘the cooperation was never finalised and the need for it evaporated as Beardmores’ fortunes picked up after 1910’.2 In fact a few years later Beardmore were again in financial difficulties. Trebilcock also claimed, ‘generally Beardmores were effectively domesticated and to a certain extent were also successfully employed in the harassment of Armstrongs’.

Managerial Skills: Armstrongs and Vickers

There is some evidence that Armstrongs undervalued the skills of managers and innovators, and in this respect lost out to their competitors. George Carter, manager of Elswick shipyard after 1894 and a local director of the firm from 1911, resigned the following year at the age of 52 in what was said in shipbuilding circles to be a surprise development. He became Managing Director of Cammell Laird’s Birkenhead yard. More significantly, perhaps, he was given a seat on the Cammell Laird board and, it was believed, 1½ per cent of their profits. He became a director of the associated company, Coventry Ordnance.1 Carter went on to play a prominent role in wartime and immediate postwar national shipbuilding. Yet Carter’s loss to Armstrongs and their apparent inability to keep a first-rate man in his prime must be balanced against the fact that at the same time Vickers lost their shipbuilding manager, when Archibald Campbell moved from Barrow to become General Manager of Beardmores’ naval yard at Dalmuir.2 On the other hand, it is quite clear that Armstrongs starved their automobile division and eventually lost thereby Engel-bach, their enterprising manager, who was to become a key figure in the Austin organisation in the 1920s.

The Newfoundland Project

The biggest of all Armstrong’s new, postwar ventures was in the unfamiliar field of hydroelectric power and pulp and paper manufacture. It was undertaken in the difficult physical environment of Newfoundland. There they built on foundations laid by others in large-scale resource development, but in doing so they were embarking on the project which contributed most to their financial collapse.

Armstrong Whitworth in the First World War

Some time before the First World War, Sir Edward Grey remarked that one effect of a major conflict would be a substantial extension of state control over the economy, an advance of what he described broadly as socialism. The war was to sweep Armstrong Whitworth and other armament and heavy industrial firms into a crisis similar to that which Sir Edward Grey had anticipated. The position of Armstrongs was made still more vulnerable as they had by this time a new Chairman, one who was in some ways ill-equipped to deal with the crisis, or even indeed with the peacetime organisation of so vast a concern.

Armstrong Whitworth and Vickers Armstrong after the Merger

Only Armstrong’s armament and naval work was taken over by the new company. Their other activities continued, though often reorganised. Already in 1927, the Development Company had become the Armstrong Siddeley Development Company Ltd, controlling their motor and aircraft departments. Armstrong Whitworth (from July 1929 renamed Armstrong Whitworth Securities Company Ltd) was left with a quarter-interest in Vickers Armstrong, and with the non-military engineering and shipbuilding operations on the Tyne. It controlled the Construction Company (formerly A. and J. Main of Glasgow), the machine tool business of Craven Brothers, which now managed that trade at Openshaw, and retained an interest in Pearson and Knowles, which became an involvement in Wigan Coal and in Lancashire Steel.

The Problems of Diversifying into Commercial Lines: The Instance of Scotswood Locomotives

On 10 October 1918, the full board of Armstrong Whitworth decided that they should take up locomotive manufacture. Immediate steps were to be taken to organise the new department. Capital cost estimates were of the order of 500000 plus 20000 for a boiler-making plant which in part would serve the locomotive works. With the removal of automobile production to Coventry and the need for replacement work for its projectile and ammunition sections, Scots-wood seemed the ideal location. A decision was taken not to stint in making this a first-rate operation. To that end arrangements were made with Mr G. M. McColl of the Baldwin Locomotive Works in Philadelphia to supervise building and start-up.1 By 1919, a target annual production of 300 to 400 locomotives had been decided. During that year a big party was thrown at the Station Hotel in Newcastle to launch the new department. After the party the guests were taken to Scotswood to see the first of the new locomotives run down the track and, to cheers, cut a red, white and blue ribbon. The department thus inaugurated with a flourish which recalls some of the pre-war battleship launches was to provide an interesting illustration of the differences between the economics of armament and of commercial engineering. In December 1921, McColl returned to America at the end of his contract.

Problems of an Early Multinational: the Origins of Armstrongs’ Italian Venture

Multinational companies have become of great, indeed for some commentators of outstanding importance in the international economy of the last half of the twentieth century. They were emerging a hundred years earlier. The multinational has been concisely defined as a business corporation which is registered and operates in several countries at once. It provides a package of resources in the shape of investment funds, entrepreneurial, managerial and technical skills. A major criticism is that such firms have no enforceable loyalty to any national government; consequently the need for regulation of multinational concerns is now widely agreed. What is often forgotten is how vulnerable the multinational may be to the political pressures within the ‘host’ country.

Introduction: British Industrial Decline and the Armament Trade

It is common to trace concern about the decreasing competitiveness of British industry back at least to the 1870s. Of the relative national decline there can be no doubt, although there may be much dispute as to its scale according to the indicators employed. Debate about the causes continues to be lively. The study of the northern firm of Armstrongs which follows may illuminate some of the themes of this discussion.

The Emergence of Vickers

Into the late 1890s Armstrongs were the outstanding British armaments firm (see Table 7.1). In the world as a whole the only company of equal or greater standing was Krupp. Within ten years they had a peer at home in the form of Vickers Sons and Maxim. Contemporaries were aware of the change. Later historians have argued that it was the outcome of Vickers’ superior organisation and entrepreneurial talents. There seems to be a good deal of truth in this contention, but the situation was complex.