Chapter CLIV: If You Seek Prosperity, Prepare for Peace.
Chapter CLIV: If You Seek Prosperity, Prepare for Peace.
The start of September saw the first round of shadow factories completed, for a somewhat arbitrary value of first round and indeed shadow factory. The term shadow factory had been stretched somewhat from the original intention and so, depending on how one counted, there were anywhere between 5 and 30 factories in the first round. The large range should give the reader an indication of how protean the phrase had become and how much the intended first round had been disrupted by the emergency requirements of the Abyssinian War. The original definition was a government funded, private sector operated, new build aero-engine factory that was built close to an existing car factory. The new factory was intended to be "in the shadow" of the existing one as it would both physically be very close and it would be the existing site that would provide the management, technology and expertise to get the new factory up and running. In practice however almost any new armaments factory ended up being dubbed a shadow factory, in part due to journalistic laziness but in part because the phrase took on a bureaucratic life of it's own; almost any planning problem or local concern could be ignored if the work was being done by the crown for defence purposes, therefore a great many schemes invoked the mantra of shadow factory without being overly concerned about official definitions. It is worth noting that originally there was absolutely no secrecy implied by the term shadow, the majority of the schemes were deliberately very high profile both for domestic and international audiences. A very large scale investment in massively increasing defence related industrial capacity, or as it was unsubtly dubbed 'war potential', was considered to have a deterrent effect as well as providing tangible backing to British foreign policy, so the aerial portions of the scheme in particular were well publicised. A few truly sensitive facilities were actually kept secret, mostly those connected to the ongoing RDF work, and most of the Admiralty schemes passed unnoticed as the Sea Lords felt keel laying and launching ceremonies were publicity enough for their own efforts. In hindsight the great public emphasis given to the aero shadow factories was perhaps a mistake, the scheme never had a chance to be a deterrent as it had barely stared before war with Italy broke out, while domestically it's high profile merely made the later problems trickier to solve.
The newly opened Earls Court Exhibition Centre, hosting as it's first event the 1937 Chocolate and Confectionery Exhibition. The exhibition and 1937 in general would be one of the highpoints of the so-called chocolate renaissance of the 1930s with the Kit Kat, Smarties and Rolos all launched that year. To the extent any of the exhibitors had concerns about foreign affairs and overseas matters their thoughts would have been mostly focused on the Gold Coast and the potential production problems in the cocoa market there, even confectionery had an Imperial dimension, with attention just as much on changes in the futures markets in the City as on the exhibits in Earls Court. That aside they, like much of the rest of the country, had fully transitioned back to a peacetime mentality which saw 'abroad' as a market to sell to or buy from and not a source of threat. This attitude would complicate how the government and industry approached the question of the shadow factories.
From the earliest planning phase of the scheme the shadow factories had been subject to a range of constraints, the strictest being the economic ones as opposed to the political or even financial limits. The mantra had been that the scheme must not disrupt the wider civilian economy, so many plans had been limited not by what the Treasury could fund but by what the economy could absorb and adapt to. This was very much in line with British strategic thinking of the time which held that the economy was the 'Fourth Arm of Defence', this was on the basis that any sustained conflict would be decided as much by industrial and financial factors as strength of arms. Naturally all of this carefully calibrated policy was hurriedly discarded at the outbreak of the Abyssinian Crisis and the country switched over to a semi-war economy. In amongst the mountains of urgent defence orders for new equipment the shadow factory schemes were kept as a high priority, the government agreeing with the Chiefs of Staff to plan for a long war even while hoping for a short one. The scheme survived the post-war winding down of defence spending and even the wartime second round were continued, if nothing else because they were far too advanced for there to be any financial advantage in cancelling them, however the completion of the factories meant some decision had to be made about them. In contrast to the pre-war years by the autumn of 1937 the economy was growing strongly, both due to internal demand and increased trade with the expanding sterling area. The civilian sectors had easily taken up the slack from the switch away from the wartime orders and a combination of technological advances, union in-fighting and labour disillusionment had essentially broken the boilermakers strike by the end of the summer. Indeed by some measures the economy was over heating, or to be more precise inflation was starting to rise as the idle capacity in the economy was used up and various bottlenecks and shortages became apparent. In the grandest traditions of the British economy these issues were not evenly distributed across either industries or geographically. The newer light engineering industries were experiencing the worst of the problems as were their heavier brethren in steel, ship building and associated trades. It was many of the other traditional staple industries such as coal and textiles that were struggling, indeed had been struggling even before the Depression. In part this divide was due to the regional and structural trends discussed in Appendix B, for example increased foreign competition meant that employment in the textile staples such as cotton and jute was never going to recover to pre-Depression levels, but that only explains the lagging sectors. When looking at the booming sectors a different picture emerges however, while some of the limits and bottlenecks were in specific strategic materials which we shall be looking at in due course, the overarching problem across all the over-heating sectors was labour supply. Skilled and semi-skilled workers, provided they had the right skills and were in the right part of the country, were in great demand and their wages were rising in response. Long term of cause the solution was training new staff, both in government and industry funded schemes and work was underway around this, but there was a limit on how many staff could be trained and absorbed by the industry, so in the short term there would be a skill squeeze. This would have been a government concern in any event due to the potential economic and inflationary consequences, however for many of the industries it was the shadow factories that were the cause of the labour shortages and this made the matter especially difficult to resolve.
The Rootes Securities shadow factory at the Speke aerodrome in Liverpool under construction in the summer of 1937, the works were notionally intended for manufacture of the Bristol Blenheim. Rootes was at the time one of the 'Big Six' car producers in the country and had intended to construct the factory in the south near Maidenhead, however intense government pressure has seen it moved to one of the 'special areas' where the local economy remained depressed. Despite the move to Lancashire, were unemployment remained stubbornly high, the factory was still disrupting the wider civilian economy; The steel framed factory was erected by the structural department of Rubery Owen who, like the rest of the construction industry, had a full order book and an ever growing waiting list. To put is simply the manpower and steel used for the construction at Speke could have been building a civilian factory in the booming south east or midlands. For all the intentions of Whitehall the ripples of the shadow factory scheme affected much of the wider economy.
One of the main intentions of the shadow factory scheme had been to massively increase production to allow rearmament to be completed in a reasonable time-frame. As an example it had taken Bristol's main works in Filton almost six years to produce 420 odd Bristol Bulldog biplane fighters, the Speke shadow factory was intended to build 40 of the far larger and more complex twin engined Bristol Blenheim monoplane bombers a month, or just under 500 a year. It was a step change in production volume and the Ministry of Labour had made it clear there wasn't enough skilled labour in the country for them all to be made in the traditional manner and even attempting to do so would cause immense disruption to the civilian economy. This assessment had been one of the mains reasons for selecting the motor industry as the base for the shadows, they were perceived to have management experience of mass production and doing so with a mostly unskilled workforce. It was true that a production line approach did reduce the overall demand for skilled staff, however it also tended to concentrate the remaining demand on a few key points in the process. While an inexperienced person could become a decent enough line worker in a few shifts, assuming a properly organised production process, the fabrication of the tools and jigs that said line worker used remained a skilled trade and so demand for those 'tool room' skills still increased. That those skills were also useful in the non-mass production context, to a certain extent if you could make the tooling for an item then you could also make the item, meant the shortage rippled out across a range of seemingly unrelated sectors of the economy. If this had been the end of the matter then it would have been a straightforward but difficult decision for the cabinet on how much to reduce or delay the rearmament programme in order to free up skilled labour for the civilian economy. However there were alternative options which promised the possibility of keeping full production at the shadow factories while not impacting the wider economy. Naturally the cabinet expected there would be a catch to these plans and so it proved.
The Committee for Imperial Defence had amongst it's many sub-organs an industrial Advisory Panel, essentially the voice of business on defence and rearmament related matters. The panel had been instrumental in planning and organising the shadow factory scheme and had been amongst the business voices that held firm on the matter of welding and the reorganisation of the shipyards. It was this group that suggested the first alternative, take the example of the successful (if unintentional) dispute with the boilermakers union and do the same to the tool room workers union, the AEU (Amalgamated Engineering Union). As one would expect from a craft union of the time the AEU demanded strict limits on apprenticeships, training and demarcation, limiting the number of new workers that could be trained up and what their members could do once trained. There was undoubtedly a very large degree of self interest in this, many of the key members of the panel had been agitating for a showdown with the AEU over the two ds (dilution and demarcation) for many years, yet it was also true there was wide dissatisfaction across the country with the AEU's intransigent positions and the bottlenecks it was causing. Indeed it had only been the pressures of wartime production, and then the transition back to peace, that had stopped the panel from pushing for such a confrontation earlier, with that out of the way they resumed their campaign with the support of lobby groups such as the well connected Economic League trying to bring a mass of MPs on board with the plans. The cabinet was far less certain of the merits of such a showdown, having just got through one period of industrial unrest there was very little desire to provoke another, moreover the circumstances that had led to victory in the boilermakers strike did not seem to apply here. While there was always a hard core in the party that would happily scrap with the trade unions at almost any excuse, the other factions united against the plan, though in truth the cabinet did not take much convincing before deciding against the option.
Newly hired welders starting their practical training at the Rosyth Royal Dockyard. Scenes like this were exactly what the United Society of Boilermakers and Iron and Steel Shipbuilders (USBISS)had been striking to prevent. The staff were being trained by their employer over a few weeks and not through a 5 year long apprenticeship with compulsory union membership, even worse after training they were expected to work anywhere on site without strict demarcation limits or union veto. As more and more firms adopted welding, and the vast majority of welders chose unions that would accept them as full members rather than the USBISS position that they were merely apprentices until USBISS said otherwise, the strike collapsed. It is worth noting that neither USBISS nor their colleagues in the AEU would have allowed the women in the picture to join even if all their other conditions had been met. This attitude was not shared by the employers or indeed the more progressive unions and so the female welding workforce would continue to grow, not least due to the relative ease with which an ex-textile worker could switch from working power loom to using a continuous wire welder.
The second option was the result of a very different conception of what mass production was, such variances in opinion being fairly common as mass production was a somewhat vague term that mostly described the result (a large number of things being produced) and not how this outcome was achieved. The Air Ministry, and so the aero shadow factories, had been set up as broadly Fordist in their approach to mass production; Everything that could be deskilled was through a large up front design effort, line work was simplified as far as possible and efficiency came from economies of scale and volume. In fairness this was a surprisingly common approach, to take the extreme examples both Nazi Germany and the Soviet Union had sent delegations to Detroit to study the Ford approach and to bring the knowledge back. That two such bitterly ideologically opposed states both implemented Fordism speaks to the hidden similarities between the two regimes and perhaps to the practical realities of Fordism; as preached by Ford it had a heavy emphasis on centralised planning and control, heavily suppressed change or deviation from the plan, and relied upon a small managerial and technical elite overseeing the unskilled masses on the lines. For obvious reasons these concepts found favour in Berlin and Moscow and, more domestically, were also popular with the AEU and it's sister unions in the UK; they entrenched the status and bargaining power of the skilled artisans of the tool room, while the unskilled line workers were never considered as potential members anyway. Leaving aside any philosophical objections to this vision of mass production one clear issue was it's obsession with economies of scale, if volume was the only way to lower cost then the largest producer would always be cheapest. It should therefore not be surprising that it's greatest rival was developed as a way to achieve similar efficiencies and cost savings at low production volumes. Flow production, or Woollardist production as it became known, was developed in the mid 1920s by Frank Woollard in his time as the General Manager of Morris Engines. The details and principles of his system need not detain us at this point, in summary the approach was to ensure smooth 'flow' along the system of production all the way from initial design to customer but without the intense capital spending and inflexibility of the Fordist approach. For our purposes the key difference was in the approach to the workforce, automation and tooling were ways ensure quicker cycle times and smooth flow not aims in themselves, so tasks were simplified but not necessarily deskilled. In addition one of the key principles of Woollardism was continuous improvement and fixing issues on the line, which required an engaged and involved workforce. As a result on a flow production line staff could expect to rotate around through various stations, both for the variety and so they could see how they connected together, an understanding that prompted many improvements. All of this meant an increased requirement for semi-skilled staff, but a dramatic reduction in the need for skilled tool room and line repair workers. There was an strong track record to support this option, not just in the civilian world but within the broader shadow factory/government factory scheme. When Lord Beaverbrook had been assembling his team at the Ministry of Production prior to the outbreak of the Abyssinian War, Woollard had been one of his first hires. The catalyst had been the anaemic production estimates coming out of the Royal Ordnance Factories (ROFs), figures Beaverbrook found unacceptable and which prompted him to look for an expert in mass production. As Woollard had quite literally written the book on it, his Principles of Mass and Flow Production would become a seminal text in the field, Beaverbrook recruited him to completely re-organise the ROFs and their suppliers. The resulting leap in efficiency and production output was crucial in keeping the Army supplied in the early weeks of the war once they had burned through the inadequate pre-war stocks and the wartime production had not got into gear. With this example of the dramatic changes that were possible it was suggested that the Air Ministry switch over to this system for their shadow factories and push it out into the supply chain.
The Morris Motor Company's engine factory in Coventry, it was the first site where Woollard had the chance to implement flow production. Lord Nuffield had acquired the factory from Hotchkiss after they had insisted that it was impossible to produce more than 300 engines a week without an impracticably vast capital injection. After the purchase Woollard was installed as manager and switched the factory over from batch to flow production, within a year he had doubled production and he repeated the feat in the following year, after which production hit 1200 engines a week, all achieved without large scale plant investment. Woollard himself would have a falling out with Lord Nuffield and departed Morris in acrimonious circumstances at the start of the Great Depression, blacklisted in the motor industry his wartime work for Beaverbrook propelled him back into prominence.
The possibility of a fight with the AEU over the euphemistic 'modernisation of working practices' had gone straight to cabinet, the civil service very keen to avoid such an obviously political question. In contrast the actual modernisations of working practices in the ROFs had been pushed through by Beaverbrook with barely a mention in cabinet and the consideration of extending the scheme was mostly confined to the depths of the civil service. It might be expected that the Air Ministry would resist the change on principle as it came from outside the department, in this case from a mix of the War Office (which nominally owned the ROFs), the Treasury (which had inherited Beaverbrooks short lived Ministry of Production and Development post-war) and the Ministry of Defence Co-ordination (which could be relied upon to always stick it's nose into any inter-departmental fight) and to an extent this happened. However the Air Ministry was beginning to have second thoughts about it's embrace of Fordism, primarily due to growing doubts about the economies of scale, or lack of them, within their plans. In their losing rear-guard action against the shadow factory scheme the Society of British Aircraft Constructor (SABC, the aircraft industry trade body) had argued that aircraft changed too rapidly for mass production to be appropriate. The Air Ministry, looking at the thousands of aircraft required by the defence plans and rearmament schemes, had dismissed this as self serving and disregarded it. Subsequent experience proved that SBAC may have had a point, to take the example of the Bristol Blenheim factory mentioned previously it was setup to produce the Blenheim Mk.I using Bristol Mercury VIII engines. As we saw in Chapter CL Bristol were hard at work on the 100 octane powered Mercury XV engine throughout 1937 and, with an eye on Far Eastern operations, a prototype Mk.II with larger fuel tanks for greater range would fly scant weeks after the grand opening of the shadow factories. For a Fordist factory this pointed to a number of disruptive changes and expensive re-tooling exercises that would preclude the hoped for economies of scale, yet the idea of deliberately producing obsolete aircraft just to get said scale seemed far worse. In contrast Woollard believed that in Flow Production change should be celebrated, because it meant a new efficiency had been found or a better final product would be made, any of which would improve the flow from design intent to final user. More practically the costs, both financial and in time and efficiency, of adapting to any change were significantly lower due to the greater flexibility of a Flow production line. As the Air Ministry reviewed the previous years and looked to the future they found themselves agreeing with Heraclitus that 'change was the only constant', in which case a flexible production system seemed not merely a wise precaution but positively vital.
With the cabinet firmly against another major industrial dispute and reluctant to cut the pace of rearmament, they were almost as keen to agree the option as they were to not put any effort into understanding the implications, it was after all an Air Ministry internal decision that had only been escalated to cabinet because of it's impact on the wider skills shortage. A more technocratic government may have discussed the matter and considered the pros and cons of the various methods, but then a more technocratic government would never have got into this particular problem, though only because it would have gotten into a different but doubtless far larger one somewhere else. In any event the decision was made to make a phased transition away from Fordism and towards Woollard's approach, the first stage would be putting Woollard's team in charge of the still under-construction second wave of aircraft and engine factories, on the reasonable grounds that such facilities would operate better if laid out correctly from the start. The just completed first round factories, including the many Bristol Mercury around Coventry, would be left under their current management and organisation, at least until a decision had been made on the Mercury and indeed the Blenheim, both of which had less than certain futures since the formation of Strike Command. If the Air Ministry hoped that starting with the second round incomplete factories, rather than the already operational factories, would ease relationships with the motor industry they would be bitterly disappointed. One of the second round facilities handed to Woollard to re-organise would be the Castle Bromwich Spitfire factory, which had been earmarked for Lord Nuffield's Morris Motors to equip and manage, the same Lord Nuffield that had very publicly sacked and blackballed Woollard only a few years earlier. While progress had been made on the skills problem, the problems of the Air Ministry's industrial strategy and relations with industry were far from over.
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Notes:
Another slightly larger than intended chapter, but one that easily could have gone very badly off course. I think I've kept it (mostly) on the straight and narrow and not gone off any egregiously unrelated rabbit holes and I would argue there is a bit of plot in this one.
The 1937 UK economy is a very different thing from OTL, no big dip/slight recession due to the 1937 US recession (the Butterfly world is a bit less US connected, with stronger Empire/Sterling Area links covering the difference) but instead a booming economy mostly weaned off a wartime sugar rush and hitting various structural limits. This was a big concern in the OTL rearmament period, there was factory space and machine tools (just about) and mostly the raw materials were present (a few odd cases as we shall see) but it was skilled labour that was the problem, particularly in the aero sector. Outside of that though, there is a sense that the war that was brewing has happened (Abyssinia) and now Versailles has been revised surely Germany will be reasonable, so therefore it's time to make up for lost time. This is tragically wrong but I feel it's what would have happened.
The Shadow Factories have been mentioned before and are mostly OTL but a bit faster due to wartime rushing, as said the phrase was a bit vague and even in the 1930s (and during WW2!) there were NIMBY problems that only got solved by the judicious application of Crown Authority to just get stuff done. I worried I'd been too loose in using it, but honestly so is/was everyone so that at least was correct.
Frank Woollard was an OTL figure who in the 20s/early 30s was absolutely seen as a guru on mass production, the Morris improvements and books are OTL but after falling out with Nuffield and failing to find another automotive job he mostly got mostly forgotten. His Flow Production was functionally identical to the system Toyota developed post WW2 and is recognisably similar to modern Lean Manufacturing, but for a range of reasons he never got recognised and his system got forgotten and had to reinvented. The Ford approach really was popular in the USSR and Nazi Germany, which should have made those involved a bit more doubting about it but apparently not. In any event the Air Ministry got infected quite badly with it and got into learning curves and scale factors and all sorts of such things as it planned vast production lines, but it was always a bit schizophrenic as they positively encouraged new models and new variants to keep on the cutting edge, which is the exact opposite of what you should do in the Fordist model. Beaverbrook brought in outside help in OTL when at Aircraft Production, so in Butterfly when he's looking at shipping and the Army (mostly the Army as they were in the worst shape) it seemed reasonable he'd bring in Woollard as the expert on mass production and point him at the ROFs, things spread from there.
Finally it was Roald Dahl who came up with the idea of a Chocolate Revolution in the 1930s and dubbed 1937 an excellent year, the recently demolished Earls Court centre did indeed open in September 1937 with that show and I thought it a good way of showing how the country is definitely choosing butter (chocolate) over guns.
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