Title Graphic



In retrospect British munitions production appears clearly marked by a number of features which students of British economy would at first sight recognise as typically British. A large proportion of what were munitions of war in the broad sense of the term—transport vehicles, electrical equipment, locomotives, mechanical appliances and 'general stores' of every kind—were manufactured by the appropriate section of commercial industry from existing plant. In these branches of war production the industrial structure, i.e. the size, organisation and equipment of firms, was bound to remain in war the same as it had been in peace. But even in the munitions industry in the strict sense of the term, i.e. in the production of weapons and of specialised military equipment, the characteristic features of British industry could be observed. In the first place, production appeared to be—to use a somewhat exaggerated term—atomised, i.e. carried on in numerous industrial establishments of which a high percentage were medium-sized or small. In the second place, production was not greatly specialised. A very large proportion of the munitions produced came from the 'general' industry of the country equipped for 'general' industrial—mostly engineering—operations.


The Division of Production

Needless to say neither feature revealed itself in clear and wholly unbroken outline. To say that small and medium-sized firms predominated does not mean that war industry was utterly innocent of industrial units representing great conglomerations of capacity under single management. In almost every branch of production great or even immense enterprises were to be found. At least one, Vickers-Armstrongs, made a very large contribution to almost every department of war production—ships, tanks, aeroplanes, guns and small arms. The vast industrial organisation of I.C.I. continued to expand during the war, and much of it was wholly absorbed into the making of munitions. Naval construction at the shipyard level was bound to be in the hands of large firms. As a result of the continuous expansion


of orders received by the main aircraft firms, large units predominated in the final or 'assembly' stage of production. Two aircraft firms, Vickers-Armstrongs and the Hawker-Siddeley Aircraft Company, were between them responsible for nearly half the total output of military aircraft. A number of other great firms, having switched over from civilian production to munitions, continued to operate as large units and to apply the methods of modern large-scale enterprise. The great motor firms continued to manufacture motor vehicles for the Services, and in addition most of them (Austin, Nuffield Organisation, Daimler, Standard, Rootes, Ford) ran large aircraft and aero-engine factories; while another (Vauxhall) undertook the development of a heavy tank—the Churchill. The great firms in the electrical manufacturing industry—B.T.H., English Electric, General Electric, Metropolitan-Vickers—exceeded the vast scale of their pre-war activities. Some of them separately, and all of the in combination, were mainstays of war industry and principal sources of efficient and economical output. And then there were, of course, the Royal Ordnance Factories, most of which were conceived as very great undertakings indeed. R.O.F. Chorley, the first of the new filling factories, employed at one time 30,000 people, and a 'small' filling factory was defined in 1941 as a factory employing not more than 10,000 workers. Some of the new engineering Royal Ordnance Factories were comparatively small, but even the smallest employed more than 1,000 workers. Other R.O.F.s, like Woolwich, and some of the new small arms ammunition factories were immense in size and in scale of operation.

These examples suffice to dispel the simple-minded notion that British industry in peace, was largely made up of small workshops. Such information as is available about American war industry will also dispel the notion that Britain, alone among the belligerents, found a place in her war industries for small contractors. It will be stressed again later1 that in some American trade small and medium-sized firms were very numerous. Even if they were apt to be neglected in the early years of American rearmament, they were in the end drawn into war production all over the country.

The manner in which such firms were enlisted was not, of course, the same in the United States as in Great Britain. In the United States small firms were not mobilised as they were in Britain through sheer necessity, i.e. merely because there was no other industrial capacity to draw on. Their employment in the United States became a matter of deliberate policy. The arguments behind the policy were many and various, and some of the reasons commonly adduced were


the same as in Britain, i.e. the need for what American documents describe as the 'dispersion of the load' or the 'broadening of the base' of war production. But even more powerful was the political and social incentive: the desire to alleviate the effects of the distortions and dislocations—the 'defence migrations', the 'ghost towns', and the 'distressed areas'—created by the rearmament contracts of 1939, 1940 and early 1941. These contracts gave rise to conglomerations of labour and plant under the control of relatively few firms and in relatively new places. As a result, a number of established centres of civilian production and, above all, small firms within them, were plunged into unemployment and distress.

To deal with the situation, the American Government took several successive measures. An Army Contract Distribution Division, which was established in the office of the Under Secretary of War a few months before Pearl Harbor, tried to place as many contracts as possible in distressed areas and amongst small firms. Together the the Defense Contract Service at the Office of Production Management it endeavoured to ferret out would-be contractors and sub-contractors in remote places. A year later these activities were reinforced by legislative action. In June 1942 Congress created the Smaller War Plants Corporation with a capital of $150 million charged with mustering small firms into war production. It was given authority to undertake munitions contracts which it could proceed to sub-contract to smaller firms. Following the establishment of the Corporation and the passing of the Small Business Act, much was done to carry out the policy. Small War Plants Officers were appointed as 'go-betweens'; the 'procurement directives' (the American equivalent of the successive instalments of the British Service programmes) often discriminated in favour of small firms by earmarking for them fixed proportions of the procurements. Other inducements and help to small firms were made available, such as loans or price premiums up to fifteen percent of the competitive prices. In addition, the procuring departments sometimes gave preference to firms willing to sub-contract, and even inserted into contracts clauses which favour sub-contracting. Very largely as a result of these favours and controls the share of small firms in American war industry steadily grew. The proportion of contracts held by firms employing 500 or fewer workers in 1943 was 12.6 percent of the total dollar value of all contracts, it rose to 20 percent in 1944 and to 28.5 percent in June 1945.2

By comparison, the manner in which small firms were drawn into British war production was almost wholly spontaneous. Small firms were sought out by firms and by government departments in search


of productive capacity. Some were enlisted on direct contracts even in the pre-war period, particularly by the War Office and the Admiralty; and the process was greatly increased under war conditions. As a rule, the smaller firms, i.e. those employing less than 200 workers, were mainly, though by no means entirely, enlisted as sub-contractors by other firms. The first organised enrolment of small firms en masse was carried out on the eve of the war by the Nuffield Organisation for the repair of aircraft,3 but the enlistment could not be wholly left to private enterprise. What was needed was some means of establishing rapid contact between small firms and contractors requiring capacity, and for this, normal commercial contacts were insufficient . The information now wanted was not about the commercial products of small firms, but about the size and kind of capacity they possessed and about the processes they could undertake; and this information was not readily obtainable through regular commercial channels.

The production directorates in the three supply departments began to take steps in this direction at least a year before the war broke out;4 but the first concerted attack on the problem came in 1941 when 'capacity clearing centres' were set up under the Regional Boards.5 The service was greatly extended and improved from 1942 onwards. The records and other facilities of over seventy capacity offices covering the United Kingdom helped firms and supply departments seeking capacity to get into touch with firms available for employment. This arrangement ensured that all firms, however small and dispersed, could be called in to meet urgent or increased demands.

This capacity organisation proved of great value in the second half of the war when the demand for components greatly increased. It was neither as elaborate nor as far-reaching as the American; not was it subsidised by special pricing arrangements. Yet, in spite of the great effort in the United States on behalf of small firms, the average size of American munitions factories remained larger than the British.

The contributions of great firms and of large factory units to the munitions production of the two countries is, of course, difficult to measure. It is nevertheless easy to show that the average industrial unit in American aircraft production was much great than in this country. By the end of the war, in the United States there were fewer aircraft firms than in Great Britain, but they produced a very much larger number of aircraft. This does not of course mean that the output of the two great British combines, Vickers-Armstrongs and


Hawker-Siddeley, lagged much behind that of an average American firm. In any case what mattered was not the size of firms but that of production units, i.e. individual factories controlled by them. No aircraft factory in this country could rival in size the Willow Run plant of the American Ford Motor Company, and in the American aircraft industry, taken as a whole, output came from much larger units than in Great Britain. The average size of American airframe factories of main contractors in the United States was about two million square feet, compared with 0.75 million square feet of the average aircraft factory operated by the main British aircraft firms. Employment in the American aircraft factories was commonly between 20,000 and 40,000 people: employment in corresponding British factories varied from 3,000 to 15,000. The average production per factory unit engaged in assembly in the United States was sixty aircraft per week, with a maximum of 120. In Britain the corresponding average was ten per week with a maximum of about sixty.6

The relative contributions of large and small firms in other branches of production are impossible to measure. A mere comparison of the total numbers of contractors in the two countries would be largely irrelevant even if it were possible. The total number of firms acting as main contractors and sub-contractors for the three British supply departments may well have been above 30,000.7 The figure is, however, highly inexact. It has been arrived at by adding together the number of contractors to each of the three supply departments, and no allowance has been made for contractors working for more than one department and thus counted more than once. On the other hand, some of the sub-contracting firms may have been left out of the estimates of the numbers of contractors to departments. The figure is perhaps sufficient to bring home the large number of firms drawn into war production. But even a better proof of this will be found in the non-statistical fact that in the last year of the war nearly all the firms in the metalworking, engineering and allied industries known to the regional officers of the Ministry of Production, and a large number of firms in other industries, were engaged on munitions production.

This well-known fact may also suggest the reason why in Britain, without any special legislation or preferential treatment, so many firms, small and medium-sized, found employment in war contracts. The survival in the war years of the bulk of private firms and their active participation in war production meant that, in spite of all the measures to direct labour to new employment and to 'concentrate'


civilian production in order to release resources, industrial mobilisation was much less of a reshuffle than the etymology of the word 'mobilisation' might imply. The main process of industrial mobilisation consisted not only of moving labour, management and other resources to place where munitions were already to be made, but also in placing orders where resources were already to be found. Often new capacity had to be created to make use of labour where it was available. In the special parlance of the day this was often described as 'taking work to labour', although it might with equal justice have been described as 'taking work to buildings and management'. For the great majority of the industrial firms which had functioned before the war were able to participate in war production without fundamental changes in their location and organisation.

Viewed in perspective this method of mobilising industry may appear unexceptional to the point if being obvious. Was there, it may appear unexceptional to the point of being obvious. Was there, it may be asked, any other way of expanding war production except by enlisting private enterprises where they were to be found? Yet this was not quite the method of industrial organisation in war which had sometimes been forecast. The Committee of Industrialists under Lord Weir, appointed in December 1933 to advise the Supply Board on industrial matters,8 took it for granted that armament firms alone would not carry the whole burden of munitions production and that Vickers-Armstrongs and the Royal Ordnance Factories would have to be supplemented by 'selected' engineering firms. The emphasis was, nevertheless, on selection. Only the larger firms in the engineering industry possessing suitable experience and plant and provided with facilities for design and development, would be suitable for war contracts, at any rate at the beginning. Some members of the committee also believed that if ever it were found necessary to spread the work on munitions more widely, the orders would best be canalised through the 'selected' firms.

The recommendations had been framed before the scale of the rearmament effort had become apparent, and they did not greatly influence the subsequent activities of the production branches of the Service ministries. From the outset the War Office and the Air Ministry ranged very widely over the entire field of engineering and allied firms in selecting firms for the early contracts, and more widely still in making up their list of firms for the 'war potential'. Moreover, the subsequent experience of rearmament and war compelled the supply departments to widen their limit of selection still further and to relax their principles of selection. By the time the war peak of industrial mobilisation was approached they were prepared to make use of any factory offering the essential minimum of services, and of any working


industrial concern which appeared to possess the essential minimum of competence.

This apparently indiscriminate policy. general applied by 1941, was partly to be accounted for by the urgent need for ready-made factory space. Taking work to existing buildings required less time and waiting than the shifting of resources to specially-erected war factories. Much was heard during the war about shortages of machine tools and great stress had been laid on them in this history. Yet much of the delay in starting new war factories came not from the absence of tools but from the slow progress of building operations. Machine tools (at least most machine tools) were often available before the buildings were ready; and now and again Royal Ordnance Factories and privately-owned munitions factories had to install tools and to begin operations in unfinished buildings—sometimes under tarpaulins.

To a number of observers in and out of the Government the length of time which Royal Ordnance Factories took to build appeared unconscionably long. Critics were able to recall that in the war of 1949–18 National Factories were often build in well under one year. Until the very outbreak of the war in September 1939 some private firms were able to have their new factories and extensions built very quickly. In 1938 Metropolitan-Vickers put up a factory for radar equipment in little more than thirteen weeks and build another munitions factory in the five months from April to August of the same year.9 New aircraft factories erected between 1936 and 1938 took, as a rule, little longer than year to build. On the other hand, few of the larger factories built during the 1939–45 war were completed in less than eighteen months, and some took longer than that. To this the obvious reply was that factories in this war were often more difficult to build than in the last. Most of them needed elaborate services—gas, electricity, steam, internal transport; some (especially the new aircraft factories) required much larger unobstructed spaces than the factories of 1914 vintage; others had, in conformity with the Government's policy, to be located in areas which, however convenient from the point of view of labour supply, could not offer 'easy' building sites. Now and again, and more often before 1940 than in the later years of the war, critics put the blame for procrastination on government departments. During the later years of the war there were also the obvious difficulties due to shortages of labour, materials and transport.

There were thus many good reasons for delays—at least some delays—in building. Yet even if building had been done as expeditiously as in 1914–18 , the waiting period would still have been too long for many of the urgent wartime needs. When in the hurried


months of 1940 the Ministry of Aircraft Production decided to disperse the aircraft industry, there was and could be no question of building new factories. Existing buildings—sometimes odd buildings on odd sites—had to be taken over without much delay. In December 1940, when B.S.A. dispersed post-haste their production of the Browning gun, the buildings they took included a woodworking shop, a sugar store and reinforced concrete work;10 and yet they had a better choice of buildings than firms which had to disperse their production a few months later. Similarly, in the closing years of the war when the supply departments had to cope with a vast collection of new and urgent demands, additional capacity had to be found where factories were already in existence. New building was therefore bound to play a much smaller part in the deployment of war industry than it apparently did in the United States.

The need for economising in building time does not however explain everything. It partly explains why many large firms carried out a great deal of their work in small factories. It will not by itself account for the wholesale employment of existing firms, middling, small and diminutive. What led to their employment was the conjunction of existing buildings with the other scarce factor—management.

As a result of their experience in the early years of rearmament and war, officials in the supply departments had come to attach an ever-greater importance to management. The better-managed firms were singled out and loaded with contracts to the point of overloading. The wartime story of a famous electrical firm and of its rapidly expanding responsibilities in war production is essentially one of a government department—in this case M.A.P.—imposing successive responsibilities on a group of managers who had proved themselves in the earlier stages of the war. Among the contractors of the Ministry of Supply there were quite a number of firms with managers whom the Ministry rated so high that they were invariably entrusted with difficult and urgent contracts. There was an engineering firm in the North which before the war produced a small car in rather small quantities, but which was now expected to tackle on difficult munitions job after another; or a well-established firm in the Eastern Countries which before the war specialised in making large-scale equipment for the food industry, but which was now expected to lead the way in a variety of engineering jobs, mostly in the making of gun components and carriages; or a great motor firm in the Home Counties, and yet another firm of electrical manufacturers in the Midlands, both of which turned into veritable arsenals, making everything from tanks to components of small-calibre guns.


Indeed, on more than one occasion the existence of a manager of proved quality was sufficient to attract munitions contracts, however remote might be the field of the manager's pre-war activities. A famous firm of chocolate manufacturers in the Midlands was asked to undertake the manufacture of aeroplane parts and components for rockets at its home factory and to manage a new factory for 'jerricans' in London; a Scottish transport corporation was asked to make parts of aircraft. But nothing illustrates better the crucial importance of management than the wartime career of certain well-known promoters of football pools. They became a large unit of war production manufacturing not only parachutes and balloons, but also machining parts of aircraft, ammunition and gun carriages. What to some extent commended the firm to the officials was its experience in employing large numbers of young women and its extensive premises. But what qualified it most was the reputation of its directors for efficiency and drive.

It was because managerial enterprise was so scarce that the supply departments in the later years of the war were so anxious to employ more or less all the competent entrepreneurs there were, and to do so in their own firms. Hence also the remarkable picture of British production with its countless small workshops operating as part of the munitions industry. Some of them were nothing more than local garages, but each garage proprietor brought with him his building and his enterprise. It was the building and the entrepreneur that were required in the later stages of the war when time for new building was denied and the supply of managers was very limited.


Production Specialised and Unspecialised

The atomised structure of British war industry is closely related to its second feature, its unspecialised character. British war industry was more unspecialised in more senses than one. It was not, and could not be, concentrated in armament firms, i.e. in undertakings possessing previous experience of making arms with nuclei of skilled arms-makers among their employees and facilities for the development of weapons. There were, of course the three old-established ordnance factories—the Royal Arsenal, Woolwich, the Royal Small Arms Factory, Enfield Lock, and the Royal Gunpowder Factory, Waltham. There was also the great armament firm of Vickers-Armstrongs; there was also B.S.A. with its long and intimate experience in the making of small arms; Beardmores, where the aptitude for the manufacture of guns had not wholly died; and there was capacity for the


manufacture of small arms ammunition at I.C.I. and at Greenwood & Batley. In addition, at least three newly-founded private enterprises were set up in the rearmament years with the sole purpose of making munitions: Nuffield Mechanizations, the British Manufacture and Research Company and New Crown Forgings (a subsidiary of Stewarts & Lloyds). Despite the serious deterioration in shipbuilding capacity many of the shipyards which had previously specialised in naval construction were still available. In aircraft production most of the larger aircraft firms had before the war catered mainly for the Air Ministry and had the necessary experience of tendering and designing to Air Ministry specifications.

Yet even with the aircraft and naval shipbuilding firms included, the size and scope of the armament industry was very small, and there is no need to explain at length why it was no greater. The specialised armament industry reached the highest point of its development during the great naval armament race before the First World War, and it was bound to slump in the inter-war period when naval construction all over the world greatly declined and the demand for munitions sank very low. The slump in the armament industry led to the winding-up of some firms and the drastic curtailment of others. At the same time the part which armament firms might be called upon to play in a future war had come to be questioned. The experience of 1914–18 war appeared to prove that in time of war munitions could and should be made by the unspecialised industry of the country. Reporting in 1918 the McKinnon Committee drew the moral the 'the basis of armament supply is now so broad that specialising in the future on the part of a limited number of firms will probably not be necessary for the safety of the country'.11 The lesson was well learned by the men in charge of the pre-war preparations. In planning future mobilisation they assumed as a matter of course that the British armament industry would be insufficient to cope with the problem of war supply in its entirety and that the bulk of the orders would have to fall on 'general' industry and, more especially, on its engineering, electrical and chemical branches.

British war production was also 'unspecialised' in another sense of the term, that of equipment. At the peak of war production, and to some extent even in the earlier stages of expansion, the use of unspecialised plant and machinery was widespread—more so than it might have been had Britain possessed the time and the resources to build her munitions industry anew.

It is, of course, important to bear in mind that the lack of specialisation was only one of degree. Factories specialising in production


of munitions had to be set up. Without them the war industry would have been unable to produce the immense quantities of munitions it in fact turned out. To begin with, the armament industry proper greatly expanded during the years of pre-war preparations and continued to grow during the war. In the early stages of expansion between 1936 and the outbreak of war, and even during the early years of the war, the supply departments busied themselves with the building-up of a specialised arms-making industry. The measures which the Admiralty then took to expand capacity largely consisted of additions and improvements to naval dockyards and to the factories of the principal naval contractors. The 'shadow' factories which the Air Ministry attached to the main motor firms might perhaps be regarded as additions to the non-specialised capacity. But at the same time (more especially after mid-1938) the Air Ministry sponsored vast additions to the floor space and the machining capacity of the principal aircraft and aero-engine firms. Above all, the efforts of the War Office were concentrated on the build-up of a specialised armament capacity in private hands and of a network of Royal Ordnance Factories.

These preoccupations with specialised capacity were, of course, inevitable and were implied in the very notion of a general industrial mobilisation. For it was assumed that 'general' firms, even when mobilised and properly adapted to the needs of war production, would be unable to meet the demand for some of the most important and 'difficult' munitions. In the War Office and later in the Ministry of Supply the tendency was to grade munitions according to their suitability for production by ordinary firms. At one end of the scale there were stores, like uniforms or water-bottles, which could be made by the clothing and hardware firms in the country. At the other end of the scale there were munitions, like filled shells, which bore no relation to any commercially marketable commodity and which could not be made by the equipment or processes of civilian industry. Between these two extremes there were war-stores of greater or lesser affinity to either type; and it was generally assumed that some of them were unsuitable for production by an average firm. On these assumptions a fully-mobilised war industry required a large component of specialised munitions factories; and the building-up of this component was, therefore, bound to appear as an urgent prerequisite of the industrial mobilisation to come.

This was, broadly speaking, the procedure recommended to the Government by the Committee of Industrialists to which a reference has already been made.12 In their view the first step in rearmament was to decide what expansion of capacity was possible at the Royal


Ordnance Factories and Vickers-Armstrongs. The next step was to decide what new production units could be set up and operated by Royal Ordnance Factories and Vickers. The final stage was to decide what additional capacity would have to be obtained by the introduction of industrial firms. In the event, the supply departments built new armament factories and approached a number of 'general' engineering firms more or less simultaneously, but until 1939 the main effort and most of the new orders (such as there were), apart from orders for shells and tanks, were absorbed by the Royal Ordnance Factories and the armament firms.

This preoccupation, inevitable in the early stages of rearmament, did not and could not survive the demands of war, especially after the crisis of 1940. The measures which the Admiralty had to take in order to enlarge the range of firms supplying it with instruments and equipment have already been described:13 so also have the successive additions to the circle of the 'family' firms in the aircraft industry.14 This circle was greatly extended by the coming into operation of the 'shadow' factories and by the enlistment of several large firms into the manufacture and assembly of aircraft. Thus, in the manufacture and assembly of the Halifax bomber a group of firms participated in addition to the 'parent' firm (Handley Page)—English Electric, Fairey Aviation, Rootes, and the 'London Aircraft Production Group' (a combination of the London Passenger Transport Board and a number of London motor firms). The making of bombers of the Manchester-Lancaster-Lincoln breed was entrusted to a number of firms, and many other aircraft in quantity production were also made by firms outside the 'family'. In the building of engines not only were the factories of Rolls-Royce, the Bristol Aeroplane Company, and Napier extended and duplicated, but several 'newcomers', including the Daimler, Austin, Standard and Ford motor companies, took a large and growing part.

Among sub-contractors, firms outside the aircraft industry always predominated. The labour force at sub-contractors serving the makers and assemblers of airframes increased well above the thirty-five percent target of 1938.15 Sub-contracting in aircraft construction rose from ten percent in 1938 to thirty percent by the middle of 1939 and to over forty percent in the later years of the war.16 In a few instances nearly ninety percent of the total value of the orders placed with aircraft firms was sub-contracted.17


The record of army weapons tells the same story of a gradual submerging of the specialised armament firms and of Royal Ordnance Factories in the general body of mobilised industry. The filling of shells and, to a very large extent, the making of explosives and propellants remained to the end of the war the prerogative of the Royal Ordnance Factories, I.C.I. and the agency factories. Guns, i.e. gun barrels and mechanisms, had also also been regarded as 'armament work' par excellence, requiring special equipment and experience.18 Indeed, the earliest batches of orders for guns in 1936, those for medium and heavy anti-aircraft guns placed in the opening years of rearmament, went to the new Royal Ordnance Factory which was specially equipped for the purpose. They continued to be largely made in Royal Ordnance Factories and by armament firms until the requirements of these guns were substantially met. In 1937 production of Bofors 40-mm. anti-aircraft guns was undertaken by the same Royal Ordnance Factory and by a new armament firm (Nuffield Mechanizations). The initial orders for 2-pounder tank and anti-tank guns went to the Royal Arsenal, Woolwich, to a recently-erected Royal Ordnance Factory and to Vickers-Armstrongs. With the outbreak of war further capacity for the manufacture of anti-aircraft guns and 2-pounders was to be provided in new Ordnance Factories. From the summer of 1939 the erection of new Royal Ordnance Factories for guns followed in rapid succession; by 1941 at least ten Royal Ordnance Factories were engaged in making guns. Yet, so rapid had been the introduction of 'outside' firms, i.e. firms normally engaged in civilian manufacture, that by the end of 1942 only half the total output of guns of 40 mm. and over cam from Royal Ordnance Factories. A proportion of the remainder came from Vickers-Armstrongs and Beadmores, but the larger part came from the 'outside' firms.

Field guns were from the outset largely entrusted to 'outside', i.e. non-armament, firms. Such firms played an important part in the conversion of the 18-pounder guns; and between 1941 and 1943 they were called upon to play a part at least as important in the making of the 25-pounder. From 1940 onwards 'outside' firms were also engaged in ever-growing numbers in the final manufacture of 2-pounder, 6-pounder and 17-pounder tank and anti-tank guns, 3-inch tank howitzers and 95-mm. howitzers. Indeed, when in 1940 capacity


for the 3-inch tank howitzer had to be found at short notice, the Ministry of Supply placed the production contracts almost entirely among 'outside' firms. The main contractors for the 6-pounder in 1942 included five Royal Ordnance Factories and nine private firms, of which seven were 'outsiders'. Among the contractors engaged in sub-assemblies for the 6-pounder gun, 'outside' firms greatly predominated. The position was even more striking for 6-pounder carriages. Altogether by 1942 some fifty-five firms had been drawn into the manufacture of 6-pounder carriages; and had production been allowed to continue on the scale originally planned, there would have been by the end of 1942 nearly 100 firms engaged on the making of carriages—nineteen acting as 'parent' firms and about eight as supporting contractors. In general, at the end of 1942 about eighteen groups of 'outside' firms were engaged on the making of guns and over forty on carriages. If the work of sub-contractors were counted, the total contribution of 'outside' firms to gun production, and most certainly to carriage production, must by that time have greatly exceeded that of the Royal Ordnance Factories and the private armament manufacturers put together.

The production of small arms illustrates even better the growing part of the non-specialised firms. Small arms production at the beginning of the war, the Bren machine gun for the Army, the Browning machine guns for aircraft, the Beza large-calibre automatic gun for armoured vehicles, the Vickers' machine gun for the R.A.F. and the Boys' anti-tank rifle, were being made by the Royal Small Arms Factory at Enfield or by private armament factories, mainly B.S.A. and Vickers-Armstrongs. The same is largely true of the early instalments of the various 20-mm. guns. The Hispano-Suiza gun which came into production in 1938 was mainly manufactured by the British Manufacture and Research Company and by other specialist armament factories including Royal Ordnance Factories specialising in small arms.In 1943 the British Manufacture and Research Company was responsible for forty-six percent of deliveries, a Royal Ordnance Factory specialising in small arms for about twenty-five percent, B.S.A. for twenty-six percent and the Royal Small Arms Factory, Enfield, for three percent.

None of the small arms introduced in later years—rifles being the only exception—could be ordered from specialised makers in the same proportion as the Browning machine guns or the Hispano-Suiza gun. When in 1940 the Admiralty introduced into production the Oerlikon 20-mm. gun, B.S.A. undertook to make the gun in its entirety. but although this firm from the very outset relied upon a large number of sub-contractors they were unable to cope with all the expanding orders, and the Admiralty was compelled to go outside the armament industry and to appoint several 'general' firms to act as


main assembly firms. At the same time the Admiralty placed orders for components with a large number of other 'outside' firms/. When the latest of all the 20-mm. guns—the Army's Polsten—came to be ordered, 'outside' firms were enlisted from the very beginning. By November 1941 when the requirements for the gun crystallised, the capacity of B.S.A. and the other specialised makers of small arms was fully loaded. The new gun was therefore specially designed to enable firms outside the range of specialised weapon-makers to undertake its manufacture. The early work on the gun was done by the Royal Small Arms Factory, Enfield, and by the Royal Ordnance Factory, Poole, but the main burden of production fell on 'outside' firms. Some of the latter undertook the main assembly, while a large number of other firms (some thirty-four by 1943) supplied comments. It was only in January 1943 that the tailing off of earlier orders enabled some of the Royal Ordnance Factories to accept a large order for Polsten guns. By that time, however, the old line of demarcation between munitions suitable and unsuitable for production by 'outside' firms had almost completely broken down.

So much for the specialisation of firms. The specialisation of equipment was a different matter. A fairly general use of special equipment was essential. In so far as it was in their power, the production directorates of the Service ministries fostered throughout the years of rearmament the widest possible use of specialised machinery and plant. From as early as 1934 the War Office based its plans for industrial potential on the expectation that it would be both possible and necessary to 'mass produce' a number of munitions by means of specialised plant and machinery. Needless to say, much of what the War Office wished to do in order to provide civilian firms with specialised equipment was bound to remain on paper. Yet even then a great deal was done to design or to help in designing many new types of munitions-making machinery. Some of the special machines were designed by the firms themselves, others by Government agencies; but whatever their authorship, ingenious and highly-specialised machines made their appearance both before and during the war. Thus there were special presses in the aircraft firms, there were new machines for the economical rifling of gun barrels, for the making of cartridges and shells, for small arms ammunition, for the machining of rotor blades of gas turbines, for cutting large and difficult gears, for the manufacture of fuses.

Indeed, in the making of some arms the use of specialised machines and tools was indispensable if they were to be made in any quantity. There was first of all the question of the size of machining operations. The boring of guns barrels, through in principle no different from any other boring operation, required machine capable of making holes


much longer and truer than those normally specified in general engineering practice. One of the reasons why markers of machinery for oilfields were at fist expected to participate in the making of gun barrels was that they were believed to possess the necessary equipment and experience in the 'long bores'. Yet, as it turned out, they too had to be provided with special equipment for the purposes. Similarly, the machining of the long spars of aircraft frames, the making of the larger gun forgings, the manipulation for the welding of medium and heavy tanks, all raised technical problems which were necessarily those of scale, i.e. of weight and size. For this reason alone munitions contracts necessitated the installation of special machine tools, hammers, presses and cradles.

The other peculiarity of weapon production which made it necessary to install special tools was higher precision. For as a rule, greater accuracy and precision were required in the manufacture of weapons than in the making of peacetime products. In the making of gun mechanisms or shell components, of fire-control gear or predictors, a degree of precision was expected which ordinary engineering tools could seldom achieve. In general, it was necessary to install machines and to use tools capable of working to much smaller tolerances than was customary in the engineering industry.

Even where special plant and machinery were no different in either design or construction from those employed in civilian industry, they were sometimes required in much larger quantities than in ordinary well-balanced engineering factories before the war. Thus, welding as a method of joining metal parts had been used in Britain for years before the war, but it did not become a common practice until it had to be generally used in war industry and, above all, in shipbuilding19 and in the making of gun carriages and tanks. With the extension of welding came also the need not only for welding equipment proper, but also for manipulating cradles and for plant for heat treatment. Simultaneously with the greater precision of machining operations came also a vast expansion in the use of high-speed tools and the consequent changes in the processes and equipment of tool-rooms.

Thus, a great deal of specialised equipment was bound to be installed, and it is not surprising that single-purpose tools and specialised plant of every kind should have been employed in greater numbers than before the war. Yet, in most firms, the general character of industrial equipment was not thereby radically changed. New and special machines were often grafted on to the more ordinary equipment of firms or, as the expression goes, the equipment of the firm was 'balanced' for arms production. A large proportion of the machine


tools supplied during the war were general-purpose tools: lathes and drills, or other types of unspecialised plant and machine tools used in engineering and other metalworking industries.

What is true of individual machines and plant is truer still of entire workshop units. Much of the specialised equipment was supplied (sometimes had to be supplied) in combined 'units', i.e. complements of machines making up in combination specialised and self-contained workshops In pre-war plans for rearmament and war potential, specialised 'units' figured very prominently. They were an obvious alternative to brand new factories since they made it possible to produce munitions en masse by means of special machines, while making use of the facilities of existing firms: their management, their technical experience and staffs, their tool-rooms.20

One of the most important instances of specialised equipment to be installed in the rearmament period was the shell-forging plant which produced shell bodies with finished cavities and thus obviated much internal machining. The plant was from the outset made up as a self-contained production 'unit', and was first erected at Stewarts & Lloyds—the firm which had developed the design in cooperation with the War Office. Almost all the subsequent expansion of shell-forging capacity, both at the 'parent' factory and elsewhere, was achieved by the installation of similar shell-forgoing units—some sixty-two were manufactured and forty-two installed in Great Britain by the end of the war.21 Integrated combinations of machines were also designed for the manufacture of cartridge cases and the machining of gun ammunition, and were installed in a wide range of private firms. The output of small arms ammunition, mechanical time fuses and cartridge cases came entirely from combined 'units' of specialised machines. When the decision was made in 1941 not to replace current 2-pounder production with 6-pounders, but to prepare instead for production of 6-pounders in large quantities in the near future, several factories were equipped with elaborate and highly-specialised 'units' of machine tools and plant capable of turning out the gun on well-night mass production lines.22 From some points of view, the installation required for the assembly of aircraft was made of in integrated 'units' of this kind. They consisted very largely of assembly jigs unsuited to any other type of aircraft  (hence the difficulty and delays in changing over to new types of aircraft).

Nevertheless, in the entire field of munitions self-contained factory 'units' equipped with specialised plant were far from being universal.


A large part of the output of munitions in this country came from factories which, whether large or small, were laid out as 'general' engineering shops, even thought they may have been strengthened or adapted by the addition of special equipment. Changes from civilian production to that of making weapons, and changes from one weapon to another, were to a large extent achieved not by the complete re-equipment of factories, but by the re-tooling of existing machines and by the addition of relatively few special machines to existing plant.


Inheritance and Necessity

The peculiarities of munitions manufacture—its dispersion and its unspecialised structure and equipment—may appear to perpetuate what have often been regarded as the congenital characteristics of British economy: its multiplicity of small firms and its predilection for traditional methods. The inherited elements in the make-up of war industry must not, however, be exaggerated or misunderstood. Broadly speaking, the dispersal of ownership and control among private firms and the reliance on small factory units were less congenital than the lack of specialisation. But even the latter was due more to the circumstances of Britain's war than to the inherited constitution of her economy.
No doubt, taken as a whole, British industry on the eve of war was less 'concentrated' than that of the United States, the U.S.S.R. of even Germany. Small firms, i.e. those employing fewer than 100 workers, were relatively more numerous in Great Britain. Diminutive firms, i.e. those employing less than ten wage-earners, were undoubtedly more numerous in Great Britain than in the United States and in the U.S.S.R., though, perhaps, not more so than in Germany. Large firms, i.e. those employing more than 1,000 workers and still more those employing more than 5,000 or 10,000 workers each, accounted for a smaller share of the national output in Great Britain than they did in the United States, the U.S.S.R. or Germany. Although some of the world's greatest combines were formed in Great Britain and operated from London, industrial combinations (as distinct from trade associations) did not play as important a part in the national economy as that played by the great American firms or German cartels. It is, therefore, only too easy to see a connection between the comparatively 'unconcentrated' structure of British industry in peacetime


and the greater dispersal of ownership and the smaller size of factory units in wartime industry.

Some connection there certainly was; yet it is not obvious as it might at first sight appear. In the industries which bore the main brunt of war production, the metalworking, machine-building and electrical industries of every kind, international differences in structure were not as great as in other branches of production. These industries harboured large numbers of small firms in all countries. In them, side by side with relatively few vast manufacturing enterprises, such as the great motor manufacturing concerns or the main electrical manufacturers, small workshops continued to play an important part. Some of them found a natural function in the work of repair and maintenance which invariably develops around every industry producing complicated machines and implements. But large numbers of small firms were also to be found at the manufacturing end and were to some extent sustained by sub-contracts from their greater brethren. With one or two famous exception, American motor firms, like their opposite numbers in this country, manufacture a relatively small proportion of their components and devoted themselves mainly to the assembly of cars. to some extent this was also true of the large machine-making firms who obtained castings, forgings, tubes, bolts and nuts and even more complicated components from firms much smaller than themselves. The proportion of smaller firms 'tied' to large firms, i.e. earmarking their entire output to a single large customer may have been much greater in the United States than in Great Britain. But whether 'captive' or 'free' small firms found it possible to survive in large numbers in metalworking industries in both countries. (See Tables 54 and 55).

Average number of wage-earners per establishment23



In the United Kingdom (1935)
In the United States (1939)

All establishments
Establishments employing more than ten wage-earners
All establishments
Establishments employing more than five wage-earners
Engineering, shipbuilding and vehicle trades
Iron and steel trades excluding blast furnaces, iron and steel smelting and rolling
Non-ferrous metals trades


Percentage of total number of wage-earners in establishments employing24


Less than 101
101 to 500
501 to 1,000
Over 1,000

U.S. U.K.
U.S. U.K.
(1,000 and over)

Engineering, shipbuilding and vehicle trades
Iron and steel trades, excluding blast furnaces, iron and steel smelting and rolling
Non-ferrous metals trades

It is thus impossible to hold the British industrial structure before the war wholly responsible for the relatively greater dispersion of the British munitions industry in war, or for the employment of the many small factory units. Had the British munitions industry enjoyed the necessary breathing space and been able to deploy itself, so to speak, at leisure, it might have contained a much larger proportion of great newly-created plants à l'americaine and a much larger proportion of its output would have come off mass production lines. The leisure, however, was not given. To repeat again—in Britain the necessities of industrial mobilisation during the war did not allow sufficient time for building-up the munitions industry anew. Industrial capacity had to be taken where found, and as much of the existing equipment as possible had to be utilised for immediate purposes of production.

In addition, there was also the policy of dispersal to meet the bombing attack. It has already been shown that the dispersal units originally intended as reserves and as safe retreats for 'parent' firms bombed out of their main premises were eventually taken over and fully occupied even when the main premises still stood undamaged and intact.25 A great deal of additional capacity was thus created in most branches of war industry, but mainly in those engaged in aircraft production. But although much additional floor space was thus made available it was often made up of small and even diminutive units. Thus, in 1943, at the end of the German bombing, B.S.a. found themselves operating, in addition to their main factories, some thirty-five dispersal units.26 The average size of the units was bound to be much smaller than that of the firm's main 'parent' factories.


The same exigencies of time and the effects of enemy attacks also prevented greater development and use of specialised equipment. Even if the conditions of war had been more suitable to specialised industry, the shortage of dollars would have made it difficult to build up a munitions industry, the shortage of dollars would have made it difficult to build up a munitions industry as highly capitalised and specialised as that of the United States. But so some extent differences of industrial methods in this country and the United States were bound to assert themselves in this respect.

It is common knowledge that before the war American firms specialised more than their British counterparts and that the tendency to specialise reached down to the smallest manufacturer. It has already been mentioned that in the United States a great proportion of small firms were tied to large customers and were thus producing a limited number of components.27 But even where firms were not thus 'tied' there was a general tendency among them to confine themselves to a narrow range of products. In a branch of metalworking industry least suited to specialisation, the 'jobbing' founders, which by definition are expected to work for the open market to customers' specifications, firms tried as far as possible to make large batches of uniform products. In the 'jobbing' branch of the drop-forging and stamping trades, most shops restricted their activities to no more than about half a dozen types of components. A recent report cites an example of a medium-sized factory employing about 600 people engaged all through the year almost exclusively on pressing backing plates for car brakes.28 Other factories may not have reached the same degree of specialisation and standardisation, but even the smallest among them refused to set their presses for short-run batches. As a result, the whole organisation of the workshops, indeed the very composition of the labour force, was different.29

That in Great Britain the average contractor and sub-contractor managed their affairs differently is undeniable. British firms both large and small were much less specialised; their products were more diversified; and they were prepared to produce a far wider range


of measurements and designs. And for this the material conditions of British economy were largely responsible. In the United States a large internal market with a relatively uniform demand made it possible to standardise production and to reduce in every industry the number of variations in designers' specifications. In Britain the domestic demand was both smaller and less uniform. What is more, a number of industries and, above all, the metalworking industries produced to a large extent for export and had to cater for a great variety of needs in different parts of the world. The opportunities for standardised output and specialisation were correspondingly smaller.

This congenital lack of specialisation could not be done away with in the few years of rearmament and war. It has been shown that where specialised equipment was absolutely essential, as in the manufacture of ammunition, it was created and the necessary delays were accepted. For the rest, the urgent enlistment of a multitude of firms, particularly in the later stages of the war, meant that the equipment and the methods of pre-war industry were in the main carried over into war production.

So much for the inheritance. Whether inherited or imposed by the conditions of war, the structure of British war industry undoubtedly differed from that of the United States. It may have differed even more from that of the U.S.S.R. where both before and during the war, indeed even before the Revolution, the average size of industrial undertakings was very large by Western standards. Whether British war industry was more dispersed and less specialised than German war industry is difficult to say. It is, however, probably that after 1943, as a result of Speer's reorganisation and in response to Allied bombing, Germany's vast reserves of domestic and handicraft industries were more fully drawn upon.

Did British war production suffer from its dispersed structure and less specialised structure? The disadvantages of small-scale enterprise and unstandardised production are well known, and have of later years received great publicity. Small firms could not afford sufficient facilities for experiment, design and development; very few were adapted to quantity manufacture. Though some undertakings were as efficient as the best anywhere, a large number of firms in the engineering and allied industries fought shy of the methods of more modern large-scale industry and did not fully master the more advanced arts of modern management, such as the scientific organisation of the 'production line', the economical 'break-up' of operations, or even efficient cost-accountancy and store-keeping. Before rearmament the arts of modern management were strange even to some of the aircraft firms. The early records of aircraft production abound with examples of stubbornly persisting small-workshop methods. It is therefore all


the more remarkable that by the end of the war the efficiency of some British aircraft factories, measured in labour costs per unit of production, should have risen to equal that of comparable American factories. In those few cases where a type happened to be in production for a long enough period in quantities sufficient to bring about the economies of large-scale production (i.e. where weekly output was twenty to thirty bombers or fifty to sixty fighters) costs per airframe in man-hours were probably about the same as in factories of the same size in the United States.30

If, nevertheless, the average cost of aircraft, taking the output as a whole, was in the later stages of the war much higher in Britain than in the United States, this was probably due to the differences in the scale of production and in the size of average factory units. Arguing from what is known of the average size of American and British factories and from what can be assumed and has been observed about the economies of quantity production of airframes, some authorities have concluded that the American output could be expected to be (and probably was) half as costly in man-hours per aircraft as the British.31

Unfortunately similar comparisons for war industry as a whole are difficult to draw. The artificial rate of exchange between the pound and the dollar make purely monetary comparisons between British and American costs meaningless. The differences in the design of weapons and in methods of manufacture make it equally difficult to compare costs in terms of man-hours. Conclusions about comparative costs of most American and British weapons can therefore be no more than impressions. Such impressions as can be formed suggest that in some branches of munitions industry real costs in the United States were considerably lower than in Britain. On the other hand, it is by no means certain that there was much difference in costs in the manufacture of gun ammunition or small arms ammunition—two fields in which specialised capacity predominated in both countries. And it is certain that British ships cost less per ton of weight than the American. The ingenious method of prefabrication and sub-assembly which Mr. Kaiser introduced into the manufacture of shops made it possible to produce large numbers of cargo vessels, but they turned out to be very costly.

The relevant comparison, however, is not between American and British costs, but between the cost in Britain of weapons produced by traditional methods and the cost of weapons turned out en masse from new and specialised plant. But here again exact measurements are


impossible. Comparison in costs in different war-stores are beside the point; while in comparing costs of the same war-store it is difficult to find instances of the same store being made in specialised mass-producing factories and in factories not thus equipped. In general, the economies of mass production, when they happened to be introduced, were only too obvious. Measure in man-hours and machine hours the cost of shell bodies manufactured by the new mechanised forging methods and machined on the specialised equipment was considerably below that of shell bodies produced during the war of 1914–18 even though the shells now had to be made to much finer tolerances; the 6-pounder production in highly-specialised and elaborately-equipped factories was much more economical than that of any other gun of comparable complexity; and the cheapness of the Ste gun, which was designed for mass production, became a byword. It has also been shown that at two British factories producing the same aircraft with very similar equipment and tools, the one producing about fifteen aircraft per week took about twice as many man-hours per airframe as the one producing fifty-five per week.32

Yet economy in production, even in terms of labour, is not the only, or even the chief, yardstick of industrial efficiency in time of war. Even if it could be shown that some of the British methods of war production brought with them the disadvantages of high real cots, these disadvantages might still have been worth accepting for the same of countervailing advantages. And the main countervailing advantage of the British industrial layout was readiness.

In the early stages of industrial mobilisation, i.e. between 1938 and 1940, the speed of rearmament was all-important. What the situation demanded, and what the Government and the public expected from industry, were quick and immediate returns. Ability to get off the mark without much delay was often prized beyond all industrial virtues. Readiness became even more important after 1940. Britain was in the front line of battle and in that position the ability of industry to respond to military demands with the least possible delay was more essential than ever. From this point of view, the smaller scale and the less elaborate equipment of the average British manufacturing unit was in itself a blessing in disguise. It may not have brought the peak rates of production to levels as high as those in the United States, but it often made it possible not only to achieve a quick start of deliveries, but also to complete the full requirements earlier than would have been possible with a more carefully planned layout.

In general, British industry, equipped as it was largely with general tools, staffed with men trained to tackle manufacturing tasks of great


variety, was well adapted to respond to the urgent and fluctuating demands of war. It was highly elastic, and elasticity meant ability to meet demands which fluctuated not only in quantity but also in kind. The war industry was constantly called upon to improve the quality of weapons, to introduce new weapons and, above all, to make modifications in the old. Throughout the war the designs of most standard weapons were being continually altered. There were forty-one 'marks' of the Merlin engine, twenty 'marks' of the Spitfire, eleven 'marks' of the Churchill tank; but these and most other weapons were also subjected to a host of modifications and variations too small and piecemeal to deserve the status of a 'mark'. When modifications were so frequent, methods of mass production in elaborate production lines, equipped with special-purpose tools, lost much of their value.33 True enough, the Americans, with their great experience in mass production and their vast machine-making resources, were often able to equip large manufacturing units for the mass production of weapons in less time than it sometimes too to adapt or to 'balance' existing factories in this country. But again, the relevant comparison is between specialised and unspecialised factories in this country; and here it remains true that the less specialised factories with their simpler equipment found it easier to introduce modifications and to change over from one type or mark of weapon to another than factories elaborately equipped for mass production. Thus, the factory, which Ford's equipped for the production of Merlin engines on mass production lines and managed throughout the war, succeeded in producing the single-stage Merlin engines more cheaply and more rapidly than the factories of Rolls-Royce themselves. But, unlike the Rolls-Royce works at Derby, they were unable to change over to the two-stage marks of the Merlin without a complete re-equipment of the machining and assembly shops.


Sub-division of Production and 'Free Issues'

The corollary of an industrial structure as dispersed as the British was what, for want of a better term, might be called the division and sub-division of production. Production of war-stores could be shared in two ways, by dividing responsibility for the making of the final product and by 'farming out' the production of parts and components. Where a single firm was too small or too preoccupied to shoulder responsibility for the entire output of a weapon, the obvious remedy


lay in distributing the contracts among a number of firms.34 This was also desirable as an insurance against bombing. Throughout the years of rearmament and war the division of orders among several manufacturers was a rule to which there were few exceptions.

The second method of dividing the manufacture of weapons was for some firms to act as 'main manufacturers' and by given contracts for the assembly of complete weapons, while other firms made parts or components. It is this form of sub-division that is commonly termed 'sub-contracting'. It was the normal habit of most firms to 'buy out', i.e. to sub-contract, parts, components and accessories, and facilities for sub-contracting were accordingly great. In the Midlands, the North-West and the Clyde the conglomeration of sub-contracting firms had before the war become one of Britain's most competitive advantages, or to use the jargon of textbooks one of the 'external economies' of her industry. Although production in smaller engineering workshops was less standardised than in the United States, many of them owed their survival to their concentration on separate engineering processes. Thereby the makers of industrial goods were relieved of the necessity of providing themselves with facilities for all the ancillary stages of production. Moreover, in the regions in which the engineering industries conglomerated, sub-contractors were so numerous that ancillary operations were performed at highly competitive prices.

How considerable these economies were is illustrated by the example of a well-known electrical firm in the North-East which in the last stages of the war was considering a plan for establishing an up-to-date factory of electrical appliances capable of producing all the parts and components of the finished articles. But even before its plans matured it discovered that, however efficient and up-to-date its plant, it could not compete with much smaller and more modestly equipped manufacturers in the Midlands who merely assembled parts manufactured for them by sub-contractors.

The economies of sub-contracting were sufficiently great to sustain the system through the booms and depressions of the inter-war years. How deeply ingrained it then became is illustrated by another example of sub-contracting. Some time before rearmament had begun the Engineer-in-Chief of the Fleet discovered that a firm in the Midlands was the sole maker of some very large forgings much needed in the manufacture of certain armament. The firm was very competent, though small, but it had become the only repository of the necessary technique and equipment. The Engineer-in-Chief therefore rightly concluded that safety demanded that similar facilities should be developed elsewhere. Orders for similar forgings,


or orders embodying them, were placed with several large firms, including one or two famous makers of armaments. It is easy to imagine the Engineer-in-Chief's surprise and disappointment some months later when he discovered that the same Midlands firm, acting as sub-contractors, was busy making the very forgings which had been ordered from the larger firms for their education.

This being the habit of general industry, sub-contracting was bound to establish itself in the munitions industry from the very beginning of rearmament. The contracting departments of the three Services tried to secure the highest possible degree of sub-contracting, and in some cases contracts were negotiated with the understanding that a great deal of the work would be sub-contracted.35 But, on the whole, the tendency to divide and sub-divide manufacture, and above all to separate the final assembly from the sub-assembly and from the manufacture of parts, became more pronounced as the war progressed and the circle of main contractors widened. The making of 3.7-inch anti-aircraft guns and of the early batches of Bofors guns could still be entrusted to factories manufacturing weapons in their entirety; but the manufacture of guns in later years, e.g. 6-pounder and 17-pounder tank and anti-tank guns, had to be split among a large number of contractors. In addition, the contractors themselves sub-contracted the essential components or relied upon the supply departments to provide them. The same is true of tanks. The facilities of Vickers-Armstrongs enabled them to make most, though by no means all, the components of the Valentine tank. But many of the firms subsequently employed on tank manufacture limited their work to final assembly only, though Leyland Motors, Nuffield and Vauxhall. Motors were notable exceptions. The contracts for the cruiser tanks—the crusader, the Covenanter and the Cromwell—were divided among several heavy engineering and locomotive firms, many of which were responsible only for the final assembly of the tank.

A still better instance of the growing important of sub-division and of sub-contracting will perhaps by found in the story of small arms, summarised elsewhere in this chapter.36 The story is essentially one of production shared by a large number of firms; but it also exhibits the ever-growing reliance on sub-contracting. The largest of the early contracts for small arms—those for the Browning machine gun placed by the Air Ministry in 1935—was to be carried out more or less wholly by B.S.A. and Vickers-Armstrong; each of a self-contained firm if ever there was one. But when in 1939 vast new orders for the Browning machine gun appeared imminent, B.S.A., the principal makers of


the weapon, had to adopt a different system. They built a new factory devoted mainly to the assembly of components: the latter were to be sub-contracted to a large number of 'outside' firms. Still more extensive had to be the sharing of contracts and sub-contracting in the manufacture of the Admiralty's 20-mm. gun—the Oerlikon—which began in 1940. B.S.A. were the principal contractors, but had to enrol some forty-three firms all over Britain as sub-contractors.37 A similar system was adopted in the making of the latest of the 20-mm. guns—the Army's Polsten.

Sub-division and sub-contracting became a habit and necessity. Without it a large number of firms brought into war industry could not have been woven into the general system of armament orders. By the middle of the war sub-contracting had become not only extensive but also highly complicated. Firms which acted as main contractors for some finished weapons also manufactured parts and components for other contractors. How complicated and circular the system could occasionally be is shown by an instance of a Vauxhall sub-contract described in full in the firm's own history.38 A firm undertook to supply Vauxhalls with a certain component of the Churchill tank. Being intended for a big and heavy armoured vehicle, the component  required a very large and heavy casing which turned out to be beyond the unaided powers of the sub-contracting firm. The first firm therefore sub-contracted the casing to a second firm. This firm in its turn found it necessary to look for someone to help it in carrying out its undertaking, so it sub-contracted a part of the work to Vauxhalls.39

It has already been indicated40 the subcontracting components was not the only method of freeing manufacturers of finished munitions from the necessity of producing their own components or fabricated materials. The most important alternative method was that of 'free issue' or 'embodiment loan'. Supply departments often took it upon themselves to find the necessary productive capacity for parts and components, and ordered them on their own account. Components thus orders were then issued to manufacturers for embodiment into the main weapon (hence the term 'embodiment loan').

In the early years of rearmament it would have been difficult to find a clear principle or policy behind the distinction between components


ordered directly by the Government and the components left to private arrangements between main contractors and their sub-contractors. Most of the components on 'free issue' in aircraft production and in naval construction were either large and complicated, or were in the nature of 'equipment', i.e. detachable and largely independent installations. Thus, naval guns, aircraft engines, propellers and turrets—all large and complicated equipment—were as a rule supplied as 'free issues' or 'embodiment loans'. So were also instruments of every kind. Yet this distinction was not observed consistently. Undercarriages—a highly complex and substantial part of an aircraft contractors' so also were pumping and lifting gear of every kind and a great deal of the electrical installation on naval vessels.

Quite different considerations in fact prompted government departments in later years to assume responsibility for the ordering of components. Standardised items of equipment lent themselves well to centralised ordering and to distribution by 'free issue'. In aircraft production 'free issues' helped to standardise components and were often used with that object in view. This, however, was not the sole explanation of the growing importance of 'free issues'. Where the components happened to be designed wholly or mainly in the supply departments or in their research establishments, e.g. radio equipment and most of the armament in aircraft and ships, the department as a rule ordered and supplied them as 'free issues'. Parts and components received from the United States could be most conveniently supplied in the same way. Similarly it was convenient to treat as 'free issues' components which were also being ordered for the Service departments—the Air Ministry of War Office—to be used in army units or air squadrons as spares and replacements. What frequently involved government departments in the ordering and distribution of components of shortages, more especially shortages which called into play the Government's powers of allocation and distribution. When supplies of materials and components used by more than one firm or even by more than one industry, such as ball-bearings, became 'difficulty', i.e. actually in short supply or insufficient for projected expansion of programmes, government departments stepped in so as to ensure that priorities were observed, and that the new provisions were sufficient. The need for allocating supplies led to decisions to 'plan' them, and the planning of supplies of difficult components often led to 'free issue'.

In the early years of rearmament it would have been difficult to find a clear principle of policy behind the distinction between components


reasons of efficiency and economy.41 If offered obvious economies and conveniences of bulk buying and issue; it promised to rationalise the distribution of orders of components and to prevent the overloading of some firms and under-employment of others. Above all, it offered a remedy against the evils of cross traffic. When B.S.A. found themselves employing, on the production of the Browning gun, sub-contractors as far apart as Dowlais in Wales, Crawley in Sussex and Glasgow in Scotland, this may well have appeared to them as something of an achievement. But to the supply departments the scattering of sub-contracts over the face of Great Britain inevitably spelt endless complications and delays, additional difficulties of inspection and unnecessary loads of the transport system.

The tendency on the part of the supply departments to introduce 'free issues' wherever possible was, therefore, more or less inevitable. Equally inevitable was the opposition from some firms. A great aero-engine firm or an old and famous armament firm could argue that it was linked with its sub-contractors by years of commercial collaboration; that it and its sub-contractors knew each other's methods and requirements and therefore spared each other a great deal of effort and time. To interfere with mutual relation so reliable would, it was argued, only add to the waste and confusion of wartime industry.

Opposition on this issue did not, however, flare up into real conflict. Neither side pushed the arguments to any length. No private firm objected to 'free issues' in principle. Some of the firms which were most anxious to protected their relationships with sub-contractors from Government interference were in fact receiving most fabricated materials and some components as 'free issues'. At one point the clearing banks suggested that a system of universal 'free issues' embracing the bulk of materials, parts and components might assuage industry's need of circulating capital.42 But the supply departments were not greatly influenced by the purely financial advantages of 'free issues' In general they never contemplated recasting industry by centralising the supply of components. In 1942 the Federation of British Industries expressed their objections to the threat of a greatly extended system of 'free issues', but the threat was unreal. Neither then nor at any later time was there any danger of a wholesale replacement of private sub-contractors by Government orders of parts and components. It was not the habit of the British Government in wartime to work cut-and-dried principle of industrial organisation, still less to force them upon the resistant body of British industry.




With the division and sub-division of production among many firms, some form of integration was a necessity if the disadvantages of a dispersed industrial structure were to be avoided. The supply departments themselves could, of course, be relied upon to coordinate the activities of the many thousands of their contractors and to prevent too great a waste of effort as a result of the division and sub-division of orders. But an obvious corollary of sub-division was the grouping of firms to ensure that all firms sharing the manufacture of the same weapons obtained the necessary knowledge of techniques and supplies of drawings, tools and materials. This was as a rule necessary even when the firms happened to be large. An occasional exception was sometimes provided by Royal Ordnance Factories or armament factories engaged on the execution of very large-scale orders, but even they sometimes found it advantageous to join groups.

There were two main types of group organisations for munitions production corresponding to the two main methods of dividing production. Where the production of complete munitions was distributed among several main contractors, the group (let us call it a 'quantity group') consisted of the firms responsible for the final manufacture of a store. Where in addition the supply department also sub-divided the production, i.e. issued direct contracts for the manufacture of sub-assemblies as well as for the final assembly, the group (let us call it as 'process group') consisted of both the final assemblers and the sub-assembly firms. Here separate groups might sometimes by formed by each final assembler and his sub-assemblers, or one group might combine all the final assemblers and sub-assemblers. It should, however, be noted that the group system was necessary only where production was divided between separate firms. A large part of aircraft production came from factories or subsidiaries controlled by the same commercial firm, e.g. Vickers-Armstrongs or Hawker-Siddeley, and in these cases coordination between individual factories could be left to the headquarters of the combines.

In the first type of group a special position was occupied by the 'parent' firm. In an aircraft or tank group the 'parent' firm was usually the firm which had produced the design, but where it happened that the designing firm did not share in the production, another firm could be nominated as 'production parent'. Usually, the 'parent' firm was called upon to provide other firms in the group


with drawings and, in some instances, with jigs and tools. In addition, it often assumed responsibilities for the distribution of materials and components. As the group system became more widely adopted here occurred frequent instances in which 'parental' functions were divided among several firms. Thus the responsibility for jigs and tools might be undertaken by one of the members, or by several members each working out a particular technique. Possible variations in the distribution of responsibility within a group were considerable..

Both types of group organisations were established in the rearmament period, but their numbers and activities were considerably increased under war conditions. The earliest group was set up to bring together the five firms which shared in the manufacture of Bristol engines—the first engine 'shadow' scheme started in 1936 under the leadership of the Austin Motor Company. This group was of the second type, i.e. a 'process group', since only two of the firms thus grouped undertook final assembly; the other three were engaged on major sub-assembly. The earliest grouping for the War Office programme was for the 18/25-pounder gun conversion scheme, which by 1937 had led to the formation of two groups. The beginnings of the group system in tanks may be traced back to 1937 when four firms undertook the production of light tanks under the 'parentage' of Vickers-Armstrongs.

Apart from the tank group, these early combinations were 'process groups', and as a rule came into existence without a formal constitution. Thus the two groups formed in 1937 for the 18/25-pounder gun conversion had no formal organisation, even though they were to have a long life. Tank groups were not formally organised as such until 1939. On the other hand, 'quantity groups' combining major manufacturers of the same weapons were usually the outcome of deliberate policy and often appeared on the initiative of the supply departments.

The first, and indeed the major, examples of 'quantity groups' thus formed were the aircraft production groups established in 1939. The idea appears to have germinated at the Air Ministry and it emerged officially at the end of 1938 when production planning of a new programme had to be considered. This meant introducing a limited number of new types of aircraft and dividing the total production of each type between several firms. For this a group system was considered essential. It offered the best means whereby the designing firm could establish satisfactory relations with the other firms and could help in securing efficient standards of technique and equipment. In January 1939 three groups were formed for new bomber types and three for new bomber types. The Stirling and Halifax groups were headed by the designing firm, with the addition of the Rootes and Austin 'shadows' in the first, and English Electric


in the second.43 The Manchester group was more complex; it had A. V. Roe as the designing firm and Armstrong-Whitworth and Metropolitan-Vickers as the other producers. Some opposition to the idea was at first expected because some designing firms were to be asked to undertake production of aircraft designed by other firms. But, in the event, the firms accepted the new situation and loyally contributed the resources of the groups.

The official initiative in the formation of these aircraft groups showed itself in their organisation. In the early stages each group was administered by a committee of the firms presided over by the Director General of Production at the Air Ministry, and was served by a secretary and finance member from that Ministry. Sub-committees, with officials sitting on them, looked after management problems, jigs and tools and sub-contracting. It appears however that the Ministry did not intend to take a prominent part beyond the early stages. Very few meetings of the committees were in fact held, and by the outbreak of war each group came to be centred on 'parent' firms and to be administered from their works. Officials still attended the meetings of the groups, but no longer directed them.

In the initial stages of production, groups mainly concerned themselves with design problems. The 'parent' firm undertook to supply drawings to the other members of the group. Usually the designing firm had a Ministry contract which gave it the authority and imposed on it the obligation to give technical assistance to the other firms. At this stage firms also shared information and ideas about jigs and tools. As production passed out of its early stages, the group organisation mainly occupied itself with the purchase and allocation of materials. In addition, there were the problems of modifications and of the production of spares.

The organisation of groups for tank production was on very similar lines to that for aircraft. Tank production groups were in some ways more important as they included all the firms engaged on tank assembly. In consequence, the entire industry engaged on the final manufacture of tanks honeycombed with groups. The head of the group was 'production parent', but the 'parent' was not always the firm that designed the tank, and its functions might vary from group to group. The general tendency was to entrust the 'parent' firm with as much as possible of the ordering and progressing of components and materials even though the Ministry to an increasing extent took upon itself the responsibility for these supplies.

As mentioned above the earliest group was formed by the four firms which with Vickers-Armstrongs undertook production of light tanks in 1937, but the real formation of tank groups came in 1939 and


1940 with the great increase in the number of firms engaged on tank assembly. The largest groups were for the Churchill with eleven firms headed by Vauxhall Motors, and for the Crusader with nine firms headed by Nuffield Mechanizations. Many firms were, of course, in more than one group. In 1943 some twenty-seven firms 'made up' eight groups with a membership of forty-two. Within each group firms of every type were to be found. In the 'Churchill' group there were three motor firms, four railway carriage and wagon builders, a locomotive builder, a shipbuilding firm and two engineering firms.

The group system also pervaded the production of guns and carriages during the war. Some form of group organisation was set up for all gun and carriage production except where it happened to be entirely in the hands of R.O.F.s and the armament firms. In general, the more elaborate was the division and sub-divisions of production, the more necessary was it to combine firms into groups. As already noted, the conversion of 18 to 25-pounder guns from 1937 in the hands of two groups of firms,44 but as a formal organisation was lacking it was left to the Ministry to coordinated the supply of materials and 'free issues'. The first formal group for gun production was that formed in July 1940 for the 2-pounder. 'Outside' firms had been employed on the gun since April 1939, and with the introduction of bulk purchase of materials and with the growing need for greater output, production committees and group organisation had to be formed. For the 6-pounder a group committee, introduced in February 1941 at an early stage in production, undertook the rationalisation of production by adopting that highly elaborate division of processes which became the feature of 6-pounder gun production. For 17-pounder production, a similar committee was formed early in 1942.45

The production of these three types of guns was sub-divided into major stages, sub-assemblies, for which direct contracts were issued. The groups were therefore of a 'process' type, and the members of the committees were the contractors for the main sections of production—barrels, breech rings and mechanisms and the final assembly.

In carriage production 'outside' firms had a much greater share than in gun production.46 In consequence, production committees and group organisations were established for almost every type of carriage and mounting. Two groups were formed in 1940 (25-pounder


carriage and 40-mm. platform), two in 1941 (40-mm. mounting and 6-pounder carriage), and two in 1942 (2-pounder and 17-pounder carriages). The carriage production committee members were confined to the final assemblers of the carriages; the firms engaged on major sub-assemblies were not included. Such 'process grouping' as there had to be was informal and was run separately by final assembly firms.47 The supply of maintenance spares became a serious problem in carriage production and for several types of carriage the capacity for the production of spares had to be organised by a special sub-committee of the production group.

The administration of each production committee was a considerable task and, apart from one committee administered by an R.O.F., the work was undertaken by one of the 'outside' firms in the group. This method of administration relived the production directorates in the Ministry of much detailed coordination and introduced a form of decentralisation and self-government welcomed by the firms. But the main contribution of the firms went much further than mere improvement in administration. The 'process groups' succeeded in coordinating production to a degree which could otherwise have been achieved only in large-scale production with highly-specialised technical services.

Groups were extensively used for airframe, tank, gun and carriage production and, by the Admiralty, in the production of landing craft and small naval vessels. But groups also occurred in other fields. Whenever production methods had to be coordinated, or a complex division of resources had to be introduced, a committee of firms was established. Some of these coordinating committees were concerned with semi-finished materials, and at least two of them—the gun-forging committee and the drop-forging committee—gave outstanding service. In general, various forms of industrial collaboration became a marked characteristic of British war production.

The group system as such did not concern itself with the enlistment of small firms. In the aircraft and tank groups the members were mainly large firms. This does not, however, mean that small firms always remained unorganised or unaided except as sub-contractors to a main contractor. In some instances small firms formed themselves into commercial groupings and collectively undertook direct contracts from production departments. This, however, was not the only method of bringing such firms together. Two examples of other


methods were provided by the Civilian Repair Organisation by which the activities of hundreds of small firms engaged on aircraft repair were coordinated by a motor vehicles manufacturing organisation,48 and by the administration by football pool promoters of the supply and distribution of spare components for shell fuses manufactured by small firms. There was also some machinery for cooperation among small firms which was mainly concerned with plant and machine tools. Thus much help was given in securing an even supply of small tools by the 'Mutual Aid' scheme. Under that scheme meetings and contacts were organised in each region for users of small tools who were willing to exchange stocks of small tools to meet current demands.

In general, mutual assistance was often made available to firms which were not necessarily members of an organised group or employed in making the same munitions. It was a marked feature of British war production that cooperation and mutual assistance developed to a high degree, not only between friendly firms or forms in the same trade organisation, but also between firms which had not hitherto worked together or had even competed against each other.


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1 See pp. 405406.

2 The figures are based on the United States War Department's classification of contractors.

3 See pp. 318319.

4 In the Air Ministry a Directorate of Sub-contracts was appointed in November 1938.

5 See p. 264.

6 See E. Mensforth, Airframe Production, Proc.I.Mech.E., Vol. 156, No. 1, 1947, pp. 28 and 36.

7 Some 14,000 engineering works (other than garages) were engaged on contracts for M.A.P at the peak of aircraft production.

8 The committee consisted of Lord Weir, Sir James Lithgow and Sir Arthur Balfour.Its report of February 1934.

9 See Contribution to Victory: An account of some of the special work of the Metropolitan-Vickers Electric Co. Ltd. in the Second World War, 1947, p. 191.

10 See D. M. Ward, The Other Battle: A history of the Birmingham Small Arms Co. Ltd., 1946, pp. 68–72.

11 Second interim report, dated 22nd November 1918. See Cmd. 229, March 1919. Report of the Committee of Enquiry into the Royal Ordnance Factories, Woolwich, p. 8.

12 See p. 392.

13 See pp. 299 and 397.

14 See pp. 2122, 319320; also pp. 435436.

15 See p. 22.

16 See E. Mensforth, Airframe Production, Proc.I.Mech.E., op. cit., p. 26.

17 See E. Devons, Planning in Practice, Essays in Aircraft Planning in War-time (Camb. Univ. Press, 1950), p. 150.

18 Unlike guns the manufacture of gun carriages and mountings was considered better suited to 'outside' firms. From the very outset there was a division of labour by which the various Royal Ordnance Factories and armament firms made the gun barrels and mechanisms while 'outside' firms made mountings and carriages. Among the new Royal Ordnance Factories Nottingham alone was planned to make complete equipments. The bulk of the gun output depended on carriages and mountings made 'outside': thus in the rearmament plans of 1937–38 the Royal Ordnance Factories were assigned approximately one-quarter of the total output of carriages.

19 See p. 297.

20 This was the policy of the Armament Supply Committee of the Supply Board from before 1934: then and as adopted later, it was mainly intended to apply completely to certain types of munitions, particularly to shell production.

21 See p. 43 and An Industrial War Record: A Review of Activities of Stewarts & Lloyds Ltd., 1939–45, p. 29.

22 See p. 194.

23 Details explaining the composition of Tables 54 and 55 are given in Appendix 6.

24 Details explaining the composition of Tables 54 and 55 are given in Appendix 6.

25 See p. 165.

26 See The Other Battle, op. cit.p. 78.

27 See p. 405.

28 See Report of the Pressed Metal Productivity Team, Anglo-American Council on Productivity, July 1950, p. 4.

29A British mission, report on American industrial methods, recorded that even in such a diversified trade as that of drop forgings the very meaning of the word 'skill' differed from the British. It meant deftness and agility in a repetitive and highly-specialised operation. At one forge a 'skilled' hammer-man was employed for two years in forging crankshafts of the same standard size and design (See Report of the Drop Forging Productivity Team, Anglo-American Council on Productivity, April 1950, p. 46). The insistence on specialisation was partly the result of ingrained habits of the manufacturing classes. the small American sub-contractor was able to standardise and to specialise because his client—a cost-conscious manufacturer—was prepared to take highly-standardised components in large quantities. A recent British report refers to numerous examples of pressing-shops in the United States in which a press-run lasting possibly three of four weeks produced pressings sufficient for a year's needs of a contractor. (See Report of Pressed Metal Productivity Team, op. cit., p. 4).

30 See E. Mensforth, Airframe Production, Proc.I.Mech.E. op. cit., p. 36. The argument assumes that in aircraft, differences of design were not such as to prevent comparison.

31 See E. Mensforth, op. cit.; T. P. Wright, Factors Affecting Costs of Airplanes, Jl. Aeronautical Sciences, Vol. 3, 1936, p. 122 and the Wilbur Wright lecture, T. P. Wright, Aviation's Place in Civilisation, Jl. Roy. Aeronautical Soc., Vol. 49, 1945, p. 239.

32 See E. Mensforth, op. cit., p. 36.

33 See p. 342.

34 An important reason for the division of orders in the pre-war programmes was the needs for educating several firms as 'war potential' capacity.

35 A reference to the Directorate of Sub-contracts in the Air Ministry was made on p. 390.

36 See pp. 400401.

37 See The Other Battle, op. cit., pp. 175–77. Later several other firms—engineering establishments of high repute but without previous experience of the manufacture of weapons—had to be invited to share with B.S.A. the responsibility for final assembly.

38 W. J. Seymour, An Account of our Stewardship, 1947, p. 83.

39 For a similar instance in the sub-contracting of the Lancaster bomber see E. Devons, Planning in Practice, op. cit., p. 114, footnote 1.

40 See p. 411.

41 See E. Devons, Planning in Practice, op. cit., Chapter IV: Planning the supply of components.

42 See, The Banker, Vol. LIX, No. 188, September 1941.

43 For the later expansion in the membership of the Halifax group see p. 398.

44 See p. 418.

45 An unusual feature of the group committee for 17-pounder gun production was the grouping together of Royal Ordnance Factories and 'outside' firms. The chairman was from the Royal Ordnance Factories and the coordination of raw material supplies was undertaken by the ordnance factory organisation.

46 See p. 399n.

47 As with guns the R.O.F.s were included in some of the carriage production groups.

48 See p. 319.

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