Chapter 10

POST-WAR RECOVERY

It was inevitable that a company the size and importance of Wolseley should find itself in a quandary when the order to "cease fire" was sounded on November Ilth, 1918. Beginning with a mere trickle, output of war material of all kinds had, for rather more than four years, continued in one ceaseless crescendo to an extent that would have been regarded as fantastic a few years before.

But when hostilities ended the Company found itself with a small army of supernumeraries on its pay-roll, and poor prospects of absorbing such energy now the call for arms of all kinds had ceased. Almost every contract for the supply of war material was automatically cancelled, and so great quantities of overworked machinery, most of which would be of but little use for peacetime production, remained on its hands, and there was no fixed programme for the future.

Such an outlook was neither bright nor encouraging, but it was common to other companies, and difficulties are only overcome if they are regarded at the outset as surmountable. It was necessary for the Wolseley Company to formulate a programme quickly, because it was decided at an early date by the Society of Motor Manufacturers and Traders that the annual motor exhibition, which had been suspended for five years on account of the war, should be resumed in November, 1919. Thus, within almost exactly one year, the Wolseley Company had to effect a complete reorganization of its factories, and make the necessary extensive changes in its administration, production and programme. It had to replace or dispose of a great deal of superfluous and, in many instances, worn-out machinery, and it is an arguable point whether the change-over from peace-time production to war work in 1914 was as revolutionary or as difficult to accomplish as the change back in 1918-19.

The first post-war programme had to undergo more than usual care and thought. Public outlook on automobilism had changed in the four years of war. Whereas in 1914 the motor-car was only indifferently understood or appreciated, and the number of people who could drive was strictly limited, the war had bred a new race of motorists; it had opened the eyes of the youner generation to the vast possibilities the motor-car presented. It had performed miracles of hard and useful work in the field, and had played one of the leading roles in achieving the hard-won victory.

The ex-Service man of the first war had seen automobilism in its true perspective, and he realized that, given normal opportunities and time for development, the large manufacturers might well place motoring within the possibilities of the average family man of moderate means. In short, a new type of prospective car owner had arisen, and it was to meet this coming demand that a production programme had to be formulated by the Wolseley Company.

There was at least one growing, tendency in 1914 that would have to be checkmated at all costs if the Wolseley Company were to produce vehicles at prices to be within the reach of many. Prior to the war, any firm making two or more models received requests for certain things to be incorporated, which were slightly different from standard practice. The prospetive motorist demanded this or that should be different from the normal, and ow-lng to the Company having given way in certain instances to such requests -often minor in themselves-the wheels of rapid production and low prices had been clogged. One purchaser would desire a short frame for a short body, another would want a longer frame or some variety in the coachwork, all of which increased production costs to a degree wholly unappreciated by the purchaser himself. It blocked production on a large scale and called for a huge design staff; it was a feature which could not be tolerated if something in the nature of mass production were to be achieved.

Thus, for the immediate post-war season, a programme had to be formulated from which no deviation could be permitted. Although it would be an overstatement to suggest that immediately after the termination of the 1914-18 war the British Motor Industry conducted an export drive in any way comparable with that which followed the second world-upheaval, it is no less a fact that the Wolseley Company was swift to see the possibilities of considerable developments in overseas trade. Many valuable seeds had been sown prior to the first war, and these were carefully fertilized and extended as soon as peace conditions were re-established.

At Sandhurst Bridge, Bombay, an extensive depot had been completed just as the 1914 conflict broke out. It was commonly regarded as one of the finest buildings of its kind in India. During the war, when normal commerce between the two countries was either at a standstill or was drastically restricted, this building was not used for the purpose intended, but with the re-establishment of peace conditions, it became active and an extensive business was carried on from that centre.

Resident factory Representatives were appointed for South Africa, Australia, New Zealand and South America.

In Canada, a company called Wolseley Motors Limited was formed in 1914 with headquarters in Toronto and with a subbranch in Montreal, but when the war terminated, a Canadian company was formed in conjunction therewith which traded under the name of British & American Motors Limited, and operated for some years from the same address in Toronto.

In view of the great extensions which had been made to the Company's output capacity during the war, and in order to absorb the new factories, etc., which had been erected, and to equip them with new machinery, it was necessary for an extensive reorganization to take place in the Company's finances. It has already been stated that Vickers held the whole of the ordinary shares of the Company, and also the whole of those of the Electric & Ordnance Accessories Co. Ltd. (the sponsors of the "Stellite" car).

The latter Company had, in 1914, built an extensive works on a 65-acre site at Ward End, some 11 miles from their main factorv at Aston. This Ward End factory was engaged throughout the war on the production of fuses and shell cases and employed as many as 13,000 people.

It is interesting to note that in those days, Ward End was sufficiently separated from Birmingham for it to be considered quite safe to store explosives there, and the fuses were actually filled on the site.

In 1919, Vickers decided that it would be helpful to their general policy for the Wolseley Company to take over the Ward End site, and, under an agreement dated 30th September, 1919, the transfer was effected. The purchase price was £400,000, payable by the issue to the Vendors or their nominees of 400,000 Ordinary Shares of £1 each.

A department of the business taken over with the Ward End site was engaged in the manufacture and sale of Timken bearings, and, in 1920, a separate Company was formed with the title British Timken Ltd., to deal exclusively with this side of the business. In 1925 the Company's shares in the British Timken Ltd. were transferred to Vickers Ltd.

During the war the Company's Adderley Park factory had been considerably extended, and the prospect of the further increase in their ownership of land and buildings by the acquisition of the Ward End site raised some doubts in the minds of the Directors as to the possibility of the profitable employment of all these workshops.

At the same time it was urged that the future was very bright; for the last ten years, through peace and war, the Company had made substantial profits, and with the vast expansion in the public knowledge of and interest in motoring as a result of the war, there was a huge demand for cars waiting to be satisfied.

A lavish programme of re-equipment and extension of plant was agreed, the broad principles of which were that the erecting, assembling and body departments should be extended to keep pace with the developments which had been made to the Machine Shops.

It was also decided to embark on the building of a new London show room, and the building of the magnificent Wolseley House in Piccadilly was put in hand, at a total cost of nearly a quarter of a million pounds. This building introduced the fashion of luxury motor showrooms in the West End of London.

It was essential, if this programme were to be carried out, for the developments set out above to be effected quickly, and this necessitated the provision of additional working capital.

The Directors accordingly agreed to the issue of £1,700,000 6 ½ per cent. debenture stock, which included the conversion of the existing £442,000 5 per cent. debenture stock. £1,100,000 of this 6 ½ per cent. debenture stock was purchased by the public following an offer for sale dated November 8th, 1919, the balance being disposed of privately. On the 14th November, 1919, a trust deed was executed by the Company, by which there was created a specific first charge on the Company's properties, freehold and leasehold, and a floating charge on the Company's undertaking and all property and assets, present and future, including uncalled capital. To meet this interest, and to provide for redemption by drawings over twenty-five years, the Company was faced with an annual charge of £140,250, and in the light of subsequent events the wisdom of raising money by these means can well be Questioned.

The initial production programme after the termination of the war of 1914-18 consisted largely of a continuance of what was in production "when the war broke out. An examination of the full schedule of Wolseley productions, which forms the appendix to this book, will show that every effort was made to move with the times, and to cater for the public demand. The influence of war experience, and more especially of aero engine design, was clearly apparent. The two light high-efficiency 10- and 15-h.p. cars had engines which followed closely the Hispano aero engine with overhead camshaft, which had proved so successful during the war. Unfortunately, the publ'c did not take too kindly to these modern developments, and, realizing the competition was too keen to, warrant a struggle against the strong tide of public demand, the 15-h.p. model was abandoned and a 14-h.p. car was brought into production for the 1922-23 season to provide a comfortable car designed on more orthodox lines. The smaller 10-h.p. model was intended to replace the older " Stellite," and incorporated certain improvements, albeit the combination of gearbox and rear axle was retained.

It was at this stage that the management decided to re-enter the racing feld. Details of an extensive and costly racing programme adopted during the 1902-05 period have been given already in Chapter 6 when this country possessed no Brooklands on which experiments, etc., could be carried out. It is highly questionable whether the vast outlays incurred were justified, but a lessen had been learnt, and when this second incursion into high-speed competition was decided on, the programme was to be a very different one from its predecessor.

During November, 1921, a standard Wolseley "Ten," modified slightly to suit track conditions, and fitted with a racing body, set up fifteen new records in the Light Car class at Brooklands. On 2nd May, 1922, the same car was driven at Brooklands for twelve hours continuously, and during that time it covered 843 miles at an average speed of 70.32 m.p.h., establishing thirteen new records. The car was then locked up for the night, and on the following morning it started on a further twelve hours' run, at the conclusion of which it had covered 1,456.6 miles at an average speed for the twenty-four hours of 61.06 m.p.h. This constituted the first double-twelve hours' record for the British Light Car class.

This was followed during the following August by an equally remarkable performance. A standard Wolseley " Fifteen " underwent similar modifications, and was run on the same track for twelve hours, in which time it covered 1,015 miles at an average speed of no less than 84.64 m.p.h. On this occasion, forty records in Class D from 100 to 1,000 miles, from 100 to 1,600 kilometres, and from 1 to 12 hours were set up. It is an interesting fact that the distance was sufficient to give it the thirteen hours' record also.

The authorities at Brooklands would not permit a longer run than twelve hours to take place, and so the car was scaled up for the night, and on the following morning the run was continued. Another stretch of twelve hours was completed, which brought the total mileage up to 1,922 miles 1,600 yards, thus averaging, for the twenty-four hours, a speed of 80.10 m.p.h. This constituted the double-twelve hours' record irrespective of class.

A serious attempt was made to cater for the growing demand of the man of strictly moderate means, by the introduction of a " flat " twin-cylinder, water-cooled 7-h.p. car, with a bore and stroke of 82 by 92-mm. This model was a two-seater with battery and coil ignition, side valves and three speeds. At its first public performance - the Scottish Six-Days Reliability Trial - it was awarded the gold medal in its class. Although no twin-cylinder engine possesses the smooth running of a well-designed "four," this particular power-unit had certain advantages over the " four " of that period, in that each cylinder, having more ample proportions than the miniature " four," provided a rather better performance on hills, and proved popular.

One effect of the termination of the 1914-18 war was to awakefl all to the fact that this country had become " motor-minded," thanks to the prodigious work motor vehicles had carried out during the conflict. Possessing nothing more than that small knowledge, which is so proverbially dangerous, of engineering and finance, new companies sprang up which had but slender chances of survival in the growing field of competition, to cater for the wants of the post-war motorist. Some of them hopelessly over capitalized and others handicapped in other directions, their misguided sponsors could see nothing but success with which their enterprise would be crowned. They had witnessed various forms of vehicles for war purposes being turned out on something approaching mass production lines; they had read of what Henry Ford was doing in the States, and they argued that this was a golden opportunity.

History was indeed repeating itself; the earlier cycle industry of this country had gone through the same process, although perhaps on a somewhat more extensive scale. In such circumstances, the financial opportunist is blind to the many gulfs which lie between him and the success he visualizes; these can only be bridged by a combination of commercial acumen, experience and engineering skill, far outside the reach of many who claim pos. session thereof.

All might have been well if the boom conditions had lasted, but the country was passing through a very difficult phase, and in 1920-21 the Motor Industry was precipitated into a serious and long moulders' strike, which restricted the manufacture of cars to an extent which seriously affected the cost of production. Labour disputes in the following year added to the difficulties, but in spite of this, in October, 1922, Mr. W. R. Morris (now Lord Nuffield) startled the whole Motor Industry by a substantial reduction in the price of his cars. This necessitated other rnanufacturers following suit if they were to remain in competition, and, although at the time the majority of manufacturers regarded Mr, Morris's policy with extreme disfavour, the ultimate results undoubtedly vindicated his action, and it is now recognized that it proved the salvation of the British Motor Industry in keeping out foreign competition.

The immediate reaction of this, and the other circumstances mentioned above, proved too much for many of the companies which had sprung into being, and many fell by the way.

In the case of the Wolseley Company, the position was particularly unfortunate in that they had embarked on such extensive and costly commitments, and they, too, soon felt the etlect of the enormous overhead costs, unsupported by anything like the anticipated output.

Owing to ill health, Ernest Hopwood had resigned in 1919, after which Arthur MacCormack continued as Managing Director until November, 1923, when he, too, resigned. In April of the following year a Committee of Management was formed, consisting of: -

M. B. U. Dewar (Chairman),

B. Caillard,

G. W. Grazebrook, and

W. Dallow,

the duties of which were to direct the business and policy of the Company, subject to the Board's control, and reduce expenditure, and effect economies in all possible directions.

In spite of their efforts, the affairs of the Company continued to worsen, and by 1926 there were signs that the black cloud which had been hovering over the affairs of the Company was about to break.

In September of that year, a meeting of Debenture Stock Holders was convened, and a moratorium of three months was asked for and obtained. Almost exactly a month later the Company was pressed by its creditors, and one commenced proceedings and obtained judgment for £446 10s., in respect of which execution was levied, but was withdrawn on the appointment of Sir Gilbert Garnsey and T. W. Horton as Joint Receivers and Managers, and subsequently on Ist November, 1926, the creditors re-presented the petition on which the Winding-up Order was made; and so, this Company, whose history we have followed from the days of its strange and romantic beginnings in the wilds of Australia, was declared bankrupt with the huge liabilities of over £2,000,000, the crash echoing throughout the whole motoring world.

Surely this was not to be the last chapter in the history of Wolseley Motors?