Authors: Nevil Shute
By the end of the first financial year of the new company it was evident that we were still working at a loss, though in the first flush of optimism we had paid one interim dividend. This loss was due primarily to our small turnover coupled with the ever decreasing basic price of small civil aeroplanes dictated by our competitors. At the annual general meeting to announce this loss Lord Grimthorpe resigned from the chairmanship of the company, to my regret. He had seen the company through its earliest days two thirds of the way to success, but the business now demanded much work from the chairman and was located in the south of England, while he lived in the north. He remained a member of the Board and was succeeded as chairman by Mr. Richardson, who enjoyed the confidence of our aged shipbuilding associates, could talk to them like a Dutch uncle, and often did. He worked hard for the company and picked up a knowledge of our peculiar business very quickly, while his reputation in the
City probably saved us from a good deal of trouble as we passed our dividends year after year.
By the beginning of 1936 an order for seven Envoys had been received from the South African State Railways. It reflected the condition of the world at that time, that these were civil aeroplanes for use on an airline but they were to be readily convertible to military purposes. Bomb racks and release gear were to be provided, a mounting for a forward firing gun, and the roof of the lavatory was detachable and replaceable by another roof which carried a gun turret. Apart from this and one or two other orders, we had taken sub-contract work from other aircraft companies to the value of about fifty thousand pounds, so that we had orders in hand totalling about £90,000 though no Air Ministry orders for machines of our own design had yet come our way. A further extension to the factory was put in hand to cope with all this work, and with the larger orders which were now certain to come in due course.
A difficult situation now arose over our association with Fokker. The increasing amount of work for the Air Ministry on which we were engaged made it necessary for everyone to sign the Official Secrets Act and precluded any alien from entering our factory without Air Ministry sanction. This not only excluded the Dutchmen from our factory but made it expedient to exclude them from attendance at our Board meetings. It was unfortunate that the drift towards war had developed to this point only a year after we had gone into our association with the Fokker company but there was nothing to be done about it; we made an attempt to carry on the partnership over civil aeroplanes but from this time onwards the association declined, partly, perhaps, because of the increasing ill health of Fokker himself.
By the end of March the orders in hand totalled £117,000 and the employees had risen to nearly six
hundred. There were still no direct orders from the Air Ministry, though verbal assurances had been given to us by officials that our factory would be kept full of work for at least three years to come. By this time the proposal to convert the Envoy to a twin engined military training aircraft, later to become known as the Airspeed Oxford, was well advanced, and the same officials were talking glibly of an initial order of a hundred of these machines, with a total requirement of four hundred.
These prospects, however, were of little value, and the long delays at the Air Ministry in placing orders for the rearmament programme caused a great deal of loss to our shareholders. The layout of a factory for building aeroplanes and the layout of a factory for building small parts of aeroplanes is totally different. Our works was established on an aerodrome and laid out for the construction of complete machines, and in the end the orders were to justify this set-up. While the Air Ministry delayed in placing production orders with us it was necessary to reorganise this unsuitable factory to build small components for more fortunate companies, with a totally different ratio of machine tools to floor area; we entered on this process unwillingly, convinced that in six months the civil servants would have finished drinking their tea and would consent to send out orders for complete aircraft to us, making it necessary for us to rip out all our new installations and re-convert the factory to its original function. This is in fact what was to happen, and involved a totally unnecessary loss to our shareholders in the years 1936 and 1937 due, I think, to ignorance of industry on the part of the politicians and high civil servants in charge of the Air Ministry in those years.
In May we received an order from the Air Ministry for two prototype machines to be known as the Queen Wasp. The Queen Bee was a radio controlled target aircraft based
on the well known de Havilland Tiger Moth training machine, and the Queen Wasp was to be a better and bigger edition of the Queen Bee. Tiltman had designed a very beautiful little tapered wing biplane cabin machine with the Wolseley engine for this job, much too good to serve as a target and be shot down, but he had argued very rightly that perfection was the best selling point to senior Air Force officers spending other people’s money. The Queen Wasp was fitted alternatively with a landplane and a seaplane undercarriage; for target use it was always fitted with a seaplane undercarriage and was landed on the sea if it remained undamaged after the shoot.
In July our shipbuilding controllers offered us a general manager from their shipyard, an offer which I was glad to accept. Mr. Townsley was a genial, friendly man with long experience of labour relations in the shipping industry. He filled a gap in our organisation which needed filling, for I had little experience in dealing with trades unions or labour problems on a major scale. By that time we were employing over eight hundred men and the shop was getting slack and out of hand, while the costing and rate-fixing departments on which the whole prosperity of an engineering business must depend needed reorganisation with an expert hand. Townsley was gravely handicapped at first by ignorance of aircraft and the peculiar, rapidly changing aircraft industry, but he made up for these deficiencies by his energy and will to learn. From the first he was a great addition to our team, and under his management the business for the first time looked as if it might some day be working at a profit.
Townsley was young enough to learn the aircraft industry, but some of my shipbuilding co-directors were not. In August 1936, when they had had two years’ experience upon our Board, the minutes show a bitter comparison of our work with shipbuilding. The design of
a ship, it was stated, took eight weeks, and a cruiser 700 feet long could be delivered complete with all details in twenty-seven months; therefore Airspeed was a grossly inefficient organisation. Age was no doubt a factor in this unwise expression of opinion; I doubt if many men retain the flexibility of mind required to learn a novel industry after the age of seventy. It did not make our day-to-day conduct of the business of the company any easier when time had to be wasted in trying to educate old men to the basic facts about our industry. We were indebted to Swan Hunter for assistance in our public issues and for giving us a first-class general manager, but for little else.
In July 1936 the Spanish civil war broke out, and by August agents for one side or the other were buying up every civil aeroplane that would fly. We made a bulk sale of practically the whole of our stock of unsold Couriers and Envoys to one British aeroplane sales organisation and heard no more of them. One aeroplane was excluded from this deal, our first demonstration Envoy on which we had carried out a large amount of development flying, I think because we could not spare it for a week or two. Then I decided to take the opportunity to shift it. An agent at Croydon aerodrome had a client who wanted to buy it, and for this middle aged aeroplane with Wolseley engines I quoted the very high price of six thousand pounds; I think we must already have heard about the Viceroy sale. The client did not blench but he insisted on seeing the machine first, and would inspect it nowhere but at Croydon aerodrome.
At that time there was some cheating going on over these aircraft sales to Spain; once the machine was handed over to a British agent it would leave the country usually within an hour and would never be seen again. Cases had occurred where payment for the machine had been omitted, a small formality which somewhat marred the
deal from the seller’s point of view. I could not spare Colman to wait at Croydon so I sent a young man of our sales staff up in the machine to stay with it until I had received the cheque and our bank had pronounced that it was good. I told him that he was to take sleeping gear with him and that he was not to leave the aeroplane till it was well and truly paid for; he was to stay with it all day and night, and sleep in it, till he received further instructions from me.
They flew to Croydon early in the morning. In the late afternoon I got a message that my young man was coming back upon the evening airline service; with our sales manager I waited for him in the Aero Club, drinking beer. The airline Envoy landed and the young man joined us in the bar. I asked him why he had come back, since no cheque had been received. Without a word, he took out his wallet and spread out on the bar before us six one thousand pound Bank of England notes.
None of us had ever seen one before and nor had our bank, but they proved to be quite good. It was in this machine that General Mola, one of Franco’s most successful generals in the early part of the war, was killed by flying in to the side of a mountain in bad weather. That was the end of our first Airspeed Envoy, which had produced such a good impression at the S.B.A.C. display of 1934 and had, perhaps, made possible our first public issue.
In August 1936 we got another order from the Air Ministry for two small prototype machines called Irving biplanes. These were never in fact built, and are only mentioned as a stage in the development of our order book. The type was to be a small single-seater with a Wolseley engine, carrying no armament but provided with a power operated winch from which two thousand feet of steel cable could be unreeled in flight. The function was that of barrage balloon cables; the machines were to be flown
in large numbers just above a layer of cloud trailing their cables down into the cloud, so that enemy bombers would never know where to expect a barrage. Second line pilots, or women pilots, were proposed for these little unarmed aircraft. The scheme, however, was abandoned.
By that time we had managed to get the whole of our aeroplane production on to Wolseley engines. This engine was a radial engine of about 250 horsepower, modern in design and with a geared propeller, and a very considerable technical advance on any other British engine in its power range. It was manufactured by the well known Nuffield motor car organisation who had devoted much effort to its development. They did not, of course, make aeroplanes, so that the use of this engine freed us from our previous trouble of buying engines from our competitors, while in size it suited all the production, present and future, that we had in hand. It was therefore a tremendous blow to Airspeed when, in September 1936, Lord Nuffield stopped production of this engine without notice.
The circumstances that led to the abandoning of this fine little engine deserve record. At that time Britain was at peace but was re-arming in preparation for war. The Government were having a rough time from the Opposition over the cost of this rearmament; to placate the country over the rising taxation the Government pronounced that armament manufacturers would be strictly controlled from making excessive profits.
This policy decision, when filtered through the ignorant and over cautious high officials at the Air Ministry, arrived at the manufacturer in this form. For any given number of machines it was proposed to order, the manufacturer was required to quote a fixed price for the contract. A document called an Instruction to Proceed, or I.T.P. for short, was then sent to him. This document said, in effect, that he might start work and would be paid something
some day, when the government accountants had had time to investigate his business. His quoted fixed price would be taken as a maximum, more than which he could not be paid; he would probably be paid a good deal less. Government accountants were to have full access to all the costs of his business and would make their own estimate of his overheads properly chargeable to the contract, and would then announce the price which they would pay.
The aircraft industry, being dependent for their existence upon government orders, had no option but to accept contracts on these lines, while commencing corporate negotiations to eliminate the initial inequities and absurdities of the standard I.T.P. document. Not so the motor car manufacturers. After a good deal of negotiation by Lord Nuffield’s aero engine sales manager his company received an invitation to tender for two hundred engines for installation in machines that it was proposed to order from us. I do not think that even his worst enemy could ever accuse Lord Nuffield of attempting to swindle the British public. The price that they quoted struck me as low at the time though I forget now what it was; on a basis of pounds per horsepower it was much lower than the price we were then paying for competing engines. The Air Ministry responded by sending them an I.T.P.
Lord Nuffield received this document and spent a morning studying it with Mr. Boden, his only co-director at that time. They read it carefully, and noted all the provisions; neither of them had seen or heard of anything like it before. If they were to submit their vast business to this sort of an investigation it would mean a wholesale re-orientation of their offices; it would mean engaging an army of chartered accountants on their side with a consequent increase in overheads. They had quoted a price for the engines which might well involve them in a heavy loss, through a genuine sense of patriotism, and they were
rewarded by this suspicious nonsense. They were very angry.
They had spent at that time about two hundred thousand pounds upon the Wolseley aero engine, and it had led only to this. In the scale of their whole business that was not a large amount of money, and as good business men they knew when to get out of an unsatisfactory venture. To admit the Air Ministry methods of doing business into their vast enterprise would be like introducing a maggot into an apple; the whole thing might well be brought to ruin in the end. Better to stick to selling motor vehicles for cash to the War Office and the Admiralty who retained the normal methods of buying and selling. They sent the I.T.P. back to the Air Ministry, rejected, and closed down the aero engine side of their concern.