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The Reyrolle Story: 36 – A Black Year

The huge Tyneside engineering firm Reyrolle at last merges with another major manufacturer, Parsons.

Robert Owen continues his history, The Reyrolle Story.

Perhaps the first hint of the troubled years to come was the gradual fall in new orders during the mid-Sixties. This was one of the reasons the Reyrolle Board applied to the Government for a £2million Development Grant. Their application fell on stony ground and the Company got only a token amount. Managing Director James Bennett was furious. He expressed his anger in the Press saying " He found it difficult to understand the way Special Aid Acts, (which included Development Grants) were enforced. To him it was equally important to try to maintain full employment as it was to provide new jobs."

However, Reyrolle did not have the monopoly of economic troubles. In the late sixties the Country was riddled with industrial unrest, high inflation and endless demands to cut costs and increase productivity. Michael Shanks (1963) in his book "Stagnant Society" saw Britain as "tired, flaccid and hopelessly behind its foreign competitors." He linked the country's sagging industrial performance with "backward looking semi-Luddite trade unions; an inefficient and ignorant management based on old-boy networks of terrifying complacency; and its timeworn adversarial stance in industry which made Britain incapable of modernising or competing in the modern world". Strong words which shook the industrial world.

On Tyneside, as European countries began to overtake Britain in the productivity league, many engineering and ship-related companies sought refuge by rationalisation of products and economics of scale via merges and take-overs. Just across the river the giant Swan-Hunter complex amalgamated with nearby yards on the Tyne. Other engineering companies either downsized or merged. No-one realised it at the time, but this was the beginning of the de-industrialisation of Tyneside. In Reyrolle's case, it finally brought action after three decades of consultation with C. A.Parsons.

Ever since the 1930s informal consultation had taken place between Reyrolle and Parsons about closer liaison over mutual interests. After the Second World War, that consultation gathered apace but even with the same Chairman of both companies, talks faltered with Parson sticking out for greater financial independence. It was not until the C.E.G.B called for a greater rationalisation in the field of power station and transmission plant that something happened.

Another factor that stimulated a Reyrolle-Parsons merger was the General Electric Company's take-over of Reyrolle's competitors, Associated Electrical Industries in 1967 and English Electric in 1968. The Reyrolle Chairman warned of export undercutting as a result of the mergers.

So in 1968, after a very long courtship the marriage was finally arranged between Reyrolle and Parsons. Some observers at the time said it was now a marriage of necessity rather than one of convenience. Others claimed that because Parsons was still a private company, its desire to cling to independence for so long had cost both Companies a great deal of money and had a major effect on the liquidity of the new Reyrolle-Parsons group.

Speaking at the 1969 Otterburn Conference, new Chairman Edward Judge said "The point of the merger with Parsons was to improve product ranges, productivity, prices and profit; not just to grow bigger". However, many Reyrolle workers believed that the Company's troubles began with the Reyrolle-Parsons merger. Harry Woodcock, for 30 years Head of Production Services with the Company, said in the Press "After that, Reyrolle was just a small branch on a big tree".

Sir Harold Mullens was the Chairman of Reyrolle at the merger with Parsons, as he had been for the last ten years. He was an electrical engineer, with a successful career in the electricity supply industry and continued as the first Chairman of the new Group. Sir Harold retired in 1969 and was replaced by Edward Judge from the steel industry. The Reyrolle workforce was rather suspicious of the new Chairman, but reassured themselves that they had James Bennett, a Reyrolle man, as Managing Director of their part of the business.


To purchase a copy of Robert’s book please click on http://www.amazon.co.uk/Reyrolle-Story-History-Co-Ltd/dp/1905295073/ref=sr_1_1?ie=UTF8&s=books&qid=1245678876&sr=1-1


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