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GKN: 1934 Review

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Note: This is an abridged version of a chapter in British Commerce and Industry 1934

The Guest Keen interests traverse a wide area of the whole field of the British iron and steel industry, from the ownership of raw materials and mines to several thousands of finished products entering into almost every branch of human activity in this steel age.

Its £15,000,000 of capital is spread over eighteen subsidiary and allied companies employing over 50,000 workers, included in which are three great and interdependent combinations, specifically organized to hold their own in all markets under the new technique of trading imposed by the various governments of the world.

The three main combinations within the group are John Lysaght, the Welsh Associated Collieries, and the British (Guest Keen, Baldwins) Iron and Steel Co., Ltd. They represent the advance measures taken in the intensive centralization movement which has been proceeding in the industry generally in recent years as a preliminary to highly rationalized methods of production.

The nucleus of some of the members of the last two may be traced to the original coal and iron interests of the Guest family in South Wales. The Keen interests in nuts and bolts which were mainly around Birmingham, but with an important foothold in Monmouthshire, were linked to those of the Guest group in 1900, to be followed in 1902, through the initiative of the late Mr. Arthur Keen, by the absorption of the prosperous Nettlefold screw undertakings. Hence the names in the main headline of the group, and thus did Birmingham become its headquarters.

Guest — a family of pioneering ironmasters, and now represented by the Wimborne Peerage — began with John Guest taking over the Dowlais Iron Works in 1760. Six generations of Guests followed over nearly 150 years. For the first Guest was fortunate. Coal was found in the neighbourhood in the same year, and smelting by the aid of charcoal, which had restricted the use of iron in life, one might say for 3,000 years, became for the first time of historical and not of practical interest.

Successive members of the family remained in control of the great Dowlais Iron Works and its associated collieries. Here some of the original experiments in the use of iron rails for transport were conducted. And even some of the early locomotives were built here — one of which had a funnel of bricks and mortar, necessitating the permanent attendance of bricklayers on its journeys down one of the Welsh valleys.

Later, in 1865, the first steel rails ever made by the Bessemer process were rolled at these works.

In 1888 developments took place at Cardiff on the seaboard, when the Dowlais-Cardiff Iron and Steel Works was established, and this is now being reorganized and equipped by the British (Guest Keen, Baldwins) Iron and Steel Co., Ltd into the most modern steel works in the world.

Keen — a name associated with railway fastenings, nuts and bolts, originally Watkins and Keen of London Works, Smethwick, successors of Fox, Henderson and Co, builders of the Crystal Palace. The firm owed its rapid development to the vision of Mr. Arthur Keen.

In 1864 he formed the Patent Nut and Bolt Co, by amalgamating Watkins and Keen with the Stour Valley Works of Weston and Grice at West Bromwich and the Cwmbran Iron Works, near Newport, in Monmouthshire, which was founded in 1800. He was the man who brought the three names (i.e. Guest, Keen and Nettlefold) together in the first years of this century.

The life-work of Mr. Arthur Keen was continued by his son, the late Mr. Francis W. Keen, for the extensive nut and bolt and other interests of F. W. Cotterill, of Darlaston were later incorporated, this firm having previously absorbed John Garrington and Sons. Since the war this powerful manufacturing sub-group was further strengthened by the acquisition of the Vulcan Works, Darlaston, Horton and Son, Enoch Wilks and Co, James Simpson and Sons, Tolley Sons and Bostock, and the Staffordshire Bolt and Nut Co.

To-day the nut and bolt section of the group is probably the largest combination of forces in the world. No more accurate or better finished work can be produced in any other country, and the various member firms are called on to execute specialized engineering specifications, and to manipulate qualities of steel which were unheard of twenty years ago.

Nettlefold — a name famous since 1826 for the wood screws of John Sutton Nettlefold, who started outside London and migrated in 1842 to Birmingham.

In 1854 the firm became Nettlefold and Chamberlain, when a brother-in-law was brought in — Mr. Joseph Chamberlain, father of the eminent statesman of that name, and grandfather of Sir Austen Chamberlain and the Rt. Hon. Neville Chamberlain, M.P. The Rt. Hon. Joseph Chamberlain, M.P., advance apostle of Protection, Tariff Reform and Imperial Preference, was himself a partner until he withdrew in 1874 to devote himself to politics. In the same year the business was converted into a company under the title of Nettlefolds Limited. It had absorbed a rival concern, the Birmingham Screw Co now the St. George's Works at Smethwick; a file-making firm — now the Imperial Mills; and the firm of James and Avery — now the King's Norton Works.

Later, to obtain command over its raw material, it established at Rogerstone and Newport, Mon., the Castle Works, the H.P. Wire Nail Works, and the Imperial Mills.

The name of Steer is also associated with the Nettlefold activities, the late Mr. Charles Steer being responsible for consolidating the position won by the foresight and business capacities of the Chamberlains, and his brother, the late Mr. Edward Steer, D.L., becoming Chairman of the entire Guest, Keen and Nettlefold interests.

Now to move forward to the latter-day Guest, Keen and Nettlefolds. Developments and further acquisitions since 1919 have been almost continuous and on a more sweeping scale. During the war a man of inspiration and great personal thrust appeared in the South Wales firmament under the aegis of the late Lord Rhondda — Mr. Henry Seymour Berry. His genius ran to amalgamations. He first grouped and regrouped various coal companies. Then in two swift magical strokes came his acquisition of the whole Lysaght Iron and Steel group, and almost simultaneously its merger with Guest, Keen and Nettlefolds. His abilities and successes were quickly recognized, and by his untimely death through a riding accident shortly after he was raised to the peerage as Lord Buckland, the whole iron and steel industry of Great Britain undoubtedly lost a rare personality whose inspiration would have been invaluable in solving many of the problems still remaining to the industry as a whole.

Since the war, too, less spectacular but no less solid has been the acquisition of a controlling interest in the old firm of Bayliss, Jones and Bayliss, of Wolverhampton, which is famous for its wrought iron, gate and fencing products. The direction of this still includes representatives of the Bayliss family under the chairmanship of Mr. Torn S. Peacock, the present Managing Director of the Guest, Keen and Nettlefold group. It may be recorded here that it has always been the Guest Keen policy, so far as possible, to continue in management of other concerns acquired the leading personalities under whom the success of the amalgamated businesses has been built up.

Overseas, too, the connections include an important screw works in Australia, near Melbourne, and a sheet iron mills and galvanizing works established by Lysaghts at Newcastle; a Lysaght sheet iron mills at Hamilton, Ontario. in Canada; a Lysaght corrugating and galvanizing works in the Argentine; a nut and bolt works in Sao Paulo, Brazil; a substantial holding in the Stenman Co. of Sweden; iron ore interests near Bilbao, Spain, and an interest in the engineering firm of Hy. Williams (India) Ltd.

Coming to the first of the "combines within a combine," the Lysaght group is under the direction of Mr. W. R. Lysaght, C.B.E., who is President of the Iron and Steel Institute, and has been chairman of the Steel Trade Wages Board for over twenty-five years. Its operations include every process from the mining of iron ore to the manufacture of articles from galvanized iron. At Scunthorpe, in Lincolnshire, the recent installation of a new battery of coke ovens, representing the latest development in fuel economy, has enabled the company to make steel without the use of raw fuel (other than small coal for coke), and at a cost which is actually below the pre-war cost of steel production. Scunthorpe alone is capable of producing high-class bars and billets in enormous quantities.

In addition, the Lysaght interests have works at Bristol, Newport, and Wolverhampton, and they hold the share capital of Joseph Sankey and Sons, whose mills are at Bilston, Bradley, Ettingshall, and Wellington, Salop. The Sankey mills and works are vast in themselves, one alone covering thirty-three acres of ground and five acres of buildings.

The group has been exposed to fierce competition from the Continent of Europe, where wages have been around half the English level. Many internal changes for the rationalizing of work have been made between the various branches within the group, such as the closing down of the galvanizing and corrugating works at Bristol, and their removal to Newport adjacent to the rolling mills, leaving the constructional works and wire netting works at Bristol.

The Guest Keen-Baldwin fusion was not a complete union of interests between the two companies, but of their iron and steel works in the South Wales area and some ancillary collieries. Changes have been proceeding involving the concentration of certain plant and work at Port Talbot and later at Cardiff for the purpose of building up the most modern steel works, and the removal of activities previously carried on at other Welsh centres to these central works.

The Chairman of Baldwins, Sir Charles Wright, Bart., has undertaken the task of Managing Director of this group, and already the company has notable achievements to its credit. In the view of the directors of both the Guest Keen and Baldwin groups this merging of interests for the production of heavy steel in South Wales is one of the most effective pieces of rationalization undertaken by either party, and already the annual losses each had been accustomed to sustain in the manufacture of heavy steel in South Wales has been transformed into substantial profits. The fusion does not intensify competition within the iron and steel industry, neither does it involve any loss or withdrawal of capital from the industry, but it prepares the way for the rationalized production of the future.

Finally, the Welsh Associated Collieries group in its present form has already enabled a number of collieries previously working either independently or as part of a previous group to operate without loss. Since these latest arrangements the group as a whole has even been able to earn profits in spite of a considerably reduced output of coal. This amalgamation, too, is considered a most satisfactory scheme of reorganization. Under the direction of Sir David R. Llewellyn, Bart., the present head of a Welsh family who may be said to have coal in their bones, the various groups of collieries are able to help one another; and the inclusion of the well-known exporting firm of Gueret, Llewellyn and Merrett as a selling organization has secured world-wide connections for the Guest Keen interests at all coaling centres and distribution points in all parts of the globe.

The annual coal output of the combine in a normal year should be around eleven million tons, representing about twenty-five per cent. of the total Welsh output of steam coal. The reserves of coal are over eight hundred million tons, and these are spread over sixty pits, levels and drifts occupying an area of fifty-five square miles.

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