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The title of thus thesis was chosen early in its writing, largely for two reasons. The first was the relative degree of historical attention given to the two companies, Newbolds, the refractory and B.H.P, the steel producer. The second reason arises out of the economic imperatives which make for such a high degree of interdependence between refractory and steel producers. However, the theme, as should be evident in the preceding chapters, can be pursued even further.
The economic fortunes of Newbold's ran very much parallel to those of the B.H.P. This is not surprising in view of the fact that the demand for refractories is a derived demand. As the steel industry is overwhelmingly the single largest consumer of refractories, when steel is down, so too are refractories. Again, the parallels go beyond this simple relationship.
The success enjoyed by Newbold's from the early 1930's onwards ran parallel to the prosperity enjoyed by B.H.P. However, Newbold's was prosperous not just because steel did well but also because they emulated several B.H.P strategies.
First, in the 1920's, considerable and successful efforts were put into improving efficiency and lowering costs (especially that of labour). New technology was introduced, labour was used more effectively. Second, Newbold's also took advantage of its own strong financial position in the Depression of the 1930's, and achieved almost complete market domination through a series of takeovers. This was not behaviour which was typical of a refractory producer (see Ch.1) but it did make sense in Australian circumstances.
Third, there has always been a stated policy by both companies of regular fact-finding missions overseas to keep pace with technological change in both industries. These trips involved members of the company from various levels of management. It was not unusual for the top managers, in this case Arthur Newbold and Essington Lewis to head the delegations personally.
As to the exact nature of the relationship between the two companies, Newbolds and B.H.P, this is not always possible to determine. The limited evidence which exists, essentially the letter book relating to the crisis of the early 1920's, suggests that relations were not intimate. In numerous letters written during the crisis of 1922-1923, Arthur Newbold mentions visits to the steelworks. Yet on many of these visits his best source of information is informal conversations with members of middle management. Even in these conversations there are only hints given of possible events to come. Arthur Newbold is given no official forewarning of the situation at the steel works nor of possible implications for his firm. His only official words of warning from the B.H.P come in the form of a reduced order and then the final cessation of brick orders.
However, Newbold did have some communication with the top level of B.H.P management. In discussions held with David Baker, Works Manager, in late 19221, Newbold was led to believe that the situation at the steel works was on the mend. Discussing a large order for Coke Oven bricks in the near future, Newbold was told by the manager responsible, Mr Wilson, that business had been delayed so that talks could be held with him on his return before final decisions were made.
Some sort of relationship at the top levels of the companies evidently existed. The strategic importance to refractories in the production structure of steel required close attention to the quality of refractory products. The letters of complaint from Baker toNewbold about defects is witness to that2. However, the exact closeness of that relationship at this stage is impossible to determine with any certainty. The existing evidence is incomplete at best.
In later years, however, the available evidence on the B.H.P/Newbold's relationship indicates that Newbold's did enjoyed a special relationship with B.H.P. As it was put by a current employee of B.H.P Refractories, Newbold's was given "...favourable consideration..."3 in all aspects of its dealings with B.H.P. In fact, the relationship between B.H.P and its refractories supplier, paradoxically, markedly deteriorated when B.H.P gained control of Newbold's in 1974 and placed its own staff in authority4.
The apparent closeness of the relationship between the two companies must in part explain why it took so long for B.H.P to take control of Newbold's and thus control its own refractory needs. There would seem to be an attitude that there was no need to takeover Newbold's, and there was no incentive to do so, as the company was to a certain extent already considered part of the family. An example of this was the willingness of Newbold's to construct the plant for the tar-dolomite refractories to service the BOS furnaces. Despite the large cost involved, Newbold's was quite willing to undertake the venture at the request of B.H.P. In fact it is likely that the major reason B.H.P did eventually take Newbold's over was concern over their supply, fearing disruption after the takeover of the company by the Hooker-controlled Manufacturing Resources of Australia Ltd. B.H.P was to a certain extent forced into the action to protect itself, not because of any dissatisfaction with the Newbold's product.
While the relationship between the two companies was by necessity a close one, this did not prevent Arthur Newbold from cultivating other markets at every possible opportunity. One example comes in a letter to Mr Parkes, then Chairman of the Company, from Arthur Newbold while overseas in 1923. Newbold noted that the large British refractory firm of John D. Stein Ltd had not secured a large order from the Melbourne Gas Company. Newbold commented that he could hardly raise the matter of Newbold's not securing the order as he did not even know about its possible existance. However, he advised Mr Parkes to "...look them up & find out just what big job they have on....evidently something is getting past us."5
Even while overseas Arthur Newbold was always looking to expand business. This policy would seem to be part of a concerted effort to mitigate the dependence of Newbolds' on the steel industry. The economic circumstances of the early 1920's had underscored the dangers of this position.
The similarities between the two companies went beyond those enforced by economic factors and common business strategies. In a number of respects, the companies' cultures were alike. Both were inward-looking in their personnal as well as their business strategies. Thus, both companies evolved a tradition of promotion from within. Further, the B.H.P Co from the mid-1920's had established a staff training programme. Although the company employed university-trained technical personnel, there seems to have been a feeling that the in-houseAlthough the company employed university-trained technical personnel, there seems to have been a feeling that the in-house trained employee, who had often not worked for anyone else, was a more trustworthy employee. A prime example of the policy was one-time Chairman of the B.H.P Co Group, Sir Ian McLennan, who rose up in the company from a junior staff position.
A similar story can be told concerning the Newbolds' side. Arthur Newbold believed in promoting experience, even if not accompanied by formal qualifications. Jack Scroope, who managed several of Newbolds' production plants, began with the company as a brick layer6. Another example was John Henry, a clerk in the 1920's, who later became a company secretary despite having no formal qualifications.
Such similarity in the cultures of the two companies had predictable results in the length of service of employees. Many employees of both spent their entire working lives with their respective company. Many employees at Newbold's, who joined the company in the 1930' and 1940's, continued with the company for 30 or 40 years, some even longer. Such length of service reinforced the culture of the company and how the company itself was perceived by its employees.
Finally, however, one dramatic area of difference between Newbold's and B.H.P lies in the industrial relations history of the two companies. Newbold's does not appear to have had any major industrial relations problems through most its history. The disputes of the 1950's and 1960's seem to have reflected industry-wide problems rather than anything specific to Newbold's. The B.H.P on the other hand is well known for the continuing disputes that have plagued its history, many lasting weeks, some lasting months. Perhaps most significantly, there is little sign of the ambiguity which has always marked the attitude of employees towards the B.H.P, on the part of the employees of Newbold's. The firm seems always to have been regarded with a fair amount of affection.
There are several possible reasons for this divergence. The B.H.P acquired an American hostility to trade unionism along with its technology in its early days. Thereafter, antipathetic tendencies between management and workforce were reinforced by such factors as size of the company and the location of the top management in Melbourne, far away from the location of its major plants.
By contrast, Newbold's evolved a very different tradition, even though its founders also came from abroad. For most of its history, the small size of Newbold's plants meant that those who ran the company and those who worked on the plant floor were in close contact with each other. This sense of community persisted at Newcastle even as the company grew to an appreciable size in the post-World War Two era.
The contrast in industrial relations over time stands out as the glaring divergence in the histories of the two firms up until the 1970's. Thereafter, the takeover of Newbold's marks another divergence - this time in B.H.P's favour. The former has dispeared as an independent firm, the latter has become a major multinational. Nevertheless, as far as industrial production is concerned, the same old inderdependent function of manufacturing refractory products and steel persists to this day. It will do so, within whatever company structure, into the future.
1 A.R Newbold to S.Parkes, 2nd December, 1922
2 Letter from David Baker to Newbold Silica Fire-Brick Co. Ltd, 20th November, 1922
3 Interview with Ian MacKay 25/7/1994 - B.H.P Slab & Plate, Port Kembla.
4 ibid.
5 A.R Newbold to S. Parkes, 26th August, 1922
6 Interview with Ex-Newbold employees, Thirroul Plant, 26/7/1994
© Copyright - Michelle Watson, 1996
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