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The die was cast for Midland steel industry

By Mark Andrews | Business | Published:

Legend has it that, at the height of the Industrial Revolution, the majority of the steel in the world was made within a 20-mile radius of the Earl of Dudley's Steel Works.

Whether this story is based in fact, or is just a mythology, is hard to establish, but there is no doubt that the West Midlands led the world in steel production.

As well as the Earl's work at Round Oak, the Black Country was also home to sprawling Alfred Hickman works in Bilston and Patent Shaft in Wednesbury, employing thousands of workers. And of course, just as Abraham Darby's works at Coalbrookdale sounded the birth of the Industrial Revolution, the steelworks at Haybridge, Madeley Court and Priorslee formed the backbone of Shropshire's manufacturing base for much of the 20th century.

Last week's news that British Steel, the last vestige of this once-great industry, has been placed into receivership is a sad reflection of how British industry has declined over the past 100 years.

In 1875, Britain was responsible for almost 40 per cent of the world's steel production, with 40 per cent of that going to the United States. America, until this time a largely rural backwater, was undergoing a period of rapid industrialisation and needed British steel for its railways and burgeoning infrastructure, but it would not last.

By 1896, the British share of world steel production had fallen to just 22.5 per cent, after the American market largely dried up. Having completed its process of industrialisation, the US was now self-sufficient, and had overtaken Britain as the world leader of steel production. But worse than that, American steel manufacturers were now undercutting British-made steel, just as the Chinese have provoked Donald Trump's wrath by undercutting the Americans today.

The iron and steel industries of the Black Country and Shropshire date back to the early 17th century, and are closely intertwined through the same family.

Dud Dudley, son of Edward Sutton, Fifth Baron of Dudley, left Cambridge University in 1618 to manage his father's furnace and forges in Pensnett. He was reputedly the first ironmaster in the world to smelt iron ore with coke rather than charcoal. While this ground-breaking innovation had the potential to make Dudley a fortune – the Black Country was built on its rich coal resources – he didn't live to see its commercial potential fulfilled. That fell to his great-grand-nephew Abraham Darby, whose furnace at Coalbrookdale kick-started the Industrial Revolution, and paved the way for his grandson, Abraham Darby III, to build the Iron Bridge in 1781.

During the 19th century, the more durable steel began to replace iron as the metal of choice for manufacturing around the world, and the ironworks on which the region's industry was built began to switch over to making steel. In 1890, Earl of Dudley William Ward built a steel-making plant at his 15-acre Round Oak Iron Works, which would become one of the area's most familiar landmarks until its demolition in 1984.

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Another big beast of the early steel industry was Alfred Hickman, whose father George Hickman owned the Groveland Ironworks and Moat Colliery in Tipton. After a period working for the family business, Alfred struck out on his own in 1867 when, at the age of 37, he bought the Spring Vale blast furnaces in Bilston. Like the Dudley family, he was quick to see the benefits of new technology, and by 1900 it was employing more than 2,000 people to produce 3,000 tons of iron and 1,500 tons of steel every year. Under Hickman’s direction it continued to install the latest machinery such as gas engines, and his rolling mills were reckoned amongst the best in the world.

Six new blast furnaces were erected between 1866 and 1883. Five of these were producing a total of nearly 25,000 tons of steel per year at what was now known as Bilston Steel Works. The first electric powered blast furnaces opened there in 1907, and finally in 1954 the huge "Elisabeth" blast furnace marked the opening of another chapter at Bilston. Nicknamed 'Big Lizzie' by workers, the huge furnace was unlike anything that had been seen in the area before, visible for miles around, and churning out 275,000 tons of steel per year.

So what went wrong? While there is no single reason for the decline of the British steel industry, it appears that the innovation and entrepreneurial spirit which drove the founding fathers appears to have been lost by the turn of the 20th century.

A 1996 study by Japanese economist Prof Abe Etsuo suggests that Britain's steel makers had been slow to adopt the more efficient open-hearth furnaces.

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Another study, by Prof Alasdair Blair of De Montfort University, also suggests a lack of innovation and investment had held the industry back during the first half of the 20th century.

But he adds that the battle of ideologies between the different governments after the Second World War – the British steel industry was twice nationalised, and twice privatised – added to the woes.

The second attempt at nationalisation, brought about by the Iron and Steel Act of 1967, was probably always going to mark the death knell for steel manufacturing in the West Midlands. One of the main arguments put forward by Harold Wilson's government was that bringing all the different steel companies under government control would allow a process of rationalisation, focusing on large plants with easy access to the sea. This marked the beginning of the end for the works in the land-locked Midlands, which owed their origins to their proximity to the dwindling supplies of coal.

By this time, Shropshire's last blast furnace had already bitten the dust. The Lilleshall Company's Priorslee Steel Works, which had four furnaces at Euston Way in 1851, were by 1912 the only remaining furnaces in the county. The last furnace closed in 1959, although the works continued to operate as a steel processor and foundry until 1983, when its operations were moved to Tipton.

By the mid-1970s the nationalised British Steel Corporation was making heavy losses, and pursued a strategy of focusing on steel-making in five areas: South Wales, South Yorkshire, Scunthorpe, Teesside and Scotland.

Bilston was one of the first to bite the dust, the announcement coming in 1977 that the plant would shut within three years.

The announcement was met with a mixture of shock and anger, with many suggesting that the decision to target the Black Country was political rather than economic, with plants in South Yorkshire being given favourable treatment.

Stanley Smith, who had been metallurgical manager at Bilston, said the works had been profitable until British Steel ordered the closure of the Elisabeth furnace in 1977. He said in April that year, Bilston's carbon steel tube billets order book had also been largely transferred to Sheffield, making it impossible for the plant to compete.

British Steel's chief executive, Sheffield-born Robert Scholey, countered that just because Bilston had been profitable in the past did not mean that it would be in the future. He said the investment which had been made elsewhere in the country had rendered Bilston obsolete.

Either way, the decision left a sour taste in the mouth in the Black Country when Bilston's steel-making plant closed on April 12, 1979, followed by the steel mill the following year. Coming three weeks before a general election, the timing couldn't have been worse for beleaguered prime minister Jim Callaghan.

But it was just the beginning of the bad news. Patent Shaft, which was part of the state-owned Cammell-Laird rather than British Steel, followed shortly after, closing its doors in June 1980, and Round Oak followed suit in 1982.

Today, there are few traces left of the once-mighty industry which made the region great. A pub named the Elisabeth Arms, in memory of the famous blast furnace, is the only reminder of the Bilston steelworks. The belching chimneys of the Alfred Hickman's works have made way for neat suburban houses, the beating heart of heavy industry has been replaced by a B & Q and Poundland warehouse.

Round Oak, which at its height employed 3,000 workers, was replaced by the Waterfront office and leisure complex, part of the controversial Dudley Enterprise Zone in the 1980s, which also saw the creation of the Merry Hill shopping centre on neighbouring farmland.

The slimmed-down British Steel did manage to turn its first profit in 10 years in 1986, and was privatised two years later, but the global steel market of today is a very different place to that of 30 years ago. A merger with Dutch company Koninklijke Hoogovens led to the creation of the Corus Group, the biggest steel manufacturer in Europe, and in 2006 this was acquired by Indian-based Tata, to become the fifth-largest steel manufacturer in Europe. The recession of 2008-09 led to a downturn in demand, and when the economy did improve, it found itself facing cut-price competition from China.

The company's long-products division – products such as wire, metal bars and railway lines – were sold to Greybull Capital in 2016, and it is that area of the operation which is now in the hands of liquidators. Tata, which still has plants in Wolverhampton and Walsall, last year announced plans to merge its UK steel operation with German rival Thyssenkrupp, although there have been suggestions that the tie-up will be blocked by the EU.

With the last remnants of the steel industry hanging in the balance,

Johnathan Dudley, national head of manufacturing at accountancy firm Crowe, says having an indigenous steel industry is vital the UK's long-term prosperity.

"The focus in the headlines is for jobs at risk of course, and rightly so," he says.

"However, there is a much bigger subtext here in that, unless somebody, government backed or otherwise, picks up the production capacity before it becomes irrecoverable, this will further shrink our country’s indigenous capability to produce steel without even greater reliance of production and supply abroad."

Mr Dudley says uncertainty in supplies of steel has dogged British manufacturing on and off for years. Just a few years ago there was a worldwide steel shortage caused by demand in the Far East, only for it to flood the market with cheap metal a few years later. Maintaining a British manufacturing presence would prevent such fluctuations in price, he says.

"Aside from the risk to our manufacturing base at a time when it already faces headwinds caused by the likes of the world economic slowdown, Brexit uncertainty and issues in the automotive industry, there are so many infrastructural projects planned in the UK which will need heavy steel over the next few years," he says.

"Apart from HS2, there are projects nationwide to promote more rail and light rail transport; there is a desperate need to build more homes across the country as well as regeneration projects surrounding the Northern Powerhouse and the Midlands Engine."

Mr Dudley adds that contracts have just been drawn up to build a new generation of Royal Navy ships in the UK, and all these projects will need a ready supply of steel if they are to be delivered on time and on budget.

"Years ago British Steel used to have the strapline, ‘British Steel, British Strength’," he says. "Maybe it’s a timely reminder to repeat this mantra to those in the corridors of power."

Mark Andrews

By Mark Andrews
@MAndrews_Star

Senior news writer for the Shropshire Star specialising in in-depth features and commentary, investigative reporting and political matters.

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