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Aviation History
1963
1963 - 1295.PDF
JGHT International, 25 July 1963 121 NATIONALIZATION N PRACTICE "Flight International" photograph SIR REGINALD VERDON SMITH talks to FRANK BESWICK on present progress and future prospects DF the aircraft construction personalities caught up in the great reorganization of 1960 two especially were avowedly Conservative—the late Sir Frederick Handley Page and lr Reginald Verdon Smith; but while "H.P." always castigated ationalization, saying that only the "r" distinguished it from lationalization, Sir Reginald's views—as can be seen below—were precisely the opposite. The firm of Handley Page remains obstinately independent, mt the Bristol Aeroplane Company became rationalization itself -identified in some form with almost every group. If there are to be any further changes in the industry, under the •resent or possibly future government, with a view to tightening he bonds or improving communications between industry and itate, there must be lessons to be learned from the Bristol company's ery successful new position. This point I tried to explore, but first questioned Sir Reginald about his general views on the present >attem of the aircraft industry. You have [I asked] as wide a view as anyone of the aircraft con struction industry; what are your views of the reorganization which itemed three years ago ? Looking back, do you think the pattern night have been planned differently ? I start [Sir Reginald replied] by being a protagonist of reorgan ization into large units: my principal reason lies in the tremendous ;hange of recent years in the design and production of aircraft *nd aero engines, and in the need for large technical, manufacturing *nd financial resources. For a long time my view was that for a arge number of medium-sized companies to be maintained in artificial competition by Government development contracts was Jn anachronism. It was old-fashioned not to look at defence and Production in international terms. As you can see from the record, my associates and I did all we could to promote rationalization. Bristol and Rolls-Royce took an early step, quite voluntarily, by arranging the sale of Rotol to the Dowty group: next Bristol and Hawker Siddeley took the step °f creating Bristol Siddeley Engines. Later on, when Government Policy made it possible to go further, we were ready and willing to loin English Electric and Vickers in the formation of the British Aircraft Corporation. As to results, I have been greatly impressed by the readiness of People at all levels to work together, often surrendering personal Positions in the wider interests of their companies so that the industry has been able to deploy maximum strength on particular Projects to a degree not previously possible. It has been a feature °| the mergers that the boards of the companies concerned have a|med at unity, not federation: merely to maintain a collection of *Parate companies under one financial control would have been Use'ess in present conditions. Can I just clear a point about your own company—the Bristol Aeroplane Company ? Are your present holdings in the companies which emerged from the reorganization—20 per cent of British Aircraft, 50 per cent of Bristol Siddeley, 10 per cent of Westland Aircraft, and so on—fixed by the original agreement or could you switch from one to the other if you judged it profitable to do so ? In other words, what is the difference between Bristol Aeroplane and an investment trust ? There is nothing to prevent the company from switching its investments if it so wishes. On the other hand, the proportions held in these operating companies by the various owners have been arrived at by negotiation and agreement, and none of us would wish to disturb the established balance without prior consultation. In this respect the Bristol Aeroplane Company's investments are rather different from those of an ordinary investment trust. How different ? Well, with an ordinary investment company no one investment is of really major proportions, while, as you know, most of the Bristol Aeroplane Company's holdings are large and we are very closely connected with the operating companies in which our funds are invested. In your chairman's statement at the annual meeting, you spoke with pride, proper pride, of the various projects with which the operating companies are concerned—for example, the Pegasus engine, the BAC One-Eleven and the TSR.2. How would you say the company makes its contribution to the success of these projects—by finance, at board level, or in other ways ? By finance of course, at board level certainly—and there is also another less easily defined contribution which the owners bring to these new companies: I would describe it as a parent-daughter relationship. Companies originally started in life by Bristol—and, of course, by our associates—have in due course grown to maturity and have "married" with others: we like to think they were highly eligible candidates for matrimony and that they have married well. We naturally take great pride in the offspring of these marriages; and we also believe that, without interfering in the domestic affairs of these young marrieds, we can help them a great deal by reason of the wider industrial and commercial experience which their parents possess. / particularly wanted to ask your view of the proposal that we should have in this country an authoritative body capable of drawing up a general long-term plan for the aviation industry for which financial backing could be obtained from the State over, say, a five-year period. Under this Government, or the next, I am assuming we shall have some national planning body—NEDD Y, a reformed Treasury, or a new economic planning department. As I see it, from whatever planning body we evolve we want to get agreement on total investment on aviation, and then leave the actual deployment of the money, the placing of contracts, with a more technical body, thus eliminating the constant need to get Treasury approval. The
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