Scott Lithgow: Déjà vu all over again! The Rise and Fall of a Shipbuilding Company (review)

Baseball legend Peter ‘Yogi’ Berra came up with some of the most memorable (and baffling) sayings in American English, but none is more famous than his comment that he was expecting ‘déjà vu all over again’ during one game. The essential insight in this apparent nonsensical remark is demonstrated once again in this well researched, clearly argued and frequently depressing book.

The authors indicate that they initially planned a more modest study, focussing on the period from the mid-1960s, when Reay Geddes’s Shipbuilding Inquiry Committee published its Report, 1965–1966 on the competitiveness of the British shipbuilding industry and prompted a wave of merger activity including the creation of Scott Lithgow from two older yards until the demise of the merged company in 1992. They decided, however, to extend the coverage backwards in order ‘to achieve a fuller perspective of each [component] firm’ (p. viii). Accordingly, nearly half of the book deals with alternating chapters on Scotts and Lithgows from their respective inceptions to the Geddes report. The authors’ decision in this respect was a very good one for at least two reasons. For one thing, they offer here a fuller account of Lithgows through 1945 than has previously been published. Secondly, the background is essential for readers to be able to get a sense of the corporate cultures of the two firms, but also to remind us of the extended periods of success that the firms enjoyed prior to the constant crises of the postwar period, especially from the 1960s. That having been said, it was to some extent entrenched practices and attitudes, themselves bred in part from long-term and frequently profitable activity, that led to these crises. Lithgows was family owned, secretive and prone to half measures when forced by circumstance and government policy into merger into larger groupings, first in the Lithgow Group and then into Scott Lithgow between 1965 and 1970. Scotts were already overly reliant on naval contracts for profitability. Both were retrograde in labour relations, negligent in the area of technical innovation and slow to introduce modern techniques of management and cost accounting and control. In the face of stiff competition from overseas after 1945 and changes in demand from customers for particular products (e.g. oil drilling rigs and oil tankers), these qualities led to decreased competitiveness, and a gradual turning towards the government for direction and, more gradually, for financial assistance. The authors make it clear that the latter development was very gradual indeed, illustrating it by the stark contrast between the £20,000 Scott Lithgow had received from the government in consultant’s fees through 1969 and the £20 million the government paid to get Upper Clyde Shipbuilders up and running and keeping it afloat. Even on the eve of nationalisation in the late 1970s, ‘Scott Lithgow had survived . . . with little government support compared to the millions expended. . . on four [other] large shipbuilding establishments’ (p. 256) in the United Kingdom.

That all changed, of course, when the assets of Scott Lithgow and those of the other major remaining private British shipbuilders were nationalised and incorporated into the massive British Shipbuilders plc. The ill-fated and short-lived experiment brings into sharp relief one of the strands of the authors’ multifaceted explanation for the demise of the British shipbuilding industry and of this firm in particular by the early 1990s. Entrepreneurial failure was certainly one factor. Poor industrial relations and the rise of competition from abroad were others. But the government’s role was also extremely important. On the one hand, the government was far too intrusive into management decision making, in particular by pursuing largely political ends such as the stabilisation of employment, especially in Northern Ireland, to the exclusion of ones based on economic realities. On the other hand, it did not push effectively...