In August 1936 we got another order from the Air Ministry for two small prototype machines called Irving biplanes. These were never in fact built, and are only mentioned as a stage in the development of our order book. The type was to be a small single-seater with a Wolseley engine, carrying no armament but provided with a power operated winch from which two thousand feet of steel cable could be unreeled in flight. The function was that of barrage balloon cables; the machines were to be flown in large numbers just above a layer of cloud trailing their cables down into the cloud, so that enemy bombers would never know where to expect a barrage. Second line pilots, or women pilots, were proposed for these little unarmed aircraft. The scheme, however, was abandoned.
By that time we had managed to get the whole of our aeroplane production on to Wolseley engines. This engine was a radial engine of about 250 horsepower, modern in design and with a geared propeller, and a very considerable technical advance on any other British engine in its power range. It was manufactured by the well known Nuffield motor car organisation who had devoted much effort to its development. They did not, of course, make aeroplanes, so that the use of this engine freed us from our previous trouble of buying engines from our competitors, while in size it suited all the production, present and future, that we had in hand. It was therefore a tremendous blow to Airspeed when, in September 1936, Lord Nuffield stopped production of this engine without notice.
The circumstances that led to the abandoning of this fine little engine deserve record. At that time Britain was at peace but was re-arming in preparation for war. The Government were having a rough time from the Opposition over the cost of this rearmament; to placate the country over the rising taxation the Government pronounced that armament manufacturers would be strictly controlled from making excessive profits.
This policy decision, when filtered through the ignorant and over cautious high officials at the Air Ministry, arrived at the manufacturer in this form. For any given number of machines it was proposed to order, the manufacturer was required to quote a fixed price for the contract. A document called an Instruction to Proceed, or I.T.P. for short, was then sent to him. This document said, in effect, that he might start work and would be paid something some day, when the government accountants had had time to investigate his business. His quoted fixed price would be taken as a maximum, more than which he could not be paid; he would probably be paid a good deal less. Government accountants were to have full access to all the costs of his business and would make their own estimate of his overheads properly chargeable to the contract, and would then announce the price which they would pay.
The aircraft industry, being dependent for their existence upon government orders, had no option but to accept contracts on these lines, while commencing corporate negotiations to eliminate the initial inequities and absurdities of the standard I.T.P. document. Not so the motor car manufacturers. After a good deal of negotiation by Lord Nuffield’s aero engine sales manager his company received an invitation to tender for two hundred engines for installation in machines that it was proposed to order from us. I do not think that even his worst enemy could ever accuse Lord Nuffield of attempting to swindle the British public. The price that they quoted struck me as low at the time though I forget now what it was; on a basis of pounds per horsepower it was much lower than the price we were then paying for competing engines. The Air Ministry responded by sending them an I.T.P.
Lord Nuffield received this document and spent a morning studying it with Mr. Boden, his only co-director at that time. They read it carefully, and noted all the provisions; neither of them had seen or heard of anything like it before. If they were to submit their vast business to this sort of an investigation it would mean a wholesale re-orientation of their offices; it would mean engaging an army of chartered accountants on their side with a consequent increase in overheads. They had quoted a price for the engines which might well involve them in a heavy loss, through a genuine sense of patriotism, and they were rewarded by this suspicious nonsense. They were very angry.
They had spent at that time about two hundred thousand pounds upon the Wolseley aero engine, and it had led only to this. In the scale of their whole business that was not a large amount of money, and as good business men they knew when to get out of an unsatisfactory venture. To admit the Air Ministry methods of doing business into their vast enterprise would be like introducing a maggot into an apple; the whole thing might well be brought to ruin in the end. Better to stick to selling motor vehicles for cash to the War Office and the Admiralty who retained the normal methods of buying and selling. They sent the I.T.P. back to the Air Ministry, rejected, and closed down the aero engine side of their concern.
This was a major disaster to Airspeed, for every type that we were then designing or manufacturing was fitted with the Wolseley engine. It was also a major disaster to Britain, for the engine was technically far ahead of any competitor in its power range. I had a hurried consultation with my chairman and then a telephone conversation with Lord Nuffield’s secretary. It was always difficult to see Lord Nuffield personally, but he agreed to see me and I went to Oxford to visit him next day.
My object, briefly, was to induce him to give us the aero engine business for nothing, for we hadn’t got two hundred thousand pounds with which to pay for it, or anything like it. The most we could have offered would have been another public company to take the business over, in which we could have offered him a block of shares. I found Lord Nuffield very courteous, and he listened attentively to what I had to say. He told me that before closing his aero engine business down he had thought of Airspeed and had ascertained that there was a competing engine that we could use. I said it was a rotten engine compared with his, and he remarked that for that I had to blame the Air Ministry. He was still furious with the Air Ministry. He grew red in the face at the thought of them, and thumped the desk before him. “I tell you, Norway,” he said, “I sent that I.T.P. thing back to them, and I told them they could put it where the monkey put the nuts!” How many managing directors must have echoed the thought in those days and, unlike Lord Nuffield, had to swallow their principles with their pride.
Over the aero engine business he was sympathetic to our wish to take it over and willing to consider any proposal that we could put up; he was in no hurry to dispose of the assets but would require the factory space within two months for other military production. I left with the knowledge that he was genuinely sorry for the trouble he had caused us and he was anxious to assist us if he could.
The opportunity to continue the manufacture of the Wolseley engine was one that Airspeed should have taken; if we had done so, on however insecure a basis, it would have come out all right under the increasing war demand for aero engines of all powers. It proved impossible, however; the matter was too big for us. Airspeed had never made a profit and so had little power of gathering in the finance that would have been required, and we had nobody within our organisation who knew anything about the manufacture of aero engines. Our shipbuilding controllers, perhaps rightly, were averse to any further adventures till we had shown that we were capable of working at a profit. In the end we had to let this opportunity go, to my great regret; such opportunities do not come very often in the life of a company. The Wolseley engine died and today is hardly remembered, to the great loss of Britain. For this the blame must be laid fairly and squarely on the Air Ministry high civil servants of that day, for all their decorations and their knighthoods. They should have had the wit to handle the business of the country better than that.
We had not long to grieve over the engine changes that were forced on us, because in October 1936 the company received an I.T.P. for 136 Envoy trainers from the Air Ministry, the type that was to become known later as the Airspeed Oxford and was to become the standard twin engined training aircraft of the British Commonwealth during the war. The re-design necessary to turn the basic Envoy into a first class military trainer was very considerable, while the tooling nec
essary would take many months. The reconversion of the factory to making aeroplanes instead of parts again delayed production, so that it was to be more than a year before the first Oxford could be delivered and production could commence. At last, however, the company had a run of work ahead of it which would result in profits, tenuous though they might be on Government contracts. The success for which we had striven through so many years was now within our grasp, and I cannot recollect now that we found it specially exciting. Perhaps it had come too late, for hope deferred makyth the heart sick.
We lost another opportunity a month later, again through the restrictions of finance and the caution, perhaps justifiable, of the Board. British Continental Airways, the forerunners of the present British European Airways, asked us to tender for the manufacture of a batch of twelve Douglas D.C.3 aircraft. This was the successor to the D.C.2 for which we held the manufacturing licence and we could have got the drawings of the D.C.3 with little trouble; it was the aircraft which was later to be christened the Dakota when in British service. If we had taken this opportunity to go into production on the Dakota it would have had a very far reaching effect upon the fortunes of the company. First things, however, had to be put first, and we had half a million pounds’ worth of Oxfords to build before we should be free to take the opportunities that seemed to pass us every day. We were, however, still struggling to find a means to carry on the Wolseley aero engine, although hope was gradually dying.
In the year 1936 Watt sold the film rights in my novel Lonely Road quite suddenly and unexpectedly to Ealing Studios. In writing the chief character in this book I had visualised him in the person of Clive Brook the well known actor, and on publication of the novel I had sent a copy to Clive Brook. I had practically forgotten all about it in the pressure of more important business, but now four years later Ealing Studios bought the story for a film starring Clive Brook and Victoria Hopper. The sum paid by this British company for the film rights was not large by American standards but I had the pleasure of seeing the film made, and the visits to the studio were an interest and a diversion from the frustrations of the growing aircraft business of those days.
With orders in hand which would keep the company busy for years ahead and which must show a profit, even though a small one, I now began to feel less personal responsibility to the shareholders. It no longer seemed necessary to abandon every personal interest to the company, and for recreation in the evenings I began to write again. It was five years since I had touched my typewriter except to write a business letter; now I got it out and gave it a new ribbon and began to write another book which was to be published later under the title of Ruined City in England and Kindling in the United States. It was a relief to turn to something that would take my mind off Airspeed and its troubles, for by that time I was often at variance with the other members of the Board.
It was a relief, also, to turn a little to domestic life. Since our marriage Airspeed had absorbed the whole of my energies, and in this my wife had been both helpful and co-operative. We had had few holidays in the six years of our marriage beyond weekends of cruising in the Solent on my old ten tonner Skerdmore, and there had been periods when we had been acutely short of money as the salaries remained unpaid. We had two daughters by that time aged five and two and just becoming interesting; I had had little time to get to know them. Not only personal credit must be thrown into the pool by any managing director who dares to start a company like Airspeed Ltd; domestic life must be thrown in as well. Now I had time, I felt, to get back to a normal life, to confine the business of the company substantially within office hours, and to try to behave more as a father and a husband should.
At the beginning of 1937 war was brewing all over the world, and it was becoming practically impossible to sell a civil aeroplane abroad without finding that it was to be put to a military use. In January we received an order from a British agent in Hong Kong for a civil Envoy for the personal use of the Governor of Kwangsi Province. This order was from a reputable agent and the money was real. I knew little of China at that time and looked at the atlas; Kwangsi was in the south and bisected by a great river which ran out near Hong Kong, which was probably their shopping town. It looked all right, and it still looked all right when the agent told us that the client was in a hurry for his aeroplane and would pay to have it flown out, instead of being crated and shipped.
I gave the job to Colman, with a young man from our college as a ground engineer. My wife went with them for the joyride, getting off at Calcutta. The flight out went without incident until the aircraft landed at Hanoi in Indo-China, to refuel and spend the night before the final stage on to Hong Kong. There the British agent met the machine. He told Colman that the Governor was in a great hurry for his aeroplane and to fly through Hong Kong would be an unnecessary detour; they would fly northwards from Hanoi straight to the client and deliver his machine.
Colman knew that he was urgently needed back at Portsmouth and this seemed to save a couple of days’ flying; it did not occur to him that Hong Kong was British territory and that might have something to do with it. They flew north from Hanoi next day over hundreds of miles of mountainous and desolate country, and finally landed at a place called Liuchowfu upon a military aerodrome. It was explained to Colman there that Kwangsi had two Governors, a Military Governor and a Civil Governor, and this machine was for the Military Governor. It was immediately surrounded by Chinese technicians studying it to see where they would attach the bomb racks, and where the machine guns.
Before taking delivery the Governor wanted a flight in the machine. He had a bodyguard of four soldiers armed to the teeth who had to come with him. Each soldier wore a leather belt provided with two hooks, one on each side; from each hook hung a Mills bomb dangling by the safety pin. Colman struck at that, and insisted on the bombs being left behind. After the flight the Governor, very pleased with the machine, gave them a banquet of Chinese food that lasted for nine hours, and sent both Colman and the engineer to bed with acute gastro-enteritis. They were shipped down river to a hospital in Hong Kong, and came home from there.
A week after the delivery of the machine at Liuchowfu an official of the Foreign Office rang me up in my office at Portsmouth. The Chinese Government in Peking had sent a Note to the British Government complaining that they had been supplying arms to a rebel state, to wit, one Airspeed Envoy. The official wanted to know all about it and I told him. Evidently the matter was smoothed over, because we sold another Envoy to the same Military Governor at Kwangsi a couple of months later, with the full knowledge and consent of the Foreign Office. I sent that one out also by air, with George Errington as pilot, who had joined us as a ground engineer and is now one of the best known test pilots in England.
In March 1937 we were honoured by an order for an Airspeed Envoy for the King’s Flight, for the personal use of His Majesty and the Royal Family. This was the largest aeroplane that the King’s Flight had acquired to that date, and we made a special effort over the finish of the aircraft, as might be supposed. The machine was painted in deep crimson and royal blue and had seats for four passengers, with accommodation for pilot, wireless operator, and steward. When Wing Commander Fielden, the Captain of the King’s Flight, came to see me about the specification of the aircraft I questioned the necessity for carrying a steward in a vehicle that was little larger in accommodation than a motor car, and in which the passengers were unlikely to travel for longer than two or three hours. In explanation I received a brief account of the fatigue that royal personages must endure, a disturbing picture of radiant people who had opened a Town Hall and shaken a thousand hands smiling and waving to the crowd as they got into the aeroplane that was to take them home, and collapsing in a coma of fatigue directly the door was shut, grey faced and utterly exhausted. I said no more about the steward.
With this order, I think Airspeed reached the peak of its career. Whatever the profit and loss account might show, no company could receive a higher endorsement or
the quality of its products than we had received. We might continue to do as well technically; we could hardly do better.
From that time onwards, I think I began to lose interest in the company that I had brought into being. Civil work was coming to an end and all new design projects were of a military nature. None of us had ever served in the Royal Air Force, and though that experience may not be absolutely necessary for the production of a good military aircraft I think that our military designs lacked the touch of genius that had characterised our civil aeroplanes. Personally I could not pump up a great deal of enthusiasm for the military work that came our way, and with the approach of war and the conservative policy of our Board no new adventures were possible. Ahead of us stretched an endless vista of producing Airspeed Oxfords, and in fact the company was to go on producing Oxfords to the limits of its capacity for the next eight years. From this production there was not even the incentive of profit, for essentially the I.T.P. system boiled down to work upon a cost-plus basis with a small margin of profit on whatever the costs happened to be. Ahead of the managing director of Airspeed Ltd stretched an unknown number of years to be spent in restraining men from spending too much time in the lavatories in order that the aeroplanes might cost the taxpayer less, with the reflection that every hour so saved reduced the profit ultimately payable to the company. In time of war the sense of national effort will galvanise a system of that sort, and does so; in time of peace it tends to make a managing director bloody-minded. I think it did with me.
From this state of affairs stemmed the personal disagreements that began to plague the company about this time, which were to check its growth and ultimately lead to its absorption into a larger concern. Even the finance was now far beyond anything that we could do about it, for Airspeed by that time was a national asset and no bank dare close us down for such a trifle as an overdraft of £104,000, the figure reached by July 1937. With orders in hand for £594,000 of military aircraft we could cash the wages cheque without a thought about the bank manager, who in his turn had no control over the situation; our overdraft, with that of many other aircraft companies, was now a matter for negotiation far over our heads between the Board of the bank and the Secretary of the Air Ministry.