[BITList] Austin, 150

[John Feltham]

An Australian Connection.



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Austin,  Herbert, Baron Austin  (1866-1941), engineer and motor vehicle manufacturer, was born on 8 November 1866 at Grange Farm, Deep Mill Lane, Little Missenden, Buckinghamshire, the second of five children of Giles Stevens Austin, a farmer, and his wife, Clara Jane, daughter of Willoughby Simpson, a customs officer in Rotherhithe. After beginning his education at the village school at Wentworth, Yorkshire, where his father was appointed farm bailiff on Earl Fitzwilliam's estate, Herbert Austin was educated at Rotherham grammar school and later at Brampton Commercial College, where he trained with a view to becoming an architect.

Australia and the Wolseley company

During a period of apprenticeship entered into with a paternal uncle, Austin decided to train as an engineer. While he was awaiting a vacancy for an apprenticeship at the Great Northern Railway, in 1884 his mother's brother arranged an apprenticeship for him at the Melbourne engineering firm of Richard Parks, where the uncle was works manager. After two years Austin moved to another Australian firm, Cowans, in order to gain experience of high precision engineering; the company was an agent for printing machines and Crossley gas engines. He moved finally to Langlands foundry, which specialized in making steam engines and wheels for locomotives and machinery for the gold mining industry, where he completed his apprenticeship in 1887. During this time he continued to practise his talent for freehand geometric drawing, a favourite childhood pastime which he revived as a prize-winning student attending evening classes at the Hotham School of Art.

Austin married Helen (d. 1942), daughter of James Dron, a Melbourne merchant, in 1887; they had two daughters and a son. Shortly before his marriage, Austin had taken up his first appointment, as manager of a small general engineering business in Melbourne in a firm which was connected to Richard Parks & Co. The business had been set up to develop a new sheep-shearing machine for an inventor, Frederick York Wolseley, an immigrant from Dublin who since the 1860s had managed a sheep station. In 1876 Wolseley had patented a shearing machine and acquired a large sheep station where he pioneered its use. In 1887 he formed the Wolseley Sheep Shearing Machine Company (WSSMC) in Sydney. He was impressed with Austin's record as a reliable supplier of high quality parts, which reflected an engineering ability which Wolseley himself lacked, and persuaded him to join the company as chief engineer. This led to the Austin family's removal from Melbourne to Sydney, followed by their return to England in 1893.

The circumstances which led to these changes included the winding up of the original WSSMC in 1889, when a new company of the same name, capitalized at £200,000, was formed in London. During the early 1890s Austin studied machinery in operation on a large sheep station. As a result he took out several patents for the improvement of Wolseley's machines, all of which in 1893 he assigned to the WSSMC. He also undertook to sell to the company all future patents relating to sheep shearing as part of a deal which brought him the managership of the company's operations, to be based from then on in a small workshop in central Birmingham. Although he received a share in the new company's equity, he was not a director.

Austin's return to England in 1893 occurred when the company was in crisis, leading to the founder's resignation in 1894. The company's reputation had sustained serious damage as a result of the sale of a large amount of defective machinery, which Austin concluded was the result of the failure of local component suppliers to meet specifications with the precision required. His solution was to switch from assembly to manufacture. With great difficulty, he also persuaded the Wolseley directors to acquire a more spacious factory, the Sydney works, which allowed him to pursue a new policy of diversification. Until then the company had been an exporting business in a highly seasonal trade. Austin set out to alter the balance, beginning by adding to shearing machines the construction of machine tools for other trades and industries which generated a demand within Britain, particularly from cotton manufacturers and cycle makers; new products included lathes, screw cutting machinery, milling machines, high speed steam engines and castings, and gas engines. Austin also built up a business as a cycle agent, his first step in the direction of road transport.

In 1894 Austin took out a joint patent with H. H. Mulliner, a leading coachbuilding firm, for a flat circular furnace for attaching metal tyres to wheels, but Mulliner withdrew from an initial alliance with Austin and the WSSMC in preference for a connection with the extensive newly formed, and ill-fated, Daimler Syndicate. After observing a 'horseless carriage' in Paris, either in 1895 or 1896, Austin, working in his own time during evenings and at weekends, constructed a motorized tri-car modelled on the French Bollee. The WSSMC directors agreed to invest £2000 in plant for vehicle manufacture under Austin's personal supervision, and the Wolseley Autocar Number 1, another three-wheeler, was exhibited at the Crystal Palace National Cycle Exhibition in December 1896. By building this vehicle, one of only a handful of experimental prototypes made before production was begun by the few companies which showed interest in the commercial potential of the motor car, Austin secured his place as one of the principal creators of a British motor industry. By 1897 the Autocar No. 1 incorporated several Austin patents, as did his first four-wheeled Wolseley vehicle of 1899/1900, which was built entirely from British parts and achieved a breakthrough to commercial success. In 1900 the 'voiturette', driven by its creator, won first prize from the Daily Mail and a silver medal in the Auto-Club's 1000 mile trial. Relations between Austin and the Wolseley directors were not harmonious; he felt frustrated, dissatisfied at his exclusion from board discussions of policy issues, and disappointed by the directors' apparent lack of commitment to the commercial potential of the motor car. His own initiatives to form a company, for which he sought financial backing, failed. His achievements at Wolseley, however, led the directors of Vickers and Maxim, Britain's largest armaments manufacturer, who in 1896 had agreed in principle to enter the new industry, to decide to invest in Austin's vehicle enterprise, hitherto part of the WSSMC business under a contract nearing termination.

The Wolseley Tool and Motor Company Ltd, capitalized at £40,000 and based at the Adderley Park works, was formed by Vickers in 1901. Austin was given a five-year contract as managing director, a salary, and 5 per cent of the company's annual net profits. After a period of nine months, during which he was free to spend half his time on the management of the WSSMC, his involvement with the latter was limited to that of director or consultant. He also received payment for the transfer of patents taken out in his name. Production commenced before the end of 1901; by the time the contract ended in 1906 more than 1500 Wolseley motor cars had been produced, the Wolseley marque had been established, and the company was the largest British motor manufacturer. Austin achieved an international reputation.

Austin Motors, the early days

Differences of opinion with Thomas and Albert Vickers over engine design precipitated Austin's departure shortly before the management contract expired. Convinced that he could only achieve his ambitions in the infant industry if he owned, controlled, and managed the business (a persistent theme of his private and public utterances throughout his life), by December 1905 Austin had persuaded the steel magnate Frank Kayser to provide mortgage and simple loans to the value of £11,350 for a new company. In addition to £3000 issued in the form of debentures, Austin held virtually all of the remaining capital, in the form of £5629 in ordinary shares, which he purchased with accumulated personal assets through savings and the sale of patents; together, these formed the financial underpinning for the Austin Motor Company Ltd. As one of the two founding directors, Kayser made financial guarantees which were also important in securing substantial overdraft facilities from the Midland Bank during the new company's crucial first few years. A further injection of capital in 1906 brought William Harvey Du Cros (1846-1918), managing director of the Swift Cycle Company, on to the Austin board of directors. In its first full year of production the company employed 270 workers and built 120 vehicles; in 1914, when it became a public company capitalized at £650,000, 1500 vehicles were produced by roughly 2300 workers. By that time the Austin Motor Company was probably the fifth biggest British motor manufacturer, after Wolseley (which continued to be the largest), Humber, Sunbeam, and Rover. Austin's position in the new company was similar to that in the Wolseley Tool and Motor Company, chairman and managing director for an initial five-year term. His shareholding was the same as that of Du Cros, each possessing almost one-half of the ordinary capital, though Austin also received a salary and 2.5 per cent of net profits.

The First World War saw a transformation in the scale and scope of production at the Austin plant at Longbridge, as the product range changed from cars to armoured cars, ambulances and lorries, shells, guns, aeroplanes, generators, and pumps. Expansion in production was accompanied by an increase in employees to 20,000. Austin's services to the war effort were recognized in 1917 by appointment as KBE, and in Belgium by admission as commander of the order of Leopold II. After the war problems associated with the conversion of a hugely expanded manufacturing capacity from war to peacetime production created serious financial difficulties for the company. For peacetime purposes the works layout, which consisted of three separate complexes each comprising several buildings, was inconvenient, while much of the plant and equipment was unsuitable. Purchase of the large north and west works from the Treasury and the conversion to peacetime production necessitated a public issue in the form of £1 million preference shares in 1919. In addition, some of Austin's commercial decisions did little to alleviate post-war difficulties. Pre-war success had been based on the manufacture, assembly, and sale of relatively large, high quality, and expensive vehicles. Crucially, before the war ended Austin misinterpreted the significance of Henry Ford's single model strategy by deciding to limit car production after the war to the large, expensive Austin Twenty, first produced in 1919; the logic for doing so was the simultaneous manufacture of tractors and lorries which incorporated the same 20 hp engine. During the deep depression which struck the industry in 1921 the company's creditors, notably the Midland Bank, forced it into the hands of the official receiver. As a result, Austin cars were excluded from the prestigious annual Olympia Exhibition.

This was a turning point both for Austin and for his company. The economics of car production in Britain had begun to be transformed by Henry Ford's English assembly plant shortly before the war, while after the war William Morris (later Lord Nuffield) succeeded in Anglicizing Ford's approach to the market, also on the basis of assembling, rather than manufacturing, vehicles. Austin's post-war financial crisis, therefore, occurred at a time when the company was most vulnerable because of the pace of change in the industry. In 1919 the Midland Bank's substantial financial support in the form of a mortgage and a large advance was extended, but only after Austin's two co-directors were replaced by bank nominees, one being a director of Portland Cement, the other a director of several financial organizations. In the reconstruction, which began in 1921, intervention went further. On the insistence of creditors, particularly the debenture holders and the Midland Bank, the managerial functions of finance, production, and organization were transferred to outsiders recruited to assume these key responsibilities. Austin, who remained as chairman though not managing director, accepted the appointments with reluctance, particularly that of Charles Richard Fox (Carl) Engelbach, whose responsibilities as works director initially set out by the creditors' committee he succeeded in modifying so that vehicle design continued to be his own personal responsibility. Even though he owned at least one-fifth of the voting shares in the company after financial restructuring, management by a committee, which was one of the reforms imposed by the creditors' committee, was clearly intended to remove overall control of corporate strategy from the founder.

Loss of managerial control of the business which he had created, allied to his personal financial difficulties, may help to explain Austin's proposals to effect a merger with William Morris's business empire in 1924/5. Morris rejected this overture, while in the same year Austin's hopes of selling out to the American automobile manufacturer, General Motors, also came to nothing. Then approaching the age of sixty, in both instances the founder of the Austin Motor Company had clearly envisaged a secondary role for himself, limited to design and matters related to his professional engineering interests, rather than as a manager. In 1926, the creator of the Wolseley marque suffered a further personal blow when he was outbid by Morris, who acquired the Wolseley Motor Company from the receivers. Nevertheless, as a result of the 1921 reorganization the Austin Motor Company survived, and in two key aspects of management Austin continued to shape corporate policy.

In 1918 he introduced a formal apprenticeship scheme involving attendance at technical colleges and which extended to training in engineering, a trade, or commerce. He also founded an Austin scholarship which enabled successful candidates to continue study at Birmingham University. While labour management was not his particular responsibility, his hostility to trade unions was reflected in the company's policy which neither the trade unions nor the Engineering Employers' Federation regarded as at all co-operative. Until the tightening of the labour market during the late 1930s, Longbridge was virtually a non-union company.

Development of popular models

The other aspect of the business which Austin dominated even more was that of design. After the war, serious difficulties faced by the Austin Motor Company led him to design cars which would appeal to a wider section of the population than had previous Wolseley and Austin models. This occurred in stages. The Austin Twenty single model policy was scrapped during 1921, when Austin designed a scaled down, lower priced version in the form of the Austin Twelve. Then came the innovation which captured a large section of the market, which before the war had been dominated by Ford and during the early 1920s by Morris; the Austin Seven, 'the baby Austin', entered the showrooms in 1922.

By the end of the decade profits from the sale of this car enabled the Austin Motor Company to pay off huge debts to the bank and to other debenture holders, and by 1929 to begin resumption of dividend payments to holders of ordinary shares. Austin's diminished personal assets rose as a result of accumulating royalties from his patent on the Austin Seven, which he designed on his own initiative and initially without corporate support. Between 1925 and 1932 the car accounted for roughly half the company's production, at a time when roughly one-fifth of all cars made in Britain were made at the Longbridge factory. This national share rose to a quarter in 1933 and 1934 when, for a short time, Austin produced more cars than Morris. The boost to sales provided by the Austin Seven was sustained during the mid-1930s by the success of the Austin Ten, designed by Austin at the request of his co-directors, who on that occasion ensured full financial backing from conception to production, as a response to the innovative Hillman Ten. The Austin Ten was important in enabling the company to retain second place to the Nuffield organization in the face of intensified competition from the Rootes group, the Standard Motor Company, the Vauxhall Motor Company (General Motors), and from the new Dagenham plant of a thoroughly revived Ford Motor Company.

Versions of the Austin Seven were produced on licence in France, Germany, and the USA, though with mixed results. The greatest overseas success occurred in Japan where, following a period when a company, later known as Nissan, had been infringing Austin patents, in 1934 the same Japanese company began to build cars under licence. This marked the beginning of the internationally successful Datsun motor car and the growth of a company which later, following the collapse of the British-owned motor industry, became one of the largest vehicle manufacturers in Britain.

Recognition and public life

These achievements owed much to Austin's success as an engineer and a creative designer, though much less to his ability to manage financial, personal, or corporate affairs, or a large organization. At its peak during the late 1930s the company employed 20,000 workers and produced between eighty and ninety thousand vehicles. His working life was concentrated on Longbridge, though he continued as director of WSSMC, of which he was also chairman, between 1911 and 1933. His contribution to the motor industry and his professional standing among engineers were recognized in several ways. He was president of the Institute of British Carriage and Automobile Manufacturers in 1912, of the Cast Iron Research Association in 1929, of the Institution of Automobile Engineers in 1931, and of the Institute of Production Engineers in 1932-3. He was elected to an honorary life membership of the Institute of British Foundrymen in 1935, and of the Institution of Mechanical Engineers in 1936; he became president of the Society of Motor Manufacturers and Traders in 1934. In 1937 he was chairman of the government's shadow aero-engine committee.

The philanthropic causes which received Austin's financial support included the Birmingham hospitals. He was chairman of the Birmingham General Hospital in 1932 and in 1940 became president of the Birmingham United Hospital. The largest donation he made was in 1932, when £250,000 was donated to Cambridge University to advance Lord Rutherford's research at the Cavendish Laboratory. In 1936 he became Baron Austin of Longbridge. He received an honorary degree of LLD from the University of Birmingham in 1937. Religion played no part in his life, though after the death of his only son, Vernon, who was killed in action in France in 1915, he embraced the philosophy of Pelmanism. A contemporary suggested that rather than diminishing, grief over his son's death intensified.

In politics Austin was a Conservative, serving as MP for the King's Norton division of Birmingham between 1918 and 1924, when he was publicly silent on, though elsewhere an advocate for, the need for 'businessmen's government'. His public life was limited; until his death Longbridge absorbed most of his energies. He died at his home, Lickey Grange, near Bromsgrove, on 23 May 1941. Minutes before his death he signed documents approving the design for new car models. Austin's enduring legacy was his achievement as a professional engineer in helping to create the British motor industry; his managerial approach and style proved less effective in the large organization which his company eventually became, though any explanation for these limitations must take account of his temperament, as well as his personal financial embarrassments, and his grief following the death of his son.

Roy Church 

Sources  R. Church, Herbert Austin: the British motor car industry to 1941 (1979) + Z. E. Lambert and R. J. Wyatt, Lord Austin: the man (1968) + H. Austin, 'Sir Herbert Austin, KBE: his life story', Autocar (23 Aug 1929) + St J. C. Nixon, Wolseley: a saga of the motor industry (1949) + DNB + GEC, Peerage
Archives priv. coll., sketchbooks
Likenesses  two photographs, 1931-6, Hult. Arch. · I. Opffer, drawing, 1933, NPG · W. Stoneman, photograph, 1937, NPG [see illus.] · G. Harcourt, portrait; destroyed in the Second World War
Wealth at death  £509,712 9s. 8d.: probate, 3 Nov 1941, CGPLA Eng. & Wales




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