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The British Thomson-Houston Co. Ltd. (BTH) History

The foundations of British Thomson-Houston (BTH) were laid in 1886, when a London firm Laing, Wharton and Down was formed to exploit in the United Kingdom the sale of products made by the American Electric Co. (which became the Thomson-Houston Electric Company in 1892). It had an office in Bankside, London and one of its first contracts was incandescent lighting for the eastern part of the City of London. This firm became part of British Thomson-Houston Ltd. when it was formed in 1896 with the capital held mainly by American Thomson-Houston (part of GE of America) and partly by British and French bankers. With offices at 38 Parliament Street, Westminster, the new company no longer acted as an agent as it had acquired patents and exclusive manufacturing rights from the American company. In May 1896 the company became firmly established when its name was changed to The British Thomson-Houston Company Ltd.

One of the first major undertakings by BTH was to promote a parliamentary bill to form ‘The General Power Distribution Company’. This bill, if passed, would allow the Company rights to provide electricity to regions of Derbyshire, Nottinghamshire, Lincolnshire and West Riding, Yorkshire. Though the bill was unsuccessful, the Power Act of 1900 enabled BTH and British Westinghouse to obtain new contracts involving power supply to large areas.

Rugby became the heart of BTH production due to its geographical location with good accessibility by rail and local coal supply. In 1900, Glebe Farm was purchased for £10,000, from Thos. Hunter & Co., as a site for new works. Manufacturing began in March 1902 with a factory floor space of 206,000 sq. ft. Heavy equipment was the primary output of the site with priority given to steam turbines, motors, converters and switchgear. In 1902 BTH obtained the rights for the Curtis steam turbine. The plant at Rugby produced its first turbo-alternator in 1905 and in 1907 BTH engaged in a joint venture with Wolseley Motors to construct petrol-electric buses. 1909 saw the Company involved in providing electrical equipment for the first trolley buses in London. From its time of origin the Company was connected with the manufacture of incandescent lamps. In 1911 they obtained all the GE patents for drawn-wire tungsten filaments and the Mazda trade mark. The Company’s profits reached their zenith in 1913, almost certainly due to the growth in the lamp business, soaring to £400,000 (before tax) in 1919.

Before the First World War the administration of BTH was under the direction of three Americans: Howard C. Levis, William Clardy Lusk and Harry Sporborg. Howard C. Levis became chairman of BTH in 1916 and was made chairman of AEI in 1928, retiring a year later. William Clardy Lusk and Harry Sporborg were to remain prominent figures in the company after it's amalgamation with AEI in 1928. Lusk was chairman of BTH in 1929 and became a leading figure in AEI until his death in 1944. Harry Sporborg became a director in 1910 and replaced Lusk as chairman in 1944.

The outbreak of the First World War in August 1914 placed a considerable strain upon many British electrical firms. BTH was no exception, though the main output from its factories consisted primarily of non-military products. The development of marine apparatus for naval service was the Company’s most significant contribution in assisting the war at sea. The 1920s was a period of vast expansion for BTH with new extensions built at many existing factories such as Willesden, Birmingham, Chesterfield and Lutterworth. BTH also made significant advances in domestic appliances during this period. The main strength of the company was its lamp business which continued to flourish, whilst the radio manufacture made low returns.

In 1926, Gerard Swope, the president of General Electric of America proposed that BTH, Westinghouse, GEC and English Electric should amalgamate. Lord Hirst of GEC was not interested in Swope’s scheme and his ambitious plan resulted merely in the merger of BTH and Metrovick in 1928. It was during this period of confusion that BTH obtained two small but significant British electrical companies, Ferguson Pailin and Edison Swann. These companies were to be submerged with BTH and Metrovick in the merger with AEI in 1929. BTH, like many of the leading electrical firms, suffered badly during the Depression of the 1930s relying on the profits from its lamps to help the company through the world-wide economic crisis.

The outbreak of the Second World War allowed BTH to maximise its profits and the company’s main achievement lay in aircraft. BTH and Metrovick, independently of each other and without Government assistance, were the first two companies in the world to construct jet engines in 1935. The BTH team achieved this task using centrifugal compressors developed by Sir Frank Whittle, regarded as the inventor of the jet engine. BTH’s success in the field of aircraft was further enhanced when in 1938 it secured seventy per cent of the shares in Westland Aircraft. BTH failed to capitalise commercially upon the jet engine claiming that it could not afford to redirect resources away from electrical goods.

Due to the lack of commercial enthusiasm required to exploit their inventions, and the historical rivalry between BTH and Metrovick, both companies suffered at the hands of competitive American firms. Despite this, the BTH factories at Coventry, Birmingham, Willesden, and Chesterfield were effective in co-ordinating their resources to assist the Allies in their struggle for supremacy in the air. By providing substantial amounts of equipment for the RAF's fighter aircraft such as magnetos, compressors, and starting switches, the Company contributed to the outcome of the Battle of Britain in 1941. BTH also played a significant part in the development of radar. Equipment provided by the company contributed to the sinking of the German battle cruisers "Scharnhorst" and "Bismarck". A new torpedo factory was constructed at Rugby during the war years. Further achievements for the war effort included the development of the electrically propelled torpedo and the anti-acoustic mine device.

The succession of Captain Oliver Lyttelton (created Lord Chandos in 1954) as chairman of AEI in 1945 was to be exceptionally advantageous to BTH. Chandos’ expansionist nature and keen eye for investment allowed BTH to embark upon several important projects. The most well-known was at Larne in Northern Ireland, where BTH constructed the largest turbine works in Europe, costing £8 million pounds and completed in 1957. Much to the resentment of Metrovick, the company also secured the contract for the Buenos Aires power station, valued at £35 million. BTH’s success was further established in the manufacture of turbo-generators and in the realm of domestic appliances, especially in the 1950s. During his second term as chairman of AEI (1954-1963), Lord Chandos began a period of internal reorganisation in the hope of making the company more efficient following recent poor financial performance. Though he was a major player in the revitalisation of AEI after 1945, Chandos was unsuccessful in eliminating the rivalry between BTH and Metrovick. More significantly, his drive for the unification of AEI was to result in the familiar names of British Thomson-Houston and Metropolitan Vickers being abolished from the electrical world on January 1st, 1960. This decision was considered essential for the regeneration of AEI as Lord Chandos pledged to re-establish the Company’s dominance in the electrical market. The decision to remove the familiar names backfired and AEI experienced a further drop in profits and a decline in shares.

Reorganisation, unprofitability and the continuing "MV.v BTH." antagonism did not help AEI through this unstable chapter in its history. The designs for recovery initiated by Lord Chandos fell short of their intended targets, and the structural weaknesses in the Company were to remain unresolved until AEI was absorbed into GEC’s expanding electrical empire in 1967.

BIBLIOGRAPHY

'BTH Reminences sixty years of Progress'
Compiled by H. A. Price-Hughes.
The British Thomson-Houston Company Limited.

'Anatomy of a Merger: A History of GEC, AEI and English Electric',
R. Jones & O. Marriot, (1970),
Jonathan Cape, London. ISBN 0 224 61872 5

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Published on:2004/11/23 09:21:03