Anatomy of a Steel Works: The Australian Iron and Steel Company Port Kembla, 1935-1939

Abstract

For Australian secondary industry the Great War had two outstanding effects: one was the wider production of import replacement goods; a second was the rise of a metals processing industry, with silver, lead and zinc dominated by the Collins House conglomerate and iron and steel by BHP at Newcastle. After the war BHP moved inexorably towards a monopoly of iron and steel production, and built a network of subsidiary and associated firms which catered for the bulk of semi-finished iron and steel commodities produced in Australia. Yet the 1920s were difficult years for this company: at the outset it faced a flood of cheap metals from abroad as well as the competition of its one local rival, Hoskins Iron and Steel. Tariff protection was heightened, but not in proportion to the slump in overseas metals prices. The company shut down in 1922 to cut losses, subjugate a troublesome labour force and modernise. Then it moved into shipping and coal-mining, and into the production of various metal products. The base of the enterprise, iron and steel production, was moderately profitable towards the end of the decade. The depression which followed was offset by a continuous decline in labour costs, by a sharply depreciated currency, high tariff barriers, a temporary extension of the working day, some increase in the export of iron ore and, notably, a reduction in coal costs following the defeat of the miners of northern NSW. These factors combined to place the domestic market in the hands of local producers for the first time. The metals industry led the way out of the economic trough creating, from the middle of the decade, a backlog of demand for steel which BHP sought to fill.1 It did so by means of takeovers, vertical integration, rationalisation and modernisation of plant. In Port Kembla alone the combine acquired the Hoskins steelworks (Australian Iron and Steel) in 1935 and participated in three new 'downstream' ventures in steel products. All three were operating by 1939.2 This extraordinary metamorphosis is one of the paradoxes of the depressed thirties. As Neville Wills noted in his history of the steel industry, it reached 'an all time high level of prosperity on the eve of the war'.3 This 'anatomy' of the Port Kembla steelworks deals with the conditions which affected industrial relations in the plant in the years immediately following the BHP takeover. The analysis is divided into four parts covering, successively, the plant and industrial environment (including amenities and the hazards of work); the regional labour market and management policy on unionism; the socio-occupational structure and the problem of 'allegiance' and, finally, the industrial mobilisation of labour culminating in the total unionisa