Manufacturing made love, not war in the 1960s

AUSTRALIA’S 1960s might be remembered as a time of surfing, go-go dancing and John Farhnam, but local manufacturing had brushed off its dancing shoes and thrown itself head-first into a decade of industry, employment and prosperity that put Australian manufacturing on the world map. 

Growth of manufacturing output per employee from Federation to World War II had varied from 1.0 to 1.3% per annum (excluding the years of the Great Depression). However, growth rose dramatically in the 1960s to an average of 4.3% per annum with its proportion of total gross domestic product (GDP) as high as 29% in 1960.

Over this period, the expansion of manufacturing productivity per annum was 11% higher than in the agricultural sector and almost double that of the economy as a whole. The entire economy was expanding, fuelled by large-scale immigration and technical and scientific innovation, as well as the increasing availability of raw materials after protracted wartime shortages. 

With manufacturing seen as vital for national development, the pre-war protective tariff remained, and import licensing restrictions and controls were retained until 1960. As a result, by the beginning of the1960s manufacturing’s share of GDP and employment had reached historic heights.

The white goods industry mushroomed after World War II, and by 1960 large-scale production of Australian motor vehicles had begun (more on this later). The development of the motor vehicle industry created further demands for steel, gas, plastics and rubber. In 1960, one person in 16 of the entire Australian workforce was employed in the manufacture, distribution or servicing of this industry.

However, Australian manufacturers who were nurtured by government policy failed to increase productivity. This was highlighted by the increases in the productivity of overseas manufacturing which did not have the same level of protection as Australian producers.

Unions took advantage of the 1960s environment with their labour shortages and plentiful profits and sought rewards to keep pace with inflation and to maintain steadily increasing wages. They were powerful and there was constant strife with management over wages and conditions.

Then, in the late 1960s, Britain started negotiations to enter the European Economic Community and Australia’s privileged access to the British market began to end. While the UK and EU markets started to close, exports of manufactured goods as a proportion of total merchandise exports actually started to climb. Over the past 30 years, exports have more than doubled from less than 14% in 1963-64 to 33% in 1996-97. 

We said in 1961

Reading through the inaugural issue of Manufacturers’ Monthly (May 1961), it is clear many topics that troubled manufacturers in 1960s are still major topics today: automation, exports, industrial relations, reducing inventories, equal pay for women, exports, safety, short-run production lines and management skills.

Devotees of Lean Manufacturing will be interested to read an article in the launch issue titled ‘Case histories of cost savings through Methods Engineering’, written by a Mr SS Cullen. The author describes Method Engineering as a technique which subjects work to close analysis in order to eliminate every unnecessary operation. Sound familiar? The technique also includes the standardisation and simplification of equipment, methods, work conditions and the training of operators to follow a standard method, just like Lean Manufacturing today. And we thought that was a relatively new idea.

However, managers at the time were also using Method Engineering to determine "by accurate measurement" the standard time in which an operator can do the job – a principle which doubtless explains the source of some criticism directed at Methods Engineering from the union movement of the time. 

The author however explains that in the ‘fullest" form of the technique, Method Engineering can help develop output and some plans include compensation through bonus payment. He writes, "It [Method Engineering] is not designed to encourage sweated labour, but to establish uniform standards necessary for orderly and efficient production".

A case study on a metal stamping company concluded that by adopting Method Engineering the company’s productivity rose by 65% for a total payroll increase of 25% resulting in a direct labour saving of 21% per annum. 

Another case study on an ornamental steel company reported its productivity rose 83% for a 20% payroll increase, resulting in a labour cost reduction of 34%. The company noted that one operative, whose daily output was five to six steel panels a day, rose to 14 panels a day following the introduction of a bonus scheme. The power of money!

An article headed "The problems of short-run production", written by a Mr BP Ferrie, is another interesting read from 1961 and sets-out a rational argument for automation. While the majority of manufacturers at the time were focusing on mass production, the author puts forward advice on incorporating short-run production in the most cost-effective way. He also espouses the benefits of ‘automation’, saying people should no longer have "fear, misconception and muddled thinking" on the subject.

The author writes: "The tendency of automation is to lessen drastically the proportion on total product cost represented by direct labour; to leave the portion of cost represented by raw material constant or slightly less than erstwhile; and to increase the so-called overhead burden of capital equipment, tooling, planning and indirect costs. That this policy has been a sound one is evidenced by results."

The need for short-run production in the 1960s was described as ‘the necessity to provide spare parts, pilot models, and make-up batches of components to balance stocks brought about by unduly high rejections during production." Obviously, quantity was more important than quality in the 1960s.

In conclusion, the author says: "The manufacture of short-runs of products in an organisation and a national economy which are paced and attuned to large quantity production requires the greatest of care. The ‘nuisance factor’ of the short-run must be minimised.

"Planning for the most effective handling of the short-run batch must extend beyond the mere setting-up and breaking-down of the machine and other purely technical considerations. 

"It must include flexible and unconditioned thinking in the tool-room, the material store, the receiving store, the production department, and in every other department which will be concerned even indirectly. And that means all departments!" 

Car industry

Australia’s car industry in the 1960’s was very different to today, though – like today – it led the way in automation and manufacturing techniques.

In 1961 Australia had six car-makers/assemblers: British Motor Corporation (Australia); Chrysler; Ford; Holden; Renault; and Toyota, though most cars assembled here were direct (or very close) copies of cars manufactured in the US or UK.

British Motor Corporation (Australia) assembled Austin and Morris vehicles including Austin Lancer, Morris Major, Mini, Austin Freeway, Wolseley 24/80, BMC 1100, Austin 1800 and the Morris Mini Moke at Sydney’s Victoria Park facility. During a period of significant postwar reconstruction, migrant assimilation and technical innovation, the factory employed a peak of 7,000 people from 35 nations. At the time, it was the only plant in Australia to manufacture the complete vehicle.

It introduced to Australia the in-line transfer machining of engine blocks, the "rotodip" paint process, automatic conveyor assembly processes and major advances in just-in-time and flexible manufacturing concepts. In 1968, following further corporate changes in the UK, it was renamed Leyland Motor Corporation Australia which continued until closure in 1982. 

In the inaugural edition of Manufacturers’ Monthly, an article headlined "Fuss about automation decried by BMC expert", highlights the prominence of the car company at the time, and how automation was viewed in the 1960s. In the article, Mr NH Humphries, chief manufacturing engineer with BMC, warns that many people were fed-up with the controversy over the word ‘automation’.

"I think it’s a pity the word was coined in the first place, otherwise there would not have been half as much fuss about this natural evolution of mechanisation," he said.

While he claimed "in the ultimate there will be no direct labour whatsoever" (we are still waiting to see this today), he concluded "full automation is very difficult to apply in the majority of industries, as they are not suitable for rigidity of control".

"Industries producing complex products are likely to find that line-flow production and a large degree of automation would reduce costs and improve the quality of the product, but its complete adoption would be too costly and would rob the plant of the flexibility necessary to meet the vagaries of consumer demand," he said.

"This applies particularly to the automobile industry in which complete automation with the present design of vehicles is not economical."

Later on, Mr Humphries put forward ideas of how computers could be used to improve production efficiencies, with each part of a vehicle given a code number with information of the material and production of the part. This information would be passed to the buying office for replacing components and raw materials from major suppliers to be delivered as required by teletype: the birth of enterprise resource planning (ERP)!

Ford Australia at the time was assembling the North American Ford Falcon, but during the mid 1960s the Australian and American product lines separated when the US Ford product proved inconsistent with Australian desires and requirements. Founded in Geelong in 1925, Ford Australia bought a large tract of land in the northern Melbourne suburb of Broadmeadows in 1956, and in July 1961 announced that the new Melbourne factory would become the company headquarters.

Chrysler Australia made a substantial investment in Australian manufacturing facilities in the 1960s, including opening a new assembly plant at Tonsley Park in 1964 and an engine foundry at Lonsdale in 1968. During this time, Chrysler Australia established its position as the third of the ‘Big 3’ Australian motor manufacturers behind General Motors Holden and Ford Australia. Chrysler Australia produced the American-sourced Dodge Phoenix from 1960 to 1973.

During the 1950s, GM Holden dominated the Australian car market with the Holden 48-215 and invested heavily in production capacity, which allowed the company to meet increased post-war demand for motor cars. By 1960, Holden introduced its third major new model, the FB which was the first Holden that was adapted for left-hand-drive markets, enhancing its export potential. Throughout the 1960s, Holden introduced many new models including the EK, EJ, EH, HD, HR, HA (Viva), Torana and HK (pictured). The LC Torana was the result of Holden’s $16.5 million transformation of the Woodville, South Australia factory for its production. 

Despite the arrival of serious competitors – namely, the Ford Falcon, Chrysler Valiant, and Japanese cars – in the 1960s, Holden’s locally-produced, large six- and eight-cylinder cars remained Australia’s top-selling vehicles. Richard Phillips, present director vehicle assembly operations, said the Elizabeth assembly plant in South Australia was put in place in the mid 1960s and at the time it was well-advanced in production techniques. "In fact, some of that equipment is still in use today," he told Manufacturers’ Monthly.

"In the press room for example, where we press the panels, up until the late 1980s, the press technology had not changed that much from the 1960s. But in the late 1980s we brought transfer presses which basically transfer panels, so it becomes a single press rather than multiple presses and automatically transfer panels between presses.

"Even today if you go into the press shop you will see a couple of press lines that were installed in the 1960s. They are still operational today, but are probably less than 10% of the shop." 

He explained that presses typically last 30 to 40 years: "In the 1960s, most of the body panels were bolted together and then painted by hand. Automated spray did not start until the late 1980s," Phillips said.

"For general assembly in the 1960s, we used a ‘chain-on edge’ production line, which ran through to mid 2002/3. Essentially that was a single chain that transferred the cars through 140/150 stations through general assembly."  

Keith Moss, now in his 80s, remembers working for Holden in the 19 60s well. "In 1960 I was employed as a senior engineer in the planning group at the Woodville plant in South Australia," Moss told Manufacturers’ Monthly.

Moss said he planned the instrument panel, the roof, the doors and deck lid rear end for the EJ model: "Part of my work was getting rid of the gap between the engine hood and the bulk of the windscreen in the plenum chamber area; we also got rid of the package tray at the back.

"We also designed a crumple zone in the engine hood so that in an accident it didn’t come into the cabin. I was also involved in the door assemblies in the 1960s. We were fabricating all the door assemblies in Woodville, 1,150 a day, packing them in boxes and posting them to the various vehicle assembly plants around Australia at the time; to Pagewood, (Sydney), Acacia Ridge (Brisbane), Dandenong, Perth and for export. We were very busy working 19 out of the 21 shifts to achieve that figure."

With Holden running out of room in Woodville, the company built a new press shop in Elizabeth.

"That was plant 4. It was a very advanced plant for the time, with all the presses built in Australia, many built by Perry’s Engineering to a UK design," Moss said.

"When we went to the EJ model, I made a career change to become foreman in the fabrication assembly plant. I can’t remember the wages, but they were always a little higher than outside."

Moss said safety was already an issue in manufacturing. "I remember when I was manager of the press shop in Woodville; I started safety meetings with shop stewards. We worked in consultation in those days, with the unions becoming more powerful," he said.

"At this stage there was very little automation, but we did have air tools. It was all hand spot welding on the general assembly then. For different colours in the paint shop it was just a case of changing guns."

In the mid 1960s, Renault Australia was set-up in Heidelberg, Melbourne, and assembled the R8, R10, R12, R16, R15, R17, R18, R20 and some Peugeots. However, the company closed in 1981.

The Toyota Motor Corporation Australia (TMCA) first began in 1958 where Toyota Land Cruisers were imported by Thiess Toyota for the Snowy Mountains Hydro-electric scheme. 

By 1963, assembly of Toyota vehicles in Australia by Australian Motor Industries (AMI) had begun at the production plant in Port Melbourne, Victoria. The production line of Toyota vehicles in 1963 was devoted to the Toyota Tiara.

Image: In 1960, one in every six workers in Australia was employed in the automotive industry. Holden’s EK Holden (1961-1962) was the car-maker’s first offering with an automatic gearbox, and optional fins. Image from GM Holden.

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