Government, Global Business and the Scottish Highlands

An exploration of the Scottish Highlands and the aluminium industry. This book charts this neglected history of an industry that became inextricably tied to imperial interests and national defence, and its impact on the communities and landscape around its Highland works.



Product Description

In 1895 the fledgling British Aluminium Company started work on its first aluminium reduction works at Foyers on the banks of Loch Ness. By the outbreak of the First World War – a conflict that was to transform the perception of the metal and the industry – the company’s two Highland factories produced 12 per cent of the total global production of the metal. This book charts this neglected history of an industry that became inextricably tied to imperial interests and national defence, and its impacts on the communities and landscape around its Highland works. With a foreword by Rt Hon Charles Kennedy MP.

This heavy Highland industry is the subject of Dr Andrew Perchard’s book, a lecturer in business history and strategy at Strathclyde University. Dr Perchard stresses: “This is a story about the Highlands being at the centre of a global industry. On the eve of the First World War, Foyers and Kinlochleven accounted for 12% of the global production of aluminium. These Highland smelters were the backbone of the aluminium industry in the UK for the bulk of the 20th century.”
Herald Scotland (17/08/12)

‘A new book about how aluminium smelting has shaped life in the Highlands over the past century was launched in Fort William on Monday. Aluminiumville is by Dr Andrew Perchard, a lecturer in Business History and Strategy at the University of Strathclyde Business School and was formely a post-doctoral research fellow on the history of aluminium project at the Centre for History, University of the Highlands and Islands.’
Oban Times (30/08/2012)

‘Aluminiumville is a magnificent achievement. It covers a great deal of ground. It is packed with interesting ideas and insights, all resting on extraordinarily thorough research.’

‘The emergence of the aluminium industry in the Highlands has been put under the spotlight by a new book published this week. ‘Aluminiumville’, written by Dr Andrew Perchard – a former Research Fellow at UHI’s Centre for History – charts the emergence of the aluminium industry in the Scottish Highlands as part of the global trade in the metal.’
Ross-shire Journal (31/08/2012)

  • Author: Andrew Perchard
  • Binding: Paperback
  • ISBN: 9781905472154
  • Pages: 448
  • Date of Publication: May 2012
  • Dimensions: 234 x 156 mm

2 reviews for Aluminiumville

  1. :

    Andrew Perchard’s study of the development of the aluminium industry in Britain examines the economics and economic development of the industry, its relations with government, and the impact of the industry on the human and physical geography of its location. The British Aluminium Company (BACo) was registered on 5 May 1894, two months after it had acquired the exclusive British and colonial rights to the Héroult process from the Neuhausen Company of Switzerland, holders of the global rights for the process.The British industry was located in Scotland initially at Foyers (1895) and later additionally at Kinlochleven which might have been named ‘Aluminiumville’ (1909), and at the Lochaber scheme near Fort William (1929). The main impression after reading this well-researched and absorbing history of the industry is a slight bemusement that it survived in Britain for as long as it did. Many of the industry’s advantages and difficulties arose from its economic characteristics. A large sunk investment industry, it had high financial capital set-up requirements, but was then able to enjoy some incumbent advantages in an industry to which entry was difficult. Given such economic characteristics, the global industry had strong tendencies towards cartelization and for the first half of the twentieth century these were arranged in a gentlemanly manner. The clubroom quiet was disturbed by the Great Aluminium War of 1958–9. In 1958, BACo’s shares were raided by the semi-manufacturer Tube Investments (TI) and US Reynolds Metals (RM) which as Reynolds–Tube Investments Aluminium (RTIA) held 94 per cent of BACo’s stock by July 1958, albeit at a high price.WithTreasury backing British Aluminium survived in name until its merger in 1982 with the UK subsidiary of the Canadian multinational, the Aluminium Company of Canada (Alcan). British Alcan survived until 2007 when it was taken over by RioTinto Zinc.That take-overs and mergers, allied to forward and backward integration in the UK market, should have characterized a high-entry cost industry with high sensitivity to rate of capacity utilization was not surprising, although the marked aggression in acquiring market share from the end of the 1950s is interesting and may have reflected fears of excess capacity allied to a fluctuating rate of return on capital employed (ROCE). In BACo’s case, ROCE fluctuated between 11 per cent and 2 per cent in the years 1929 to 1971. A dominant variable cost for the industry was that of electricity. In Britain, plant was deliberately located near sources of low marginal cost electricity, initially near hydroelectric sources and later near the promise of nuclear power. As that promise faded, so too did Alcan seek to renegotiate its electricity supply contract for the Invergordon smelter which came on stream in 1971 and closed controversially in 1981. With the Highlands being surprisingly vulnerable to droughts, or more precisely lacking sufficient constructed water-storage capacity, and with nuclear power failing to release the British industry from its necessitous attachment to hydro, the electricity supply costs of the industry placed it at an international competitive disadvantage. The British industry was also comparatively hampered by the inadequacy of its domestic market and its limited ability to protect itself from imports. During the interwar period, when potential protection was offered in the tariff of 30 per cent on aluminium ingot imposed after the Ottawa Agreements of 1932, Alcan as a British Empire producer was exempted from duties, while Norwegian exporters enjoyed a concessionary duty of 10 per cent under the Anglo-Norwegian trade agreement of 1933. The return of world war dramatically increased the demand for aluminium and, as in the First World War, valuable R&D was funded by the government.Yet while wars demonstrated the strategic importance of the domestic aluminium industry, outside of war government was not always a faithful partner. Peacetime brought slumps in demand and increased competition, not least after the Second World War from a North American industry which had built much larger and more technologically advanced smelters and rolling mills during the war. Immediately after the SecondWorldWar, of the aluminium used in the UK between 1946 and 1952, 76 per cent was in the form of Canadian ingots imported under government contracts.As the economist Siegfried Moos noted in a lecture to the Royal Economic Society in December 1948, given lower Canadian prices, the criteria for the size or existence of a British aluminium industry were unclear. Such questions and the fundamental economic and industrial factors shaping the fortunes of BACo and its successor companies in Britain are well analysed by Perchard and shrewdly located in their political and environmental context. This is a valuable, well-researched book which is both very readable and well worth reading.
    Martin Chick

  2. :

    Scotland has been described as ‘the cradle of the aluminium industry’ (p, 180). The statistics of its role in this global industry in the twentieth century are impressive. By 1913 British Aluminium Company’s Scottish reduction works made ‘a major contribution’ to global output, producing 92 per cent’ of the UK’s aluminium (p. 31). They also produced 12 per cent of the global aluminium output. In that year, seven companies controlled 94 per cent of the global share of aluminium production. One of them was a Scottish company: British Aluminium Company, which had incorporatedsin 1895. Until the 1970s, its Scottish smelters were described as the ‘only significant territorial producers of the virgin metal within the UK’ (p. 13). Even today, the Lochaber smelter of its successor, Alcan, continues to be a significant player, producing around I per cent of the primary aluminium output of the second largest producing region in the world, Western Europe. The aluminium industry had a distinct physical presence in the western Highlands where it was primarily located, especially in Kinlochleven, Lochaber, Foyers and Invergordon. It required gigantic schemes, factories and plant to be built, as also villages and amenities to support these. It was also a major employer. In the early 1980s the aluminium smelters in Kinlochleven and Lochaber employed around 7 per cent of the economically active population on permanent contracts, and also contributed very substantially to the local economy. But by the twenty-first century, the scale of operations had changed significantly: the Kinlochleven works, central to the operations of British Aluminium Company and its successor, were closed in 2000 while most of Alcan’s Scottish assets were closed between 2001 and 2004. This book charts the history of the aluminium industry in Scotland through the history of the British Aluminium Company, known as Alcan after 1982. But it is not a conventional history of a major company and an industry. It examines the development of British Aluminium Company’s activities using ‘a thematic approach and deploying a broad theoretical framework’ (p. 18). Each theme is dealt with using a historical chronology. The book’s subtitle ‘Government Global business and the Scottish Highlands’ highlights the major themes: the relationship between business, industry and the state; global developments and their impact on the business, industry, government intervention, and also community; the relationship of government, business and industry on the Highlands as a ‘problem’ area that required special intervention to ensure its economic development. The book moves from the wide context of the global and British industries through to the impact that the British Aluminium Company had on the landscape and environment where the schemes were built and operated, to the working lives of its employees, their employment conditions (and health and welfare), their homes, and their personal recollections of their employer. This structure allows Perchard to skillfully interweave the themes throughout the book and show how they permeated all aspects of the industry. Aluminium is a metal of strategic importance. It is therefore a key industry for intervention by government, whether the British government, the Scottish Office, local authority, or all of them. State support has therefore been critical to the endurance of the industry. It provided ‘vital orders, and political, financial and scientific and technical support … which aided the expansion of the industry’ (p. 78). Maintaining, developing and nurturing the relationships between the British Aluminium Company and the government was therefore critical. Through his acute observation, thorough knowledge of government, and deft analysis of an extensive range of evidence, Perchard provides a well-crafted analysis of their complex relationships with the different players within government. These relationships were not always easy to manage: there was a labrynth of players to be negotiated, each with their policies and priorities, roles and responsibilities and place within government. Relationships between the different parts of government were not always congenial, and tensions arose, highlighted only too clearly by the government’s role in the establishment and closure of the Invergordon smelter. There were also tensions between civil servants and ministers. These relationships were carefully managed. The government shaped its relationships with the industry. As a result of its direct control, Perchard concludes that it ‘fostered a culture of dependency within BACo, increasing myopia in its dealing with ministers and officials, and was compounded by the recruitment of former senior military staff and civil servants’ (p. 78). Therefore, that relationship also had ‘a -profound impact on the strategic outlook, organizational culture, staffing, and consequently the fortunes of the company’ (p. 15). It also changed over time. Perchard concluded that it was ‘a marriage of convenience with the state’ which ‘gradually soured into a fractious co-existence, in which neither party was satisfied with the other’ (p. 321). The politics of regional development and the economic importance of the aluminium industry and its impact on the communities where British Aluminium Company was located gave rise to a number of tensions. These relate to issues such as the impact of the works on the local environment (environmental health and safety), as well as the working environment in the plants themselves (occupational and health and safety). Perchard observes how ‘environmental concerns remained secondary, or sidelined, in planners’ prioritization of economic regeneration and job creation until the 1970s, especially in the Highlands’ (p. 200). Thus, ‘environmental health and safety was leavened by the context of the politics of regional development’ (p, 243). Central to the book is the corporate narrative developed and used by the British Aluminium Company to establish an identity, in which it set out its corporate values, and established a contract between the company, its workers and the wider geographical area where it undertook its business. Perchard observes that its ‘public persona was inextricably linked to its portrayal of itself as a ‘pioneer’, ‘social benefactor’ and ‘key industry’ (p. 322). It drew on ‘the notion of a common ancestry, language and history; it aimed to create a “community of interest” bound by tenents of “service” and “loyalty” with Sir William Murray Morrison [an early Director] as the pater familial (p. 322). That historical narrative was used as a ‘tool for promoting consensus and encouraging loyalty’ (p, 322). The company was astute in using that identity to ‘consolidate its position in the highlands and counteract criticisms ofits activities’ as well as its presence in the Highlands (p, 322). It was used at key episodes of the company’s development such as the expansion of its activities, restructuring activities, strikes (in 1910 and 1936) as well as in its day-to-day activities and communications with its workers and the communities where the company was located. These can be seen through its corporate communication in its newsletter after 1948, which sought to ‘stimulate the interests and loyalty of employees’ (p, 163). Its message, ‘observance of duty, loyalty and service’ (p. 164) was achieved through ‘the story of its Highland ventures: a tale of daring human endeavour against adversity, of salvation, and social mission set against the common motifs of modern Highland history’ (p. 164).These motifs, which are examined at length, provide valuable insights into the impact and legacy of corporate narratives. Perchard examines how the British Aluminium Company’s stewardship of the Highlands was central to its mission in that area. While the company was a major landowner and employer, it shaped the Highland communities where it was located. For Perchard, ‘British Aluminimum sought to engineer the “entire reality” oflnverlochy and Kinlochleven’ (p. 246): ‘in Kinlochleven, and to a lesser extent Inverlochy, the lines between factory and communities blurred to create one ecosystem’ (p. 246). He shows how the company constructed ordered settlements, maintained a corporate culture in them as well as managing the social networks within them and the villages themselves. So important was the social contract between the company and the local community, as well as the company’s narrative and culture, that it made the closure of the works so devastating to the communities: ‘for many it was viewed as a betrayal’ (p. 267). The book brings together a wide range of approaches and disciplines, including anthropological and sociological studies, business history, industrial history, social and economic history, environmental history, oral history, political studies and policy studies. This interdisciplinary approach allows Perchard to fully explore and examine his themes as well as providing insights that wouldnot have gained by using more traditional approaches.

    Perchard draws on an impressive range of sources of evidence located in four countries spread over two, continents. They include the main company’s archive at Glasgow University, records of major competitors, government departments, and trade unions, as well as photographic evidence. He also uses oral testimony and questionnaires to gather further evidence on former employees and residents of two company settlements. He skillfully weaves these different sources together. For example, his use of oral evidence allows him to show the personal impact of the Company’s activities on its former workers and people who lived in the company towns in ways that cannot be achieved from documentary evidence. Through the wide range of sources, he also firmly places the experience of the British Aluminium Company and its successor within broader theoretical frameworks and other wider experiences of business and industry, thus allowing the reader to more firmly understand them. While written as an academic book, it is one that will appeal to both the academic as well as the general reader. It is well written in an eloquent and very readable style. That writing style conveys Perchard’s passion for his subject, his thorough understanding of his sources of evidence, his skillful and highly developed research skills, as well as his deft ability to analyse large quantities of evidence which is succinctly synthesized and then reflected upon and considered. This book is a model for industrial and business history and
    will inspire others to examine and re-examine what good industrial and business history is.
    Heather Holmes

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