Hawker Siddeley Group Public Limited Company

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Hawker Siddeley Group Public Limited Company

18 St. James’s Square
London SW1Y 4LJ
United Kingdom
(071) 930-6177
Fax: (071) 627-7767

Public Company
Incorporated: 1935 as Hawker Siddeley Aircraft Co. Ltd.
Employees: 4,500
Sales: £2.14 billion (US$3.45 billion)
Stock Exchange: London

Hawker Siddeley is one of Britain’s largest engineering groups, along with British Aerospace and Rolls Royce. It was one of the pioneers of the aviation industry, but diversified over the years to remain competitive, first to electrical and mechanical engineering, and more recently to electronic components.

Hawker Siddeley is still associated with the romance of the early days of aviation. Its founder, Tommy Sopwith, produced the famous Sopwith Camel that shot down Germany’s World War I flying ace, the Red Baron. In World War II the company produced the Hawker Hurricane, which played a crucial role in the Battle of Britain in 1940. In 1960 Hawker Siddeley acquired another of the country’s pioneers in aircraft development, the de Havilland Aircraft Company.

Yet when Hawker Siddeley’s aerospace interests were nationalized in 1977, they were responsible for only one quarter of the company’s annual sales. After World War II Hawker Siddeley had slowly diversified from aviation, its focus since it had been formed from the merger of several aviation firms in 1935. With the important acquisition of the Brush Group in 1957 and a number of other long-established firms throughout the 1960s, Hawker Siddeley began to produce a variety of mechanical components and electric motors. By the 1970s, it was a diverse, if somewhat unfocused, heavy industrial producer.

To remain competitive in the 1980s, Hawker Siddeley had to concentrate on its higher profit areas and divest itself of its unrelated concerns. Under chief executive Dr. Alan Watkins, the company is building upon its solid reputation for dependability and financial soundness with the aim of becoming a dominant global player in its best markets.

In 1910, Tommy Sopwith, whose love for high-speed movement had already drawn him to race motorcycles, cars, and motorboats, decided to take the next logical step, to aviation. Sopwith had tried ballooning, but feeling that the future was with airplanes, he used the income from the estate of his father, an affluent engineer, to purchase a monoplane, a single-seat, makeshift vehicle like the other flying machines available at the time. With the help of other enthusiasts, Sopwith taught himself to fly at a race track that was no longer in use.

Sopwith soon earned his pilot’s license—the 31st issued in Britain—and traded up to a new biplane. The plane paid for itself. Sopwith won £4,000 for flying from Eastchurch, Kent, to Beaumont, Belgium, at 177 miles the longest flight ever made from Britain to the Continent. In 1911 he began a stunt flying career in the United States. His exploits in Boston, New York, and Chicago helped him discover the potential of this new form of transport as well as earn him a nest egg.

In 1912 Sopwith, then 25, was back in England, where he established a flying school that trained two future marshals of the Royal Air Force. He began to design airplanes, and by the end of the year, decided to invest his earnings in producing the planes. He set up Sopwith Aviation Company in an old roller skating rink outside London. Since money was tight, despite his winnings from competitions, he rented out his new factory each Saturday for roller skating.

Sopwith concentrated on design and hired his long-time mechanic, Fred Sigrist, to construct the machines. He also hired an Australian who had learned to fly at his school, Harry G. Hawker, to test and demonstrate them. By 1913, the company employed six fitters and carpenters along with a new general manager, R.O. Cary. Sopwith-built planes performed well in competitions, and their successes gave the young company a good reputation. By 1914, Sopwith Aviation had about 100 employees.

The future of Sopwith Aviation changed dramatically when World War I began in August 1914. Britain required high-performance military aircraft, and Sopwith was determined to provide them. The company grew to over 2,000 employees by 1918—predominantly women by the end of the war years—who produced 14,000 aircraft of 10 major types.

All of the single-engine Sopwith models—the Sopwith Strutter, a two-seat biplane fighter; the Sopwith Pup, a single-seat scout biplane; and the Sopwith Camel, single-seat fighter—were virtually handmade of fabric over wooden frames. Though it was difficult to learn to fly, the Sopwith Camel was considered the greatest aircraft of the day by skilled aviators. A letter found on a captured German pilot stated that, “Of all the allied aeroplanes, the Sopwith Camel is the most to be feared.” It was a Camel that Canadian airman Captain Roy Brown flew when he shot down Germany’s most famous flier, the Red Baron (Manfred Von Richthofen).

Sopwith Aviation had proved itself in action, but continuing its success after the war years was difficult. Former war planes flooded the just-emerging civil aviation market, and prices plummeted. At the same time, some potential customers turned to new competitors. The United States had also developed an aviation industry to meet wartime demand, and its innovative production methods meant efficiency.

When Sopwith Aviation was unable to pay the taxes on wartime excess profits, the company was liquidated in September 1920. Two months later Sopwith was back in business with his partner, the Australian test pilot Harry Hawker. The HG Hawker Engineering Co. Ltd. manufactured parts for aircraft that were already in operation, designed and built motorcars and motorcycles, and built aircraft to order.

Only seven months later, on July 12, 1922, Hawker died in an accident while practicing for the annual Aerial Derby, but the company named for him was off to a strong start. By 1925, Sopwith, the chairman of Hawker, had put together perhaps the strongest design team in the business: Fred Sigrist as joint general manager, Sydney Camm as chief designer, F. S. Spriggs as the general manager, and F. I. Bennett as chief engineer. Under their direction, Hawker began to produce all-metal aircraft and began an aggressive marketing campaign. The company supplied the airforces of Yugoslavia, Norway, Sweden, Canada, New Zealand, South Africa, India, Egypt, and Persia, and produced seven types of aircraft for the British government. By 1933, Hawker was one of the largest aircraft construction companies in the country.

In 1934, Sopwith saw that rearmament meant further growth for his company, and he acquired Gloster Aircraft, a company known for strong management but lacking a good design team. In 1935 he made the move that resulted in the modern Hawker Siddeley Group when he purchased the Arm-strong-Siddeley Company’s aviation interests.

Unlike Sopwith Aviation, John Davenport Siddeley’s business began with its roots firmly in the ground. The son of a manufacturing family, Siddeley came to motorcar design through cycling. He designed and raced cycles and worked in cycling-related jobs. He applied what he had learned with cycles to automobiles, becoming an agent for the French Peugeot Company. Shortly after 1900, he set up his own Siddeley Autocar Company, which produced a model that was basically the Peugeot with some of Siddeley’s own modifications. In 1909 he formed a partnership, the Siddeley-Deasy Motor Company, with the explorer Major Henry Deasy, to increase production.

As with Sopwith Aviation, World War I got the young firm airborne. Siddeley-Deasy’s Parkside works built airframes and the Beardmore-Halford-Pullinger aero-engine. Siddeley himself worked on the engine and developed an improved, water-cooled model, the 240-horsepower, six-cylinder Siddeley Puma engine.

After the war, Siddeley-Deasy was acquired by Armstrong Whit worth Development, a holding company. When Armstrong Whit worth formed an aircraft subsidiary in 1920, Siddeley concentrated on that part of the business, eventually buying the subsidiary in 1926 and renaming it Armstrong-Siddeley. Two years later, Siddeley was ready to expand again, buying the aircraft manufacturer A.V. Roe.

Siddeley had learned his trade in motorcars, and his priorities remained with automobile development. Aero-engines were less important to him, and aircraft took a distant third place. The company lost its preeminent position in air-cooled airplane engines, and Siddeley dismissed his chief aviation designer, John Lloyd, when Lloyd argued that non-Siddeley aero-engines should be used in the company’s aircraft.

After Siddeley sold Armstrong-Siddeley to Hawker in 1935, the new company became known as Hawker Siddeley Aircraft Co. Ltd., controlling not only the Hawker and Armstrong-Siddeley aviation interests but also the recent acquisitions, Gloster Aircraft and A.V. Roe. Siddeley, a stubborn man with definite ideas about engineering, remained chairman of Armstrong-Siddeley Development, a separate holding company, until he retired the next year.

Hawker Siddeley was formed just in time for Britain’s buildup of armaments prior to World War II. This time the Air Ministry was not as concerned with aircraft design as it was in the World War I when flight was newer. Instead it was more interested in company management and in how well firms could deliver necessary equipment on time.

The Hawker Siddeley aviation companies met the government’s requirements. The company provided 40,089 aircraft to the Royal Air Force during the war, 30% of all RAF equipment. The Hawker Hurricane became the best-known plane. A Camm design, the Hurricane went into production in 1936. During the Battle of Britain in 1940 two Hurricanes were in the air for every Spitfire, and they shot down more enemy aircraft than all other defender-aircraft put together. A.V. Roe’s Lancaster bomber also played an important role in the war effort and added to Hawker Siddeley’s profits and prestige.

The company had to expand to meet wartime demand. At its peak during World War II, Hawker Siddeley employed 100,000 people. During the latter part of the war years, Sopwith removed himself from running day-to-day affairs of the company to concentrate on overall policy as chairman. Frank Spriggs took the title of executive chairman.

Business remained good with the return of a peacetime economy. A.V. Roe developed civil versions of its military planes, and Gloster flew the first aircraft with a Whittle jet engine. The company became particularly strong in Canada, where A.V. Roe Canada was formed in 1945.

In 1948 Sopwith renamed the firm the Hawker Siddeley Group, emphasizing that it would concentrate on two core business areas, industrial and aerospace production. In 1957 he began diversification outside aviation when Hawker Siddeley acquired the Brush Group of companies. Brush, which had been founded by a U.S. engineer, Charles Brush, in 1879, was a leader in electrical engineering. That same year, Hawker Siddeley also purchased the Canadian Dominion Steel and Coal Corporation, a major producer of mining machinery and tunneling equipment, to build upon its successes in Canada.

In 1960 Sopwith showed that he intended Hawker Siddeley to remain strong in aviation by acquiring three other aviation firms, Folland, Blackburn, and de Havilland. His move was a response to government pressure to integrate the aircraft industry into larger units to utilize the economies of scale. The resulting company became one of the top two British aircraft producers and one of the top ten manufacturing engineering companies in the world.

By 1963 Sir Thomas Sopwith, described in the Dictionary of Business Biography as one “who had seen aviation move from the string and canvas biplane to the jet liner,” decided to step down from an active role in Hawker Siddeley. He took the honorary position of “life founders president” and was succeeded by his former managing director and vice chairman, Roy Dobson.

Dobson followed Sopwith’s careful approach to diversification until he was succeeded by Sir Arnold Hall as chairman in 1967. Hall had begun his career in aviation during World War II and had joined Hawker Siddeley in 1955. Since then he had been part of all major British aircraft developments, including the Harrier jump-jet, the 146 short-haul airliner, and the Hawk trainer. Under Hall, Hawker Siddeley became a mechanical and electrical engineering conglomerate. His tenure was marked by slow but steady growth, both in size and profits.

Hall was able to maintain this growth even after nationalization of the company’s aviation interests in 1977. Hawker Siddeley was prepared for this move, and after Hall’s determined diversification, its aviation-related businesses accounted for only a quarter of sales. The company retained its foreign aircraft interests, such as the Australian company, Hawker de Havilland, Ltd. Hawker de Havilland, which designs and builds aircraft and aerospace components, has been a steady profit maker.

Hall’s careful approach, considered admirable in the early 1970s, was seen as dated by the end of the decade. Analyst Roger Cowe said in a Guardian article of October 22, 1987, that Halls’ diversification efforts “got rather out of hand,” making the company “a mess of engineering and other interests with little rationality.”

When Bob Bensly took over as managing director in March 1984, he and financial director David Bury faced Hall’s legacy of slow growth, along with the impact of a sluggish economy. Hawker Siddeley’s diesel orders were down, and its other mature industries like electric motors and generators, transformers, and switchgear were also in a slump.

Bensly reviewed the company’s operations. He established a better accounting system and reorganized United Kingdom operations, merging some smaller units and functions such as marketing. Bensly stated that the company would remain committed to its traditional core businesses, including dieseis and transformers, despite their underperformanee, but he looked to the areas in which Hawker Siddeley performed best—controls, instrumentation, and cables—to maximize growth. Bensly added to Hawker Siddeley’s electrical interests to build a major world position in the field by acquiring firms, especially in the United States. He disposed of companies with low returns or those outside its core businesses. In 1984, for example, Bensly acquired 40% of Safetran, a U.S. manufacturer of railroad signaling and crossing equipment. By 1987, he was making his 144th U.S. acquisition, Aerospace Avionics in New York. In the first six months of 1988, he purchased von Weise Gear Company, a U.S. maker of fractional horsepower motors and gear reducers that could be integrated into another Hawker Siddeley subsidiary in the United States, Fasco Industries. He sold companies such as Invergordon Distillers.

As the 1980s drew to a close, Hawker Siddeley’s heavy industry components had increased sales. Its subsidiaries, Brush Electrical Machines, Westinghouse Brake & Signal, and Mirrlees Blackstone had substantial new contracts to upgrade the British Rail locomotive fleet. Brush also won the lucrative contract to power the new Channel Tunnel shuttle trains. In addition, analysts were claiming that Bensly had given Hawker Siddeley a sharper focus by changing its emphasis from heavy engineering to lighter electrical and electronic components. His approach was low risk. While he made a great number of acquisitions, they were primarily of small companies. Bury warned that the company would soon have to shift to larger acquisition targets.

Another change in company policy, however, was left to a new chief executive. Alan Watkins, former head of the aerospace division of Lucas Industries, took over as managing director and chief executive officer in August 1989, with his eye firmly focused on growth. “If you don’t become a real continental or global player, the fact that you are growing at 5% or 10% a year is neither here nor there,” he said when he took the job, as reported in the Sunday Times of August 13, 1989. Watkins aimed at a growth rate of 20% fueled by substantial acquisitions, especially in Europe, where Watkins wanted to increase Hawker Siddeley’s presence.

To achieve that level of growth, Watkins intended to concentrate on six or seven core businesses. He hoped to make Hawker Siddeley the number two or three producer worldwide in at least several of those areas. Acquisitions since Watkins came on board—Standard Aero of Canada and GEC Alsthom Electromotors—indicated his intentions of remaining in aviation maintenance and electric motors. His purchase of a small Japanese instrumentation business indicated his intention of being a global investor.

Watkins identified several other means of reaching his goal of growth. He intended to revamp the company’s corporate structure, upgrade its outdated manufacturing plants, and group the company’s businesses to work together better. Watkins saw “pockets of excellence” in the company; and planned to expand them.

Hawker Siddeley changed from a purely aviation firm, to a diversified electrical and mechanical engineering firm and producer of electrical and electronic components. Founder Tommy Sopwith died in 1989 at age 101, leaving a company with the qualities he identified as being the key to success: “The courage to think and the capacity to do.”

Principal Subsidiaries

Aerospace Avionics Inc. (U.S.A.); Augier S.A. (France); Brook Crompton Controls Ltd.; Brook Crompton Ltd.; Brook Crompton Betts Pty. Ltd. (Australia, 51%); Brush Electrical Machines Ltd.; Brush Fuses Inc. (U.S.A.); Brush Switchgear Ltd.; Brush Transformers Ltd.; Bunnings Ltd. (Australia, 24.2%); Clarostat Mfg. Co. Inc. (U.S.A.); Crompton Greaves Ltd. (India, 37.5%); Crompton Externacell Ltd. (Singapore); Crompton Lighting Ltd.; Crompton Parkinson Ltd.; Crompton Stud Welding Ltd.; Daytronic Corporation (U.S.A.); Dimetronic SA (Spain, 90%); Electro Corporation (U.S.A.); Electromotors Ltd.; Elmwood Sensors Inc. (U.S.A.); Elmwood Sensors Ltd.; Fasco Controls (U.S.A.); Fasco Consumer Products (U.S.A.); Fasco Motors (U.S.A.); Harowe Servo Controls (U.S.A.); Hawker Energy Products Ltd.; Hawker de Havilland Ltd. (Australia, 70%); Hawker Instruments Inc. (U.S.A.); Hawker Instrumentation Supplies Ltd.; Hawker Noyes Pty. Ltd. (Australia); Hawker Pacific Pty. Ltd. (Australia); Hawker Siddeley Canada Inc. (59.1%); Hawker Siddeley Electric Africa (Pty.) Ltd. (South Africa); Hawker Siddeley Power Engineering Ltd.; Hawker Siddeley Power Plant Ltd.; Hawker Siddeley Power Transformers Ltd.; Hollybank Engineering Co. Ltd.; HDA Forgings Ltd.; Insumat Ltd.; KW Battery Co. (U.S.A.); Lister-Petter Ltd.; Lister Shearing Equipment Ltd.; Mirrlees Blackstone (Stamford) Ltd.; Mirrlees Blackstone (Stockport) Ltd.; Oldham Crompton Batteries Ltd.; Oldham France SA; OptoSwitch, Inc. (U.S.A.); Power Conversion, Inc. (U.S.A.); Safetran Systems Corporation (U.S.A.); Standard Aero Ltd. (Canada); Saro Products Ltd.; South Wales Electric (Private) Ltd. (Zimbabwe); South Wales Switchgear Ltd.; Torin Ltd.; Tungstone Batteries Ltd.; Uniross Batteries Ltd. (70%); Von Wiese Gear Company (U.S.A.); Westcode Semiconductors Ltd.; Westinghouse Brake & Signal Co. (Australia) Ltd.; Westinghouse Brake & Signal Ltd.; Westinghouse Brake and Signals Holdings Ltd.; Westinghouse Systems Ltd.