History

The Dowlais Ironworks developed rapidly to meet demand for iron as Britain charged through the process of industrialisation, particularly under Josiah John Guest – later Sir John Guest – who took over the running of the company in 1807. During the Napoleonic Wars, Dowlais Ironworks supplied cannonballs to the British army and by the 1840s, had more than 7,300 employees manning 18 blast furnaces and producing almost 90,000 tons of iron a year.

Dowlais supplied iron rails to rail companies throughout Britain, but also exported them around the world. From the 1830s, rails were sold to the USA for use in the construction of the new railroads opening up America’s frontiers. Then in the 1840s, markets in Europe began to expand with major sales to Russia and Germany, and smaller sales across the continent. Lady Charlotte Guest described a contract made in 1844 to supply 50,000 tons of rail to Russia as, “the largest contract of the kind ever made.”

As a result, of the railway-led boom, Dowlais had, by 1845, become the largest ironworks in the world, and had helped transform the industrialising world.

At this crucial point, Lady Charlotte took the reins and led the business through three critical years. The advantage Lady Charlotte had was that she knew the business inside out, having immersed herself in it to support and advise her husband. She had drawn up the monthly accounts, been involved in planning and learned the principles of iron production.

She set about assembling a strong management team and oversaw a programme of renovations. Under her management, Dowlais became the world’s largest manufacturing company and laid down plans for further expansion.

Prior to its introduction, steel had been around 10 times more expensive than iron – making it too expensive for use in railways, bridges or the frameworks of buildings. After the industrialisation of the Bessemer process, steel and wrought iron soon became similarly priced and most manufacturers quickly turned to steel. In 1871, Dowlais produced almost 26,000 tons of Bessemer steel; by 1884, it was producing more than 118,000 tons.

With steel production supplanting iron, Dowlais continued to grow through the second half of the century and, in 1888, built a second steelworks in South Wales, this time in Cardiff. The company had successfully evolved its business and entered the 20th century as one of the largest ironworks in the world.

Through a contact, Keen learned that Lord Wimborne was ready to sell the Dowlais Iron Co. As Dowlais was larger than PNB, this would be a reverse takeover. Stretching his resources to the limit, Keen agreed in September 1899 to pay Wimborne £1.53m for Dowlais. He told his shareholders that the deal would “give the company a position of complete independence...enabling it to hold its own in competition with the whole world.”

In July 1900, the combination of Dowlais and PNB was incorporated into a new group, Guest, Keen & Co. Two years later, Keen drove through the takeover of a reluctant Nettlefolds Ltd and the enlarged company became Guest, Keen & Nettlefolds.

In 1905, GKN was the 15th largest British company – with assets of £4.54m – and the largest iron, steel and coal group in the country.

After WW1, a new leader emerged from an unexpected source to give GKN fresh direction. H. Seymour Berry (later Lord Buckland) had built up a profitable coal-mining business with his business partner David Llewellyn. In 1919, they bought a controlling interest in the steel-making group John Lysaght Ltd and then acquired Joseph Sankey & Sons, which was established as a supplier of wheels, chassis frames and bodies to Britain’s new motor industry.

Three months later, they proposed a merger to the GKN board. Lysaght was merged into the larger GKN, but Berry and Llewellyn became the group’s driving forces.

This new GKN contained most of the elements that would sustain it through the Great Depression and propel it through the next half-century: heavy steel-making; steel-processing; fasteners and other steel products; and motor components. But it did suffer one historic casualty: in 1936, the Dowlais works closed, bringing an end to 170 years of iron and steel-making.

When war broke out in 1939, GKN again made a full contribution. The Hadley Works produced Spitfires, Lysaghts assembled a specialised tank for the D-Day landings and the company produced steel, forgings and fasteners for tanks and aircraft, as well as millions of steel helmets.

GKN explored new business avenues. It expanded its involvement across the newly independent countries of the British Commonwealth and became involved in a host of steel-related businesses, including vehicle components such as crankshafts and propeller shafts. Building on wartime experience, the company began production of the famous Warrior tank for the British Army.

GKN also expanded in the industrial services sector. In 1974, the group and the Australian company Brambles formed the GKN Chep pallet pool in the UK. Four years later, the venture expanded into mainland Europe and the group’s most successful industrial services business was on the road to international growth.

GKN’s diversification was a process that by the 1980s had led to involvement in a huge variety of industrial services ranging from plumbing and roofing to locks and window latches.

As GKN’s UK businesses struggled, Uni-Cardan – in which the group took majority control in 1971 – kept the company afloat. Nevertheless, in 1980 the group made the first loss in its history.

GKN fought through the downturn, laying down foundations for fresh growth: opening plants in the US, expanding in Europe and, crucially, forging close links with all of Japan’s leading vehicle makers.

A wave of global investments followed: in Brazil, Mexico, India, Australia, South Africa, Japan, Thailand, South Korea, Malaysia, Taiwan and, in 1989, China – as the driveline business created a global network and cemented its market leadership.

GKN was now focused on a few growth businesses: Driveline, Chep, Cleanaway, Aerospace/Defence and Off-Highway, which had developed from the original Sankey operation. Strategic moves expanded Chep into the potentially vast American market and Driveline into post-communist Eastern Europe. Powder Metallurgy and Sinter Metals were identified as a potential core activity and the company embarked on a rapid expansion through acquisition, mainly in the US, but later in Europe.

The expansion into new areas drew GKN closer to a new rubicon. Chep, now thriving in the US, was a huge joint venture that GKN did not completely control; the helicopter industry was rapidly consolidating; the aerostructures business needed to stay at the leading edge.

In 2001, an extraordinary few months of activity re-shaped the business for the 21st century. In a multi-billion pound deal – the biggest in the company’s history – Chep and Cleanaway were de-merged; Westland’s helicopter business was merged into a joint venture with Agusta, owned by the Italian group Finmeccanica. And Boeing’s military aircraft structures plant in St Louis was acquired in a groundbreaking outsourcing deal.

It was the most fundamental re-shaping for a century and focused GKN on four world-leading businesses: Aerospace, Driveline, Powder Metallurgy and Land Systems.