Under New Management: Holden in the Thirties

I wasn't planning to get bogged down in the politics, but this was too interesting to leave out, and it sort of follows on from mentioning the Sydney Harbour Bridge in my previous post. It occurred to me that the Great Depression was taken as an invitation on an embossed card by both the far-Left and far-Right all around the world, so what about Australia? Did we get in on that action while all the cool kids were doing it? This being Australia, the answer turned out to be, "Yes, but..."

Friendlyjordies called him, "The Greatest Australian of All Time". Statistically, the greatest Australian of all time probably lived and died long before white settlement... but he was pretty neat.

The usual course of events was that, with laissez-faire capitalism down for the count, and the pre-Stalin Soviet Union seemingly going from strength to strength, communists around the world started getting stroppy. This in turn triggered a far-Right backlash¹ from Great War veterans and middle-class professionals who feared their country was going Red. While there was a Communist Party of Australia, founded in 1920 and featuring members like Adela Pankhurst (daughter of famed British suffragist Emmeline Pankhurst), they never really gained a foothold in this country, so party membership and vote share remained tiny. No, the Right's real boogyman in this country was NSW Premier Jack Lang, who was then a member of the Labor Party and regarded as a major threat. What kind of policies could the Big Fella have espoused to elicit such vitriol? From his Wikipedia page:

During his first term as Premier, Lang carried out many social programmes, including state pensions for widowed mothers with dependent children under fourteen, a universal and mandatory system of workers' compensation for death, illness and injury incurred on the job, funded by premiums levied on employers, the abolition of student fees in state-run high schools and improvements to various welfare schemes such as child endowment (which Lang's government had introduced). Various laws were introduced providing for improvements in the accommodation of rural workers, changes in the industrial arbitration system, and a 44-hour workweek. ...

Lang established universal suffrage in local government elections – previously only those who owned real estate in a city, municipality or shire could vote in that area's local council elections. His government also passed legislation to allow women to sit in the upper house of the New South Wales Parliament in 1926. This was the first government to do so in the British Empire and three years before ... London would grant the same privilege to women throughout the Empire.

Which is not to say he was a saint – he was an avid supporter of the White Australia Policy, for example – but for most people he crossed the Rubicon when he tried to dismiss the Upper House of NSW, the Legislative Council. He attempted such a thing because he claimed it was un-democratic – which at the time it was, functioning less like the Senate in Canberra and more like the House of Lords in London, with lifetime Peerage for those selected by the Premier. Taking advantage, Lang packed the Council with 25 members of his own choosing so the body could vote to dissolve itself: The motion failed by a single vote and, deciding this man was a bit too radical for their tastes, the voters kicked him out of office soon after.

Come the Great Depression, however, the newly-impoverished knew what was good for them and Lang was brought back in a landslide. Soon NSW was running bigger deficits than the rest of the country combined and, fearing they were witnessing the rise of the tyrant, a group calling themselves the New Guard rose up to oppose him – the first and largest fascist organisation in Australia, founded by Great War veteran Eric Campbell. The group claimed a whopping 50,000 members at its peak – a terrifying number when there were fewer than 4,000 police in the state – and featured celebrity members like former North Sydney mayor Hubert Primrose, and aviation pioneer Charles Kingsford Smith. Most New Guard members however were returned servicemen like Campbell, and under his leadership they broke strikes, disrupted "communist" meetings and, yes, attacked members of the Labor Party – standard Brownshirt stuff. But then, at the opening ceremony for the new Sydney Harbour Bridge, the group made its real mark on history...

Before Lang could cut the ribbon, a certain Francis de Groot, formerly a captain of the 15th Hussars² but lately a New Guardsman, spurred his horse forward and slashed the ribbon with his sword, declaring the bridge open in Lang's despite³. De Groot wasn't supposed to be there, but by borrowing a horse and putting on his old uniform, he'd blended in with the troop of NSW Lancers well enough that no-one asked questions. He was swiftly arrested and the ceremony carried on anyway, but the headlines had been made.

I've heard about this incident about a dozen times over my life, but only in the most recent retellings is it mentioned that de Groot was a member of a fascist paramilitary – if you didn't know better you could mistake him for a common protester, or even some sort of loveable larrikin. Thankfully, the New Guard rapidly broke up once Jack Lang was dismissed from office and, taking the hint, Eric Campbell went on to found a political party instead. He called it the Centre Party which, given he'd first consulted with Nazi diplomat Joachim von Ribbentrop and Sir Oswald Mosley, leader of the British Union of Fascists (and father of Max – there's your motorsport connection), is kind of a misnomer.⁴ Australians being Australians, however, in the subsequent 1935 election the Communist Party got just 1.5 percent of the vote; the Centre Party didn't even manage half of that, with 0.6 percent.

TVtropes once pointed out that Australians solve problems slowly and with a minimum of physical violence. There are times when I am profoundly grateful for that.

Trouble in Paradise
Things were similarly divided within the headquarters of GM-H. No matter how management might promise otherwise, a corporate merger always results in two people competing for each job, and the pressure is on when there's a mortgage on the line. Within the offices of 169 City Road, Melbourne – formerly home of General Motors Australia Ltd, now base of operations for General Motors-Holden's Ltd – the backstabbing was exacerbated by a clash of cultures between Australian and American ways of doing business.

Case in point, they'd tried to stretch the top crown across two heads, making Augustin N. "Gus" Lawrence (the former head of GM Australia) and Edward Holden (his opposite number at Holden's) joint managing directors, with Edward also serving as chairman. That was never going to work. As far back as 1929, then-GM Australia head Innes Randolph had famously complained: "Amazing people these Australians. They just won't do as they're told." Holden's had always developed the vehicle to suit the local market, which was why they'd risen to the top of the local industry, but it took a bit more time and, crucially, a bit more money than just assembling whatever shovelware GM had shipped over. The Americans by contrast were all trained in the Chicago school of business, and would insist on a carbon copy of the original. Even in good times, deviating from Plan and Budget is viewed as a personal betrayal by upper management: In the midst of the Great Depression, it was probably something to settle with pistols at dawn.

When the infighting got too much, Edward Holden appealed to our old friend James D. Mooney, head of the General Motors Export Corporation, to swing an axe. The alterations to the personnel roster were sharp and dramatic: Gus Lawrence was kicked upstairs, given a regional directorship of Australian and South African operations, and most of the former GMA technical men went with him. Edward Holden fared only a touch better, Mooney deciding he should be chairman only, and bringing in someone new to take on the role of managing director, someone who'd already displayed adaptability in the face of colonial conditions – one Laurence J. Hartnett.

Here caught in a rare moment behind his desk. (Source: ABC.net.au)

Hartnett was fond of telling this story and, to put it gently, he wasn't shy about making himself the main character. Nevertheless, no-one could dispute that he had an enormous effect on the direction the company would take in the coming decades. He'd been born in 1898, to a middle-class family in Woking, and had initially attended Epsom College with the aim of becoming a doctor. He left at age 16 to pursue a mechanical direction instead, joining Vickers Ltd as an apprentice – the same Vickers whose heavy machine gun would soon become the terror of the Western Front. In March 1918 he finally enlisted, joining the Royal Naval College in Greenwich to become a pilot, only for the war to end before he could fly a single mission.

With the fighting over, in 1919 he embarked on his first business venture, purchasing a small South London concern that specialised in identifying war widows whose husbands had left motor cars up on blocks before going off to France, buying up said motor cars and then refurbishing them for sale. It worked for a while, but in 1921 the bubble burst and the company folded. Undaunted, Hartnett instead accepted a position as an automotive engineer with Guthrie & Co., an outfit busy administering a number of rubber plantations in south-east Asia, while also taking responsibility for importing tea, alcohol and motor vehicles into the region. The catch was the job meant relocating to Singapore, but that wasn't so bad given the region was booming, as worldwide demand for rubber made certain people in the right places very rich. 

Rubber tapping in Malaya. Twenty years later, the effects of British rule would see the region become Australia's dry run for Vietnam... (Source: Economic History Malaya)

Upon disembarking on the island fortress, Hartnett was immediately put in charge of Guthrie & Co's automotive division on Grange Road, which put him in touch with General Motors for the first time. Guthrie had obtained the local franchise for Buick the previous February, and Hartnett was now employed assembling and distributing their cars to dealers throughout the region (with Hartnett himself handling the Singapore dealership, and speculating in rubber futures as a sideline).

Such was Hartnett's success that, after three years at Guthrie, Mooney offered him a position as head of the General Motors Export Company's operations in south-east Asia – a position in which he excelled. Hartnett was now on the ladder, and the only way was up: By 1927 he'd been appointed to General Motors Nørdiska in Stockholm, and then in 1929 he returned to Blighty as export director of Vauxhall. In 1930 he was sent on an extensive tour of South Africa, New Zealand and Australia to gather intel on what would make for a successful export model, with Vauxhall's subsequent VX and VY Cadets tricked out according to what Hartnett had learned. Now he'd been summoned to put his talents and experience to work turning the Australian outpost around.

Thankfully, just the fact that he was British and not American made him more acceptable to the locals, and in 1934 he became managing director of GM-H, with a mandate to, "Make it profitable or close it down" – not the last time we'd hear those words. Fortunately, Hartnett understood the resourceful nature of the Australian operation and had a certain respect for it, saying: "The economies achieved by Holden's at Woodville put them, in many ways, years ahead of the rest of the world in manufacturing techniques. The resourcefulness and initiative of the Australians in this industry is beyond praise."

Hartnett began an overhaul of GM-H, sacking executives as needed and placing the dealers on a more stable footing. Agreements between the dealer network and the company, previously renewed annually, were rewritten so that they remained in perpetuity provided certain sales numbers were met. He also put his personal charm to work schmoozing in the halls of power, making friends with Labor Prime Minister Joseph Lyons to ensure the tariffs that kept Holden competitive remained in place (even then, it was known that if either party scrapped the tariffs, Holden was doomed).

Hartnett (far right), Lyons (centre) and someone with a real job, Nov 1936. (Source: Port Places)

 

The Sloper
The victory of the Australian faction within GM-H created space for innovation, and the rewards for that came in 1935 with the debut of a unique new body style. Holden's called it the "All-Enclosed Coupe", but it's known to most petrolheads by a much more descriptive name – the Sloper.

Press image of the "Sloper"-bodied 1935 Chevrolet Standard coupé.

Aimed at the travelling businessman, the Sloper was the forerunner of the modern three-door hatchback. The process began when GM shipped over the chassis and mechanicals for one of their Chevrolet, Pontiac or Oldsmobile "coops", ready to be dressed in a Holden's body. As we know, however, Holden's had a habit of modifying the design to suit local conditions, so rather than go with the classic bootlegger-chic three-box design (with or without rumble seats – remember those?), Holden's brought the roofline down to meet the rear bumper in a single long, clean curve – a "slope", if you will. By thus enclosing the boot and cabin together as a single space, and fitting a folding rear seat, they created a lot more weather-proof volume for kids or cargo, and the front and rear windows could also be cracked open for instant flow-through ventilation. There was also the cost-cutting benefit of needing to stamp out just one steel panel instead of two – albeit an unusually large one, but more on that in a moment... 

Compare the pair: The outline of the previous year's Oldsmobile shows what a difference the Sloper body style really made. (Both images via Five Starr Photos on Flickr).

If it all sounds suspiciously like GM's "Albanita" experimental – itself a response to Chrysler's "Airflow" – you're not all that wrong. Holden's were the Leibniz to Chrysler's Newton, that's all. The tyranny of distance left the Australians entirely unaware of the experimental new models in the U.S., so Holden's had simply forged ahead with what they thought was a really good idea. And crucially, unlike the Americans, the Australian version worked: By employing their deep institutional savvy with wood, Holden's were able to construct a body strong enough to take all the punishment Albanita could not, while avoiding the expensive tooling that ultimately sank the Airflow. Production is estimated to've run to around 7,300 all-up, but compared to just 212 for the Airflow – especially given the vast resources available to Chrysler – that was a bonanza. In fact, that year GM-H employed some 7,000 people drawing £1.25 million in wages, to produce 23,129 motor bodies for a net profit of £650,000 (about $77 million in 2023) – all in all, not a bad referendum on Hartnett's leadership.

The Bend
But the gears were always turning. The industry was putting less and less wood in its vehicles every year, but so far none had dared make an all-metal car. The reason was simply that no-one had a steel press big enough to manufacture the "turret" (i.e. the roof panel) – none, that is, except Woodville. With their Sloper experience, they were the obvious choice when, in 1937, Plymouth became the first brand in Australia to cross the threshold and put an all-steel car up for sale. They were able to do so because Holden's had geared up for the new model by installing a giant new steel press at Woodville, a piece of machinery so vast it had been inaugurated by PM Lyons. Rather than laboriously fashioning some two hundred individual pieces of timber, the new Plymouth merely required Holden's to stamp out the four major panels, then spot-weld them together. The savings in time and effort were more than enough to pay for the new steel press.⁵

(Source: Shannons Club)

It was another feather in GM-H's cap, but the Plymouth highlighted a looming problem – the car industry was moving away from fitting separate bodies to chassis in favour of integrated mass-production that saw a complete vehicle roll off the production line, ready for sale. Once the industry made the transition, Holden's would cease to be a true manufacturer and would become just another assembler of Chevrolets built for the streets of Manhattan. If Hartnett really wanted to push for, "A wholly Australian car," it might be now or never.

Hartnett often spun the story as if the idea of GM-H building a uniquely Australian model was his alone. In fact, he was pushing against an open door. Under the leadership of company chairman and president Alfred P. Sloan Jr, General Motors was busy building up its subsidiaries and encouraging them to develop vehicles suited to their various local markets. Opel was the go-to example: Mooney had long been explaining to the board that the Chevrolet cost 75 percent more in Europe, where the buyer only had 60 percent as much money with which to buy the car! Instead, they'd forged ahead with their own Kadett, Olympia and Admiral models, plus the Blitz lorry, with only the Blitz bearing serious resemblance to the prior Bedford.

Thus Hartnett asked for, and got, permission to build GM-H its own manufacturing plant in Australia – specifically in Melbourne, where GM had already set up shop. Doing nothing by halves, Hartnett chartered a plane to fly over the city and identify a nice empty plot suitable for a brand-new factory. After inspecting fifteen possible sites, his attention focused on a tract of sandy, swampy land on the south bank of the Yarra River called Fishermans Bend⁶, a name coined in 1879 by harbour engineer Sir John Coode, after a solitary fisherman who lived on a bend in the Yarra, near what was is now called Coode Island. 

Naturally, that means it's now a peninsula. The bikini-clad girl in the corner hints this map is post-war. (Source: Reddit)

Although located only two kilometres from the city centre, directly across the Yarra from Coode's main wharf facilities, hitherto the city's industry had all but ignored the area. They used it mainly as a chemical dump, with the Ingles Street area home to tallow-rendering for nearby glue and soap factories, plus a manure depot. The only other development had been the Victoria Golf Course and a privately-owned aerodrome, which also served as a race circuit (another motorsport connection!). The view from the air revealed numerous holes where sand miners had dug to feed the city's concrete industry – holes they were supposed to have filled back in, but hadn't. Nevertheless, it was an attractive site for an industrialist – flat and wide-open, with a high-voltage transmission line nearby and a brand-new wharf that had recently been completed by the Harbour Trust opposite. It was perfect.

Although this photo was taken after completion, it still shows off the "sandy wasteland" aspect of the site nicely. (Source: The Race Torque)

Although the traditional owners were the Boonwurrung nation, by 1936 the the site was considered Crown land, and for some time the government was reluctant to sell it. The sale of fifty acres ("or thereabouts") was finally negotiated for £400,000, nearly $47 million in 2023. GM-H was obliged to spend at least another £200,000 on buildings and infrastructure within two years as well, among a laundry list of other stipulations by the Victorian government (my favourite being that all machinery and materials had to be sourced within Victoria, with the rest of Australia to be sought only if Victoria couldn't meet needs, and the rest of the British Empire following only after that. Nothing American, in other words). As Crown land, the sale required its own Act of Parliament and, since the act was signed on the eve of King Edward VIII's abdication to marry Wallis Simpson, it bore the signatures of both Edward VIII and George VI. Victorian Premier Albert Dunstan turned the first sod of earth on 23 February 1936, on what had been a green of the golf course, and the work began.

Since City Road was in poor condition, crowded and rat-infested, Hartnett knew the site would also have to serve as the company's new head office⁷. The initial design thus incorporated an office building, an assembly plant and a warehouse to service Victorian and Tasmanian operations. The assembly plant itself was a large, utilitarian building of a type common to industry around the world, notable only for its sheer size – with a floor area of 30,600 square metres, or more than 7½ acres, it was the largest single-storey building in Australia. When it was finished, the plant was capable of producing a hundred cars a day, travelling along the line on a chain nearly 140 metres long.

The front that GM-H chose to present to the world, however, was the Administration Block, a rather attractive two-storey office building occupying 251-259 Salmon Street. The Art Deco influence on the facade was restrained, but unmistakeable.

Today the building appears to be the head office of Boral concrete. Fortunately, it's also heritage listed.

Remarkably, the whole thing was completed in just seven months. On 5th November 1936, in the presence of 1,500 guests, Joseph Lyons opened the new factory, saying proudly: "There is nothing that Australians cannot attempt and nothing that they will fail to do once they have made up their minds." On the same day, the first car assembled at Fishermans Bend (an Oldsmobile) was driven off the line by the plant's architect, John Storey, with a beaming Larry Hartnett in the passenger seat.

"In fact, nowhere else in the world will there be any [GM] plant containing all of the modern units and processes which will be operating at Fisherman's Bend," reported The Mercury on 11 January 1936. "A place of particular interest will be the special air-conditioned paint processes department, which has been designed to ensure the best possible working conditions, and the total absence of dust, which is so essential to constant high quality in paint finish." Which might come as news to those who remember the quality of Holden paint at some points in their history, but in 1936 all that was still well in the future.

The total cost of the Fishermans Bend plant was estimated at the time as £433,085 ($50.6 million), which was divided between £278,940 for the buildings themselves and £102,653 for the equipment within them. It was a colossal addition to local industry for a country still staggering out of the Depression, but it was nevertheless built with one eye firmly on the future – Hartnett always intended the plant be able to commence full local production as soon as he could extract permission from the masters in New York. And given the company posted a net profit of £1 million ($117 million) by the end of the financial year, that permission couldn't have been too far off.

Pig-Iron Bob
If it was all coming together a bit too easily, don't worry, it wouldn't last. Australia had emerged from the Depression a year earlier than the U.S., but we also took a bigger hit when the so-called "Roosevelt Recession" arrived in 1937. Living in the shadow of its bigger brother, this downturn is all but forgotten today, but it came when Washington started cutting welfare programmes a bit too early, resulting in a downturn in corporate cash and a brief dip in the Dow.

In Australia, however, the recession had less to do with the U.S. than it did with Japan.

(Source)

The Imperial Japanese Army (notably, not necessarily the Imperial Japanese state) had been fighting in Manchuria since 1931. In July 1937, events kicked into overdrive with a full-on invasion of China proper. Seeking help from the wider world, in August the Chinese deliberately expanded the war to Shanghai, where the carnage would be fully visible thanks to all the Western businesses and journalists based there. The news pouring out of Shanghai shocked the world alright, but it resulted in little real help, and it was nothing compared to what happened in December, when the Emperor's troops reached Nanjing...

Our problem was that this was being done (partly, at least) with Australian steel. In the 1920s we'd started realising Australia possessed iron ore of unusual purity, which BHP immediately started exporting – initially to the Americans, but before long the Empire of the Rising Sun took over as our best customer. A Prime Ministerial note from the day outlined that:

...substantial tonnages of iron ore have been exported for several years from Iron Knob in South Australia to Japan. In 1934/35 out of a total export of iron ore from Australia of 400,000 tons 250,000 went to Japan. In 1935/36 out of 430,000 tons 290,000 went to Japan. In 1936/37 out of 270,000 tons 194,000 went to Japan. Balance largely to America in each of these years.

Local enthusiasm for iron-ore exports chilled, however, as fears grew that Japan was in the early phases of a wider war of conquest. We'd been primed to believe this thanks to the notorious Tanaka Memorandum, a document supposedly outlining Japan's strategy for conquering the Pacific in the not-too-distant future. Today this document is generally regarded as a forgery, as it only appeared in 1934 (after fighting in Manchuria had already begun): It seems no-one has ever sighted the original which, given we have the meeting minutes from the conference where the Nazis decided to have a Final Solution, isn't too much to ask. But a thing doesn't have to be true to be influential, and the outbreak of war in China gave the Memorandum a huge injection of credibility.

On 18 April 1938, therefore, the Lyons government in Canberra passed a total ban on the export of iron ore – a ban that would stay in place until 1960. Their stated reason was that Australia had only so much ore to go around and most of it would be needed for domestic use, which is incredibly funny given the shape of the economy today: In reality, they were probably just squashing a rival for BHP. But there were no restrictions placed on exports of lesser scrap or pig iron, which led to the infamous Dalfram Dispute of 1938.

On 15 November that year, the British cargo steamer SS Dalfram docked at Port Kembla, NSW. The wharfies enquired as to the nature of the cargo and its destination, and when told it was indeed pig iron for Japan, they downed tools and walked away. The wharfies were on strike, and would remain so for the next ten weeks.

Making his way through the protesters. (Source: Robert Menzies Institute)

This was one strike that didn't have the support of the Labor party, however, so they called in then-Attorney General (and future Prime Minister) Robert Menzies to massage the situation. Despite solidarity strikes across the country (and immense support from Australia's Chinese immigrant community, who provided food to striking workers' families so they didn't go hungry), Menzies ultimately broke the strike and the workers loaded the iron "under protest". The whole affair had achieved little beyond giving an unknown number of Chinese people ten more weeks of life, and Menzies suffered the epithet "Pig Iron Bob" for the rest of his life.

And in the end, as feared, we got it all back a few years later when the Kates and Zeroes hit Darwin and Broome, and the mini-subs popped up in Sydney Harbour to torpedo the ferries. The War to End All Wars, Part 2, was only months away.

¹ There's a reason such politics are called "reactionary"...

² 15th Hussars are probably best known for serving at Waterloo, but also for carrying out the Peterloo massacre not long after. In-keeping with fascism being a middle-class phenomenon, however, in civilian life he had the whitest, most salmon-mousse job imaginable: He was an antiques dealer.

³ Although it's generally reported that he cut the ribbon, at least one witness claimed he failed to do so with his sword, and the ribbon only parted when the hooves of his rearing horse broke it. Given the Pattern 1908 cavalry sword was basically a pointed crowbar, designed for skewering not slashing, it's quite likely this is true.

⁴ You know how when a country's name starts with, "People's Democratic Republic of", you know it's going to be none of those things...?

⁵ The car was probably the 1937 Plymouth Deluxe P4 – which, believe it or not, is the car that underpins the hedgehog car in Mad Max: Fury Road.

⁶ Fishermens Bend, Fisherman's Bend... being from the 19th Century, the spelling varied from person to person and somehow, by osmosis, we ended up settling on the most annoying version. The lack of an apostrophe will never not irk me.

⁷ GM Australia might've only moved in a decade earlier, but the building itself dated back to the 1870s.