All was not well with the British Steel Corporation. They had started with a flourish, adopting an expansionist policy based on the efficiencies of size. This lead to their creating five massive plants as their centres of production. This was almost bound to lead to problems, such as underinvestment, for the existing sm aller units such as Bilston – which, whilst vast and vastly important in the context of Bilston, was quite small compared with the five giants. BSC’s plans were also caught out by a worsening general economic climate. Their plans were based on meeting an estimated need of 30 million tons per annum; but it soon became clear that the need was actually about 16 million tons per annum. Not only that but there shortages of scrap – an essential ingredient in the process – that was driving up the price of this essential raw material. Perhaps even worse was the increasing competition. Part of this came from the UK as the unusual structure of the nationalization had brought only part of the industry into public ownership and did nothing to stop new firms being set up. The other part of the competition came from abroad, not only from places such as Germany, France and Sweden, but places further afield, many of which had set up iron and steel industries with the assistance of the UK which had exported expertise and know how. Many people, especially those to the political right, emphasized that BSC’s problems also arose as a natural result of the bureaucratic nature of nationalized industries, and the lack of commercial flexibility that entailed. The set up of the BSC also ensured that they could not take major decisions without getting the approval of central government, with the delays and uncertainties that involved.
In this poor climate for the whole industry many felt that the Bilston steel works had got the worst of the deal; and that the eventual closure of the works was not the result of decisions taken in 1978 or 79 but the result of a string of decisions taken earlier. In a clear, well argued and powerful letter (sent to Councillor Jim Speakman, a Conservative councilor for Bilston and energetic campaigner against the closure, and to Sir Keith Joseph, the shadow spokesman for trade and industry, Stanley J. Smith, a former Metallurgical Manager at the Bilston steel works, described the way the works had been undermined. He points out that in 1970 the Bilston works were directed into the Special Steels Division of BSC at Sheffield. He goes on: “In my opinion Bilston works has been politically killed off by Sheffield Division in the following distinct stages:
1. Bilston is accused of being technically obsolete, being based on Open Hearth Steelmaking as distinct from the more modern Electric Furnace process as operating in Sheffield and Rotherham. This completely ignores the fact that under the previous Tubes Division, Bilston had developed a scheme to completely modernise its processes, based on Electric Furnaces and a new mill which had reached the stage for final approval by 1970. On entering Special Steels Division this development was immediately shelved by the new Divisional management in favour of developing Rotherham and Sheffield works. From that time onwards the only developments permitted at Bilston were those necessary to Keep the works in production.
2. In 1972 the Special Steels Division was reorganised into an Alloy Steels Group and a Carbon Steels Group, Bilston being placed in the latter works category. Bilston’s alloy tube steels order book was then (logically)? transferred to Sheffield works. Bilston countered the drop in order volume by developing a wider range of products, particularly by increasing its capacity for tube billets from 10” diameter maximum to 12” and subsequently 14" diameter.
3. While customers were allowed to order from individual works, Bilston continued to thrive, even although at a lower output than its potential. This changed when in 1976 a Divisional Order procedure was introduced whereby customers ordered centrally and the Division allocated the producing works. The Divisional ordering procedure was based in Sheffield and from that moment Bilston lost its power of competition.
4. Bilston’s prime role had been the production of seamless tube billets in its original Stewarts & Lloyds organisation and specialised in this field. Despite constant requests for adequate specialised inspection equipment for these billets, when such equipment did become available it was installed not in Bilston but in Sheffield.
5. The new a equipment for inspection having been installed at Sheffield, Bilston's carbon steel tube billets order book was then largely transferred in April 1977 to Sheffield works.
6. Bilston's economy depended on liquid iron for steelmaking being available from "Elizabeth" blast furnace. In November 1977 the Division ordered closure of "Elizabeth” resulting immediately in steelmaking productivity being almost halved. From a constant profit making plant, Bilston immediately became a loss plant.
7. Having eliminated "Elizabeth" the number of steel furnaces in operation could be reduced, thereby exacerbating the loss position and, making Bilston a liability instead of an asset.”