A brewer of ‘craft’ beer starts making sanitising hand gel and a car manufacturer converts one of its factories so it can make medical face masks. Just two of the many global examples of how different industries are responding to the health crisis and economic shock of the coronavirus pandemic. Several other times have revealed the ability for rapid industrial conversion, not just to tackle tragic but transient challenges, but long-term economic and geo-political shifts. What are the lessons about industrial conversion for the long term, rapid transition to a low carbon economy, not just from the pandemic response, but also ranging from conflict to the end of the Cold War?

In China where the pandemic began, a car plant run by the manufacturer Fiat Chrysler was converted to make face masks for health and other key workers, with several more in the car industry redirecting resources to address the shortage of hospital ventilators. Making ventilators is, however, a highly specialised task not easy to begin quickly. For that reason clinicians at London’s teaching hospital, UCLH, worked with engineers from car maker, Mercedes, to develop and rapidly introduce for testing a simpler breathing aid which still gets oxygen to the lungs, but without a full ventilator. In the United States a team of car prototype designers from the maker Ford worked with a range of others including doctors and even a hair stylist, to design and begin producing by hand protective face shields for health workers and ‘first responders’ in Detroit.

Elsewhere, a distillery in Aberdeen, Scotland, was re-purposed from making beer to help meet the shortage of hand sanitiser. On a larger scale, Aberdeen is a city that has been synonymous with the oil and gas industry which is now planning to transfer its skills to convert to be a leading renewable energy player. For other sectors it has been a matter of changing how their businesses operate. With restaurants and many fast food outlets closed due to the pandemic, the Leon chain collaborated with food suppliers and distributors to begin delivering meals to front line health staff. The Cooperative also provided free meals to the children of its Co-op academy schools, as well as delivering to food banks.

Current responses echo a long and dynamic history of innovation during upheavals. In times of national emergency such as war – and today’s global pandemic – the need for certain skills and products come sharply to the fore. In wartime, planes are needed more than domestic cars and in times of mass respiratory illness, face masks and ventilators matter more than executive bonuses. Governments play an important role in directing where energy should be focused, but they cannot magic all the products that are in short supply into being. Only manufacturers, designers, engineers and workers can bring to life the items and perform the tasks we need. This ability to be flexible is what links a 1940s hand-built wooden plane, a Formula One team, and an Indian train company.

When the world’s first multi-role combat aircraft, the De Havilland Mosquito, entered service in 1941 during the Second World War, it was nicknamed ‘The Wooden Wonder’. Although it was one of the fastest operational aircraft in the world, the Mosquito was not made from modern materials in a shiny new military factory; instead, it was made from pieces of wood, pressed and glued together in moulds. This helped to preserve scarce metal reserves, was quick to produce, and used existing skills easily found in furniture factories and among cabinetmakers, luxury car builders and piano makers.

It turned out that wood, which was more plentiful than metal in wartime, when covered with a thin layer of ‘doped’ fabric (material with a layer of plasticised lacquer added) made a remarkably smooth, drag-cheating surface free of rivets and seams. Plus, battle damage could be repaired relatively easily in the field. The Mosquito went on to become one of Britain’s most successful war planes, with 6,710 built during WWII and production continuing until 1950. It was an example of shifting production and matching it to the needs and capabilities of the times.

The changing scenarios of geo-politics and the enormous budgets involved in making arms mean that many countries have used state intervention to transition in or out of military hardware. During times of war, factories are often requisitioned for the manufacture of weapons, ammunition and military vehicles. But in times of peace, these same industries face shrinkage and the loss of jobs that accompanies such industrial change. After the end of the Cold War, state run programmes in many countries invented ways to keep the skills needed alive, while developing alternative products in mainstream commercial markets. This relied on partnerships with the private sector and collaboration from the workforce. The UK has seen the same conversations around the proposed end to the Trident nuclear missile programme, with many MPs and campaigners stressing the potential for redeploying resources elsewhere without creating unemployment and losing skills.

These same elements come into play today, as we face the challenges of needing to scale-up the production of protective clothing, ventilators and respirators overnight. A consortium of Formula One designers Mclaren, Rolls Royce, Airbus, Ford, Siemens and GKN aim to start production soon of an existing ventilator design on multiple sites across the UK. In the US, Ford Motor Company is working with 3M and GE Healthcare to manufacture respirators, ventilators, and face shields. General Motors has meanwhile teamed up with Ventec Life Systems in an initiative led by StopTheSpread.org, an organization that is uniting the business community and the public sector. GM will use its purchasing power, logistical expertise and production facilities to begin assembling the ventilators which are designed by Ventec Life Systems. The UK manufacturer Dyson, known for their vacuum cleaners have joined other designers and specialist engineers to create a new ventilator for the NHS, that is currently awaiting approval. In India, the Integral Coach Factory (ICF) in Chennai, makers of India’s first electric semi-high speed train, is attempting to manufacture ventilators, while the Rail Coach Factory (RCF) in Kapurthala is converting unused train carriages into isolation wards for those with Coronavirus.

Wider relevance

As we see how skills and resources can be re-purposed in times of emergency, it raises the prospect of how skilled engineering talent from the arms industry could transfer into efforts to fight climate change. This is far from being a fanciful proposition. There is some clear crossover in the skills needed and there are genuine human security benefits in halting climate breakdown. Defence sector skills are geared towards working as a team to solve immediate problems, while the arms industry supplying it contains highly trained and able engineers. There is potential for bringing people, brainpower and physical resources to catalyse innovation for rapid transition. It is worth noting that globally, some 11 million people are already employed in the low carbon and renewables sector, but the numbers of people and resources currently focused on fossil fuel industries and their dependent products and services remain vast.

Importantly, the best ideas do not always come from above. In times of emergency, there is a tendency to revert to a command and control, highly centralised economy, but this form rarely encourages innovation – unless the ability to try out new ideas is devolved out to those in the best position to trial them. A 2018 report by the Nuclear Education Trust, “Defence Diversification: International learning for Trident jobs” pointed out that innovative ideas often  come from the workers and affected communities – but that a broad partnership is needed to successfully tackle the issues. This might include the former arms companies, national and local government, trade unions, civil society, academia and other stakeholders, supporting the workers and affected communities in making decisions for their future. Any such coalition must be given appropriate support in organising, analysis and planning as well as implementation – and years of preparation can be needed for a plan to be successful. Current efforts to engage communities through citizens assemblies might also form a suitable way to discuss re-pointing our economies toward rapid transition.

It’s not just manufacturers that are able to adapt; individual people have always responded to changes in the external environment by retraining. In times of emergency, this can happen very quickly as people are rushed through to take up frontline roles. The UK family firm of holiday coaches, Baker Dolphin, are working with the local ambulance service to retrain coach drivers for ambulance work – a couple of days’ training and they will be part of a medical team responding to calls from the public. Fire services staff are also being retrained to assist the ambulance service where possible, and grounded airline cabin staff with first aid training being approached to support health service workers. Staff within the UK’s National Health Service (NHS) who are not used to working with ventilators are being trained in the expectation that thousands more people will need such care. In addition, 20,000 ex-NHS workers have volunteered to return to support existing staff, while a call for volunteers from the public was suspended within days after being overwhelmed by 750,000 offers of help.

Context and background

In the UK, any discussion of industrial conversion, and specifically defence diversification, often refers back to the ambitious 1970s Lucas Plan – a ground-breaking union-led proposal to protect jobs threatened by redundancy at the company Lucas Aerospace. This was about the need to move people from making arms to designing and manufacturing commercial products. A multi-union combined shop stewards’ committee drew up a plan to save jobs by converting workers’ skills and facilities to new products, whilst protecting workers’ rights. After a call went to experts and produced only three suggestions for alternative things to manufacture, the workforce itself was asked. Ideas then flooded in. Among the list narrowed down to 150 proposed alternative products that Lucas could produce were several that have now become mainstream; wind turbines; hybrid car engines; cheap heating systems and medical products such as dialysis machines. The plan gained widespread support and became an international cause célèbre with Lucas taking their ideas to the United States, Sweden and Germany. Although the plan didn’t ultimately secure cooperation from the company’s management to go ahead, many of the products suggested did go on to be made and the plan was nominated for a Nobel Peace Prize. One of the leading actors in the Lucas Plan, Mike Cooley, moved on to work at the Greater London Council. There he established Technology Networks that produced innovations for everything ranging from disability aids, to electric bicycles, small-scale renewable energy including wind turbines and energy conservation services. Prefiguring by decades, the work of the hacker community, they re-manufactured and re-purposed products, developed equipment for children’s play, and supported community computer networks, including a women’s IT co-operative.

Under President Obama, the US invested in defence diversification programmes that offered a region-based, community-orientated programme with the emphasis on empowering local communities to choose how to use resources to help themselves. They have a number of long running, government funded projects to mitigate the impact of forces base closures and to assist diversification, known as the Defence Industry Adjustment programme (DIA). It is currently working with 44 communities across the country. In order to be funded, communities have to show that they are affected by the Department of Defence (DOD) cuts or are at risk. An important difference from diversification programmes in other countries is that the Office of Economic Adjustment (OEA) funds communities or their services providers and not companies. Network learning is also encouraged, with an annual conference for all the grantees to update each other and talk about their experiences.

In the 1990s, as in many European countries, Italy carried out large post Cold War cuts to military spending. By 1995, the Italian state arms procurement budget was at 50% of its 1988 level in real terms. Workers and unions at the 90% military aerospace company Aermacchi, proposed to management that the company agree a diversification strategy. The trade unions then took on a ground-breaking role of verifying the progress made by the company on the agreement. As a consequence, Aermacchi began working with the German aerospace firm Dornier to co-produce a civilian aircraft. By 1995, a third of the company’s business was in civilian aerospace, although they still suffered significant job losses. In 1991, BPD Difesa e Spazio, a Fiat subsidiary producing ammunition, rockets and propellants for rocket engines, converted a plant near Rome to produce exploding caps to inflate car air-bags. The company then established a joint venture with two major US major air-bag producers, successfully identifying a market and customer base for its new products. They made the most of their partners’ commercial experience to promote the new product range. BPD workers were also able to work with local government and take advantage of European Union funds through the regional adjustment and diversification KONVER programme to access retraining programmes. These are European programmes for economic conversion and diversification in areas weakened by the cuts in the defence industry and military bases.

Enabling factors

Many of these examples are about consortiums, collaboration, learning from others and operating within a specific geographic area. Regional responses generally deal better with assisting not only major companies, but also small firms. Smaller companies supplying components rather than end products, are more likely to be more able to convert their business quickly to new kinds of work than large firms. The Nuclear Education Trust (NET) report suggested that Small and Medium Enterprises (SMEs) can often convert their business to other purposes more easily as their technology and business model is rarely as specialised as large businesses – and is therefore more adaptable. It will be interesting to see what we might learn from the coronavirus emergency by way of collaboration at the local level. There is a strong tendency for government to prefer tenders from large firms and yet many smaller firms have responded flexibly en masse, for example in response to food procurement – with local caterers turning to delivery overnight.

In Germany, the threat of post Cold War defence cuts resulted in a Bremen Disarmament and Conversion report in 1990. This came as the result of a lengthy social process including hearings involving a huge range of stakeholders, plus company managers, company employees’ representatives, and business and employees’ chambers and associations. It was formally adopted in 1992 with support guidelines for companies, containing a regional economic approach for supporting structural change. Over 50 company conversion projects and around 5 conversion-related infrastructure projects were supported. The venture was considered a remarkable success and was recommended as a model by the European Commission. Despite one major company – Bremen Vulkan corporation – not participating and going bankrupt in 1996, 50% of the decrease in defence employment in the region was reclaimed and 11% of the Bremen arms company employment changed from military to civil work by 1997.

The Bremen experience showed that incentives and state support in the medium-term helped overcome companies’ institutional resistance to diversification, while the regional approach coordinated behaviour that would benefit the wider region for the common good. This prevented companies from following a purely individualistic, competitive path of trying to grab as much of the budget for themselves as possible. Industry can be blamed in times of national or international cooperation for still retaining elements of competitive behaviour, but wholesale change is difficult if firms are operating within a capitalist system not designed explicitly to reward openness, collaboration and transparency per se. Companies that do, can place themselves and the people they employ at risk. Systemic change, involving a much greater role for social enterprises, mutuals and cooperatives, is required to strike a better balance.

Scope and evidence

  • In the US, Ford Motor Company is working with 3M and GE Healthcare to manufacture respirators, ventilators, and face shields. General Motors has meanwhile teamed up with Ventec Life Systems in an initiative led by StopTheSpread.org, an organization that is uniting the business community and the public sector.
  • In India, the Integral Coach Factory (ICF) in Chennai, makers of India’s first electric semi-high speed train, is attempting to manufacture ventilators, while the Rail Coach Factory (RCF) in Kapurthala is converting unused train carriages into isolation wards for those with coronavirus.
  • A 2018 report by the Nuclear Education Trust, “Defence Diversification: International learning for Trident jobs”  pointed out that the best ideas and innovations nearly always come from the workers and affected communities – but that a broad partnership is needed to successfully tackle the issues.
  • The UK’s 1970s Lucas Plan was a ground-breaking, union-led proposal to protect jobs threatened by redundancy at Lucas Aerospace. Among the 150 proposed alternative products that Lucas could produce were several that have now become mainstream; wind turbines; hybrid car engines; cheap heating systems and medical products such as dialysis machines.
  • The US has a number of long running, government funded projects to mitigate the impact of base closures and to assist diversification known as the Defence Industry Adjustment programme (DIA). It is currently working with 44 communities across the country.
  • In 1991, BPD Difesa e Spazio, a Fiat subsidiary producing ammunition, rockets and propellants for rocket engines, converted a plant near Rome to produce exploding caps to inflate car air-bags.
  • The Bremen disarmament and conversion programme resulted in 50% of the decrease in defence employment in the region being reclaimed and 11% of the Bremen arms company employment changing from military to civil work in 5 years.
  • When the world’s first multi-role combat aircraft, the De Havilland Mosquito, entered service in 1941, it was nicknamed ‘The Wooden Wonder’. It was made from wood, fast to produce, and used existing skills easily found in furniture factories, cabinetmakers, luxury car builders and piano makers.
  • The Mosquito went on to become one of Britain’s most successful war planes, with 6,710 built during WWII and production continuing until 1950. It was a great example of shifting production and matching it to the needs and capabilities of the times.
  • A consortium of Formula One designers Mclaren, Rolls Royce, Airbus, Ford, Siemens and GKN aim to start production soon of an existing ventilator design on multiple sites across the UK.

Lessons for rapid transition

  1. At times of crises governments need to prioritise welfare and sustainability over business-as-usual production. Despite the shocks and disruption, new models of business can emerge which provide the basis of a more sustainable economy. Rapid industrial conversion is possible with many sectors having transferable skills that allow for diversification and sometimes unlikely switches, such as from making Formula 1 cars to medical equipment, or North Sea oil rigs to wind turbines.
  2. When industries need to change and convert to a new purpose, some of the most innovative and effective ideas can come from the communities and work forces affected. Smaller companies can prove more able to convert their business quickly to new kinds of work than large firms. Small and Medium Enterprises (SMEs) can often convert their business to other purposes more easily as their technology and business model is rarely as specialised as large businesses and therefore more adaptable. The importance of local level collaboration during the coronavirus emergency suggests lessons for government procurement, which tends to prefer tenders from large firms. Many smaller firms have responded flexibly en masse, for example in response to food procurement – with local caterers turning to delivery overnight.
  3. Successful conversions have been marked by consortiums working together, collaboration, learning from others and operating within a specific geographic area. Regional responses generally deal better with assisting not only major companies, but also small firms. Incentives and state support in the medium-term helps overcome companies’ institutional resistance to diversification, while the regional approach can coordinate behaviour that would benefit the wider region for the common good.

References