Birmingham Small Arms Company
The Birmingham Small Arms Company Limited was a major British industrial combine, a group of businesses manufacturing military and sporting firearms; bicycles; motorcycles; cars; buses and bodies; steel; iron castings; hand, power, and machine tools; coal cleaning and handling plants; sintered metals; and hard chrome process.
After the Second World War, BSA did not manage its business well, and a government-organised rescue operation in 1973 led to a takeover of such operations as it still owned. Those few that survived the process disappeared into the ownership of other businesses.
History of the BSA industrial group
Machine-made guns
BSA began in June 1861 in the Gun Quarter, Birmingham, England. It was formed by a group of fourteen gunsmith members of the Birmingham Small Arms Trade Association specifically to manufacture guns by machinery. They were encouraged to do so by the War Office which gave the BSA gunsmiths free access to technical drawings and to the War Office's Board of Ordnance's Royal Small Arms Factory at Enfield. New machinery developed in the USA installed at Enfield had greatly increased its output without needing more skilled craftsmen, bringing to Birmingham the principle of the interchangeability of parts and mass production.BSA bought of land at Small Heath, Birmingham, built a factory there and made a road on the site calling it Armoury Road. Their enterprise was rewarded in 1863 with an order for 20,000 Turkish infantry rifles.
The system of management of BSA was changed in 1863 when shareholders elected a Board of Directors: Joseph Wilson, Samuel Buckley, Isaac Hollis, Charles Playfair, Charles Pryse, Birmingham mayor Sir John Ratcliffe, Edward Gem, and J.F. Swinburn under the chairmanship of John Dent Goodman.
Erratic demand
The first War Office contract was not agreed until 1868. In 1879, without work, the factory was shut for a year.New ventures
Bicycles
The next year, 1880, BSA branched out into bicycle manufacture. The gun factory proved remarkably adaptable to the manufacture of cycle parts. What cycles needed was large quantities of standard parts accurately machined at low prices. In 1880, BSA manufactured the . In the 1880s, the company began to manufacture safety bicycles on their own account and not until 1905 was the company's first experimental motorcycle constructed. Bicycle production ceased in 1887 as the company concentrated on producing the Lee–Metford magazine-loading rifle for the War Office which was re-equipping the British Army with it. The order was for 1,200 rifles per week. BSA recommenced manufacturing bicycles on their own behalf from 1908. BSA Cycles Ltd was set up in 1919 for the manufacture of both bicycles and motorcycles. BSA sold the bicycle business to Raleigh in 1957 after separating the bicycle and motorcycle business in 1953.Bicycle components
In 1893, BSA commenced making bicycle hubs and continued to supply the cycle trade with bicycle parts up to 1936. BSA bought The Eadie Manufacturing Company of Redditch in 1907 and so began to manufacture the Eadie two speed hub gear and the Eadie coaster brake hub. BSA also signed an agreement with the Three Speed Gear Syndicate in 1907 to manufacture a 3 speed hub under licence. This was later classified as the Sturmey Archer Type X. BSA introduced a 'Duo' hub in the late 1930s which was capable of one fixed gear and one gear with a freewheel. All BSA hub gear production temporarily ceased in 1939, until they recommenced making their 3 speed hub around 1945. The Eadie coaster hub made a brief return in 1953 on two BSA bicycle models. BSA forever ceased production of their hub gears in 1955.Ammunition
BSA sold its ammunition business in 1897 to Birmingham Metal and Munitions Company Limited part of the Nobel-Dynamite Trust, through Kynoch a forerunner of ICI.Sparkbrook Royal Small Arms Factory
In 1906, Frank Dudley Docker was appointed a director of the company. By the autumn of that year BSA was in some difficulty. They had purchased the Sparkbrook Royal Small Arms Factory from the War Office, and in return, the War Office undertook to give BSA a quarter of all orders for Lee–Enfield rifles. But, the War Office did not honour their undertaking. The ensuing financial crisis did not prevent BSA from signing an agreement to purchase control of bicycle component manufacturer, the Eadie Manufacturing Company of Redditch, on 11 February 1907. That decision was ratified by the shareholders of both companies at separate Extraordinary General Meetings held in the Grand Hotel, Birmingham on 27 February 1907. Albert Eadie became a BSA director, a post he held until his death in 1931.Sporting firearms
The very variable military market was now supported by sales of target military rifles, sporting rifles, various patterns of miniature rifles and air rifles. Aperture sights were in demand for Bisley and other military rifle meetings.Motorcycles
Motor bicycles were added to bicycle products in 1910. The BSA hp was exhibited at the 1910 Olympia Show, London for the 1911 season. The entire BSA production sold out in 1911, 1912 and 1913.BSA cars
In an effort to make use of the Sparkbrook factory BSA established a motorcar department there. An independent part of it was occupied by Lanchester Motor Company. The first prototype automobile was produced in 1907. The following year, marketed under BSA Cycles Ltd, the company sold 150 automobiles and again began producing complete bicycles on its own account. By 1909, it was clear the new motorcar department was unsuccessful; an investigation committee reported to the BSA Board on the many failures of its management and their poor organisation of production.Daimler cars and trucks
Dudley Docker had joined the board in 1906 and was appointed deputy chairman of BSA in 1909. He had made a spectacular financial success of a merger of five large rolling-stock companies in 1902 and become the leader of the period's merger movement. Believing he could buy the missing management skills that could not be found within BSA, he started merger talks with The Daimler Company Limited of Coventry. Daimler and Rover were then the largest British car producers. Daimler was immensely profitable. After its capital reconstruction in 1904, Daimler's profits were 57 per cent and 150 per cent returns on invested capital in 1905 and 1906. The attraction for Daimler shareholders was the apparent stability of BSA.So in 1910, BSA purchased Daimler with BSA shares but Docker who negotiated the arrangements either ignored or failed in his assessment of their consequences for the new combine. The combine was never adequately balanced or co-ordinated. One of the financial provisions obliged Daimler to pay BSA an annual dividend of £100,000 representing approximately 40 per cent of the actual cash BSA had put into Daimler. This financial burden deprived Daimler of badly needed cash to fund development, forcing the Daimler company to borrow money from the Midland Bank.
BSA had still not recovered financially from the earlier purchase of Royal Small Arms factory at Sparkbrook and BSA were not in a position to finance Daimler, nor had either company ample liquid resources. BSA went ahead with motorcycle production in 1910, their first model available for the 1911 season. In 1913, the BSA group were compelled through pressure from the Midland Bank to make a capital issue of 300,000 preference shares. In the short term this was to solve the liquidity issue but further diluted the group's capitalisation.
Dudley Docker retired as a BSA director in 1912 and installed Lincoln Chandler on the BSA board as his replacement. Dudley Docker liked to draw a comparison between the BSA–Daimler merger he engineered and that of his 1902 merger of Metropolitan Carriage Wagon & Finance Company and Patent Shaft. However, there was not the integration of facilities in the BSA–Daimler case, nor was there a reorganisation of either BSA or Daimler and in view of the earlier criticism contained in the 1909 report of the investigation committee, BSA continued to produce cars of their own using Daimler engines. In 1913, Daimler employed 5,000 workers to manufacture 1,000 vehicles, an indication that things were not well.
Steel bodies
In 1912, BSA would be one of two automobile manufacturers pioneering the use of all-steel bodies, joining Hupmobile in the US.Lewis Automatic Machine Gun
In 1913, BSA undertook to manufacture quick-firing machine guns for the Lewis Automatic Arms Company whose rights covered the world except for the American Continent.First World War
During the First World War, the company returned to arms manufacture and greatly expanded its operations. BSA produced rifles, Lewis guns, shells, bicycles, motorcycles and, through Daimler, aero engines, aircraft and other vehicles for the war effort as well as machine tools.Following the Armistice the BSA group was described by its chairman as:
- Three distinct legal entities: BSA guns, BSA tools and BSA cycles all at Sparkbrook, Smallheath and Redditch
- Daimler at Coventry
- William Jessop and Savilles the two steel-making companies in Sheffield
- Daimler Hire and Burton Griffiths in London
New ventures
Motorcycles
In November 1919, BSA launched their first 50-degree vee-twin, Model E, 770cc side valve motorcycle for the 1920 season. The machine had interchangeable valves, total loss oil system with mechanical pump and an emergency hand one. Retail price was £130. Other features were Amac carburettor, chain drive, choice of magneto or Magdyno, 7-plate clutch, 3 speed gear box with kickstarter and new type of cantilever forkAviation
During the war Daimler had built enormous numbers of aero engines and aircraft and by the end was building 80 Airco de Havilland bombers a month. In February 1920, BSA acquired Aircraft Manufacturing Company, the world's largest aircraft manufacturer; Airco's main plant at Hendon had employed between 7,000 and 8,000 people. The Airco group of companies had turned out a new aircraft every 45 minutes.Within days BSA discovered Airco was in a far more serious financial state than George Holt Thomas had revealed. Holt Thomas was immediately dropped from his new seat on the BSA board and all BSA's new acquisitions were placed in the hands of a liquidator. Some of the businesses were allowed to continue for some years, Aircraft Transport and Travel's assets being eventually rolled into Daimler Air Hire to make Daimler Airway Limited. BSA failed to pay a dividend for the following four years while it tried to recover from its losses. Some relief was achieved when in March 1924 Daimler Airway and its management became the major constituent of Imperial Airways.
As well as the Daimler car range, BSA Cycles Ltd re-entered the car market under the BSA name in 1921 with a V-twin engined light car followed by four-cylinder models up to 1926, when the name was temporarily dropped. In 1929 a new range of 3- and 4-wheel cars appeared and production of these continued until 1936.
By the end of 1924 difficult economic conditions left the bulk of BSA profits coming from cars and cycles. There were no sales of arms for military purposes in spite of large new facilities built at Government's request. The shares in Pennsylvania's Jessop Steel Co were disposed of without loss. During 1928 there was a drastic reorganisation of the business of some BSA subsidiaries.
By 1930, the BSA Group's primary activities were BSA cycles and Daimler vehicles.
Car production under the BSA name ceased in the 1930s. BSA remained the largest manufacturer of motorcycles but the market was less than half the size of the late 1920s and production was unprofitable yet the value of BSA's motor cars and cycles was now more than half group turnover.