Harland & Wolff Contractual Difficulties
Almost all of H&W’s shipbuilding contracts had been obtained on a cost-plus basis for almost 30 years. The senior production management had no experience of any other form of working. Pirrie’s secretive nature added to the Company’s problems. Only Pirrie was aware of the precise contract conditions, and only he knew the financial outcome of each contract. As it was the oldest H&W centre it was not surprising therefore, that Belfast’s production costs were becoming prohibitively high. In the face of the dramatic decline in orders, Pirrie considered closing Belfast, but concluded that such a move would be politically unacceptable.
Towards the end of 1923 the long existence of the Commission Club created two major contractual problems as a result of the H&W management’s detachment from all consideration of cost. An IMMC liner had been completed during the war as the very large cargo ship Belgic. It was eventually returned to Belfast for conversion into Belgenland for the Red Star brand. On completion of the work the owners protested at the total cost, because H&W had not provided any cost estimates, nor had they obtained the owners prior approval before starting on a considerable amount of work that was additional to the original specification. This dispute was eventually settled at an agreed reduction in H&W’s price.
