The Story of the South China Iron Works as told by Chang Don Chien 張敦潛
Antonia Cheung, the daughter of Chang Don Chien 張敦潛, chief engineer of South China Iron Works from 1948 to 1968, has written this article based on what her father told her. She was assisted by her brother Dr. King Cheung who helped with the maps. Antonia was born in Tsuen Wan, and moved into the company housing before she was 1 year old. Her family lived there until she was 10:
The Story of the South China Iron Works, Ltd. Hong Kong (SCIW)
South China Iron Works, Ltd. Hong Kong (SCIW) was founded in 1938. It was founded as a very unique company, and under the most unusual circumstances. Unlike many companies in Hong Kong in the ‘50s, SCIW started out as a big company from the very beginning.
One would like to ask: How was the company founded, and who funded it?
Mr. Chang, Don-Chien, Chief Engineer of SCIW told the story of how the company was founded.
General Chiang Kai-shek was furious and saddened by the suffering of the Chinese citizens in the Nanking Massacre. He wanted to end the Japanese savage acts of the invasion. He wanted China to never lose a battle ever again. He consulted with a German military strategist. He got one word out of the brilliant German, “Logistics”.
This was the General’s awakening. China was a big country, her resources were plentiful, her army was strong, yet the Japanese butchered her citizens mercilessly. With this single word, the General’s staff acknowledged the problem. China failed to have good roads, strong trucks to deploy its military assets, to transport soldiers and to support the war front efforts. Recommendations were made to the General. China should construct passable roads and extend the railroad system to connect all major cities. The country must have the ability to build good trucks, transport vehicles, efficient trains. She should never rely on buying foreign made trucks, and wait for replacement parts when the trucks were broken.
General Chiang took these recommendations seriously. His only concern was that the bureaucracy of the army would slow the production of the needed trucks and parts. His staff came up with a great idea. A private defense company would be formed to build the trucks, with its only customer the army. The company would be run and owned by civilians. The company would have full autonomy to execute its business plans and manage its staff. The Bank of China was approached to provide the funding. With a full guarantee of the sales of a single type of product (military transport vehicles), the board of the bank approved the loan. China Motors Company was founded in Guilin immediately. Private investors realized the great opportunity to get high returns on their investment, and started to pour in money.
Top ranking scientists, engineers from famous universities were recruited to join this company. They might not be specialists in the fields of auto making, but all were brilliant and solid engineers who could learn and were willing to help. Mr. Chang was one of them. It was an exciting time for civilians to contribute to the war fighting effort.
The senior managers of China Motors realized that China would need the most advanced technologies to build these trucks and other vehicles. They contacted German, American and British automakers. The latter not only bought their already made trucks and vehicles, they also bought the machinery which built every integral part of these vehicles. China Motors sent their engineers/technicians to Germany, the U.S., and England to work with the engineers, designers, technicians of these automakers. China Motors was to build all the vehicles using this machinery.
At the same time, the senior management at China Motors realized that China’s entering WWII was inevitable. The soon to be delivered machinery must be kept in a safe place during the war. They requested the shipments to be delivered to Hong Kong, a British Colony at the time and protected by British armed forces. The machinery would have a better chance of surviving there. It was under this belief and hope that China Motors’ management created the South China Iron Works, Ltd. Hong Kong.
Hence, SCIW was a subcontractor to China Motors. Its function was to safeguard the machinery and to use it build the machines which made the various auto parts, and the needed tools. The Bank of China was again designated as the underwriter for the loan of the subcontractor.
SCIW Location and Company Compound
The official address for SCIW was listed as Castle Peak Road, Kowloon. It was actually located between 8 ½ and 9 Milestones in Tsuen Wan, New Territories.
This photo shows Mr. Chang with his drafting staff member Mr. Harry Chao趙振漢 near Mr. Chang’s housing unit under a tree. In the background was the fence of the company property of SCIW. Beyond were the neighboring farm houses. Between the SCIW housing and the farm houses was a river. Winter 1954
The location for the company compound was carefully selected. It had to be big since the machinery was huge, and the intended production lines were sizeable. They would need lots of space for manufacturing, sufficient storage area to hold raw materials and finished products, working offices, various workshops, and housing for the staff.This would not work if the compound was in some densely populated area in the city. The New Territories at that time was more desirable in comparison to Hong Kong Island or Kowloon.
Mr. Chang sitting on the Staircase joining the upper campus to the lower campus of SCIW. Background on the right was the Storage area for raw materials. All the hilly areas were still within company property. Winter 1955.
Tsuen Wan was mostly farmland at the time. The finally chosen property was originally built by the British as a base for their Gurkha regiment. During the Japanese occupation of Hong Kong, Japanese soldiers took over the place to build more barracks, flattened hilly areas, and extended the usable land. After SCIW leased the property, the company added fences separating the property from neighboring properties. There was an internal fence separating the work areas from the housing area. The estimated total area was about half a square mile, about a quarter mile from east to west, and two miles measured from south to north.
The south side beyond the main gate was the Tsuen Wan Police Station. The south-eastern neighbor was China Dyeing Company, which also shared the water from the river with SCIW. The rest of the surrounding areas was all farmland. Some farmers grew tropical fruit such as pineapples, some vegetables, and some even grew flowers.
The company compound had four large workshops, a die-casting foundry, two office buildings, a store, a big cafeteria, and a school house for the employees to send their kids to start school in. No tuition fee was charged to the employees’ children.
Housing was provided for 90% of the employees, rents were very low. It was divided into senior staff and staff housing units, and single workers (mostly apprentices) were in the dormitory.
In the senior staff housing units, each family got about a 40 square meter one-room unit. The families shared common bathrooms and one huge common kitchen area. There were also servants’ quarters for the families who hired housemaids.
The staff housing units were the army barracks. Eight families in one barrack block. Each family got a room about 30 square meters. The room had a front door and a back door. Windows were at the front and back. The lucky ones would take the end units, else each would have two adjacent neighbors. The kitchen was part of the unit. Residences could use the common toilets and common showers or partition part of their unit into a bath room. The staff housing blocks had some open land in front and behind to be used as front and backyards. Some families used the open land to plant a small garden, raise chickens, and keep their pets.
The dormitory was for the single workers. Some were staff engineers, some were skilled workers, but most were apprentices. Depending on their job classification, they were assigned 2, 3 or 4 to a staff unit. Each got a bunk bed, storage, and a desk. They all used the common toilets, and got their meals from the cafeteria.
- b1-b6 are staff housing barracks, each barrack has 8 units, one per family
- d1-d2 are dormitory barracks, each has 8 units, max 4 single men in each unit
- e1-e6 are workers’ family barracks, each barrack has 8 units, one per family
- the river ran from north to south, reaching the shoreline at Tsuen Wan
- water rights were shared between SCIW and China Dyeing Works Limited Co.
- dormitory on page 1, next to the clinic, was for the engineering craftsman, 4 single rooms
There was a big cafeteria which could serve three meals a day up to two hundred men at the same time. Meal tickets were sold at a very reasonable price, since the company subsidized the utility bills, rents, and salary of the chefs and the kitchen staff.
Behind the cafeteria was a small store, it sold snacks, magazines, sodas, cigarettes, and other things to the young men.
There was a basketball court where the employees could have a game in the evening. It was always crowded.
The commissary was next to the basketball court, it served as the second cafeteria. Some single staff ate their meals there. As it was closer to the engineering offices, the staff shopped there. They sold milk, soda, snacks, and a limited range of groceries. At night it was a busy place when the owner also served bowls of won-ton noodles.
The one-room school was about 40 square meters. There were usually three classes being taught by the same teacher, Ms. Chow. She divided the students into groups by age and by academic level. She tended to each group in turn. School started at the same time as the workers in the factory. But it ended by 3pm daily. No school on Sunday.
A clinic to care for the staff and their families was inside the compound, in the upper campus. There were two doctors to care for most of the population. Unless it was an emergency, these two doctors took care of common illness efficiently and most effectively. The clinic also dispensed the needed drugs, all free of charge. Many babies were even delivered by these two capable doctors.
There were power generators,a water tower, and water pump to provide the electricity and water for the plant and the housing units. Under the water tower was the recycling site. Household waste, industrial waste were all dumped there to be buried. Children sometimes went there to play ‘treasure hunt’. Cooking was done with kerosene stoves.
SCIW was quite a self-sufficient company.
Two gentlemen were named as president and vice president of the company. Dr. T.P. Wu became the president assisted by Dr. Soo. They were both brilliant engineers in their own fields: Dr. Wu in power plant engineering, Dr. Soo in sugar refinery engineering. Both were U.S. educated engineers. Dr. Wu’s family also was one of the many private investors in this defense contractor.
On the business side, the company had a sales office in Kowloon to handle the daily business affairs. It was easier to conduct business with potential clients in the city. The office was a rental unit and housed about 20 staff to handle purchase orders, contracts, legal, labor laws, human resources and sales. Inside the plant in Tsuen Wan, there were engineering design offices and payroll, accounting, material management, and planning departments. These were considered the senior staff of the company.
Regarding the technical side of the operation: there were four workshops each headed by a chief engineer and a workshop chief. The workshop was used to create and test the prototype of a new design after the engineering design department made up the drawings of the design. A wooden model was handcrafted for each of the parts for the engineering model. After the models were verified to fit together, a production model was made with the appropriate metal. It would be used to test out its functionality, its performance, and the tolerance level of that part. Since many of the machines parts were made with various alloys, SCIW needed to hire chemists, physicists, and material science specialists. Tens of these specialists were recruited among the many educated and skilled engineers/craftsmen who escaped from mainland China. They were hired at staff level.
In addition to the staff, the factory needed workers. Originally under a hundred skilled and experienced workers were on the payroll. They could perform efficiently on various types of tasks in a manufacturing environment. Some had exposure to repair and maintenance jobs. Yet, none had worked on the range of new machinery required since it had not yet been built. Hence the company aggressively hired apprentices. They were trained on the job, and they learned from the engineers, designers, masters and chiefs. Some diligent ones also learned in public trade schools at night. These apprentices were young men who had fled China, without finishing their high schools and had no work experience. They found a place to work, to learn and most importantly a place to live. Within three years of its conception the company had grown to five hundred employees, including the two medical doctors.
Most employees were males with the exception of the school teacher and a few office clerks.
The payroll was handled in cash only. There were two paydays per month. The cash was brought in from the bank to pay the employees at their offices, or at the gate of the plant. Each employee got his own pay bag with the correct amount inside. All the deductions were made accordingly. His rents, his utilities, his meals, his outstanding balances from the commissary and/or the cafeteria were all taken out first. Since the workers worked there, lived there, and ate at the plant, it was a perfect solution. No one worried about anyone skipping the loan payment.
Early Products of SCIW
The machinery was delivered from the foreign automakers safely after WWII, yet the Chinese Nationalist Party led by General Chiang had lost the civil war. The prime contractor China Motors Company was taken over by the Communist Party. The Communist Party would probably have liked to have taken possession of SCIW as well, but it was in the British colony of Hong Kong, and registered as a private corporation. . The Communist Party realized that to take it over might cause an international incident. So, they left it alone. With its sole intended customer gone SCIW did not really have to produce the engines to build trucks, or automobile parts anymore. But to keep the company open, it would still need to produce something, and the management looked for other clients.
Fortunately SCIW was able to secure a few purchase orders from the German auto maker Mercedes-Benz to keep the company afloat for a few years. The reason why Mercedes-Benz made such a huge order were two fold. One Mercedes-Benz could not produce enough auto parts for Germany’s high demand for new cars and trucks after WWII, and two it was cheaper to buy them from SCIW since the labor cost in Hong Kong was much lower.
After filling the Mercedes-Benz orders, the two presidents and the senior staff started to think about how best to align their product line to meet market demands.
Kowloon Motor Bus Co. (KMB) was a desirable client. At that time, buses were built very similarly to trucks, using similar diesel engines, and they could be repaired and maintained by the same machinery at hand. SCIW approached KMB, and got a nice maintenance contract to support KMB’s growing fleet of buses.
Hong Kong was a busy port even after the war. Ships of all sizes were used in commercial fishing as well as in transportation. The Star Ferry, the Yaumati Ferry companies needed boats to move citizens between Hong Kong Island and Kowloon. The shipping companies regularly needed to repair and maintain their fleets. Most of the ships had marine diesel engines on board. A few of the senior engineers who were familiar with diesel engines came up with the idea that SCIW could repair these engines. They would build replacement parts using modified auto part making machines. Contracts with the shipping companies were profitable. Besides selling the replacement parts, SCIW also provided the engineering solutions.
Whampoa Dockyard and Taikoo Dockyard Engineering Company also sought SCIW’s assistance when engines on some larger ships needed repairs or refurbishments.
‘If one could build diesel engines, one could build other engines’. That was the company’s motto. Continuous studies, innovation, and improvement from SCIW’s engineering design team resulted in converting many of the auto-part making machinery into marketable tools/engines for other industries. SCIW started making tools for the textile, sugar refinery, and dyeing industries. In the early ‘60s when plastic factories first opened, SCIW made tools/engines for them as well.
Listed here are some of the clients of SCIW:
The Taikoo Sugar Refinery, Hong Kong
China Dyeing Works Limited in Tsuen Wan (next door neighbor to SCIW)
The South Sea Textiles Mills (also a nearby neighbor of SCIW)
Po Sing Holdings Co. Ltd (Textile Division)
Taikoo Dockyard Engineering Company
Kowloon Motor Bus Company, Ltd.
The Star Ferry Company, Ltd.
Yaumati Ferry company.
Other Assets of SCIW
In addition to providing engineering solutions and products during those thirty years, SCIW also contributed greatly to Hong Kong Industries by cultivating great talents: engineers, technicians and masters of their trades. These human assets either started their own businesses, or worked for other factories after they left SCIW. Because of the intense training they received, and the broad technical knowledge passed on to them, these staff became pillars of many modern industries such as electronics manufacturing, the semi-conductor industry, the toy industry, and the consumer electronics industry.
This article was first posted on 8th January 2016.
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