Patriot Realm

How often do we lament that we do not have visionaries and forward thinkers in business and government today? People who say " CAN DO " instead of " You CANNOT DO that. "  

I was all set to publish a piece for today when I chanced on a phrase about Margaret Thatcher being the " Iron Lady.": Well, of course, my mind went into its usual strange mode whereby it focuses on one word and ends up in an entirely different place than the place it had originally been heading. Instead of writing about the lack of political leadership around the world, I ended up writing about Iron Ore. 

And how an Australian and an American collaborated and changed the future of  Australia forever. But, in a strange way, I did end up where I intended to be. I just came via a different route. So enjoy my journey through the Pilbara, the shipyards of WWII in America and ending up at my destination: Great Minds and Determination are needed right now. It is time to get back to building wealth, not destroying it. 

Lang Hancock’s discovery of iron ore in the Pilbara region of Western Australia is a legendary story, often considered a turning point in the history of Australia’s mining industry. The discovery happened in 1952, and it came about quite by chance. 

According to Hancock’s own account, the discovery took place during a flight he was making in a small plane over the Pilbara region with his wife, Hope, on November 22, 1952. The weather was stormy, and low cloud cover forced him to fly unusually low through the gorges of the Hamersley Range near the Turner River. While flying at a lower altitude than normal, Hancock noticed a distinctive red colouration on the surface of the hills below, indicating the presence of iron ore. 

The storm forced Hancock to fly through the gorges instead of over them, giving him an unusually clear view of the terrain. It was this low flight path that enabled him to spot the reddish cliffs, which were rich in iron ore. The red color Hancock observed was due to the high hematite content in the rocks. Hematite is an iron oxide and a key indicator of iron ore deposits.

He recognised that the deposits were likely of immense value because of the sheer size and quality of the ore. Following this initial sighting, Hancock pursued formal exploration and testing to confirm the presence of iron ore. Further investigation revealed that the deposits were part of one of the largest iron ore reserves in the world. 

Although Hancock had discovered the iron ore deposits, he faced significant challenges in capitalising on the find. At the time, there was a federal government embargo on the export of iron ore due to the belief that Australia’s reserves were insufficient to meet domestic demand. It wasn’t until the 1960s, when the embargo was lifted, that mining companies were allowed to export iron ore on a large scale. 

Enter Henry Kaiser.  He and his company, Kaiser Steel Corporation, entered the picture as potential investors and partners in the development of the Pilbara iron ore industry. Kaiser brought financial backing, technical expertise, and access to the global steel market. Hancock and Kaiser signed a joint venture agreement, known as the "Pilbara Agreement." This partnership aimed to mine and export iron ore from the Pilbara region. Under this agreement, Hancock and Kaiser established the Hamersley Iron company to oversee iron ore mining operations. The joint venture marked the beginning of large-scale iron ore mining in the Pilbara, with the first shipment of iron ore leaving Western Australia in 1966. The success of this venture laid the foundation for the growth of the iron ore industry in the region.

So who was Kaiser? I will hand it over to Happy Expat to tell you this side of the story. ( extracts from his brilliant piece here. ) 

Henry J. Kaiser (1882-1967) was an American industrialist and entrepreneur known for his contributions to various industries, including shipbuilding, automobile manufacturing, and construction. During World War II, Kaiser's shipyards played a crucial role in producing Liberty ships for the U.S. Navy.   

Kaiser was a self-made uneducated man. Un-educated in the sense that he was not a brilliant scholar. Kaiser left school and skipped town at age 13. Ten years later he was running his own construction company. His great achievement was the construction of the Hoover Dam, one of the greatest engineering achievements ever at that time. 

Kaiser offered to build shipyards and then ships. He had limited experience in both having been part of a joint venture building ships for the Maritime Commission in the 1930’s. Kaiser met with the British with a design of what became the Liberty Ship. It was called an “ugly duckling”. It was basic, austere, and uncomfortable but it had large cargo capacity and was easy to build. The British, who claimed to be the world’s greatest shipbuilders, were sceptical but after Kaiser assured them he could they awarded him the contract but it had to be done his way.

Kaiser bought land on the mudflats at Richmond on San Francisco Bay. He was told by consulting engineers that it would take 6 months to dredge the channel and clear enough land to start construction of his shipyard. Kaiser’s team did it in 3 weeks and in 3 months had constructed their first shipyard.

Kaiser based his production techniques on the Ford Motor Company production line model. Instead of building one ship at a time he built ships in sections with several identical sections being built at the same time then joining the sections by welding instead of rivets. A riveter takes 6 months to train. A welder takes two days.

Kaiser’s shipbuilding programme was for a contract to build ships for Britain before Japan attacked Pearl Harbour. Once the mobilisation of American industry was launched President Roosevelt saw how efficient the Kaiser model was and decreed that construction of warships by the Navy would cease and be handed over to private industry. Kaiser expanded his ship building and ended up with seven shipyards of which four were at Richmond.

Kaiser secured many more contracts which, in turn required more workers. People previously unemployed from all over the country are attracted to the shipyards and as Richmond is far from the usual township facilities Kaiser decides to create his own for the benefit of his workers and offers pay rates comparable to what could be earned working in an aircraft factory in or near a big city.

His first benefit was to provide health care at a cost of 18 cents per week to cover all medical and health care costs. 91% of his workers subscribed making it the largest health care scheme in the USA at the time. Next he created a Health Care company and franchised it out to health care specialists and insurance companies.

Workers flocked from all over the country to join the Kaiser shipyards and by 1943 Richmond had grown into a town of 150,000.Kaiser then embarked on the construction of 93,000 new homes to accommodate the exploding work force. With it he created all of the necessary infrastructure to become a town where people wanted to live. As well as transport he constructed shops, cafes, picture theatres and sporting facilities all open on a 24 hour basis to cater for shift workers.

25% of the shipyard workers were women. To cater for the large number of young families Kaiser built schools, kindergartens and child minding centres with qualified staff so that the mothers could be content at work knowing that their children were being well looked after. In 1933 only 50,000 were employed in shipyards. By 1943 there were 1,700,000.

At the beginning of 1942 a Liberty ship was taking 210 days to construct. By May this was down to 156 days. By July this had come down, on average to 15 days with one being completed in 2 days. Before the war it was taking the US navy shipyards 18 months to complete a Liberty ship type of cargo vessel. Kaiser now had shipyards all around the country and was being feted as a national hero.

Oregon Shipbuilding Corp., 1943. Courtesy Oregon Hist. Soc. Research Lib., Orhi68566

At the start of the war America had only 6 Gato Class submarines. These were the long range submarines that could reach the home waters and shipping channels of Japan. They were complicated and very slow to build. America wanted to do to Japan what Germany had done to Britain, i.e., cut off their supply of vital goods. American shipyards got together and developed production line techniques to build more Gatos. By adopting Kaiser’s methods a new submarine fleet was under construction and by 1944 a new submarine was being launched every 8 days; a far cry from the old US Navy shipyard output. The Gato was America’s first mass produced submarine.

Submarines represented 2% of the US. Navy fleet but they accounted for 30% of all Japanese ships sunk.

Kaiser’s next project was the design and construction of the escort aircraft carrier known as the Casablanca Class. This was a small simple fast moving aircraft carrier that could carry 20 planes and take a few weeks to build using his methods. A conventional aircraft carrier carried 60 or 70 planes and took 3 years to build. There was no time to wait for this. Kaiser met with the Navy board which gave him short shift so he went directly to the President. The President over rode the Navy Board and gave Kaiser a contract to build 50 escort carriers. He undertook to deliver 6 carriers per month and stuck to his deadline. The destruction of the Japanese fleet by the US Navy was achieved by aircraft launched from escort carriers. There were more Casablanca Class ships built than any other class of aircraft carrier on either side during the war.

 In 1943 Japan produced 122 major naval vessels. America built 2,634 in the same period.

Despite the outstanding achievements of aircraft and shipbuilding manufacturers American losses on the battle front during Admiral Nimitz’s island hopping strategy were heavy. This was due to the type of landing craft being used which were heavy, slow and did not have shallow draft. Once beached in water too shallow to proceed but too deep for troops to disembark the landing craft were sitting ducks to be picked off by shore based gunfire. 

A solution was submitted to the Navy board by a man named Andrew Higgins. Higgins worked in Louisiana servicing offshore oil rigs with a boat of his design. It was fast, highly maneuverable and had very shallow draft. His proposal was rejected by the Navy Board which insisted on retaining the current type of landing craft which it had designed.

Not to be deterred, like Kaiser, Higgins went to see Senator Harry Truman who was on the far right of the Democratic Party and well disposed towards private industry. Truman launched a senate inquiry into the Navy Board which resulted in the Navy Board being sacked and Higgins being awarded a contract to mass produce his boat.

In June, 1944 the US Navy invaded the Marianas using the Higgins boat using the biggest fleet ever assembled to that time. It was an overwhelming success but there were limitations evident in the ability to land heavy equipment such as tanks, artillery and trucks. Kaiser again entered the picture.

Kaiser’s solution was the invention of the LST, the Landing Ship Tank. The LST was designed in Britain but it was manufactured in the USA by Kaiser shipyards. The LST was designed to carry 20 tanks, 27 vehicles and 200 men.In April, 1945 the US Navy assembled the largest fleet and landing force of the Pacific war when it invaded Okinawa. Over 1,400 ships were involved of which there were hundreds of LST and Higgins landing craft. This was the last great assault of WW2. Four months later the atomic bomb was dropped on Hiroshima and nine days later the war was ended.

The “can-do” attitude and the refusal to accept that nothing was impossible propelled American industry to heights never dreamed of in 1939.

In 1941, the US Navy consisted of 17 battleships, 8 aircraft carriers, 112 submarines, 653 fighting ships of other classes and no amphibious vehicles. A total of 790. At the end of the war the US Navy was bigger than the British Navy. It had 23 battleships, 99 aircraft carriers, 232 submarines, 2,547 amphibious vehicles and 4,065 ships of other classes. These were the survivors. On top of that, American shipyards also produced the hundreds of ships lost in battle. The US Navy accounted for 70% of the total naval forces of the entire planet.

At the war’s end, Kaiser's shipyards at Richmond, Fairfield and Bethlehem were shut down. Their task was complete. Although the US Navy today is a mere shadow of what it was in 1945 it is still the dominant naval force of the world. The feats of American industry in WW2 placed America in a position of world dominance and leadership that it never aspired to but circumstances and need overcame that lack of ambition.

The advances in industrial production and method developed during WW2 were not to be discarded. They carried over into the peacetime economies and in the field of civilian aircraft production American industry reigned supreme.

A little-known venture was his acquisition of Willys Overland in 1948 and the purchase of part of the Willow Run Ford factory where he began making the Kaiser Jeep for the US Army. Today, Hancock Prospecting, the company he founded, continues to be a major player in the Australian mining industry, led by Gina Rinehart. The discovery of iron ore in the Pilbara transformed not only the Australian economy but also global steel production, as Australia became one of the largest exporters of iron ore to the world.

Gina Rinehart is one of the wealthiest individuals in Australia worth an estimated $34 billion and is known for her significant involvement in the mining industry. She also features in many roles as a generous benefactor to Australian sports and is a very passionate and loyal patriot to Australia. 

Like President Trump in America, she is known for having inherited wealth from a successful father, Lang Hancock. However, what many people do not know is that she, like Trump, created wealth far beyond their inherited " pot of gold, "  In fact, when Rinehart took over Hancock Prospecting in 1992 following the death of her father, its total wealth was estimated at A$75 million, which did not account for group liabilities and contingent liabilities of around A$100 million.

But in many respects, it matters little what you start off with. Henry Kaiser started with nothing. And he helped build a future. How many of our politicians aspire to build anything other than their own egos, bank balances and forget that they actually gave  NOTHING?  

Surely it is time to start to celebrate excellence again? Can we stop giving participation awards and get back to honouring those who say not what we CANNOT DO but what we CAN DO.