Closure of the East Town Railway Workshops, Part Two: Inability to Help

By Russell Marshall

In 1972, Russell Marshall was elected Labour Member of Parliament of Wanganui (as the electorate was then called). Rail was an important part of New Zealand’s infrastructure, protected by regulations that limited how far freight could be moved on roads. Part of this infrastructure was a network of railway workshops: Otahuhu in Auckland, Hutt in Wellington, Addington in Christchurch, Hillside in Dunedin and East Town in Whanganui. The survival of these railway workshops and the jobs of the men (and it was almost all men) who worked in them, was tied up with government on transport and rail policy. This two part article is Russell Marshall’s account of the Labour Party’s changing attitudes towards rail and the closure of the East Town Railway workshop. The first part described Labour’s 1983 ‘Save Rail’ campaign when they were in opposition and the 1984 election (Bulletin 69). This second part discusses what happens once they were in government.

In March 1985, Charlie Gibbs, a senior union member at East Town and long time Labour Party activist, asked me to do him a note outlining what, if any, initiatives I had taken for East Town since the election. I advised Charlie that I had written to Minister Richard Prebble six times between August 1984 and March 1985 and I was meeting with the minister and his officials that day.

Following the meeting with Prebble, the General Manager and Deputy Manager of the Railways Corporation, I wrote to the Manager at East Town Workshops, Roy Wilson. I said that I was on the whole satisfied with what I had been told. Light rail services were being considered for the Johnsonville line. If that happened, they would be constructed in New Zealand, and there would be
some local involvement. There was adequate work available for the next year, but thereafter any coach building work would depend on decisions made by the Wellington Regional Council. ‘Above all, I was given a categorical assurance from the Minister and the senior Railways management that all five workshops will remain open and viable, with a significant workforce at each. While I do not expect the East Town workforce to return to its former size, I am quite certain that the fears for the future existence of East Town as a major employer are unfounded (1). The essence of my letter was printed in the Wanganui Chronicle at the beginning of April.

Two days earlier, Ian Turner, secretary of the East town Branch of the NUR, wrote a story that Railwaymen at East Town were ‘ready to throw in the towel’ and that my assurances about sufficient work for the next year were ‘not worth the hot air it took to expound it’ (2). In July, Ian Turner was voted out of office as Secretary of the East town Branch of the NUR and replaced by Labour supporter Wattie Watson. Though he was a thorn in the flesh and not only in mine, in retrospect Turner had considerable grounds for resentment. Apart from being abused when he was right, Prime Minister Lange had referred to him as a prominent Social Credit member, which he was not.

Months were to pass with no further sign of progress on East Town redevelopment, and a worrying ongoing shortage of real work for workshop staff, now down another 50, to just over 400. In early November 1985, I had a discussion with Bob Henare, formerly District Engineer, by then Assistant General Manager of the Corporation. He told me that submissions were about to be made to the Corporation Board concerning the future of the five workshops, and it seemed that the major question was still one of what work would be done where. However, he also said that, without a political decision to keep all five workshops open, a commercial decision would close down at least two of them (3).

At about the same time I was advised by the General Manager, Gordon Purdy, of the details of the reorganisation of the Corporation and its regions. Six Traffic Districts and sub districts were being reduced to three. The Area Traffic Manager’s office in Whanganui closed on 10 November (4). On 1 February 1986, Rod Davies, the District Engineer of NZR, advised me that when the work on
electrification was completed, his District Office would be closed and relocated as an Area Engineer’s office in Palmerston North. It had already been decided to service traffic management from one office, which had effectively already relocated to Palmerston North.

I told Prebble of these conversations in a note on 11 March 1986 (5). He replied a week later. ‘I hope that we will be able to retain a significant Railways presence in Wanganui. It is obvious even at this stage that there will be a considerable reduction in the number of staff needed and I have asked the Chairman and Management to try and find a method of rationalisation of Railway activities to the town that will lessen the impact of any changes that have to be made. As yet there are only proposals… You may be assured that a decision to ignore the political realities will not be taken by me.’ (6) There was now no explicit reference to a firm future for East Town.

Several more weeks passed without any further information. I was due to meet the union leaders at East Town again on 2 May, but Prebble was overseas until 5 May. Among other things, his office advised me, he was looking at passenger units. They could not advise what the end result would be because decisions were yet to be made. There was not a lot that I could say that I had not said already (7). In the absence of any recent reassurance and the ongoing obvious shortage of work at the workshop, the meeting with union leaders at East Town was anxious. Staff numbers had dropped dramatically in the last year and were now down to 300, a loss of one third in the two years since Labour had come to office. At one stage in the discussion, someone asked what I would do if the decision was to close East Town. I had not really entertained the possibility, nor given any thought to what I should most sensibly do if that were to eventuate. Without thinking, I spontaneously replied that I would resign.

On Wednesday June 18, the night before I was going to leave the country on ministerial business, Richard Prebble asked me to see him in his office. Railways officials had now given him a copy of the Railways Corporation Consolidation Plan and he would be releasing it within the next few days. He said that the proposals were not as good for Whanganui as he had hoped, and that he did
not expect that all existing operations would continue. However, the main point so far as Whanganui was concerned was that although one major plant would close there would still be Railway Workshops in Whanganui. At no stage did Prebble tell me that East town Workshops were to close. I left the meeting a little confused but inferred from what he had said that the recommendation must be that Plant Zone operation at Aramoho be merged with the operations at an upgraded East Town. It was clear that there would be some loss of jobs, and it seemed a pity that the Plant Zone building would be given up when it was little over a decade old.

Nevertheless, what I had been told was nowhere near as disastrous as many of us had feared, and there was to be some certainty at last. Richard asked me not to say anything to anyone before he and his staff had had the chance to do so. Relieved that decisions were soon to be made and that, from what the Minister had told me, East Town was basically safe, I headed off to my meeting in Sydney.

Soon after I arrived in Australia I got a call from my Beehive office that astonished me. The Railways Corporation management had released a booklet outlining their preferred plans for workshops. The corporation had recommended the closure of the East Town Railway Workshops. I cancelled the Fiji leg of my travel and flew home.

There was understandable and justifiable outrage from Whanganui and especially from those affected most closely by the proposals. The Labour Electorate Committee called an urgent special meeting on Sunday 22 June. Three days later the Chairperson and Secretary wrote a letter to the Prime Minister and all members of Cabinet. ‘The closure threatens the loss of 300 jobs in Wanganui…. You will be aware that the Minister of Transport, Richard Prebble, undertook to the people of Wanganui and the workers at East Town that the Workshops would remain open with a staff of not less than 350 people. The proposal to close the workshops is therefore in contravention of the clear undertaking of the Minister…. Further, Russell Marshall has been placed in an impossible situation. In reliance on the Minister’s undertaking regarding East Town, he publicly undertook that the Workshops would not close. Russell Marshall is now fighting for his political
survival. If the Workshops close, he will be in an untenable situation.’ (8) At the Cabinet meeting the following Monday I was still pretty gutted, and there was a good deal of sympathy around the table. However, though the prospects were ominous, the door, so Prebble assured us, was not quite closed. He made it clear that the final decisions were yet to be made. Submissions had been invited in response to the Railways Corporation’s Consolidation Plan. It seemed too early to talk about broken promises. I became actively involved with the Whanganui railway unions in the preparation of a comprehensive and credible submission on the plan.

I spent Thursday afternoon and Friday, 3 and 4 July, in Whanganui and met widely with organisations and members of the community. I was coming to grips with the details of the plan and how it would affect the Railways operations in Whanganui. In June 1986, the staff at East Town numbered 298, 33 of them salaried staff. 15 were apprentices, who were expected to transfer to the Plant Zone. Redundancies were also being offered to Plant Zone staff and it was assumed that there would be at least ten uptakes. It was expected that there would be at least 130 redundancies from East Town. The Plant Zone had a staff of 95 that could only increase to 120. It was hoped that there would be room for 30 of the East Town staff, including the apprentices and the store staff, plus the store itself. Of the total Whanganui staff only five or six staff were likely to be relocated out of Whanganui.

It quickly became apparent to most, that the Railways Corporation booklet plans were basically a fait accompli. On 26 June Steve Grant sought to clarify the situation. ‘This is not accurate… We have a month in which to make changes and this union is working on the kind of changes that are needed to save jobs and make Railways more efficient… The NZRTA is convinced that there is a place for a Railways Workshop in Wanganui and we are happy that our tradesmen know as well as anyone the realities that face the Rail industry, but that does not mean that we have to surrender our own positive approach in favour of despair or despondency… This union sees the extension of Railways’ facilities at Aramoho in Wanganui into the NZR Wanganui Workshops as a project of major importance. We will be proposing to management that suitable equipment should be moved to Aramoho as quickly as possible and work made available there for those East Town workers who choose to remain at Railways.’ (9)

All the while, Prebble said that no final decision had been made. Looking back at that period, it was not one clean stroke, not one bang but many whimpers, with Prebble thereby able to escape all the slings and arrows. Unsurprisingly, my unguarded off-the-cuff response to East Town union officials a little over a month earlier that I would resign if East Town closed was discussed by both national and local media. In the telling it gradually became a serious, considered and public undertaking, a firm promise, even a threat. Then it began to be said that it was a threat I had made after the restructuring proposals were promulgated. A decade later, Prebble himself repeated this (10).

There was no shortage of mail, both urging me (often bluntly, and sometimes colourfully) to resign, and others urging me to stay. The Wanganui Chronicle conducted a poll in which 61% said that I should not resign. My press officer Jock Vennell handed me a note on Wednesday 2 July: ‘A roundup of support for you to date, ie. groups and individuals saying you should not resign – Wanganui City Council, NUR (Goodfellow), RTA, ECO, PPTA (plus several branches), NZUSA, NZTCA, ATTI, Palmerston North Teachers’ College, Otago Polytechnic, Downs Association and 30-40 individual letters and telegrams of support so far.’ (11)

To resign or not to resign? I had not given any serious thought to what resignation might mean. Belatedly, it occurred to me that because I had not thought about, let alone said, what I would resign from, it could just as easily be from Cabinet as it could from being an MP. In 1986, I was in my fifth term as the local MP, having been re-elected in 1984 by nearly 4000 votes, at that time the largest majority ever for the seat. In the House I had spent over a decade specialising on Education matters, and was now part way through overseeing a series of significant number of improvements as Minister. If I resigned from parliament, should I run again in the ensuing by-election? If so, what would my campaign be about? A campaign against my own government and one of its most prominent ministers? If not that, then what? If re-elected, would I be re-elected to Cabinet, and would I retain the Education portfolio? On the other hand, I could resign altogether, probably never to be involved in politics again. Colin James later told me that he thought I should have resigned, and stood in the ensuing by election. My stance could have been that I had made a promise that the workshops would not close, that I disagreed with the decision to close, but remained loyal to the Labour government, and that I felt it necessary to seek a renewed vote of confidence from the electorate.

I realised that to resign, it would have to be in protest against the way in which my own government and Minister of Railways had mishandled the East Town Workshops issue. I had no wish to contribute to further reducing the government’s credibility with its own supporters. I knew from the reaction I had received that to resign would also be to break faith with a lot of people in Whanganui and elsewhere who believed in what I was doing as a minister. My own immediate discomfort and embarrassment was less important; to give in to that and subject the taxpayer to the cost of a by-election would be self-serving. I decided to weather the storm and continue as MP, and made my announcement to that effect at a public meeting in Whanganui.

The final decision to close the East Town Workshops was announced in mid-September 1986 by the Chairman and Senior Management of the Railways Corporation. (12) The final closure was set down for 17 October 1986. At the 1987 election, my good majority of three years earlier disappeared almost completely. On election night I was only 27 votes in front of the Democrat candidate Terry Heffernan. For the second time in my life I received a telephone call at home from Richard Prebble, this time to say how sorry he was at the closeness of the result.

From the first indication of likely closure, my Wellington office staff and I, together with Wanganui City Council staff were closely involved in a number of conversations concerning possible use of the workshops site. Bob Henare, the Deputy General Manager commented in a farewell note that ‘the bus and truck building solution has considerable merit and may well prove to be even better for the city than the workshops.’ (13) A month later, Prebble issued a press statement with another proposal. ‘The Corporation has entered into substantive negotiations with a New Zealand engineering company to take over much of the Railways East Town Workshop site. The proposal is to assemble motor vehicles… The company expects to employ 100 rising to a possible 200 plus over the next couple of years… This proposal will not require the whole East Town site, A local Wanganui interest has submitted a preliminary proposal to lease part of the site for a new enterprise… employing approximately 35 people… local Wanganui businessmen (propose) to lease part of Railways Riverside property for hotel development… If all three projects proceed there will be more jobs than the number of workers at present employed by Railways at East Town… The proposals are exciting. The Board and Management of Railways are to be congratulated.’ (14)

Foolishly, I joined in the cheering myself: ‘If we are successful in creating as many jobs at East Town through these various proposals as we have lost, I will feel that both the government and the local MP have been vindicated. Those who called for my blood when the original close-down proposal was made will perhaps now realise the value of having a Member in Cabinet actively promoting the interests of Wanganui rather than on the back bench and far from the scene of effective action.’ (15)

It was not one of my wiser actions. Seven months later Executive Chairman Ross Sayers sent me a ‘bad news, good news’ letter about the future of the site. ‘We were negotiating with Truck Investments who had the potential to bring substantial new employment to Wanganui. Unfortunately a price for the workshop could not be agreed and the original concept could not be continued with. However negotiations have led to agreement to sell the site to another developer, who proposes to create an industrial park with rail access. I am confident this will be of great benefit to Wanganui… Railways feel rightly proud to have played a part in facilitating the sale of the site to a developer… (You) will appreciate that as a result of this new development the social impact on Wanganui arising from the Corporation’s engineering rationalisation in the town is dramatically improved.

In this regard the concerns mentioned in the Interim Environmental Impact Report are to a large extent therefore negated.’16 This optimism was not well founded either. There was a continuing tendency to count more chickens than there were eggs to hatch. One move that did come off was the local Polytechnic decision to lease part of the workshops for training facilities. In June 1987, John Scott, the CEO of the polytechnic generously allowed me to issue the press statement with the news that the polytechnic would be running ACCESS, Foundation and Employment Rich courses in what had been the administration building and part of the main workshop complex (17).

In August 1988, Richard Prebble told me ‘You will be aware that the New Zealand Railways Corporation has for some time now been considering the future of its workshops at Otahuhu, Wanganui, Hutt, Addington and Hillside. The Corporation has now advised me of its plans. Since it falls within your electorate, the future of the Wanganui Workshop will be of considerable interest to you… Underlying the Corporation’s need for change within its workshops is excess capacity that cannot be filled with either inside or outside engineering work.

Such work is simply no longer available. I am, however, able to advise you that in the case of the Wanganui Workshop the future will depend on workload. The workshop’s present role will not change, although staff numbers will continue to be matched to the amount of work required. A reduction from current numbers of about 20 is planned to match present workloads… It should be noted that Railways has achieved its staff reductions exclusively by normal attrition and voluntary severance.’ (18) This meant of course that 20 of the 25 extra jobs created two years earlier were now to go. The Railways jobs Whanganui was now to have were basically what the Aramoho Plant Zone had in 1984. The East Town jobs had almost completely gone.

This communication was part of a larger package of further Railways retrenchment, with nearly 1000 more jobs being cut (19). Jim McLees wrote in the Wanganui Chronicle that Whanganui itself had already lost over 1000 jobs. He quoted Barry Stewart, secretary of the local NUR shunters branch. ‘There has been no discussion, no negotiation, no nothing. That’s the way the Railways
operates these days… All we got were these booklets dumped on us. There is no consideration for staff… My own job is involved here. I wasn’t told that I’m no longer required. I had to find out by reading a book I found lying around.’ (20) A few days earlier, I had told the Chronicle that ‘Save Rail was one of the less wise things anyone ever did, and that to the Wanganui community Save Rail was the promise that had gone most sour of all.’ (21)

The last Railways activity at East Town to close down was the tarpaulin shop, now with nine staff, on 30 November 1988. Two years earlier the Corporation, after union representations, had agreed to keep the tarpaulin operation in Wanganui rather than transfer it to Hamilton. On the front page of the morning paper staff and union representatives ‘voiced contempt for Railways Minister Richard Prebble (bitterly remembered for his part in the Save Rail campaign), Wanganui MP Russell Marshall (for inability to help) and railways management for the handling of the shop’s decline and closure.’ (22)

The closure of East Town Workshops was bad for Whanganui morale. Though no longer the predominant local employer, especially since recent rapid attrition, Railways was still an iconic part of the city and district. The big loss in jobs was compounded by reduction or removal of jobs in other government departments, such as Education and the Ministry of Works. So far as personal consequences were concerned, the effects of the closure were felt differently according to age. Quite a number of younger employees were able to find work relatively quickly, sometimes thanks to the retraining they had been assisted to fund. Many mortgages were paid off from redundancy payments. For those aged from the late 40s and older, life was often much harder. For many there was no work, a reality that hit them hard socially as well as financially. Businesses which depended on Railway operations and customers also suffered badly, and several closed.

Against all my hopes, expectations and promises, my time as a Cabinet minister had coincided with a painful, government driven readjustment for Whanganui. The fate of the New Zealand Railways presence was the most devastating and demoralising element of that seismic shift, and I had been unable to have any influence at all on the outcome. In my final term I became to some, not least the Wanganui Chronicle, something of a pariah. The way in which the closure of East Town took place remained a major blot on my parliamentary career. Thirty years later the East Town saga is still occasionally mentioned to me, with varying degrees of accuracy.

The major puzzle, to me, was how we had been so naïve as to believe that Prebble and his Save Rail campaign meant that the existing railway workshops and their staff were to continue, indeed that funding would finally go into their upgrading and that there could even be an expansion to their role. The answer finally may have come 27 years later from an unlikely source. In his memoir Francis Small confessed to a concern amongst senior management that the changes they hoped for would not be accepted or implemented by the incoming (1984 Labour) government. ‘However, help was on the way from that most unlikely source — Richard Prebble himself… In the interregnum between the election and taking office Chuck Hopper, leader of the Booz Allen international consultants who recommended radical restructuring, had persuaded Richard Prebble to take a quick trip to the United States and see for himself the results of the restructuring of rail that had occurred to railways in the United States… Richard Prebble returned from the United States a changed man. His post election slogan was changed to “I said that I would save rail but not for all of you…”’(23)

Footnotes

1. Russell Marshall to Manager East town Workshops, 27 March 1985. All documents are in author’s
possession unless otherwise noted.
2. Wanganui Chronicle, 29 March 1985.
3. Russell Marshall to W. Watson, East Town NUR Secretary, 13 November 1985.
4. General Manager to Russell Marshall, 11 November 1983.
5. Russell Marshall to Richard Prebble, 11 March 1986.
6. Richard Prebble to Russell Marshall, 19 March 1986.
7. Report of conversation with Zvi Harmor in Prebble’s office, 29 April 1986.
8. LEC to Prime Minister and Ministers, 25 June 1986.
9. Press Statement New Zealand Railway Trademen’s Association, 26 June 1986
10. Richard Prebble, I’ve Been Thinking, Auckland, 1996, p. 69
11. Jock Vennell to Russell Marshall, 2 July 1986.
12. See MP’s File Wanganui Chronicle, 16 September 1986.
13. M.R.H. Henare to Russell Marshall, 31 July 1986.
14. ‘New Enterprise for Wanganui’ Prebble Press Statement, 28 August 1986.
15. Russell Marshall, Press Statement, 28 August 1986.
16. Ross Sayers to Russell Marshall, 6 April 1987.
17. Russell Marshall, Press statement, 11 June 1987.
18. Richard Prebble to Russell Marshall, 17 August 1988.
19. Wanganui Chronicle 27 August 1988, quoting from ‘Further Restructuring Rail Transport Division’ and
‘Proposed Changes Marshalling Yards’ issued by Railfreight Systems August 1988
20. Wanganui Chronicle, 27 August 1988.
21. Wanganui Chronicle, 20 August 1988.
22. Wanganui Chronicle, 30 November 1988.
23. Francis Small, Small Reflection: My Perspective on Some Major Changes Within New Zealand,
2013, pp. 113-115.