Shipbuilder, businessman and banker

Born: April 23, 1920;

Died: September 22, 2018

SIR Eric Yarrow, who has died aged 98, was a leading member of one of the great families of Clyde shipbuilders whose names were famous around the world. He was only the third chairman of Yarrows in over a hundred years, following his father Harold Yarrow and his grandfather Alfred Yarrow, who started the business on the Isle of Dogs in 1865 and then moved the whole operation to the Clyde in 1904.

Eric Grant Yarrow was educated at Marlborough College and at Glasgow University, where his engineering studies there and his apprenticeship with G & J Weir Ltd were overtaken by the start of the Second World War. He was commissioned in the Royal Engineers and rose to the rank of Major, serving in the Far East and being awarded the MBE (military) for his outstanding service in the Burma campaigns. One of his duties was to bring up the rear of the retreating allied forces and blow up bridges as soon as the last of his colleagues had crossed, and just before the Japanese army arrived. He was also responsible for sinking river craft, some of which had actually been built at Yarrows.

On returning to civilian life Sir Eric trained briefly with the English Electric Company before joining Yarrows in 1946. He was appointed a director in 1948, became managing director in 1958 and chairman in 1962. At that time he also inherited the family baronetcy originally conferred on his grandfather Alfred and then passed to his father Harold. From then on Sir Eric’s life and career were inextricably bound up with the fluctuating fortunes of Clyde-based Yarrow & Company Limited, primarily a naval shipbuilder but also involved in engineering, land boilers, and marine engineering consultancy.

During his 37 years on the Yarrow board Sir Eric led the company through perhaps the most eventful and turbulent times in its history. In the 1950s and 1960s there was a reduced demand for UK naval ships, and it became even more important to win overseas shipbuilding contracts, and to diversify into other activities. Under Sir Eric’s chairmanship new business ventures were introduced and the firm’s existing activities in engineering, land boiler design and construction and marine engineering consultancy were developed and expanded. This involved much travelling throughout the UK and abroad, including regular visits to South Africa which was a major source of business. Eric was fond of saying that “you never win new orders by sitting at your office desk”.

He also presided over many naval launches and special events, entertained many royals and VIPs at the yard, and presided over the centenary celebrations of the company in 1965. But by the late 1960s commercial and political storm clouds were gathering over the shipbuilding industry, several world-famous firms were close to collapse and government intervention was needed. Although specialist naval shipbuilders like Yarrows had fewer problems, Sir Eric foresaw what was likely to happen. To protect the other group businesses from falling into public ownership he converted the company’s three main activities into wholly-owned subsidiaries, with Yarrow (Shipbuilders) Ltd as a separate entity and Yarrow PLC remaining only as the holding company. This proved a wise move in advance of the Labour government’s determination to nationalise all British shipbuilding.

First in 1969 came the ill-fated experiment of Upper Clyde Shipbuilders, with Sir Eric agreeing reluctantly to sell 51 per cent of Yarrows’ shipbuilding subsidiary to UCS for £1.8 million. He believed that this attempt to weld together a range of shipbuilding companies with different products, different building techniques and different markets was unlikely to succeed. He was proved right, and less than two years later Yarrow (Shipbuilders) Ltd was rescued just in time and returned to the Yarrow fold before the UCS collapse. Sir Eric later claimed that the best business decision he ever took was not to be pressured by Tony Benn into taking on the chairmanship of UCS.

The threat of nationalisation retreated temporarily when the Conservatives returned to office in 1970, and under Sir Eric’s energetic leadership YSL’s naval business prospered again, with the company introducing the latest modern techniques for designing and building such highly complex ships. New covered berths and other facilities were added, and regular frigate orders from the MOD together with overseas contracts gave the yard a full order book.

But the return of a Labour government in 1974 brought a renewed threat to YSL, and during the next few years Sir Eric found himself engaged in fierce political and legal battles to save Yarrows’ shipbuilding company from nationalisation. The long-running campaign involved many visits to Westminster and Whitehall and countless meetings with politicians, civil servants, professional advisers and other shipbuilders.

Despite these efforts, and some stormy and famous debates in Parliament, the government finally got its way and Yarrow Shipbuilders Ltd became part of British Shipbuilders in 1977. After 70-odd years the Yarrow group headquarters left its home at Scotstoun and moved to Charing Cross Tower, to which its marine engineering consultancy company YARD Ltd had already relocated.

Sir Eric then began another lengthy fight to improve the government’s very poor compensation terms and a get fair deal for Yarrow shareholders (the parent company was not, as widely believed, privately owned by the chairman himself or the Yarrow family, but was in fact a public quoted company with many hundreds of shareholders, and Eric Yarrow’s personal shareholding was less than 1½ per cent).

A legal challenge was taken to the European Court of Human Rights at Strasbourg by Yarrows and other shipbuilders. But although the Conservatives had strongly supported the compensation claim when in opposition, after returning to power in 1979 they contested the court action and the case was eventually lost. The Yarrow Group had been stripped of its largest and most profitable business in a forced sale for a derisory amount, and Sir Eric had no hesitation in stating publicly that Yarrow shareholders had been robbed.

Undaunted, Sir Eric now set about finding new business opportunities for the Yarrow group, rebuilding it around the core activities of YARD Ltd. But other business interests were now demanding more of his time, and in 1985 Eric decided to retire from the chairmanship of Yarrow PLC, thus ending almost 120 years of his family’s connection with the business.

Throughout his career Sir Eric managed to find time for many other pursuits and interests. He was for many years a director, then vice-chairman and chairman of the Clydesdale Bank and a director of several other public companies. During his chairmanship he fulfilled his ambition to visit all 270 of the bank’s branches, believing that the success of any business was due to people, not technical aids, and that they deserved recognition and thanks. He was chairman at the time of the bank’s takeover by the National Australia Bank (now NAB), joining the main board and visiting Melbourne for board meetings and conferences several times each year. He always encouraged equal opportunities to be given to people from all walks of life.

At home Sir Eric held appointments with a number of shipbuilding and engineering organisations. He was Deacon of the Incorporation of Hammermen of the Trades House in Glasgow in 1961, Prime Warden of the Worshipful Company of Shipwrights in 1970, and was made a Fellow of the Royal Society of Edinburgh in 1975. He also followed the family tradition of support for the Princess Louise Hospital at Erskine, acting as chairman of the board of governors for several years and personally supporting many functions and fund-raising activities. Sir Eric also took an active interest in the Burma Star Association, becoming president of the Scottish branch in 1990. He gave many talks to audiences in the UK and also in the Far East on the British retreat from Burma in 1942.

Eric Yarrow was a keen sportsman, both as player and spectator. He was a loyal Scotland supporter at every Murrayfield international and a regular attender at the Open Golf Championship and at Wimbledon. He was a member of the Royal and Ancient Golf Club and a past captain of Kilmacolm Golf Club. On the golf course and even the putting green Sir Eric was always a doughty opponent, especially when a modest financial stake was on offer. That competitive spirit was also evident at the bridge table, where he was a cheerfully aggressive bidder, not averse to applying some psychological pressure on occasion. He was also a supporter and benefactor of his local football team, Greenock Morton.

Sir Eric always enjoyed the social side of life and he was an excellent host. Over the years hundreds of guests of many nationalities enjoyed his warm hospitality at his home at Cloak, Kilmacolm and at company events. After the premature death of his first wife Rosemary and a second unsuccessful marriage, Eric found a charming and supportive partner in Joan, with whom he shared many years of contented marriage. He was also a devoted family man, quietly proud of his four sons, nine grandchildren and twin great-grandchildren, and was also a much-loved stepfather and grandfather to Joan’s family. Sadly his eldest son Richard died while still in his thirties, but twins Peter and Norman and youngest son David have all done well and enjoy successful careers. Richard’s only son Ross is a stockbroker and a lay reader.

At the tender age of 92 Eric was finally persuaded by his family to set down on paper his still clear memories of his schooldays, his youthful sporting activities, his dramatic wartime experiences, and his long career as a successful businessman. His modestly-titled book A Few Memories will not be published and is intended only for his immediate family and future Yarrow generations, and for selected friends. It is a fascinating account of a long, full and eventful life, lived by one of Scotland’s outstanding business leaders.

Eric Yarrow will be greatly missed by his wife Joan and the whole family. His many friends and former colleagues will remember especially his commitment in business, his enthusiasm for whatever leisure pursuit he was engaged in, and his genuine enjoyment of good company.