The major reason for this was the technical change in production techniques when the steel structure of a ship was welded instead of riveted. This caused an evolution from the erection of the ship in single plates and bars to the construction of large prefabricated units. There are obvious advantages in doing a large percentage of the welding under cover with modern machine tools, one of the greatest being the continuous employment of the workforce concerned during the inclement weather, a factor which had caused the loss of a great deal of production time in the past while ships were being erected piece by piece on the 'open' berths.
Another reason for complete re-organisation of shipyard layout was the tendency for the average size of various types of ships to increase. Although existing berths appeared to be adequately long, their comparatively narrow width was in many cases the deciding factor in the size of ship they could build, while the lifting facilities with which they were equipped were not suitable for modern methods of ship construction.
In considering the reorganisation of both the yards, these problems had to be considered.
In 1966 Swan Hunter & Wigham Richardson Ltd., merged with Smith's Dock Co. Ltd. which had a shipbuilding yard on the Tees and extensive ship repairing interests on the Tyne. The name of the new company became Associated Shipbuilders Ltd., and later Swan Hunter Group Ltd. which, prior to nationalisation of the industry, was a holding company with subsidiaries in shipbuilding, ship repairing, engineering and civil engineering.
Following the issue of the Geddes Report on the shipbuilding industry in 1966 discussions were opened with the owners of other shipyards on the Tyne on the subject of a possible merger of all the shipyards on the Tyne into one company. As a result, the Swan Hunter Group first acquired John Readhead & Sons Ltd. and then merged with the Naval Yard of Vickers Ltd. and R. & W. Hawthorn Leslie & Co. Ltd. A new company, Swan Hunter & Tyne Shipbuilders Ltd. was incorporated and all shipbuilding interests on the Tyne were transferred to the new company. Subsequently the name was shortened to Swan Hunter Shipbuilders Ltd. In January 1969 Swan Hunter Shipbuilders took over the Furness Shipbuilding Co. at Haverton Hill-on-Tees which had been scheduled for closure and a loss of 2,800 jobs.
At that time Swan Hunter Shipbuilders Ltd. owned and operated three shipyards on the north bank of the Tyne (i.e. Naval Yard at Walker, Neptune Yard at Walker and Wallsend Shipyard) and two on the south bank of the Tyne, (Hawthorn Leslie Shipyard and Readheads Shipyard) as well as the Haverton Hill Shipyard on the Tees. In addition, Swan Hunter Group Ltd. of which Swan Hunter Shipbuilders was a wholly-owned subsidiary, owned the shipyard operated by Smith's Dock Co. Ltd. on the Tees and shipyards building smaller ships, i.e. fishing vessels, tugs, etc. at Goole on the Humber and at Willington Quay at Wallsend.