Written confirmation of conversations between them on Wednesday 21 February and Saturday 24 February.
Air Marshal Arthur William Tedder is taking over the direction of the development of the engine; 4 to 12 trial W2 engines will be ordered very soon for completion this year; quantity production on the thousand basis will be arranged for in 1941 and 1942; the trial engines to be built this year will probably be ordered from the firm to be selected for quantity production; the Air Ministry is making a capacity survey of some of the Shadow factories and will shortly approach BT-H direct in connection with this survey.
LLW referred to the agreement between BT-H and Power Jets under which BT-H has rights in regard to the manufacture of the first 100 engines and stated that he had no desire to prejudice BT-H's interests in this regard but that if the Air Ministry decided to place the further development and production work with some other firm he might have to ask them to suspend BT-H's rights in this connection until after the war. HNS said that he would consider BT-H's production facilities to see what they could do to meet the Air Ministry's requirements and that, when the time came, they would consider the question of postponing their rights, but no undertaking to postpone was either given or asked for. On 24 Feb. HNS said that if the order were placed by 1 March and the design settled so that they could issue drawings for limiting parts in 6 weeks and complete the final drawings in 3 months, they could complete 8 W2 engines by the end of the year; that with regard to quantity production at a rate of up to 25 or 50 engines a week BT-H had no existing facilities for such output and as regard to their rights under the agreement with Power Jets he did not think these need be affected by the Air Ministry's plans. To this statement LLW took the strongest objection on grounds given and that if HNS adhered to his statement he would take the matter up with Sir Felix [John Clewett] Pole [Chairman of Associated Electrical Industries] and William Clardy Lusk [Chairman of BT-H]. Gordon M. Campbell [Director of Manufacture at BT-H] pointed out that what HNS proposed was no different from what they were doing with the Air Ministry in other matters and that he did not think it would affect the Air Ministry plans as LLW feared. HNS concurred; he had given no agreement on 21 Feb. As to waiving BT-H's rights and did not do so now; his understanding was that LLW was not satisfied to take this as a final answer.
BT-H would confirm to Power Jets in a separate letter their undertaking regarding the 8 trial engines.