World War II
From 1939 the works was mostly concerned with the war effort, becoming involved in the development and production of the Matilda tank. From 1943 large orders were received from the Ministry of Supply for locomotives, 390 Austerity 2-8-0s and fifty Austerity 0-6-0 saddle tanks.
In 1944 the Vulcan Foundry acquired Robert Stephenson and Hawthorns and in 1945 received an order for 120 "Liberation" 2-8-0 locomotives for UNRRA in Europe.
The war had left India's railways in a parlous state and in 1947, with foreign aid, embarked on a massive rebuilding plan. The Vulcan Foundry benefited from orders for XE, XD, and YD 2-8-2s; and ten WG 2-8-2s sub-contracted from the North British Locomotive Company, but the writing was on the wall for all British manufacturers. Not only was the competition fierce from other countries, but India had developed the ability to build its own locomotives.
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