Recent discussions on the history of industrial relations in Britain have focused often on the role of employers' organizations. To discuss power structure between employers' local associations and their national headquarters this article deals with skill shortage in the engineering industry in the interwar period and how the employers responded to it. The Engineering Employer Federation (EEF) tackled the question of the remuneration of toolmakers, highly skilled engineers, to secure them. This article shows firstly how the EEF did not grasp changes in industrial practices on shop floor and secondly how local associations rejected the intention of their national body.