Warships
In 1864 the two companies, W. G. Armstrong & Company and Elswick Ordnance Company merged to form Sir W. G. Armstrong & Company. Armstrong had resigned from his employment with the War Office, so there was no longer a conflict of interest. The company turned its attention to naval guns. In 1867 Armstrong reached an agreement with Charles Mitchell, a shipbuilder in Low Walker, whereby Mitchells would build warships and Elswick would provide the guns. The first ship, in 1868 was HMS Staunch, a gunboat.
In 1876, because the 18th-century bridge at Newcastle restricted access by ships to the Elswick works, Armstrong's company paid for a new Swing Bridge to be built, so that warships could have their guns fitted at Elswick. In 1882 Armstrong's company merged with Mitchell's to form Sir William Armstrong, Mitchell and Co. Ltd. and in 1884 a shipyard opened at Elswick to specialise in warship production. The first vessels produced were the torpedo cruisers Panther and Leopard for the Austro-Hungarian Navy. The first battleship produced at Elswick was HMS Victoria, launched in 1887. The ship was originally to be named Renown, but the name was changed in honour of the Queen's Golden Jubilee. Armstrong drove the first and last rivets. The ship was ill-fated, as she was involved in a collision with HMS Camperdown just six years later in 1893 and sank with the loss of 358 men, including Vice-Admiral Sir George Tryon. An important customer of the Elswick yard was Japan, which took several cruisers, some of which defeated the Russian fleet at the Battle of Tsushima in 1905. It was claimed that every Japanese gun used in the battle had been provided by Elswick. Elswick was the only factory in the world that could build a battleship and arm it completely.
The Elswick works continued to prosper, and by 1870 stretched for three-quarters of a mile along the riverside. The population of Elswick, which had been 3,539 in 1851, had increased to 27,800 by 1871. In 1894, Elswick built and installed the steam-driven pumping engines, hydraulic accumulators and hydraulic pumping engines to operate London's Tower Bridge. In 1897 the company merged with the company of Armstrong's old rival, Joseph Whitworth, and became Sir W. G. Armstrong, Whitworth & Co Ltd. Whitworth was by this time dead.
Armstrong gathered many excellent engineers at Elswick. Notable among them were Andrew Noble and George Wightwick Rendel, whose design of gun-mountings and hydraulic control of gun-turrets were adopted worldwide. Rendel introduced the cruiser as a naval vessel. There was great rivalry and dislike between Noble and Rendel, which became open after Armstrong's death.