The saboteurs entered the blacksmiths guild. With some help they ascended in ranks, becoming the guild masters. They transformed the guild in a company with employed blacksmiths. They added a huge bureaucratic top-layer: Accounting, human resources, quality control, sales, marketing, R&D, supply chain management, legal and controlling. The blacksmiths got gradually replaced with inexperienced workers. The work got compartmentalized. As a result workers are unable to understand the entire organization. Then they started with quality degradation: Controlling argued that the contracted quality could still be meet while introducing inferior raw materials (iron ore rich in phosphor and sulfur). R&D had is scope changed to focus on lowering costs. Supply chain management squeezed every penny from the suppliers, resulting in raw material degradation. Legal sued the local news herald when they mocked the inferior quality.
When the city council became concerned about the degrading quality sabotage got further.
The saboteurs argued that city help is needed as competing cities are advancing in iron processing. They asked for import tariffs and city subventions and got them. They introduced a city-financed institute for advancement in iron processing. The council pressed the city council to force independent manufacturers into the iron conglomerate. The blacksmith school got incorporated into the iron institute and replaced by cheap on-the job learningleast minimum training. The institute declared that the brittle iron weapons/armor parts are state of the art, opposing opinions got suppressed by libel charges and by media campaigns, accusing them to be non-patriotic.
In the end the entire iron processing ability of the city got corrupted. Since nobody realizes the dimension of the degradation it is unlikely that the cities iron processing ability will ever raise to past quality.