Grandpa Joe continues his story the next evening. He explains to Charlie that not long ago, thousands of people worked in Mr. Wonka’s factory—but all of a sudden, Mr. Wonka fired all of them. This, Grandpa Joe says, was because of spies. Other chocolate makers were jealous, so they planted spies at Mr. Wonka’s factory to learn his secrets. The spies returned to their real employers, and other candy makers soon began manufacturing candy balloons and ice cream that didn’t melt, just like Mr. Wonka.
While competition might be a normal part of doing business, Mr. Wonka’s reaction to the spies shows that he takes issue with such unethical behavior. In some sense, stealing the recipes for these candies takes away from the candies’ mystery and wonder—knowing exactly how they’re made and replicating them on a large scale takes away some of the magic.
Mr. Wonka was incensed and closed the factory. For months, even Mr. Wonka disappeared and everyone else in town was sad. But then, one day, people noticed smoke coming from the factory’s chimneys. People ran to the gates, expecting Mr. Wonka to be there welcoming his employees—but the gate was locked and chained. People were confused, since the factory was definitely working and making chocolate. Grandpa Joe leans close to Charlie and says that the most mysterious thing was that people noticed small shadows in the factory’s windows. The shadows were clearly workers, but no one knew who they were or where they lived.
Again, this passage continues to build up Mr. Wonka as someone mysterious, almost magical, and capable of anything. The way that Grandpa Joe describes Mr. Wonka’s strange workers, meanwhile, makes it clear that there are mysteries in the world that are more or less impossible to solve—no one is going to find out who these workers are if Mr. Wonka doesn’t open his factory to the public. The novel presents this as something neutral, if not somewhat positive in that it’s intriguing.
Grandpa Joe says that the factory has been running like this for the last 10 years, and the chocolates and candies it’s produced are better than they used to be. Furthermore, no one copies Mr. Wonka’s candies anymore. Charlie asks who works in the factory, but Grandpa Joe says that nobody knows. And Mr. Wonka never comes out—only candies do, and they come out of a special trapdoor. Charlie repeats his question. This time, Grandpa Joe says that all anyone knows is that the employees are very small—they don’t even come up to a man’s knee. Charlie insists people that small don’t exist.
There’s something odd and magical going on in Mr. Wonka’s factory—and Charlie wants to understand what that is. Grandpa Joe, though, shows Charlie that all they can do is look at the information in front of them. They know that the chocolates are fantastic, that nobody goes in or out of the factory, and that the workers are only knee-high. But Charlie’s line of questioning also suggests that it's expected that people will have questions—it’s normal for people to be curious.
Suddenly, Mr. Bucket bursts into the house, waving a newspaper. He asks if anyone has seen the news and holds up the paper. The headline reads: “Wonka Factory to be Opened At Last to Lucky Few.”
Finally, the mystery is seemingly going to be solved—a “lucky few” will be able to figure out what exactly is going on in Mr. Wonka’s factory.