Diesel, the new engine, is still having a hard time in the yards since he was made to look silly in front of the freight cars as they continue to laugh and sing their rude song to him. Duck soon overhears the singing and firmly bumps the cars to stop them. Duck apologizes for the cars' behavior, but Diesel is still furious and blames Duck for making them laugh at him. Henry, who was watching nearby with James and Gordon, objects saying that Duck would never do such a thing and adds that while he, James and Gordon have their differences with Duck, they would never tell the cars about them as it would be disgrace, disgusting and despicable.
By now, Diesel's anger toward Duck has grown to such a point that he wants to find a way to get rid of him. Inspired by the engines' words about the cars, he makes a plan to tell lies about the Great Western Engine. Going into the yards the next day, Diesel tells the cars that he laughed at their joke about him and tells them some jokes about the bigger engines and claims that he heard them from Duck and just before leaving, Diesel warns them not to say he told them. The cars find the jokes hilarious and laugh rudely at the bigger engines as they pass through the yard. The cars shout at them that they came from Duck, to get even with him for forcing them to behave. Believing that Duck is responsible for the cars' ridicule, they hold a meeting and agree that Duck needs to be taught a lesson. They decide that since he once prevented them from entering the sheds, they will do the same to him.
Later, Duck returns to the sheds, exhausted after a long, hard day's work. However, when he tries to go back inside for a rest, the big engines stand close together and hiss steam at him. The big engines tell him to keep out and that because Duck tells tales about them to the cars, they hate him and want Diesel to replace him. Duck denies this and a riot ensues until Sir Topham Hatt arrives to stop the noise and see what the commotion is all about. He hears the big engines' accusations against Duck, claiming that he called Gordon a "Galloping Sausage," James "Rusty Red Scrap Iron," and Henry "Old Square Wheels." Sir Topham Hatt, (while trying not to laugh), turns to Duck and gives him a chance to explain himself. Duck swears that he did not call them any names and that no steam engine would be that mean. Diesel then comes forward and Sir Topham Hatt asks him what he knows about the situation. Diesel feigns shock at Duck's "actions," but claims ignorance otherwise.
Sir Topham Hatt is unsure that Diesel is telling the truth but nonetheless, he turns and apologizes to Duck, saying that until he can get to the bottom of this incident, he must go to work with Edward at Wellsworth for a while and kindly reassures him that Edward will be happy to see him. Believing that Sir Topham Hatt has turned against him too, Duck begins to cry and sadly obliges, while Diesel watches him puff away, satisfyingly smirking.
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