Trouble in the Shed is the sixteenth episode ever made in Season 1.
At Knapford, there is no sign of the morning train, causing the passengers to become cross. The Fat Controller goes to the sheds to see what is going on and learns that the big engines have gone on strike and refuse to fetch their own coaches or shunt in sidings. The Fat Controller is cross that the bigger engines are trying to tell him what they are willing to do and leaves for Wellsworth to enlist Edward as a station pilot to ensure that the day's trains run as normal. After Edward does all of the shunting, the trains ran as usual.
Next day, the Fat Controller visits the yard to see how Edward is getting along. To his dismay, he sees Gordon puff by and weesh loudly at Edward. Edward tells the Fat Controller that the big engines have been insulting and weeshing steam at him. The Fat Controller assures Edward that tender engines do shunt, but decides that he must bring a new tank engine to the yard to permanently fix the problem.
Visiting the engine workshop, the Fat Controller is shown all kinds of engines. Soon he sees a smart green saddletank and knows this is the one he wants. The Fat Controller asks the engine if he is willing to work hard. The engine eagerly responds that he is. With that, the matter is settled. The Fat Controller names him Percy and takes him back to the yard.
The Fat Controller asks Edward to get Percy acquainted with the yard and the pair set off for work. Edward is very impressed by his hard work and weeshing - something he learned in the workshop so as to be heard. The Fat Controller then decides to send for Thomas and calls all three engines to the yard for an announcement. He tells them that he has shut-up the big engines in the shed until they learn to behave and that, in Gordon, Henry, and James' absence, the two tank engines and Edward will run the railway.
Edward and Thomas are put in charge of the main line, while Percy takes care of the branch line and Annie and Clarabel. While there are fewer trains, the passengers understood that the three engines were doing their best to keep the railway running and that the big engines were in the middle of learning a lesson.
In the sheds, Gordon, James, and Henry were cold, lonely, and miserable as they realised just how silly they were.
- Just before Gordon hisses, he is passing Edward; but when he stops, he is passing Edward again.