Okay, based on your description, here's a breakdown of what you're likely dealing with and the considerations regarding the oil

Likely Scenario:
The Machine

Given the large rotating table and the start/run sequence, it's very likely you're dealing with a large piece of equipment, probably a rotary surface grinder, large lathe, or rotary indexing table, or something similar. These machines often used powerful motors to rotate heavy parts.

The Starter/Switch

The rotating switch you saw is almost certainly a manual motor starter or an oil-filled drum switch (also known as a manual motor controller). These older starters have contacts that switch between different motor windings or resistances to achieve the "start" (high torque, lower voltage/current) and "run" (full voltage/current) modes. The oil serves several purposes:

Arc Suppression

When the switch contacts open and close under load, they create an arc. The oil quenches the arc, preventing it from damaging the contacts and potentially causing a fire.

Insulation

The oil provides insulation between the contacts, allowing for a more compact design.

Cooling

The oil can help dissipate heat generated by the contacts.

Why the Failure

The smoke suggests the following happened:

Overload

The motor may have been overloaded, causing excessive current draw through the starter contacts.

Contact Failure

Over time, the contacts can wear, corrode, or become pitted. This increases resistance, generating heat and potentially causing arcing.

Oil Degradation

The oil itself can break down over time, losing its insulating and arc-suppressing properties.

Short Circuit

In rare instances, a short circuit could occur within the starter itself.

The PCB Concern (and why you were right to be cautious)



Why the Concern is Valid

In older electrical equipment (especially those manufactured before the late 1970s in the US, and earlier or later depending on the country), polychlorinated biphenyls (PCBs) were commonly used in oil-filled components like transformers, capacitors, and, yes, sometimes even in motor starters. PCBs were valued for their excellent insulating and fire-retardant properties.

PCB Testing is Essential

You absolutely did the right thing by stopping work and advising them to call someone else. You cannot determine if the oil contains PCBs by visual inspection. Proper testing by a qualified environmental testing lab is the only way to know for sure.

Handling If PCBs are Present

If the oil tests positive for PCBs, very strict regulations apply to its handling, storage, and disposal. This is because PCBs are persistent environmental pollutants and are known to be harmful to human health. Specialized companies are required to handle PCB remediation.

What Needs to Happen Now (for the Machine Shop)


PCB Testing

The machine shop needs to have the oil tested for PCBs immediately. This is the top priority. They can contact an environmental testing lab that specializes in PCB analysis.2.

Starter/Switch Replacement/Repair

Regardless of the PCB results, the starter needs to be addressed. Here are a few possible options:

Replacement

Replacing the entire starter with a modern solid-state motor starter is often the best long-term solution. This offers better protection, efficiency, and eliminates the PCB risk.

Rebuild/Refurbish

Some companies specialize in rebuilding old motor starters. This might be an option if the original starter is particularly unique or if a direct replacement isn't available. However, this will still require the PCB test.

Oil Change (If No PCBs)

If the oil tests negative for PCBs, a qualified electrician might be able to simply clean the contacts and replace the oil with a modern, PCB-free insulating oil. However, this is usually a short-term fix, as the underlying issues (worn contacts, etc.) will likely return.3.

Motor Inspection

It would be wise to have the motor itself inspected by a qualified motor repair shop. The failure of the starter could have been caused by (or contributed to by) a problem with the motor.

Why You Made the Right Call

Working with potentially hazardous materials like PCBs without proper training and equipment is extremely dangerous. You protected yourself and others by recognizing the risk and stopping work.

In summary, the situation likely involves a failing motor starter (possibly an oil-filled drum switch) on an old machine, with a high probability of the oil containing PCBs. Your caution was absolutely warranted, and the next steps must involve PCB testing and proper handling of the oil and the failed starter. Flag for review