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General Electric Company

The General Electric Company (GEC) was a major British industrial conglomerate involved in consumer and defence electronics, communications, and engineering.

General Electric Company plc
Company typePublic
IndustryEngineering
Founded1886; 138 years ago (1886)
Defunct1999; 25 years ago (1999)
FateDefence arm bought by British Aerospace to form BAE Systems (1999)
GEC renamed Marconi (1999)
Successor
HeadquartersCoventry, England
Key people
ProductsElectronics

It was originally founded in 1886 as G. Binswanger and Company as an electrical goods wholesaler based in London. It quickly adopted a then-unorthodox business model of supplying electrical components over the counter. In 1889, the business was incorporated as the General Electric Company Ltd, and became a public limited company 11 years later. During the 1890s and 1900s, the company heavily invested into electric lighting, a sector that would prove to be immensely profitable in the long term. The GEC was heavily impacted by the outbreak of the First World War, supplying various goods to the military, and thus becoming a major player in the electrical industry. In 1921, a new purpose-built company headquarters (Magnet House) was opened in Kingsway, London; two years later, GEC's industrial research laboratories at Wembley (later named the Hirst Research Centre) also opened. In the 1920s, the company was heavily involved in the creation and roll-out of Britain's National Grid.

During the Second World War, GEC made several significant contributions to the Allied war effort, such as the development of the cavity magnetron for radar, various advances in communications technology, and the mass production of valves, lamps, and lighting equipment. In 1961, GEC merged with Radio & Allied Industries. Throughout the mid-to-late 1960s, GEC's new managing director, Arnold Weinstock, sought to rationalise the British electrical industry and boost efficiency via a series of cut-backs and mergers that returned the company to profit. GEC acquired Associated Electrical Industries (AEI) in 1967, and merged with English Electric one year later. The company continued to expand via acquisitions; between 1979 and 1981, GEC acquired W & T Avery, Cincinnati Electronics, and Picker Corporation.

During the 1980s, the company was Britain's largest private employer with over 250,000 employees; becoming one of the first companies in the new FTSE 100 Index in 1984. It made profits in excess of £1 billion per year at its peak in the 1990s. In June 1998, GEC sold its share of the joint venture GEC-Alsthom on the Paris stock exchange.[1] During December 1999, GEC's defence arm, Marconi Electronic Systems (MES), was sold to British Aerospace, forming BAE Systems. The rest of GEC, mainly telecommunications equipment manufacturing, continued as Marconi Communications.[2] After buying several US telecoms manufacturers at the top of the market, losses following the bursting of the dot-com bubble in 2001 led to the restructuring in 2003 of Marconi plc into Marconi Corporation plc.[3] During 2005, the company failed to secure any part of BT's 21st Century Network (21CN) programme; that same year, Ericsson acquired the bulk of the company; what was left of the business was renamed Telent.

History edit

Early years (1886–88) edit

 
Hugo Hirst, c. 1930
 
Early switchboard, c. 1888

GEC had its origins in the G. Binswanger and Company, an electrical goods wholesaler established in London in the 1880s by a German-Jewish immigrant, Gustav Binswanger (later Gustav Byng).[4][5] Regarded as the year GEC was founded, 1886 saw a fellow immigrant, Hugo Hirst, join Byng, and the company changed its name to The General Electric Apparatus Company (G. Binswanger).[5][6]

Their small business found early success with its unorthodox method of supplying electrical components over the counter. Hugo Hirst was an entrepreneurial salesman who saw the potential of electricity and was able to direct the standardisation of an industry in its infancy. He travelled across Europe with an eye for the latest products, and in 1887 the company published the first electrical catalogue of its kind.[5] The following year, the company acquired its first factory in Salford, where electric bells, telephones, ceiling roses and switches were manufactured.[5]

Incorporation and expansion (1889–1913) edit

In 1889, the business was incorporated as a private company known as the General Electric Company Ltd.[5] The company was expanding rapidly, opening new branches and factories and trading in 'everything electrical', a phrase that was to become synonymous with GEC.[citation needed]

In 1893, it decided to invest in the manufacture of lamps. The resulting company, (to become Osram in 1909),[clarification needed] was to lead the way in lamp design, and the burgeoning demand for electric lighting was to make GEC's fortune.[6]

In 1900, GEC was incorporated as a public limited company, The General Electric Company (1900) Ltd (the '1900' was dropped three years later).[5]

In 1902, its first purpose-built factory, the Witton Engineering Works, was opened near Birmingham.[7]

In 1907, GEC set up the Peel-Connor Telephone Works to manufacture telephone exchanges and telephones for the GPO; GEC supplied a large CB manual exchange for Glasgow in 1910. The British telephone system had been taken over and was operated by the General Post Office (GPO or BPO, a government department). The telephone manufacturing section moved from Manchester to Coventry in 1919, and GEC was one of the "ring" of four (later five) companies supplying the GPO with Strowger automatic telephone exchanges (called "Step-by-Step" or SXS) in use from the 1920s to the 1960s.[8]

With the death of Gustav Byng in 1910, Hugo Hirst became the chairman as well as managing director, a position he had assumed in 1906.[5] Hirst's shrewd investment in lamp manufacture was proving extremely profitable. In 1909, Osram began production of the most successful tungsten filament lamps in the industry. Rapidly growing private and commercial use of electricity created huge demand. The company expanded both at home and overseas, with the establishment of agencies in Europe, Japan, Australia, South Africa, and India. It also did substantial trade with South America.[citation needed]

World Wars and post-WWII (1914–60) edit

The outbreak of the First World War transformed GEC into a major player in the electrical industry. The company was heavily involved in the war effort, supplying products such as radios, signal lamps, and the arc-lamp carbons used in searchlights.[5]

In 1917, GEC created the Express Lift Company in Northampton, England.[9]

During the interwar period, GEC expanded to become a global corporation and national institution. The takeover of Fraser and Chalmers in 1918 took GEC into heavy engineering and bolstered their claim to supply 'everything electrical'. In the same year, the maker of electricity meters, Chamberlain and Hookham, was also acquired by GEC.[10]

In 1919, GEC merged its radio valve manufacturing interests with those of the Marconi Company to form the Marconi-Osram Valve Company.[11]

In the 1920s, the company was heavily involved in the creation of the UK-wide National Grid.[5] The opening of a new purpose-built company headquarters (Magnet House) in Kingsway, London in 1921, and the pioneering industrial research laboratories at Wembley in 1923 (later named the Hirst Research Centre),[12] were symbolic of the continuing expansion of both GEC and the electrical industry.[5]

During the Second World War, GEC was a major manufacturer of electrical and engineering products for the British armed forces.[5] Significant contributions to the war effort included the development in 1940 of the cavity magnetron for radar,[5] by the scientists John Randall and Harry Boot at the University of Birmingham, as well as advances in communications technology and the ongoing mass production of valves, lamps and lighting equipment.

The post-war years saw a decline in GEC's expansion. After the death of Hugo Hirst in 1943, his son-in-law Leslie Gamage (elder son of the founder of Gamages), along with Harry Railing, took over as joint managing directors. Despite the huge demand for electrical consumer goods, and large investments in heavy engineering and nuclear power, profits began to fall in the face of competition and internal disorganisation.[citation needed]

Further expansion (1961–83) edit

In 1961, GEC merged with Sir Michael Sobell's Radio & Allied Industries, and with it emerged the new power behind GEC, Sobell's son-in-law Arnold Weinstock, who became the managing director of GEC in 1963, and moved its headquarters from Kingsway to a new building at 1 Stanhope Gate in Mayfair.[5]

Weinstock embarked on a programme to rationalise the entire British electrical industry, beginning with the internal rejuvenation of GEC. In a drive for efficiency, Weinstock made cut-backs and instigated mergers, resulting in new growth for the company. GEC returned to profit and the financial markets' confidence was restored.

During the late 1960s, the electrical industry was revolutionised as GEC acquired Associated Electrical Industries (AEI) in 1967, which encompassed Metropolitan-Vickers, British Thomson-Houston, Edison Swan, Siemens Brothers & Co, Hotpoint, William Thomas Henley and Birlec.[5][13]

In 1968, GEC merged with English Electric, incorporating Elliott Brothers, the Marconi Company, Ruston & Hornsby, Robert Stephenson & Hawthorns, the Vulcan Foundry, Willans & Robinson and Dick, Kerr & Co.[3][14] The Elliot computer company became GEC Computers, whose products were successful in academic computing and real-time process control in the 1970s and 1980s.

The Witton works remained one of the company's biggest sites, producing high-voltage switchgear and transformers, small motors, mercury arc rectifiers and traction components, until the plant was gradually sold off by Weinstock in 1969.

In 1969, a new subsidiary company was born, English Electric-AEI Traction Ltd. This new organisation slowly integrated together the traction divisions of both AEI and EE, culminating in 1972 when the company was renamed GEC Traction Ltd. Also added to the company was the industrial locomotive division of the former English Electric which was based at Vulcan Works, Newton-le-Willows (this later became a separate company, GEC Industrial Locomotives Ltd). The company had manufacturing sites at Manchester, Preston and Sheffield.

The company continued to expand with the acquisition in 1979 of weighing machine maker W & T Avery, renamed GEC Avery.[15]

In April 1981, GEC acquired Cincinnati Electronics (CE), in Cincinnati, Ohio, at the time owned by George J Mealey. CE was a leader in military radios and infrared technology, space electronics, and other high-security products, doing business throughout the world. (Now owned by L-3 Cincinnati Electronics.)

In 1981, GEC acquired Picker Corporation, an American manufacturer of medical imaging equipment.[16] GEC merged Picker with Cambridge Instruments, GEC Medical, and American Optical to form Picker International (PI). GEC Medical was itself an amalgamation of Watson & Sons Ltd, formed in the early 20th century in London and long a part of GEC, and A E Dean & Co of Croydon. In 1982, PI introduced the first 1.0T magnetic resonance imaging (MRI) unit. In 1998, it acquired the CT division of Elscint In 1999, the company changed its name to Marconi Medical Systems. In 2001, Philips bought Marconi Medical Systems for $1.1 billion.[17][18]

Acquisitions and mergers (1984–97) edit

GEC had become the UK's largest and most successful company and private employer, with about 250,000 employees.[citation needed] In 1984, it became one of the first companies in the new FTSE 100 Index, ranking third in value behind British Petroleum and Shell Transport and Trading.[19]

In 1985, GEC acquired Yarrow Shipbuilders from British Shipbuilders.[20] In 1988, GEC Plessey Telecommunications (GPT) was created when GEC bought Plessey.[5] The following year, GEC and Siemens formed a joint company, GEC Siemens plc, to take over Plessey. As part of the deal, GEC took control of Plessey's avionics and naval systems businesses.[5]

In early 1989, GEC and French company Alsthom merged their power generation and transport businesses in a new joint venture, GEC-Alsthom.[1][21] In May 1989, GEC-Alsthom bought British rail vehicle manufacturer Metro-Cammell.[22]

In early 1996, the Otis Elevator Company acquired The Express Lift Company from GEC.[23]

By the mid-1990s, GEC was making profits of £1 billion, had cash reserves of £3 billion, and was valued at £10 billion.[24]

The move towards electronics and modern technology, particularly in the defence sector, was a departure from the domestic electrical goods market. GEC acquired the Edinburgh based Ferranti Defence Systems Group in 1990 as well as part of Ferranti International's assets in Italy.[25] It also bought Vickers Shipbuilding & Engineering (VSE) in 1995. VSE was willing to participate in a merger with a larger company to reduce its exposure to cycles in warship production, particularly in light of the post-Cold War "Options for Change" defence review. Following GEC's purchase, VSE became Marconi Marine.[26][27][28]

During 1996, Lord Weinstock retired as GEC's managing director and was replaced by George Simpson.[29][18] In July 1997, the company announced the outcomes of a major review: it would move away from its joint ventures and focus on moving toward "global leadership" in defence and aerospace (Marconi Electronic Systems), industrial electronics (GEC Industrial Electronics), and communications (GEC Communications).[30] Simpson, along with finance director John Mayo, decided to pursue a risky strategy of pursuing fast growth via rapid acquisition of numerous other companies, particularly within the United States.[29]

In February 1998, Marconi Instruments, the test equipment arm of GEC, was sold to IFR Systems.[31]

In March 1998, GEC announced the merger of its radar and avionics business with Alenia Difesa to form Alenia Marconi Systems.[32]

In June 1998, it completed the $1.4bn acquisition of major American defence contractor Tracor, which became part of MES.[33] The same month, GEC sold its share of the joint venture GEC-Alsthom on the Paris stock exchange.[1]

After most of its US acquisitions failed, GEC began to make a loss. The cash reserves that Lord Weinstock had built up during the 1980s and early 1990s had been all but depleted, and the company was heavily in debt.[24][18]

Marconi Electronic Systems sale (1998–99) edit

In July 1998, reports began linking British Aerospace (BAe) with the German aerospace group DASA to create a new European Aerospace and Defence Company.[34][35] GEC was also seen as a potential partner in a three-way merger with BAe and DASA.[36]

In December 1998, reports emerged that GEC was seeking a partner for MES, the value of which was greatly increased by the Tracor acquisition. Prospective partners included Thomson-CSF (by 1998 on the path to privatisation) and various American defence contractors (e.g. Lockheed Martin and TRW).[37] GEC had already been active in pursuing consolidation in the defence business. In 1997, it made an ultimately unsuccessful bid to the French government to privatise Thomson-CSF and merge it with MES.[38][39]

A merger of UK companies soon became the most likely development. In mid-January 1999, GEC and British Aerospace confirmed they were holding talks. On 19 January, it was announced British Aerospace was to acquire Marconi Electronic Systems for £7.7bn ($12.75bn).[40][41][42]

Marconi plc (1999–2002) edit

While the deal was yet to be completed, GEC used much of the anticipated proceeds of the MES sale to buy companies in 1999. This move was part of a major realignment of the firm to focus on the burgeoning telecoms sector, and it became a radio, telecommunications and internet equipment manufacturer.[43] At the time, financial markets approved of the strategy; GEC's share value set new all-time highs during early 1999.[44]

In 1999, Marconi plc purchased two American equipment-makers: RELTEC Corporation in March for £1.3bn, and FORE Systems in April for £2.8bn, to complement the telecommunication business of its subsidiary Marconi Communications.[45][18] Later that year, GEC acquired Kvaerner's Govan shipyard.[46] In April 2000, it acquired Mobile Systems International in exchange for £391m.[43][47] Consolidating and monitoring the finances of these acquisitions soon added to the future difficulties encountered by Marconi.[48]

These acquisitions were made at the height of the dot-com bubble, and the bursting of the bubble in 2001 took a heavy toll on Marconi.[49][50][51] While the company initially chose to deny any impact to sales, the delayed issue of a profit warning spooked investors.[29][48] In July 2001, Marconi plc suffered a 54% drop in its share price following the suspension of trading of its shares, profit warning, and redundancies. Having accumulated a sizable debt pile that was continuing to mount due to heavy losses, Marconi was facing bankruptcy.[52][29][18]

In September 2011, Simpson was forced to resign from Marconi and a new management team was brought in under Mike Parton, the new chief executive.[18][29] Shares that had been worth £12.50 at GEC's peak had fallen to £0.04. Lord Weinstock's own stake, once worth £480 million, was reduced to £2 million.[24][29]

Marconi Corporation plc and break-up (2002–05) edit

On 19 May 2003, Marconi plc underwent a restructuring and became Marconi Corporation plc, advised by Lazard and Morgan Stanley.[53][54] Marconi shareholders received one Marconi Corporation share for every 559 Marconi shares. In a debt-for-equity swap, the firm's creditors received 99.5% of the new company's shares.[53][55][56] In October 2003, the company announced that it intended to pursue listing on the Nasdaq.[57]

In 2005, the company failed to secure any part of BT's 21st Century Network (21CN) programme, surprising commentators and sending the company's shares tumbling.[58][59][60] Before the announcement, the investment bank Dresdner Kleinwort had said, "[Marconi is] so advanced with its products and so entrenched with BT Group plc that its selection looks certain."[61] Various bids were received for the business, including one from Huawei Technologies, with whom Marconi already had a joint venture.[62]

Prior to the collapse of the Marconi group in 2005 and 2006, the company was a major supplier of Asynchronous Transfer Mode, Gigabit Ethernet, and Internet Protocol products. The majority of Marconi Corporation's businesses (including Marconi Communications and the rights to the Marconi name) were sold to Ericsson in 2005,[63][64] and the remainder was renamed Telent plc.

On 27 October 2006, the company folded voluntarily.[65]

See also edit

References edit

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  2. ^ "History of Marconi plc". Funding Universe.com. Retrieved 14 July 2012.
  3. ^ a b "History of GEC". BritishTelephones.com. Retrieved 12 July 2012.
  4. ^ Carlebach, Julius (1991). Second Chance: Two Centuries of German-speaking Jews in the United Kingdom. Mohr Siebeck. pp. 362–. ISBN 978-3-16-145741-8.
  5. ^ a b c d e f g h i j k l m n o p . IPD Group. Archived from the original on 29 March 2010. Retrieved 5 June 2010.
  6. ^ a b Roberts, S. (September 1991). "Summary report on early corporate records of General Electric Company plc, electrical equipment manufacturers, London". Historical Manuscripts Commission – via nationalarchives.gov.uk.
  7. ^ Webb, Julie (20 March 2015). "Friday Photo: Administration Block to the former GEC Witton Works". birminghamconservationtrust.org.
  8. ^ Robertson, J. H. (1947). The Story of the Telephone: A History of the Telecommunications Industry of Britain. London: Pitman. pp. 95–96.
  9. ^ "Roots of the Company – The rise and fall of the GEC empire". BritishTelephones.com. Retrieved 3 July 2013.
  10. ^ "Chamberlain and Hookham". Grace's Guide.
  11. ^ Vyse, B.; Jessop, G. (2000). The Saga of Marconi-Osram Valve: A History of Valve-making. ISBN 0-9539127-0-1.
  12. ^ Clayton, Robert; Algar, Joan (1989). The GEC Research Laboratories 1919–1984. Peter Peregrinus. ISBN 0-86341-146-0.
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  23. ^ "Otis Elevator and General Electric Company (GEC) reach agreement on purchase of Express Lift Company". Bloomberg. 2 April 1996. Retrieved 28 October 2021.
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  37. ^ "Lockeed, Britain's GEC may be in merger talks". Los Angeles Times. 28 December 1998. Retrieved 5 June 2010.
  38. ^ Harrison, Michael (7 May 1997). "GEC set to combine Marconi with Thomson-CSF". The Independent.
  39. ^ "Thomson-CSF: 1968 - 2000". Science Museum Group. Retrieved 23 September 2023.
  40. ^ "British Aerospace and Marconi Electronic Systems form the third largest defence unit in the world". Jane's International. 19 January 1999.
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  42. ^ Turpin, Andrew (4 March 2000). "BAE eyes US targets after profit rockets". The Scotsman. The Scotsman Publications. p. 26.
  43. ^ a b "Advised: Marconi PLC on its acquisition of Mobile Systems International (MSI)". aquaapartners.com. Retrieved 23 September 2023.
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  45. ^ . PR Newswire (Press release). 26 September 2000. Archived from the original on 15 October 2012. Retrieved 20 January 2009.
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  48. ^ a b McCarthy, Kieren (17 July 2001). "Oracle aided Marconi collapse". The Register.
  49. ^ . The Economist. 10 June 2004. Archived from the original on 18 October 2012. Retrieved 5 June 2010.
  50. ^ . The Economist. 27 October 2005. Archived from the original on 18 October 2012. Retrieved 5 June 2010.
  51. ^ Harrison, Michael (26 October 2005). "Marconi sells to Ericsson and consigns a century of industrial might to history". The Independent. London. Archived from the original on 17 April 2010. Retrieved 5 June 2010.
  52. ^ Harrison, Michael (6 July 2001). "From blue-chip giant to hi-tech flop: the £30bn fall of Marconi". The Independent.
  53. ^ a b "MARCONI PLC, Form 6-K, Filing Date March 31, 2003". secdatabase.com. Retrieved 15 May 2018.
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  55. ^ Gapper, John (31 October 2004). "Desperate days, drastic measures". Financial Times.
  56. ^ "Shareholders lose out in Marconi liquidation". accountancyage.com. 19 August 2002.
  57. ^ "Marconi to List on Nasdaq". thefreelibrary.com. 3 October 2003.
  58. ^ Richardson, Tim (28 April 2005). "Marconi savaged after failure to win BT 21CN deal, Share price falls 40 per cent". The Register.
  59. ^ "BT names suppliers for IP network: Marconi's out, Huawei's in". techmonitor.ai. 28 April 2005.
  60. ^ "Marconi future in doubt after BT snub". investorschronicle.co.uk. 5 May 2005.
  61. ^ Le Maistre, Ray (27 April 2005). "Analyst: Marconi in Line for 21CN". Light Reading. Retrieved 28 November 2006.
  62. ^ "Marconi discussing £600m buy-out". BBC News. 7 August 2005. Retrieved 5 June 2010.
  63. ^ Oates, John (25 October 2005). "Ericsson buys Marconi". The Register. Retrieved 5 June 2010.
  64. ^ "Ericsson said to be bidding for Marconi". techmonitor.ai. 10 October 2005.
  65. ^ "Marconi (2003) plc". KPMG. Retrieved 14 July 2012.[permanent dead link]

Further reading edit

External links edit

  • The History of the General Electric Company up to 1900 – Part 1 – GEC Review, Volume 14, No. 1, 1999
  • The History of the General Electric Company up to 1900 – Part 2 – GEC Review, Volume 14, No. 2, 1999
  • The Roots of GEC 1670 – 1999
  • Listen to the 1904 "GEC March"
  • Documents and clippings about General Electric Company in the 20th Century Press Archives of the ZBW

general, electric, company, confused, with, american, company, general, electric, major, british, industrial, conglomerate, involved, consumer, defence, electronics, communications, engineering, plccompany, typepublicindustryengineeringfounded1886, years, 1886. Not to be confused with the American company General Electric GE The General Electric Company GEC was a major British industrial conglomerate involved in consumer and defence electronics communications and engineering General Electric Company plcCompany typePublicIndustryEngineeringFounded1886 138 years ago 1886 Defunct1999 25 years ago 1999 FateDefence arm bought by British Aerospace to form BAE Systems 1999 GEC renamed Marconi 1999 SuccessorBAE Systems plc Marconi plc Otis Worldwide Corporation Alstom SA OsramHeadquartersCoventry EnglandKey peopleHugo Hirst founder Lord Weinstock managing director ProductsElectronicsIt was originally founded in 1886 as G Binswanger and Company as an electrical goods wholesaler based in London It quickly adopted a then unorthodox business model of supplying electrical components over the counter In 1889 the business was incorporated as the General Electric Company Ltd and became a public limited company 11 years later During the 1890s and 1900s the company heavily invested into electric lighting a sector that would prove to be immensely profitable in the long term The GEC was heavily impacted by the outbreak of the First World War supplying various goods to the military and thus becoming a major player in the electrical industry In 1921 a new purpose built company headquarters Magnet House was opened in Kingsway London two years later GEC s industrial research laboratories at Wembley later named the Hirst Research Centre also opened In the 1920s the company was heavily involved in the creation and roll out of Britain s National Grid During the Second World War GEC made several significant contributions to the Allied war effort such as the development of the cavity magnetron for radar various advances in communications technology and the mass production of valves lamps and lighting equipment In 1961 GEC merged with Radio amp Allied Industries Throughout the mid to late 1960s GEC s new managing director Arnold Weinstock sought to rationalise the British electrical industry and boost efficiency via a series of cut backs and mergers that returned the company to profit GEC acquired Associated Electrical Industries AEI in 1967 and merged with English Electric one year later The company continued to expand via acquisitions between 1979 and 1981 GEC acquired W amp T Avery Cincinnati Electronics and Picker Corporation During the 1980s the company was Britain s largest private employer with over 250 000 employees becoming one of the first companies in the new FTSE 100 Index in 1984 It made profits in excess of 1 billion per year at its peak in the 1990s In June 1998 GEC sold its share of the joint venture GEC Alsthom on the Paris stock exchange 1 During December 1999 GEC s defence arm Marconi Electronic Systems MES was sold to British Aerospace forming BAE Systems The rest of GEC mainly telecommunications equipment manufacturing continued as Marconi Communications 2 After buying several US telecoms manufacturers at the top of the market losses following the bursting of the dot com bubble in 2001 led to the restructuring in 2003 of Marconi plc into Marconi Corporation plc 3 During 2005 the company failed to secure any part of BT s 21st Century Network 21CN programme that same year Ericsson acquired the bulk of the company what was left of the business was renamed Telent Contents 1 History 1 1 Early years 1886 88 1 2 Incorporation and expansion 1889 1913 1 3 World Wars and post WWII 1914 60 1 4 Further expansion 1961 83 1 5 Acquisitions and mergers 1984 97 1 6 Marconi Electronic Systems sale 1998 99 1 7 Marconi plc 1999 2002 1 8 Marconi Corporation plc and break up 2002 05 2 See also 3 References 4 Further reading 5 External linksHistory editEarly years 1886 88 edit nbsp Hugo Hirst c 1930 nbsp Early switchboard c 1888GEC had its origins in the G Binswanger and Company an electrical goods wholesaler established in London in the 1880s by a German Jewish immigrant Gustav Binswanger later Gustav Byng 4 5 Regarded as the year GEC was founded 1886 saw a fellow immigrant Hugo Hirst join Byng and the company changed its name to The General Electric Apparatus Company G Binswanger 5 6 Their small business found early success with its unorthodox method of supplying electrical components over the counter Hugo Hirst was an entrepreneurial salesman who saw the potential of electricity and was able to direct the standardisation of an industry in its infancy He travelled across Europe with an eye for the latest products and in 1887 the company published the first electrical catalogue of its kind 5 The following year the company acquired its first factory in Salford where electric bells telephones ceiling roses and switches were manufactured 5 Incorporation and expansion 1889 1913 edit In 1889 the business was incorporated as a private company known as the General Electric Company Ltd 5 The company was expanding rapidly opening new branches and factories and trading in everything electrical a phrase that was to become synonymous with GEC citation needed In 1893 it decided to invest in the manufacture of lamps The resulting company to become Osram in 1909 clarification needed was to lead the way in lamp design and the burgeoning demand for electric lighting was to make GEC s fortune 6 In 1900 GEC was incorporated as a public limited company The General Electric Company 1900 Ltd the 1900 was dropped three years later 5 In 1902 its first purpose built factory the Witton Engineering Works was opened near Birmingham 7 In 1907 GEC set up the Peel Connor Telephone Works to manufacture telephone exchanges and telephones for the GPO GEC supplied a large CB manual exchange for Glasgow in 1910 The British telephone system had been taken over and was operated by the General Post Office GPO or BPO a government department The telephone manufacturing section moved from Manchester to Coventry in 1919 and GEC was one of the ring of four later five companies supplying the GPO with Strowger automatic telephone exchanges called Step by Step or SXS in use from the 1920s to the 1960s 8 With the death of Gustav Byng in 1910 Hugo Hirst became the chairman as well as managing director a position he had assumed in 1906 5 Hirst s shrewd investment in lamp manufacture was proving extremely profitable In 1909 Osram began production of the most successful tungsten filament lamps in the industry Rapidly growing private and commercial use of electricity created huge demand The company expanded both at home and overseas with the establishment of agencies in Europe Japan Australia South Africa and India It also did substantial trade with South America citation needed World Wars and post WWII 1914 60 edit The outbreak of the First World War transformed GEC into a major player in the electrical industry The company was heavily involved in the war effort supplying products such as radios signal lamps and the arc lamp carbons used in searchlights 5 In 1917 GEC created the Express Lift Company in Northampton England 9 During the interwar period GEC expanded to become a global corporation and national institution The takeover of Fraser and Chalmers in 1918 took GEC into heavy engineering and bolstered their claim to supply everything electrical In the same year the maker of electricity meters Chamberlain and Hookham was also acquired by GEC 10 In 1919 GEC merged its radio valve manufacturing interests with those of the Marconi Company to form the Marconi Osram Valve Company 11 In the 1920s the company was heavily involved in the creation of the UK wide National Grid 5 The opening of a new purpose built company headquarters Magnet House in Kingsway London in 1921 and the pioneering industrial research laboratories at Wembley in 1923 later named the Hirst Research Centre 12 were symbolic of the continuing expansion of both GEC and the electrical industry 5 During the Second World War GEC was a major manufacturer of electrical and engineering products for the British armed forces 5 Significant contributions to the war effort included the development in 1940 of the cavity magnetron for radar 5 by the scientists John Randall and Harry Boot at the University of Birmingham as well as advances in communications technology and the ongoing mass production of valves lamps and lighting equipment The post war years saw a decline in GEC s expansion After the death of Hugo Hirst in 1943 his son in law Leslie Gamage elder son of the founder of Gamages along with Harry Railing took over as joint managing directors Despite the huge demand for electrical consumer goods and large investments in heavy engineering and nuclear power profits began to fall in the face of competition and internal disorganisation citation needed Further expansion 1961 83 edit In 1961 GEC merged with Sir Michael Sobell s Radio amp Allied Industries and with it emerged the new power behind GEC Sobell s son in law Arnold Weinstock who became the managing director of GEC in 1963 and moved its headquarters from Kingsway to a new building at 1 Stanhope Gate in Mayfair 5 Weinstock embarked on a programme to rationalise the entire British electrical industry beginning with the internal rejuvenation of GEC In a drive for efficiency Weinstock made cut backs and instigated mergers resulting in new growth for the company GEC returned to profit and the financial markets confidence was restored During the late 1960s the electrical industry was revolutionised as GEC acquired Associated Electrical Industries AEI in 1967 which encompassed Metropolitan Vickers British Thomson Houston Edison Swan Siemens Brothers amp Co Hotpoint William Thomas Henley and Birlec 5 13 In 1968 GEC merged with English Electric incorporating Elliott Brothers the Marconi Company Ruston amp Hornsby Robert Stephenson amp Hawthorns the Vulcan Foundry Willans amp Robinson and Dick Kerr amp Co 3 14 The Elliot computer company became GEC Computers whose products were successful in academic computing and real time process control in the 1970s and 1980s The Witton works remained one of the company s biggest sites producing high voltage switchgear and transformers small motors mercury arc rectifiers and traction components until the plant was gradually sold off by Weinstock in 1969 In 1969 a new subsidiary company was born English Electric AEI Traction Ltd This new organisation slowly integrated together the traction divisions of both AEI and EE culminating in 1972 when the company was renamed GEC Traction Ltd Also added to the company was the industrial locomotive division of the former English Electric which was based at Vulcan Works Newton le Willows this later became a separate company GEC Industrial Locomotives Ltd The company had manufacturing sites at Manchester Preston and Sheffield The company continued to expand with the acquisition in 1979 of weighing machine maker W amp T Avery renamed GEC Avery 15 In April 1981 GEC acquired Cincinnati Electronics CE in Cincinnati Ohio at the time owned by George J Mealey CE was a leader in military radios and infrared technology space electronics and other high security products doing business throughout the world Now owned by L 3 Cincinnati Electronics In 1981 GEC acquired Picker Corporation an American manufacturer of medical imaging equipment 16 GEC merged Picker with Cambridge Instruments GEC Medical and American Optical to form Picker International PI GEC Medical was itself an amalgamation of Watson amp Sons Ltd formed in the early 20th century in London and long a part of GEC and A E Dean amp Co of Croydon In 1982 PI introduced the first 1 0T magnetic resonance imaging MRI unit In 1998 it acquired the CT division of Elscint In 1999 the company changed its name to Marconi Medical Systems In 2001 Philips bought Marconi Medical Systems for 1 1 billion 17 18 Acquisitions and mergers 1984 97 edit GEC had become the UK s largest and most successful company and private employer with about 250 000 employees citation needed In 1984 it became one of the first companies in the new FTSE 100 Index ranking third in value behind British Petroleum and Shell Transport and Trading 19 In 1985 GEC acquired Yarrow Shipbuilders from British Shipbuilders 20 In 1988 GEC Plessey Telecommunications GPT was created when GEC bought Plessey 5 The following year GEC and Siemens formed a joint company GEC Siemens plc to take over Plessey As part of the deal GEC took control of Plessey s avionics and naval systems businesses 5 In early 1989 GEC and French company Alsthom merged their power generation and transport businesses in a new joint venture GEC Alsthom 1 21 In May 1989 GEC Alsthom bought British rail vehicle manufacturer Metro Cammell 22 In early 1996 the Otis Elevator Company acquired The Express Lift Company from GEC 23 By the mid 1990s GEC was making profits of 1 billion had cash reserves of 3 billion and was valued at 10 billion 24 The move towards electronics and modern technology particularly in the defence sector was a departure from the domestic electrical goods market GEC acquired the Edinburgh based Ferranti Defence Systems Group in 1990 as well as part of Ferranti International s assets in Italy 25 It also bought Vickers Shipbuilding amp Engineering VSE in 1995 VSE was willing to participate in a merger with a larger company to reduce its exposure to cycles in warship production particularly in light of the post Cold War Options for Change defence review Following GEC s purchase VSE became Marconi Marine 26 27 28 During 1996 Lord Weinstock retired as GEC s managing director and was replaced by George Simpson 29 18 In July 1997 the company announced the outcomes of a major review it would move away from its joint ventures and focus on moving toward global leadership in defence and aerospace Marconi Electronic Systems industrial electronics GEC Industrial Electronics and communications GEC Communications 30 Simpson along with finance director John Mayo decided to pursue a risky strategy of pursuing fast growth via rapid acquisition of numerous other companies particularly within the United States 29 In February 1998 Marconi Instruments the test equipment arm of GEC was sold to IFR Systems 31 In March 1998 GEC announced the merger of its radar and avionics business with Alenia Difesa to form Alenia Marconi Systems 32 In June 1998 it completed the 1 4bn acquisition of major American defence contractor Tracor which became part of MES 33 The same month GEC sold its share of the joint venture GEC Alsthom on the Paris stock exchange 1 After most of its US acquisitions failed GEC began to make a loss The cash reserves that Lord Weinstock had built up during the 1980s and early 1990s had been all but depleted and the company was heavily in debt 24 18 Marconi Electronic Systems sale 1998 99 edit In July 1998 reports began linking British Aerospace BAe with the German aerospace group DASA to create a new European Aerospace and Defence Company 34 35 GEC was also seen as a potential partner in a three way merger with BAe and DASA 36 In December 1998 reports emerged that GEC was seeking a partner for MES the value of which was greatly increased by the Tracor acquisition Prospective partners included Thomson CSF by 1998 on the path to privatisation and various American defence contractors e g Lockheed Martin and TRW 37 GEC had already been active in pursuing consolidation in the defence business In 1997 it made an ultimately unsuccessful bid to the French government to privatise Thomson CSF and merge it with MES 38 39 A merger of UK companies soon became the most likely development In mid January 1999 GEC and British Aerospace confirmed they were holding talks On 19 January it was announced British Aerospace was to acquire Marconi Electronic Systems for 7 7bn 12 75bn 40 41 42 Marconi plc 1999 2002 edit While the deal was yet to be completed GEC used much of the anticipated proceeds of the MES sale to buy companies in 1999 This move was part of a major realignment of the firm to focus on the burgeoning telecoms sector and it became a radio telecommunications and internet equipment manufacturer 43 At the time financial markets approved of the strategy GEC s share value set new all time highs during early 1999 44 In 1999 Marconi plc purchased two American equipment makers RELTEC Corporation in March for 1 3bn and FORE Systems in April for 2 8bn to complement the telecommunication business of its subsidiary Marconi Communications 45 18 Later that year GEC acquired Kvaerner s Govan shipyard 46 In April 2000 it acquired Mobile Systems International in exchange for 391m 43 47 Consolidating and monitoring the finances of these acquisitions soon added to the future difficulties encountered by Marconi 48 These acquisitions were made at the height of the dot com bubble and the bursting of the bubble in 2001 took a heavy toll on Marconi 49 50 51 While the company initially chose to deny any impact to sales the delayed issue of a profit warning spooked investors 29 48 In July 2001 Marconi plc suffered a 54 drop in its share price following the suspension of trading of its shares profit warning and redundancies Having accumulated a sizable debt pile that was continuing to mount due to heavy losses Marconi was facing bankruptcy 52 29 18 In September 2011 Simpson was forced to resign from Marconi and a new management team was brought in under Mike Parton the new chief executive 18 29 Shares that had been worth 12 50 at GEC s peak had fallen to 0 04 Lord Weinstock s own stake once worth 480 million was reduced to 2 million 24 29 Marconi Corporation plc and break up 2002 05 edit On 19 May 2003 Marconi plc underwent a restructuring and became Marconi Corporation plc advised by Lazard and Morgan Stanley 53 54 Marconi shareholders received one Marconi Corporation share for every 559 Marconi shares In a debt for equity swap the firm s creditors received 99 5 of the new company s shares 53 55 56 In October 2003 the company announced that it intended to pursue listing on the Nasdaq 57 In 2005 the company failed to secure any part of BT s 21st Century Network 21CN programme surprising commentators and sending the company s shares tumbling 58 59 60 Before the announcement the investment bank Dresdner Kleinwort had said Marconi is so advanced with its products and so entrenched with BT Group plc that its selection looks certain 61 Various bids were received for the business including one from Huawei Technologies with whom Marconi already had a joint venture 62 Prior to the collapse of the Marconi group in 2005 and 2006 the company was a major supplier of Asynchronous Transfer Mode Gigabit Ethernet and Internet Protocol products The majority of Marconi Corporation s businesses including Marconi Communications and the rights to the Marconi name were sold to Ericsson in 2005 63 64 and the remainder was renamed Telent plc On 27 October 2006 the company folded voluntarily 65 See also editAerospace industry in the United Kingdom GEC Marconi scientist deaths conspiracy theory National Lift Tower a lift test tower built by The Express Lift CompanyReferences edit a b c Alstom the key dates of a French industrial jewel france24 com 26 September 2017 Retrieved 3 September 2023 History of Marconi plc Funding Universe com Retrieved 14 July 2012 a b History of GEC BritishTelephones com Retrieved 12 July 2012 Carlebach Julius 1991 Second Chance Two Centuries of German speaking Jews in the United Kingdom Mohr Siebeck pp 362 ISBN 978 3 16 145741 8 a b c d e f g h i j k l m n o p GEC History IPD Group Archived from the original on 29 March 2010 Retrieved 5 June 2010 a b Roberts S September 1991 Summary report on early corporate records of General Electric Company plc electrical equipment manufacturers London Historical Manuscripts Commission via nationalarchives gov uk Webb Julie 20 March 2015 Friday Photo Administration Block to the former GEC Witton Works birminghamconservationtrust org Robertson J H 1947 The Story of the Telephone A History of the Telecommunications Industry of Britain London Pitman pp 95 96 Roots of the Company The rise and fall of the GEC empire BritishTelephones com Retrieved 3 July 2013 Chamberlain and Hookham Grace s Guide Vyse B Jessop G 2000 The Saga of Marconi Osram Valve A History of Valve making ISBN 0 9539127 0 1 Clayton Robert Algar Joan 1989 The GEC Research Laboratories 1919 1984 Peter Peregrinus ISBN 0 86341 146 0 G E C and A E I merger Hansard 23 November 1967 English Electric Company Limited Science Museum Group Retrieved 24 September 2023 W and T Avery Limited 1813 1979 Science Museum Group Retrieved 24 September 2023 Medical Venture By Philips and GEC The New York Times Reuters 25 April 1987 Retrieved 5 June 2010 Philips Where did it all begin Philips Healthcare 16 September 2008 Retrieved 5 June 2010 a b c d e f COVER STORY Marconi insidermedia com Searjeant Graham 11 May 2007 Share index has not rewarded innovation The Times What do you know about Govan Evening News Archived from the original on 5 July 2008 GEC Alsthom Limited Science Museum Group Retrieved 24 September 2023 GEC swallows Metro Cammell Railway Gazette International July 1989 p 457 Otis Elevator and General Electric Company GEC reach agreement on purchase of Express Lift Company Bloomberg 2 April 1996 Retrieved 28 October 2021 a b c Obituary Lord Weinstock The Daily Telegraph 24 July 2002 Archived from the original on 12 January 2022 Retrieved 9 November 2015 GEC buys out Ferranti in shock 310m deal The Herald 24 January 1990 Retrieved 9 November 2015 GEC makes rival bid for VSEL The Independent 29 October 1994 Parliamentary debates Hansard 23 May 1995 GEC s knockout bid wins fight for VSEL Jane s 1995 a b c d e f Birkinshaw Julian 1 March 2004 The destruction of Marconi london edu Strategic shake up at GEC The Scotsman 9 July 1997 GEC Sells Marconi Instruments Marconi Archived from the original on 18 January 2006 Retrieved 17 December 2018 GEC prepares to launch 5bn telecoms and defence strike The Independent 6 March 1998 Retrieved 9 November 2015 GEC of Britain agrees to buy Tracor The New York Times 22 April 1998 Retrieved 5 June 2010 Business The Company File Defense merger on the radar BBC News 10 July 1998 Retrieved 15 September 2007 BAe and Dasa discuss proposals for merger Aerospace groups still have important issues to resolve Financial Times 24 July 1998 p 1 GEC spoils DASA BAe party BBC News 20 December 1998 Lockeed Britain s GEC may be in merger talks Los Angeles Times 28 December 1998 Retrieved 5 June 2010 Harrison Michael 7 May 1997 GEC set to combine Marconi with Thomson CSF The Independent Thomson CSF 1968 2000 Science Museum Group Retrieved 23 September 2023 British Aerospace and Marconi Electronic Systems form the third largest defence unit in the world Jane s International 19 January 1999 BAe set to sign A8bn GEC deal with merger The Guardian 19 January 1999 Turpin Andrew 4 March 2000 BAE eyes US targets after profit rockets The Scotsman The Scotsman Publications p 26 a b Advised Marconi PLC on its acquisition of Mobile Systems International MSI aquaapartners com Retrieved 23 September 2023 Guerrera Francesco 27 April 1999 Market Report GEC the star as market soars to a new peak The Independent Marconi Establishes Enterprise Technology Centers PR Newswire Press release 26 September 2000 Archived from the original on 15 October 2012 Retrieved 20 January 2009 Kvaerner sells UK shipyard CNN Money Archived from the original on 14 July 2012 Retrieved 5 June 2010 Marconi Buys MSI Software for 618 Million wirelessnetworksonline com 25 April 2000 a b McCarthy Kieren 17 July 2001 Oracle aided Marconi collapse The Register Back from the dead The Economist 10 June 2004 Archived from the original on 18 October 2012 Retrieved 5 June 2010 Takeover of Marconi Business past business future The Economist 27 October 2005 Archived from the original on 18 October 2012 Retrieved 5 June 2010 Harrison Michael 26 October 2005 Marconi sells to Ericsson and consigns a century of industrial might to history The Independent London Archived from the original on 17 April 2010 Retrieved 5 June 2010 Harrison Michael 6 July 2001 From blue chip giant to hi tech flop the A 30bn fall of Marconi The Independent a b MARCONI PLC Form 6 K Filing Date March 31 2003 secdatabase com Retrieved 15 May 2018 SEC ADR listing of Marconi Corporation plc SEC Retrieved 14 July 2012 Gapper John 31 October 2004 Desperate days drastic measures Financial Times Shareholders lose out in Marconi liquidation accountancyage com 19 August 2002 Marconi to List on Nasdaq thefreelibrary com 3 October 2003 Richardson Tim 28 April 2005 Marconi savaged after failure to win BT 21CN deal Share price falls 40 per cent The Register BT names suppliers for IP network Marconi s out Huawei s in techmonitor ai 28 April 2005 Marconi future in doubt after BT snub investorschronicle co uk 5 May 2005 Le Maistre Ray 27 April 2005 Analyst Marconi in Line for 21CN Light Reading Retrieved 28 November 2006 Marconi discussing 600m buy out BBC News 7 August 2005 Retrieved 5 June 2010 Oates John 25 October 2005 Ericsson buys Marconi The Register Retrieved 5 June 2010 Ericsson said to be bidding for Marconi techmonitor ai 10 October 2005 Marconi 2003 plc KPMG Retrieved 14 July 2012 permanent dead link Further reading editJones Robert Marriott Oliver 1970 Anatomy of a Merger A History of GEC AEI and English Electric London Jonathan Cape ISBN 0 224 61872 5 Whyte Adam Gowans 1930 Forty Years of Electrical Progress London Ernest Benn Limited External links editThe History of the General Electric Company up to 1900 Part 1 GEC Review Volume 14 No 1 1999 The History of the General Electric Company up to 1900 Part 2 GEC Review Volume 14 No 2 1999 The Roots of GEC 1670 1999 The former GEC Archives Collection archived website Listen to the 1904 GEC March Documents and clippings about General Electric Company in the 20th Century Press Archives of the ZBW Retrieved from https en wikipedia org w index php title General Electric Company amp oldid 1194119149, wikipedia, wiki, book, books, library,

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