In article ,
"Brian Reay" writes:
Actually, Weinstock was pretty good at recognising "core business" and
turning a profit.
It was quite simple. As one of Weinstock's companies, you could
borrow money from him if you could show him you would give him
a better return on investment than he would get investing it
elsewhere. He sat on a £1B pot which he used for this purpose.
Only thing was, the return had to be within a year -- it was very
difficult to borrow money for development over a longer period.
There were some companies in GEC which enjoyed a special position
of supporting the rest of the group and didn't need to turn a
profit themselves. The two best known were GEC Hirst Research,
and Marconi Research. The one I worked for, GEC Computers, was
also in such a position as the provider of computer systems for
many other GEC companies. However, during the 1980's, all these
companies were gradually turned into profit centres too, although
I don't think any actually managed to make a return on investment.
It all fell apart when someone decided to split up the empire, flog off the
profit making defence business, and invest in and focus on telecoms. The
results of that are a matter of history.
Yep.
Weinstock was shrewd, successful, and turned a profit. Dirty words to some
people but he presided over an empire that kept many people in gainful
employ for many years.
He spent years training his son to take over from him. His son
died of cancer before he got to the point of taking over. I left
GEC at that point, but my recollection is someone from Lucus was
brough in to run the company, and the £1B cash mountain turned
into a multi-£B hole in a remarkably short period of time. As
you say, the company decided to get rid of all it's non-telecoms
businesses (i.e. the opposite of the diversification Weinstock
presided over) just in the lead up to the dot com crash. I never
really understood this move as it also coincided with GEC having
saturated the BT network (i.e. no more System X as all exchanges
were now moderised), and having substantially failed to find any
other large market for System X in the world, it seemed to me
that the telecoms bit was heading for big trouble even if the
dot com crash hadn't happened.
The bad news is, worse is to come. The UK energy policy is wrecked, in the
late 70s everyone said "no problem, we've 300 years of coal". So research
was abandoned, the coal mines closed, the gas used more quickly, and we are
on the point of being totally dependant on foreign energy. In a master
stroke, Blair does a deal with the French (long known for their generous
support of the UK) to manage an alternative.
I wrote an article on this just recently from the point of view
of future lack of security of UK energy supplies...
http://groups.google.com/group/uk.d-...f46f4fa4a9973c
--
Andrew Gabriel