Early years (1886–88) , 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). In 1886, regarded as the year GEC was founded,
Hugo Hirst – a fellow immigrant – joined Byng, and the company changed its name to The General Electric Apparatus Company (G. Binswanger). Their small business found early success with its unorthodox method of supplying electrical components over the counter. 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. In 1907, GEC set up the Peel-Conner 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. In 1910, the meter department, also based at Peel Works, was incorporated separately as
Salford Electrical Instruments. On the death of Byng in 1910, Hirst became the chairman as well as managing director, a position he had assumed in 1906. In 1919, GEC merged its
radio valve manufacturing interests with those of the
Marconi Company to form the
Marconi-Osram Valve Company. In the 1920s, the company was heavily involved in the creation of the UK-wide
National Grid. were symbolic of the continuing expansion of both GEC and the electrical industry. In 1930 another lift manufacturer – Smith, Major and Stevens – was merged into Express Lifts and production was moved to their Northampton factory, where a disused
lift testing tower still stands. During the Second World War, GEC was a major manufacturer of electrical and engineering products for the British armed forces. 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. 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 Birmingham Witton works remained one of the company's biggest sites, producing high-voltage
switchgear and
transformers, large generators, 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. 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. 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. In 1985, GEC acquired
Yarrow Shipbuilders from
British Shipbuilders. In 1988,
GEC Plessey Telecommunications (GPT) was created when GEC bought
Plessey. In May 1989, GEC-Alsthom bought British rail vehicle manufacturer
Metro-Cammell. In early 1996, the
Otis Elevator Company acquired
The Express Lift Company from GEC. By the mid-1990s, GEC was making profits of £1 billion, had cash reserves of £3 billion, and was valued at £10 billion. 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. 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. During 1996, Lord Weinstock retired as GEC's managing director and was replaced by
George Simpson. 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. In March 1998, GEC announced the merger of its radar and avionics business with Alenia Difesa to form
Alenia Marconi Systems. In June 1998, it completed the $1.4bn acquisition of major American
defence contractor Tracor, which became part of MES. The same month, GEC sold its share of the joint venture
GEC-Alsthom on the Paris stock exchange. GEC was also seen as a potential partner in a three-way merger with BAe and DASA. 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). 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.
Marconi plc (1999–2002) 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. 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. Consolidating and monitoring the finances of these acquisitions soon added to the future difficulties encountered by Marconi. 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 sizeable debt pile that was continuing to mount due to heavy losses, Marconi was facing bankruptcy. Shares that had been worth £12.50 at GEC's peak had fallen to £0.04. Lord Weinstock's stake, once worth £480 million, was reduced to £2 million. In October 2003, the company announced that it intended to pursue listing on the
Nasdaq. 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. 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." Various bids were received for the business, including one from
Huawei Technologies, with whom Marconi already had a joint venture. 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, and the remainder was renamed
Telent plc. On 27 October 2006, the company folded voluntarily. ==See also==