~NA~TU~~~vo~L~·~310~12~J~U~LY~I~~------NEVVS------9 t UK electronics worrying that its growth has slackened off (both turnover and profits were virtually identical in the past two financial years) Sleeping giant waking up? and has, over the past five years, been ONE of Britain's largest technical is that GEC's reserves of cash and negot much slower than that of other British elec companies, the General Electric Company iable financial assets, commonly called its tronics companies such as Racal, Ferranti Limited (GEC), seems in the process of cash mountain, amount to more than and Standard Telephones and Cables emerging from two decades of well £1,500 million, more than a third of total (STC). managed torpidity. No relation of GE (for assets. Shareholders complain that they Lord Weinstock, meanwhile, is no General Electric) of the United States, the could do as well by investing their own longer Whitehall's favourite manager - company has in the past few weeks startled money in the financial markets. GEC's and not simply because of his opposition its shareholders by making a bid for British last year to the Telecommunications Bill, Aerospace, still partly owned by the British then passing through Parliament, on the Government, and (last week) by saying that grounds that the British telephone network it hopes to spend £300 million buying back was destined to be an uncontrollable private its own shares from shareholders. But monopoly. Questions have also been raised behind the scenes, and in the long run much about the once-admired management more important, GEC has set about the re technique, involving the deliberate juvenation of its research programme with devolution of financial responsibility to the unfamiliar zeal. host of companies in the group. This, the Not before time, the company's critics argument goes, may be a recipe for not will be saying. GEC now is the result ofthe losing money but inhibits concentration on 1964 Labour Government's widely-shared innovation. trust in the management style ofMr Arnold In reality, with a total of 17,000 Weinstock (now Lord Weinstock), GEC's technically-trained employees, GEC managing director then and now, and of its spends something like i 1 per cent of its belief that successful companies are pre turnover on research and development, ferably big. Thus GEC is an amalgam of its much of it on defence contracts. Devolved old namesake with Metropolitan Vickers management has inevitably left individual and English Electric (which had already Derek Roberts, the new favourite operating companies with responsibility taken over Marconi when swallowed up). technical people, however, argue that other for the size and character of their own Latterly, GEC's admirers have turned to large electronics companies (Hitachi and research programmes. While there is no grumbling. The most widely publicized Siemens, for example) have financial sign that this principle is about to be complaint is that the company's success at reserves which are twice as large when abandoned, the past two years have seen a making money (profits last year of £671 measured by the yardstick of the labour marked increase of GEC's centrally million on a turnover of £5,600million) has force - more like £15,000 per employee supported research. not been matched by its willingness to than GEC's £7,000. In the British electronics industry, invest in new enterprises. One consequence For GEC, it is (or should be) more people say that the arrival of Mr Derek H. Roberts as GEC's director of research five years ago has been the chief catalyst of Conglomerate research revives change. Since then, centrally directed IF Lord Weinstock is no longer the British together from musicians whose reputations research, previously negligible, has come Government's favourite manager, Mr have been earned as soloists. Roberts to occupy a quarter of the effort of GEC's Derek Roberts, GEC's director of research reckons to provide searching technical central research organization, chiefly and a member of the company's board audits of designs emanating from member based at the Hirst Research Centre since the end of last year, is fast becoming companies while seeking to sell to them the (Wembley, London} and the Marconi the establishment's favourite industrial benefits of research commissions with the Research Centre in Essex. scientist. A member of the Advisory Board central organizaton. New efforts are concentrated in micro for the Research Councils, in that capacity One of his innovations is a system for electronics, with the development of and in his own right he repeatedly appears encouraging the transfer of technology devices based on gallium arsenide (GaAs} as a witness before parliamentary commit within the group, partly by means of roughly on a par with those based on tees, arguing the case for more generous technical newsletters produced in-house. silicon. Although not a volume manu (and rational) policies in the support of Intra-group seminars are now common facturer of microelectronic chips, GEC is science. place. an important source of chips designed for Roberts, a vigorous Mancunian physi Microelectronics is the most obvious specialized applications (many of them in cist, was recruited to GEC from the Plessey theme in Roberts's message to GEC. The defence}. Of the £55 million spent last year Company in 1979 and elected to the Royal Hirst Research Centre at Wembley, archi by the central research organization, Society and the Fellowship of Engineering tecturally a monument to the 1920s, is roughly a half was recovered from GEC's the following year. Appropriately, be being converted internally into a labyrinth operating companies as the cost of com argues for the abolition of the conventional of air-conditioned cells for depositing f'llms missioned research, with the remainder British distinction between science and of this or that on wafers of silicon or other divided equally between externally com engineering, as well as for the recognition semiconductors. The equipment appears missioned research (from the Ministry of that women have a potentially important to come in units costing £500,000 a cell, and Defence among others} and the company's role in industrial research and the transformation is clearly far from own new research effort. development. (A brochure describing the complete. Time will no doubt tell how decisively successful careers of a score of GEC Even so, the technical people are hoping these developments will change the un women has apparently been a hit with that the British Government will let their flattering reputation that GEC has recently British schools.) company acquire British Aerospace. Un required. Last year, electronics and tele The role of a technical director in a like the London Stock Exchange, they take communications accounted for £290 conglomerate such as GEC Is a little like the line that in the fields in which they million of the group's profit, and is the that of a conductor of an orchestra put operate, size is still an asset. 0 most quickly growing sector of its business. John Maddox
© 1984 Nature Publishing Group