ABRIDGED HISTORY OF THE BRITISH ERICSSON COMPANY


Potted History

1903 - British L. M. Ericsson Manufacturer Company formed.  This was a joint venture between L. M. Ericsson of Sweden and the National telephone Company (NTC).

1912 - The GPO (who had taken over NTC) relinquish control to L. M. Ericsson.

1926 - L. M. Ericsson reduces it's share of the company and the Ericsson Telephone Company (ETL) is formed.

1948 - L. M. Ericsson sell their share of the company completely.

1961 - Plessey acquire ETL.

1988 - Plessey and GEC form a joint venture company called GEC Plessey Telecommunications.

1991 - Siemens acquires the Plessey part of the joint venture and the company name changes to GPT.

1998 - Siemens increase there share of the company and the name changes to Siemens GEC Communications.

1999 - The name changes to Siemens Communications Ltd, when Siemens buys the GEC part of the company.


Extracts from “L M Ericsson 100 Years” a history of LME produced for the centenary in 1976

During the 1920s, the largest foreign manufacturing unit in the Ericsson Group was the factory in Beeston, Great Britain.  This was run by the British LM Ericsson Manufacturing Co. Ltd., called from 30 March 1926 Ericsson Telephones Ltd.  The company had been formed in 1903, with LME owning half the shares; in 1911 LME had bought out its partner, the operating company National Telephone Co., whose repair and experimental work­shop was the origin of the Beeston factory.  In 1925 the share capital of the expanding company was increased from £200,000 to £500,000.  LME still owned the majority shareholding.

The Beeston factory's field of operations was Great Britain, Ireland and certain parts of the British colonies and trust territories.  The most important of the latter was the Union of South Africa.  The range of production was comparatively large, including all kinds of equipment for telephony and telegraphy.  Totalisator equipment and a large quantity of electrical and precision tools were also manufactured.  The total value of the British company's sales and the proportion bought by the British Post Office are shown in the attached table.

Practically all Group sales to Great Britain were from the British factory; sales direct from Sweden or with the British company as middleman were on a very small scale.  The most important operation to be carried out during the second half of the 1920s was the automation of the British telephone network.  Just as the Beeston factory had already been compelled to produce telephones of a foreign type during the early 1920s, so later it became necessary to build telephone exchanges in accordance with the Strowger system which had been adopted as standard by the Post Office before LME was able to compete in the field of automation.  However, Ericsson Telephones was also allocated its quota of equipment for automatic telephony on the cartelised British market and continued to make a very steady profit for the Parent Company.  

From 1929 onwards a further product appeared alongside the telephone sector, the automatic totalisator for race courses.  The background to this special aspect of production was the Race­course Betting Act of 1928, which permitted installations previously prohibited in Britain.  Immediately there was a great demand.  A company called Automatic Totalisators Ltd.  held the patent rights in the automatic totalisator, and set up a factory in Ealing outside London to execute the large orders placed.  These orders came from the Racecourse Betting Control Board, which supervised the purchase, installation and running of the totalisators on race courses.  From the beginning, Ericsson Telephones Ltd. supplied parts to the factory in Ealing, which was more or less an assembly plant.  In 1930, the Ericsson company bought out its customer, closed down the factory and continued to manufacture totalisators at its own factory in Beeston.  In 1931 it also began to sell installations for trotting tracks and dog tracks.  In that year a special company was formed for the dog tracks, Electric Totalisators Limited, which, in collaboration with course owners, operated installations purchased from the parent company, Automatic Totalisators Ltd.  The production of totalisators was of some importance for Ericsson Telephones Ltd; in 1929, 1930 and 1931, sales were made to the value of £12,408, £194,000 and £37,000 respectively.

Throughout the 1930s, Ericsson Telephones Ltd. in Beeston, England, continued to be LME's most important manufacturing company abroad.  In the middle of the decade, invoicing at the Beeston factory was on the same scale as at the telephone factory in Stockholm.  Towards the end of the decade sales amounted to 23 million Kronor, having doubled in less than ten years.  Elektrisk Bureau in Oslo was second in size, with an invoicing at the same point in time of about 13 million Swedish Kronor, an even more rapid expansion than had taken place in Britain.

Relations with the British subsidiary Ericsson Telephones Ltd. (ETL) were also complicated to a certain extent by the war.  The Swedish owned company in Britain was threatened with seizure under the Trading with the Enemy Act, 1939 in the event of Sweden being invaded by German troops.  To guard against such a development, LME sold 20,000 shares in ETL in 1940 for a total of £30,000, or roughly 0.5 million Kronor, thus bringing its share in the British company below 49 per cent.  The Swedish representatives on ETL's board, M. Wallenberg Jr. and H. Th. Holm, had to accept their exclusion from it.  The British referred to the company's numerous secret contracts and the measure was motivated politically; reference was made, for example, in discussions to the passage of German troops in transit through Sweden.  One result of the war was thus further to accentuate the tendency which the British subsidiary had already shown to act more and more independently of its Swedish Parent Company.  An agreement between the companies on matters of principle, signed in 1903, had restricted the British company's sales to Britain and her Crown Colonies.  This ETL felt to be a burden, particularly during the 1930s when the Beeston factory was at times as large as LME's Stockholm factory.  During the war, ETL also established contact with foreign markets outside the Crown Colonies, and immediately peace was signed the agreements between the Swedish and the British companies were reviewed; as a result, the British company's greater independence found expression also in a considerably expanded international field of operations.

During the war years, about 85 per cent of ETL's work was for the armed forces.  Its most important customer was the Royal Air Force which bought large quantities of radio equipment for ground operations, as well as for its aircraft.  The factory's resources were also used to repair telephone exchanges and other equipment damaged during the Battle of Britain.  In 1941 the number of workers employed was 4,850, most of them women, and at the end of the war 5,500.  Labour and raw materials were allocated to the company on an adequate scale owing to its importance for the war effort.

The net profit shown by ETL developed as follows (in thousands of pounds):  

1939 1940 1941 1942 1943 1944 1945
140 130 104 111 113 117 113

On the ordinary share capital, which constituted £375,000 out of a total share capital of £575,000, a dividend of 25 per cent was paid in 1939, of 22 per cent in 1940 and of 20 per cent thereafter.  The profit was thus satisfactory even after the decline in 1939-1941.  At the same time the company was consolidated by a substantial increase of its reserve funds.  In 1941 the subsidiary British Automatic Totalisators Ltd. was sold, with a capital gain of £18,000.

The British factory (ETL) mainly produced the now outmoded Strowger system for the British Post Office.  ETL gradually slipped out of the Group through a series of sales of shares that had begun as early as 1940.  In 1950 and 1951 the remainder of the shares was sold to British interests.  This sale produced a net profit of 17.8 million Kronor for the Parent Company.

British LM Ericsson Mfg. Co. Ericsson Tel. Ltd. 1920­-1931.
Total invoicing and invoicing to the British Post
Office.  In thousands of pounds.

Year Total invoicing Invoicing to the GPO Year Total Invoicing Invoicing to the GPO
1920 388 196 1926 487 266
1921 534 298 1927 350 140
1922 284 107 1928 395 204
1923 363 76 1929 389 224
1924 532 214 1930 662 252
1925 571 306 1931 573 386

Source: LME's archives.

The story continues ..........

In 1948 LME withdrew from the UK, signing an agreement with ETL not to manufacture or compete in the UK telephone market for 20 years.  All shares in ETL were sold to a British finance consortium, and it became an independent UK company until Plessey purchased all the shares in 1961.  Through the 1950s and 1960s, Ericsson maintained a trading presence in Britain through the Swedish Ericsson Company Ltd.  The main activities during this period were limited to sales of telephone equipment to organisations such as the Crown Agents, and destined for installation outside the UK.

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Last revised: March 06, 2010