ABRIDGED HISTORY OF THE BRITISH ERICSSON COMPANY
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
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):
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
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
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|
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.
Click here for L. M. Ericsson History
Click here for the history of Lars Magnus Ericsson
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