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spike1@xxxxxxxxxxxxx <spike1@xxxxxxxxxxxxx> espoused:
> Mark Kent <mark.kent@xxxxxxxxxxx> did eloquently scribble:
>> Take a second example, Vodafone. Yesterday they announced yet more
>> losses, this time $3bn for this quarter. Their margins are presently
>> running at something like -130% or thereabouts. Some of this is
>> write-down of poorly selected purchases, but even so, it's a poor
>> picture to paint for again, one of the world's largest companies.
>
> Don't forget marconi a couple of years ago.
>
> Their shares collapsed to such an extent you could buy them for pennies when
> they used to be one of the biggest electronics, communications and defense
> contractors in the world...
Defence!
You're right, though. GEC & Plessey were huge companies. No longer.
In their case, Lord Weinstock had kept the company (GEC) with multiple
markets, including, as you say, defence, radio, broadcasting, telecoms,
chip manufacturing and design, component manufacturing, medical,
industrial, control and so on; previously they'd done consumer, but had
pulled out of that.
The City decided that the growth rate he was managing was not enough, so
during the last .com boom, they staged a boardroom coup, and replaced
him with a City banker. The brokers all trousered loads of cash as the
Banker sold off all the non-telecoms bits, and declared that the
company would become really rich by just doing telecoms - this was the
exact opposite of the previous strategy, and would become the downfall
of the company.
Needless to say, as the dot.com boom ended, Marconi (as they were now
called - after one of their radio divisions) became more or less totally
dependent on BT for survival. When BT didn't place much of a major
contract with them, they were no longer viable. In the end, the final
remnants of the company were bought by Ericsson. This seems a sad
demise for a company that even 10 years ago had been one of the world's
largest, but it does go to show that City Bankers know as much about
engineering companies as your average hairdresser or brickie's mate.
>
> They almost went bust completely.
--
| Mark Kent -- mark at ellandroad dot demon dot co dot uk |
Save gas, don't eat beans.
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