The General Electric Company (GEC) was a major British industrial conglomerate involved in consumer and defence electronics, communications, and engineering.
It was founded in London in 1886 as an electrical goods wholesaler named G. Binswanger and Company, which quickly adopted a then-unorthodox business model of supplying electrical components over the counter. In 1889, the business was incorporated as the General Electric Company Ltd, and became a public limited company 11 years later. During the 1890s and 1900s, the company heavily invested into electric lighting, a sector that proved to be immensely profitable in the long term. The GEC was heavily impacted by the outbreak of the First World War, supplying various goods to the military, and thus becoming a major player in the electrical industry. In 1921, a new purpose-built company headquarters (Magnet House) was opened in Kingsway, London; two years later, GEC's industrial research laboratories at Wembley (later named the Hirst Research Centre) also opened. In the 1920s, the company was heavily involved in the creation and roll-out of Britain's National Grid.
During the Second World War, GEC made several significant contributions to the Allied war effort, such as the development of the cavity magnetron for radar, various advances in communications technology, and the mass production of valves, lamps, and lighting equipment. In 1961, GEC merged with Radio & Allied Industries. Throughout the mid-to-late 1960s, GEC's new managing director, Arnold Weinstock, sought to rationalise the British electrical industry and boost efficiency via a series of cut-backs and mergers that returned the company to profit. GEC acquired Associated Electrical Industries (AEI) in 1967, and merged with English Electric one year later. The company continued to expand via acquisitions; between 1979 and 1981, GEC acquired W & T Avery, Cincinnati Electronics, and Picker Corporation.
During the 1980s, the company was Britain's largest private employer with over 250,000 employees; becoming one of the first companies in the new FTSE 100 Index in 1984. It made profits in excess of £1 billion per year at its peak in the 1990s. In June 1998, GEC sold its share of the joint venture GEC-Alsthom on the Paris stock exchange. In December 1999, GEC's defence arm, Marconi Electronic Systems (MES), was sold to British Aerospace, forming BAE Systems. The rest of GEC, mainly telecommunications equipment manufacturing, continued as Marconi Communications. After buying several US telecoms manufacturers at the top of the market, losses following the bursting of the dot-com bubble in 2001 led to the restructuring in 2003 of Marconi plc into Marconi Corporation plc. In 2005, the company failed to secure any part of BT's 21st Century Network (21CN) programme; that same year, Ericsson acquired the bulk of the company, and what was left of the business was renamed Telent.
History 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. The following year, the company acquired its first factory in Salford, where electric bells, telephones, ceiling roses and switches were manufactured.
Incorporation and expansion (1889–1913) In 1889, the business was incorporated as a private company known as the General Electric Company Ltd. The company was expanding rapidly, opening new branches and factories and trading in 'everything electrical', a phrase that was to become synonymous with GEC.
In 1893, it decided to invest in the manufacture of lamps. The resulting company (to become Osram in 1909) was to lead the way in lamp design, and the burgeoning demand for electric lighting was to make GEC's fortune.
In 1900, GEC was incorporated as a public limited company, The General Electric Company (1900) Ltd (the '1900' was dropped three years later). In 1902, its first purpose-built factory, the Witton Engineering Works, was opened near Birmingham.
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. Hirst's shrewd investment in lamp manufacture was proving extremely profitable. In 1909, Osram began production of the most successful tungsten filament lamps in the industry. Rapidly growing private and commercial use of electricity created huge demand. The company expanded both at home and overseas, with the establishment of agencies in Europe, Japan, Australia, South Africa, and India. It also did substantial trade with South America.
World Wars and post-WWII (1914–60) The outbreak of the First World War transformed GEC into a major player in the electrical industry. The company was heavily involved in the war effort, supplying products such as radios, signal lamps, and the arc-lamp carbons used in searchlights.
During the interwar period, GEC expanded to become a global corporation and national institution. The takeover of Fraser and Chalmers in 1918 took GEC into heavy engineering and bolstered their claim to supply 'everything electrical'. In the same year, the maker of electricity meters, Chamberlain and Hookham, was also acquired by GEC.
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. The opening of a new purpose-built company headquarters (Magnet House) in Kingsway, London in 1921, and the pioneering industrial research laboratories at Wembley in 1923 (later named the Hirst Research Centre) were symbolic of the continuing expansion of both GEC and the electrical industry.
By 1927, GEC had acquired the Express Lift Company of Westminster. 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. Significant contributions to the war effort included the development in 1940 of the cavity magnetron, the concept of which was established by Randall and Boot working at Birmingham University. Specifically, GEC engineers were able to dramatically increase the power output, reaching in excess of 100 kW by 1941 and close to one megawatt by 1943. These high power pulses, generated from a relatively compact device and transmitted from an antenna only centimeters long, substantially reduced the size of practical radar systems by orders of magnitude, permitting their installation in fighter aircraft. More generally, GEC also made advances in communications technology and the ongoing mass production of valves, lamps and lighting equipment.
The post-war years saw slower expansion. After the death of Hugo Hirst in 1943, his son-in-law Leslie Gamage (elder son of the founder of Gamages), along with Harry Railing, took over as joint managing directors. Despite the huge demand for electrical consumer goods, and large investments in heavy engineering and nuclear power, profits began to fall in the face of competition and internal disorganisation.
Further expansion (1961–83) In 1961, GEC merged with Sir Michael Sobell's Radio & Allied Industries, and with it emerged the new power behind GEC, Sobell's son-in-law Arnold Weinstock, who became the managing director of GEC in 1963, and moved its headquarters from Kingsway to a new building at 1 Stanhope Gate in Mayfair.
Weinstock embarked on a programme to rationalise the entire British electrical industry, beginning with the internal rejuvenation of GEC. In a drive for efficiency, Weinstock made cut-backs and instigated mergers, resulting in new growth for the company. GEC returned to profit and the financial markets' confidence was restored.
During the late 1960s, the electrical industry was revolutionised as GEC acquired Associated Electrical Industries (AEI) in 1967, which encompassed Metropolitan-Vickers, British Thomson-Houston, Edison Swan, Siemens Brothers & Co, Hotpoint, William Thomas Henley and Birlec.
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.
Acquisitions and mergers (1984–97) In 1984, it became one of the first companies in the new FTSE 100 Index, ranking third in value behind British Petroleum and Shell Transport and Trading.