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Volume 3 Management, mergers and fraud 1987–1993

The final volume of this detailed history of Ferranti covers the last seven years of its operating existence, starting with the 1987 merger with ISC and culminating in a humiliating demise consequent upon GEC’s 1993 decision to withdraw its bid for what by then was an unprofitable rump. Extensive attention is paid to the way in which ISC evolved under James Guerin’s stewardship, providing insights into the shady world of international covert arms dealing. While in 1987 Ferranti purchased what was regarded as a highly profitable defence electronics business, by 1989 it was apparent that ISC’s net worth was marginal, creating an accounting hole in what by then was Ferranti International from which it never recovered, in spite of highly imaginative strategies enacted by a new chief executive, Eugene Anderson. The book provides detailed insights into international mergers, corporate governance issues and defence electronics that highlight the dangers associated with competing in one of the fastest-moving industries of that era.

This book surveys ‘thrift’ through its moral, religious, ethical, political, spiritual and philosophical expressions, focusing in on key moments such as the early Puritans and postwar rationing, and key characters such as Benjamin Franklin, Samuel Smiles and Henry Thoreau. The relationships between thrift and frugality, mindfulness, sustainability and alternative consumption practices are explained, and connections made between myriad conceptions of thrift and contemporary concerns for how consumer cultures impact scarce resources, wealth distribution and the Anthropocene. Ultimately, the book returns the reader to an understanding of thrift as it was originally used – to ‘thrive’ – and attempts to re-cast thrift in more collective, economically egalitarian terms, reclaiming it as a genuinely resistant practice. Students, scholars and general readers across all disciplines and interest areas will find much of interest in this book, which provides a multi-disciplinary look at a highly topical concept.

logic is not some kind of future gratification. Viewed Miller’s way, thrift remains bound within a normative economic framework in which the individual is posited as a kind of never-​ending calculating machine, who walks around weighing up present sacrifice against future satisfaction as they shop. This individual is the one that most mainstream economic history is only too familiar with, Smith’s ‘economic man’ who, through careful consideration of spending and saving, embodies consumerism and thrift and fuses them together in a symbiotic relationship (or perhaps more

in A brief history of thrift
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Thoreau in the city

108 Conclusion: Thoreau in the city The title of this book is not only descriptive, but wilfully creative of a new history. Thrift has tended to be portrayed in historical and economic discourse as either a ‘new movement’, or as something that has occurred in historical ‘blips’ or ‘moments’ when historical conditions impacted negatively upon capitalism’s ability to provide. There is so much wrong with this interpretation that it is difficult to know where to begin! For a start, capitalism is not known for its ability to provide for all; rather for its ability

in A brief history of thrift

. Although the firm had passed through similarly exciting phases in its long history – witness the 1903 crisis, not to mention contributing to two world wars1 – for many the pride in achieving the status accorded Ferranti by the 1980s exceeded any other episode. Of course, it is vital to stress that these achievements were based on the legacy inherited from the founding de Ferranti family, specifically an engineering-led strategy combined with a highly devolved organisational ethos that encouraged experimentation and entrepreneurship. It was this style of management that

in Ferranti: A History

7 The ‘New Ferranti International’1 always a tendency to write history as if all paths lead to a specific destination, in the case of Ferranti International’s final three years as a trading operation it is difficult to see it as anything other than a forlorn rescue operation. Indeed, analogies such as ‘Clearing out the Augean stables’ come to mind when analysing the efforts expended to rebuild the business. Even though in June 1990 the new chief executive sustained the equine analogy by stating that ‘having cleaned out the stable, there is still a horse in

in Ferranti: A History
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creditors,8 it was apparent that Ferranti International was once again teetering on the edge of bankruptcy, prompting Robin Broadley to ponder on its chances of securing a major contract in the near-term future.9 256 FERRANTI: A HISTORY Just as David Shipley had done in 1991, throughout 1992 Robert Davies was consequently obliged to maintain a vigilant watch on overdue creditors and liquidity. By that time, of course, given the scale of the asset disposals (see Table 8.1), the former were no longer as large as they had been in 1991. On the other hand, as one can see in

in Ferranti: A History

better known for divesting loss-making activities, such as television and radio, mainframe computers, and numerical control equipment,2 graphically illustrating the 72 FERRANTI: A HISTORY inherent dangers of remaining a self-financed operation. After the 1975 financial crisis, however, it is apparent that the board headed by Derek AlunJones was much more interested in external growth. The aggressive merger strategy was first clearly laid out by the Ferranti board during a meeting in September 1980. It was at that meeting, which focused almost solely on corporate

in Ferranti: A History

. W 108 FERRANTI: A HISTORY This chapter will analyse these issues in some detail, explaining how fundamental problems emerged in the way that Guerin not only continued to act in a mysterious manner over certain contracts, but also conjured up further missile contracts and hoodwinked Ferranti managers into believing that they were generating a sound cashflow. A complete analysis of the financial performance of what would become Ferranti International will be conducted in Chapter 6, when we shall link up with the discussions featuring in Chapter 1 concerning the

in Ferranti: A History
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the firm’s announcement of a profits warning, amounting to a 20% shortfall on the 1988–89 results. As Ferranti had already 178 FERRANTI: A HISTORY Figure 6.1 Ferranti International share price, 1987–90 reported in March 1989 that 1,000 jobs had been cut in its commercial computer division (at Wythenshawe),6 commentators were beginning to express severe reservations about holding on to Ferranti International equities.7 Moreover, even though Ferranti Defence Systems Ltd (FDSL) had secured a contract to supply the Tornado pilot display panels,8 considerable

in Ferranti: A History