Change of course on 29 June

The chapter discusses the handling of the crisis over the Spanish banking sector in June 2012.It is argued that this marked an important turning point in the evolution of the Eurozone crisis, as the German policy prescription came under concerted criticism. The decisions of the European Council of 29 June 2012 offered a new paradigm in the management of the crisis, not least because of the decision to allow the recapitalisation of European banks directly through the EFSF and the ESM. This also paved the way for a banking union within the Eurozone.

in The European debt crisis

The chapter reviews the conditions under which Greece entered the Eurozone in 2001. It discusses the controversies surrounding the manipulation of Greek statistics and sets the scene within which the Greek debt crisis unfolded

in The European debt crisis
Seeking a new solution

The chapter reviews the evolution of the Greek crisis on the first anniversary of the Memorandum. It is argued that, international ‘good will’ towards Greece began to weather amidst fears over the reliability of the Greek government to implement the necessary reforms. Domestically, the government’s efforts to forge consensus were undermined by the opposition. In response the PM stated toying with the idea of a referendum as a means of enhancing the legitimacy of government policy.

in The European debt crisis
Abstract only

This chapter tracks the final 18 months of a business that was slowly fading into corporate obscurity, holed fatally by a massive fraud and victim of a one-sided deal with its bankers that resulted in the disposal of most of its profitable divisions. GEC’s Arnold Weinstock played a key role in the final stages, but ultimately withdrew its offer to buy the remaining activities, forcing Anderson to concede defeat. Although Ferranti disappeared as trading operation in December 1993, the name lived on in various management buy-outs and a pension scheme that ironically has continued to flourish.

in Ferranti: A History
Abstract only
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 chapter identifies the key features of a business that by 1982 had been in existence for 100 years. The main theme is how the engineering-led strategy and devolved management structure created by the de Ferranti family up to 1975 had been built on by the chief executive, Derek Alun-Jones, imposed by the government as a result of its bail-out in 1974. Addressing the major market challenges facing Ferranti in the 1980s, the chapter concludes with an analysis of Alun-Jones’ ‘American Strategy’ which culminated in a major acquisition programme.

in Ferranti: A History

This chapter unravels the fraud that had been perpetrated by James Guerin in compiling ISC’s accounts over many years. This requires a detailed analysis of the missile contracts that Guerin claimed to have secured in the Middle East, Pakistan and China. While Ferranti executives conducted extensive enquiries into the veracity of these contracts, it was almost two years after the merger before they realised the full extent of the fraud. The key theme will be the extent to which Ferranti executives continued to place considerable faith in Guerin’s claims, indicating the importance of trust in such relationships.

in Ferranti: A History

This chapter provides a detailed analysis of how multi-agency American and British investigative teams unravelled the highly intricate web of illicit activities created by James Guerin since the 1970s. By the time that the Grand Jury (in Philadelphia) was charged with investigating the criminal counts, there was an enormous amount of evidence implicating Guerin and his key executives. This finally resulted in a series of trials, consequent upon which Guerin was given a 15-year prison sentence and his co-conspirators a range of smaller sentences. At the same time, Ferranti also pursued compensation through the British courts, but in the end was obliged to accept a small sum from Peat Marwick Mitchell as ISC’s auditors.

in Ferranti: A History

This chapter analyses the strategies devised by Eugene Anderson in order to effect a recovery after the traumatic discoveries of 1989. This will include an assessment of the extent to which he was able to rebuild a ‘New Ferranti International’. As well as restructuring the business, and especially the American subsidiaries, further disposals were also effected, reducing the size of the business and its prospects of recovering fully. This also coincided with dramatic developments in the world defence market, not least the end of the Cold War and the consequent mergers in military-related sectors.

in Ferranti: A History
Abstract only

While the court cases were taking place in the States, Ferranti management was assessing how the fraud could be accommodated in the accounts, and especially the extent of bank borrowing required to prevent bankruptcy. It will become clear that while a bank syndicate provided extensive loans, the conditions placed on these funds resulted in an extensive disposal programme that left Ferranti bereft of profitable activities, and especially the hugely successful Scottish division. Another condition was the replacement of Derek Alun-Jones as chief executive with Eugene Anderson, an American with extensive experience of corporate turnarounds. These developments marked a dramatic change in both the nature and size of the business, as well as the corporate culture that had flourished for over 100 years.

in Ferranti: A History