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Friday, 22 March, 2002, 11:45 GMT
Tough times for telecoms pioneer
Marconi graphic
Marconi: Caught the telecoms wave on the way down
Marconi, the troubled UK telecoms equipment maker, traces its history back more than 100 years to an Italian wireless pioneer from whom the company takes its name.

Bologna-born Guglielmo Marconi set up the Wireless Telegraph & Signal Company in 1897 after conducting several successful experiments involving transmission of messages over distance using radio waves rather than telephone cables.

Having carried out most of these experiments in England, Marconi decided to base his company there, choosing Chelmsford for his first factory and headquarters.

Early applications of Marconi equipment were particularly aimed at helping those at sea.

Name changes
1897 Wireless Telegraph & Signal Company
1900 Marconi's Wireless Telegraph Company
1963 Marconi Company
1987 GEC-Marconi
1998 Marconi Electronic Systems
1999 Marconi
In one notable instance, the UK postmaster general is reported to have said those rescued from the Titanic had been "saved through one man, Mr Marconi and... his wonderful invention".

Eleven years earlier, in 1901, Marconi had successfully transmitted the first transatlantic wireless message.

Marconi himself died in 1937 but the firm that by now bore his name continued.

GEC takeover

In 1946, it was taken over by English Electric, which was swallowed 22 years later by General Electric Company (GEC), which itself dates back to 1886.

The company was built into a huge operation, with the old Marconi business gaining particular success with defence contracts.

But the past few years have seen dramatic changes in the shape of the business.

After taking charge in 1997, George (now Lord) Simpson decided to sell Marconi's defence electronics arm and focus on the growing international market for high-capacity telecoms networks.

The new Marconi bought 4bn-worth of businesses in the United States alone but appeared, to some analysts, to be chasing the telecoms wave on the way down, having arrived too late.

In 1999, GEC was renamed Marconi.

Job cuts

By 2001, the company was winning more than 40% of its sales in the United States, where it employed 17,000 people, the same amount as in the UK.

The company maintains research and development facilities in 19 countries and manufacturing operations in 16.

But savage cutbacks in light of the extended telecoms downturn have resulted in the global workforce of about 50,000 in early 2001 being slashed to fewer than 30,000 one year later.

The UK workforce now numbers 7,000-8,000 while chairman Sir Roger Hurn and chief executive Lord Simpson (along with his deputy John Mayo) were shunted out after investor pressure.

Outsourced

Like international rivals including Ericsson, Alcatel and Siemens, Marconi has also decided to step back from manufacturing, choosing to outsource some production to those who can do it cheaper.

Marconi has said it will focus operations on its major sites while "a number" of smaller facilities will close.

Tough times continue for what was once one of the UK's flagship companies.

And with disenchanted investors unconvinced, so far, by the new management of Derek Bonham and Mike Parton, there is no sign yet of brighter times ahead.

See also:

04 Jul 01 | Business
Marconi slashes jobs
29 Jun 01 | Business
Marconi re-thinks options plan
04 Jun 01 | Business
Marconi shares climb on buyout talk
03 Jun 01 | Business
Cisco 'mulls 12bn Marconi bid'
17 May 01 | Business
Profits up at Marconi
10 Apr 01 | Business
Marconi to axe 1,500 UK jobs
06 Oct 00 | Business
Marconi nurtures US growth
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