Simpson re-groups

GEC shake-up halves the number of business units

By Arlene Foster

George Simpson, managing director of GEC, continues to make his mark on Britain’s biggest manufacturer, which he inherited from Lord Weinstock last September.

The ex-Lucas Industries chief announced last month that he is halving the number of business groups to five. Each will be headed by a new managing director, reporting directly to Simpson. This replaces Lord Weinstock’s system whereby the individual managers of the multitude of GEC’s £11bn-worth of businesses reported centrally to him.

Simpson has also introduced a team of seven core managers to reinforce the overall management structure. These comprise largely existing GEC board members, plus some former colleagues of Simpson. Notable among the latter are Jack Fryer and Robert Meakin.

Fryer, who follows Simpson from the now merged LucasVarity group, takes up the role of strategic planning director, while Meakin, a former colleague of Simpson at British Aerospace, is personnel director. Neither has a main board position.

There are also new roles for Sir Geoffrey Pattie, part-time chairman of GEC-Marconi, and Dr David Grant, GEC technical director and chairman of the Technology Foresight panel on manufacturing. Sir Geoffrey is the first marketing director of GEC and GEC-Marconi. Grant joins the core team as head of technology and managing director, engineering and technology, at GEC-Marconi.

The restructuring leaves the three main pillars of GEC: electronic systems and defence (GEC-Marconi); power systems (GEC-Alsthom); and telecommunications (GPT, a 60/40 joint venture with Siemens), intact.

Most of the US businesses have been grouped as GEC USA. Remaining businesses, from medical equipment to washing machines, are part of the new Industrial Group. The managing director of this unit comes from GPT’s Public Networks Group.

GEC claims that the restructuring has created a clearly defined operational structure and strong and coherent management team. The city seems to agree: `It’s a sensible and progressive move which helps to focus management reporting,’ said Andrew Bryant, analyst with NatWest Capital markets.

But Simpson is still undertaking a fundamental review of the group. `No business will be overlooked,’ said Bryant. `Those most susceptible to sale will either be non-performing or have no global position.’

Recently Simpson announced the £80m sale of GEC’s Satchwell Control Systems business to Siebe and more disposals from what is now the Industrial Group are expected.

As for the rumoured merger of GEC and British Aerospace, analysts believe Simpson may be more interested in forging new alliances with other European aerospace groups such as Thomson CSF of France, to square up to US competition.

Marconi’s North American businesses stay within the Marconi group, which has been restructured into six main units.