Plessey Co

The 'Plessey Company' - an electronics, defence and telecommunications company.

• 1917. 12th December. Plessey was founded in Marylebone, London as a manufacturer of jigs and tools, supplying other manufacturing companies. The company was formed specifically to take advantage of the talents of a German-born engineer, William Oscar Heyne, who had been interned at the start of World War 1. The original shareholders were Thomas Hurst Hodgson, C. H. Whitaker, Raymond Parker and his brother Plessey Parker. The company’s name was taken from the birthplace of Heyne’s wife (Plessey, Northumberland) as well as from Plessey Parker. Heyne was the sole employee initially, and went on to become one of the key figures in the development of the company during the 1920s and 30s.

• 1919 The company moved to larger premises in Holloway. One of its early customers, a galvanising company called British Electro Chemists, was partly owned by an American, Byron G. Clark, who purchased 640 shares in Plessey in 1919.

• 1922, Byron Clark’s son, Allen George Clark, started working for the company.

• 1922 Byron Clark established the British Radiophone Co to make crystal sets and valve receivers for Marconi. Plessey won an order to supply 50 crystal sets. This was the start of Plessey’s diversification into radio and electronic manufacturing. Plessey’s business model became a combination of mass-production of standard components for the makers of radio sets and sub-contract manufacture but not selling direct to the private customer. The manufacture of electrical components became a key area of growth for Plessey, eventually manufacturing a vast array of different components, many under licence from overseas companies.

• 1923 Plessey moved to larger premises in Ilford. At the time there were more than 200 employees.

• 1925 15th February. A new company was incorporated with a similar name and larger share capital to take over the company formed on the 12th December 1917.

• 1925. Byron Clark became chairman with Allen Clark and W.O. Heyne as joint managing directors. Allen Clark’s sons John and Michael later both rose to prominent positions in the company.

• 1928 Important contracts included for the production of telephones for the General Post Office (GPO) and items for the Air Force and the car industry. Production of equipment for professional customers became a growing part of the company’s business.

• In 1929 John Logie Baird’s first production televisions were manufactured by Plessey. The company also produced the first British-made portable battery radio, the “National” which was supplied to Symphony and Columbia. Allen Clark introduced “mass production” which allowed the company to undercut its competitors in component supply.

• 1935 The workforce reached 3000.

• 1936 Clark and Heyne negotiated a number of key manufacturing licences from American companies, such as Breeze Corporation, for aircraft multi-pin electrical connectors; Federal Laboratories for Coffman starters (an explosive cartridge device used to start aircraft engines); and Pump Engineering Services Corporation for the manufacture of Pesco fuel pumps. Plessey went on to produce large numbers of Pesco fuel pumps for Rolls-Royce Merlin engines, and in 1940 the fuel pump for Britain's first jet engine. Also see Aircraft Industry Suppliers.

• 1937. 17th March. In order to raise extra capital to fund expansion, Plessey became a public company with a listing of its shares on the London Stock Exchange.

• 1939 The workforce reached 5000.

• WW II - During the war, Plessey produced many different types of components and equipment for the war effort, including shell cases, aircraft parts, and radio equipment such as the R1155 (receiver) and T1154 (transmitter). Following the bombing of its Ilford site, Plessey converted a tunnel, built as an extension of the London Underground Central Line, into a munitions factory. The company also built a new factory at Swindon, and opened several other shadow factories around the U.K. The small research and development activity was moved to Caswell House, near Towcester. The wartime workforce grew to over 11,000.

• 1946 With the coming of peace came a shrinking of the company to its core activities of radio, television and components; the workforce was reduced to 6000. In this year Byron Clark died.

• 1947 EMI placed an order for at least 100,000 radio and television sets.

• 1949 Plessey entered the hydraulics field. John Allen Clark joined the company.

• 1950 Michael William Clark joined Plessey and was appointed head of the Electronic Division. The number of research staff at Caswell reached 50, investigating new areas of business including ceramics, piezo-electric materials, ferrites, radar-absorbing materials, and tantalum capacitors.

• 1951 The new Communications Division was formed, with Michael Clark at its head, and a remit to catch up with its competitors in VHF and UHF equipment. Two senior managers, John Cunningham and Raymond Brown, left Plessey to form Racal. A licence was obtained from the US company Philco for the manufacture of semiconductors; the two companies set up a joint venture.

• 1952 A plant for making pure Silicon was established but the potential of the new field of “solid state technology” (the name given to it by Plessey) was not fully recognised.

• 1957 Manufacture of transistors began at Swindon. Plessey also manufactured the first VHF/UHF airborne radio in the UK.

• 1958 Royal Radar Establishment placed a contract with Plessey for integrated circuits. A new factory was opened at Cheney Manor (Swindon) for large-scale manufacture of Germanium transistors.

• 1959 The workforce was 20,000.

• 1961 Plessey ceased radio and TV manufacture. Philco pulled out of the Semiconductors JV. Plessey merged with the British Ericsson Telephone Co, and the Automatic Telephone & Electric (AT&E), doubling Plessey’s size to become Britain's largest manufacturer of telecommunications equipment (including the majority of the country's crossbar switches / exchanges). The change in nature of the company from manufacturer of components to provider of complete systems took place faster than the evolution of Plessey’s corporate planning leading to problems in later years.

• 1961 Plessey had 23 subsidiary companies , employing 17,500 persons. These included designers and manufacturers of radio and television apparatus and components, electronic equipment, telecommunication equipment, electrical equipment, electrical instruments and commercial hydraulic power systems, makers of general light engineering products and atomic energy power control equipment.

• 1962 Sir Allen Clark died. After boardroom disagreements, John Clark became MD; several directors resigned. Plessey were partners in the development of the Atlas Computer.

• 1963 Plessey took over Ducon (Australian telecommunications equipment and components manufacturer) followed by many other purchases in the following years. Development of an electronic telephone exchange (TXE2) started.

• 1965 US management consultancy McKinsey was brought in to review the company; the businesses were divided into Groups: Automation, Components, Dynamics, Electronics, Telecommunications, Overseas.

• 1966 MOS integrated circuits were produced at Swindon, making Plessey the first European manufacturer of such microcircuits.

• 1967 The 68,000 employees included 6,500 in research and development with R&D labs at Caswell, Roke Manor, Taplow, Havant and Poole.

• 1968 Plessey made an offer to buy English Electric Co: ' the largest takeover by value in British history'..

• 1968 After avoiding a forced merger with GEC, Plessey took over the numerical controls businesses of Ferranti and Racal, and Diac. ICT (International Computers and Tabulators) which was owned 18% by Plessey and 18% by English Electric Co was incorporated into ICL.

• 1971 Plessey installed its 100th TXE exchange, demonstrating the value of the 1961 merger. Plessey's defence and aircraft business were also prospering and the Swindon silicon chip business made a profit but the Numerical Controls business was losing money and substantial redundancies were required. Worldwide workforce reached 85,000.

• 1972 Chairman Sir John Clark, needing to tackle the loss-making activities, initiates a reorganisation into 24 businesses, each operating as separate profit centres, organised in nine divisions.

• 1974 75,000 employees worldwide. Digital telephone exchange (TXE4) ready.

• 1977 Post Office cutbacks hit Plessey’s business with 4800 workers made redundant. Threats to sell the semi-conductor businesses and microchip research centre (Caswell) were reversed by the Board.

• 1981 First System X electronic exchange delivered to British Telecom.

• 1984 First drop in profits for 8 years.

• 1985 Increased semiconductor sales; focus on core businesses; sale of non-core businesses.

• In December 1985 GEC launched a takeover bid for the Plessey Company, valuing the group at £1.2 billion. Both Plessey and the Ministry of Defence (MoD) were against the merger as GEC and Plessey were the two largest suppliers to the MoD and, in many tenders, the only competitors.

• 1986 GEC’s bid was referred to the Monopolies and Mergers Commission (MMC), whose report (August) advised against the merger although did favour a merging of telecommunications interests. The government blocked GEC's bid.

• 1986 Plessey acquired Ferranti Semiconductors, creating Europe's largest semi-custom chip company. A new state-of-the-art silicon chip production facility near Plymouth was opened.

• 1987 British Telecom (BT) decided to purchase System Y from Ericsson rather than System X from GEC and Plessey.

• 1988 Plessey and GEC merged their telecommunications businesses in a joint venture GPT (GEC-Plessey Telecoms). This was the UK's leading telecommunications manufacturer but it had excess production capacity.

• 1988 Plessey took over various defence suppliers in other countries to lessen its dependence on the UK Ministry of Defence and BT.

• 1988 30,000 employees (not including GPT)

• In 1988 GEC and Siemens AG set up a jointly held company, GEC Siemens plc, to launch a hostile takeover of Plessey. GEC Siemens' initial offer was made on 23 December 1988 valuing Plessey at £1.7 billion. Plessey again rejected the offer and again it was referred to the MMC. The original proposal envisaged joint ownership of all of Plessey's defence businesses, with GPT and Plessey's North American businesses split in the ratios 60:40 and 51:49 respectively. The level of GEC's involvement in the Plessey defence businesses was not likely to meet with regulatory approval and in February GEC Siemens announced a new organisation. The takeover was completed in September 1989.

See Also

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Sources of Information

• [1] Wikipedia
• [2]
• The Engineer of 30th August 1968 p306
• 1961 Guide to Key British Enterprises
• 1961 Dun and Bradstreet KBE
• 1937 The Aeroplane Directory of the Aviation and Allied Industries
• [3] A résumé of the history of Plessey compiled by Hugh Culverhouse