Final victory for GEC Siemens Plc in the battle for Plessey Co Plc on Friday puts the spotlight on GEC Plessey Telecommunications Ltd this morning, and the future for the company looks bleak. Although GEC will hold 60% and Siemens 40% of the business, the medium term prospect is for substantial further job cuts as the company becomes a remote branch operation of Siemens’ telecommunications business. While it was always clear that on public telephone exchanges, the successor to System X would have to be developed with one of the dominant players in the world market, the Plessey-developed ISDX PABX was a highly successful product in the UK market and beginning to make its mark on the continent. And in the US, Stromberg Carlson has been carving out a niche for itself with its DCO rural exchange. Following its deal with IBM on Rolm Corp, Siemens already has more PABXs than it needs, and is not likely to want its own products to have to compete with those of a company in which it has a 40% stake, while in the US, it is vital to Siemens to build as big a base as possible with the EWSD exchange, so that the Stromberg-Carlson switch is an irritating competitor. It may be that to keep GEC sweet, Siemens will pay lip service to keeping the GEC Plessey products going, but that will not prevent Siemens salespeople telling customers when ever it comes up against GEC Plessey competition Don’t touch that product: we own 40% of that company and the product line will be terminated shortly.
