The Spanish government has come up with a two-stage solution to the problems of the former ITT defence electronics subsidiary Marconi Espana SA, where it took over control after ITT’s successor, Alcatel NV, paid $95m to write-off Marconi Espana’s debts. A new company is to be formed, owned 50-50 by AT&T-Philips Telecommunications and Amper SA, the ambitious communications and office systems manufacturer that is looking for partners all over Europe (CI No 704). The new company, as yet unnamed, will invest $30m in new production facilities and take on 450 of Marconi Espana’s workforce, retraining them to make telecommunications equipment for Compania Telefonica Nacional de Espana. Marconi Espana will then be left with 800 employees, to be reduced to 450 over time by attrition and an early retirement program, at which point it is thought that it would be able to operate profitably. The government is still looking for European partners prepared to take up to 49% of Marconi and transfer technology.