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June 11, 1990

FERRANTI’S NEW CHAIRMAN RESTRUCTURES THE FIRM BUT NOTHING LEFT IS SACRED

By CBR Staff Writer

Under the leadership of its new chairman Eugene Anderson, phase one of Ferranti International Plc’s recovery plan is underway. The new grouping is made up of three divisions, each with around UKP200m in turnover. They are: Aerospace Systems, Strategic Management Systems and Commercial & Industrial Systems. The first of these divisions, Aerospace Systems, brings together Ferranti’s aerospace operations, missiles and munitions businesses, putting them under the control of Ian Ball who was managing director of Ferranti Dynamics Division. Ferranti’s US company Marquardt Ltd which specialises in rocketing and propulsion may or may not be part of this division – its sale is said to be on ice as no offers came near reaching the asking price. The second division, Strategic Management Systems, will cater for large-scale, technologically-advanced and tailor-made systems in both the civil and the defence markets. Its managing director is Albert Dodd, a board director for Ferranti since 1987. His brief is to expand the division internationally by focussing on naval applications, radar early warning systems, and flight simulation. Commercial & Industrial Systems is the third division. This division will house control systems, computer-aided design and manufacturing systems, healthcare management systems, forecourt systems, business and personal telecommunications, advanced welding and metrology systems, oceanographic technologies and information technology services. Heading this rag-bag of computer systems operations is Bill Broekhuizen who was managing director of Ferranti Computer Systems Ltd. By the way Zonephone is part of this division, but no part of the Ferranti group has an assured future within the organisation. When asked about the future of specific Ferranti operations such as Zonephone, the stock answer is: a task force is looking into every aspect of the business. There will be rationalisation in certain areas, but it is too early to say which areas these will be. The task force is composed of both Ferranti and Coopers & Lybrand employees and is reported to be working 24-hour days to come up with a final recovery plan by mid-July when the company is due to report its year-end figures. One of the most difficult aspects of the shake-up is replacing the rather bureaucratic culture that a large defence company nurtures, with a sharper, faster market-led approach. To this end, Ferranti is trying to decentralise decision-making and empower lower and middle management. One ray of sunshine in Ferranti’s sky must come from the knowledge that it is no longer dependent on the EuroFighter Aircraft project which may now not happen – this is now GEC’s problem, something it acquired with Ferranti’s defence interests in February (CI No 1,373). Come July analysts expect the company to report losses in the region of UKP50m, however, whatever the actual figure, it is likely to be overshadowed by the accompanying announcement detailing which businesses are sporting a for sale sign. Anderson is meeting with Ferranti’s bankers on Friday to decide how to bankroll the restructuring.

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