There was once a very distinguished UK company which produced the first commercial computer, the first European microprocessor, and invented the semi-custom chip. It was a big contractor to the UK military.
The company decided to expand in the US and considered buying a company which appeared to be highly profitable on the back of arms sales.
In order to impress the UK company with its bona fides the US company took its executives to meet a gentleman in military uniform who purported to procure military equipment on a large scale for a South American country.
Impressed, the UK executives did the deal. The US company's sales turned out to be mostly illegal arms shipments which ceased as soon as the takeover went through. There was hardly any other income. The boss of the US company went to jail, and the fine old UK company went bankrupt.
MORAL: Look Before You Leap (Especially in the US)
I have a nice Ferranti paperweight. It is a red glass block with a F100-L clearly inside it! :-)
This fraud occured as I was starting my career in electronics with Ferranti in Manchester. Seeing a once great company brought to it's knees was not something a bright-eyed 18 yr old really wanted to see!
The general feeling within the company seemed to be that the accountants that recommended the deal had been rather negligent and were subsequently sued by Ferranti to recoup some losses. Sadly the company was unable to fight a drawn out legal battle and settled out of court for a fraction of what it lost. Fable 2: It's not only uniforms to be wary of - filofaxes and braces are equally dangerous.
For those unfamiliar with Sebastian Ziani de Ferranti ought to look him up - if I recall correctly, he was quite the British Edison. Fable 3: technical genius is sadly no guarantee of success and longevity.
Thanks cynical_fox, that's extremely interesting. There were some great pioneers in the early days of the UK electronics industry but by the 70s it was all run by second-generation duffers or accountants and the pioneering tradition disappeared.
I remember it well, I was an emplyee of the "Fine Old English Company", at the time and lost my job along with a great deal of other very good engineers. This was in fact the second time we were sold out. The first time was by HM Gov when the company came back into profit after being given cash support through a rough time. The House of Commons "Hansard" report from the Ferranti debate makes very interesting reading.
Yes Frank, I remember Ferranti getting a right old mauling from HM Gov over excessive profits on some missile or other. The management seemed to lose the plot. Keeping your main customer on-side is elementary common sense.
As I recall Ferranti was in dire straits in the 70s and owes a debt of thanks to Tony Benn for getting into the IC business. In the early 80s Ferranti were world no.1 in gate array ICs (then called ULA's), were a preferred supplier to Clive Sinclair and with the F100 had 1 of only 4 uP's in the world - along with Intel 8080, Motorola 6800, Zilog Z8. What could go wrong ? But they dithered too long on building a new fab and then when Fujitsu opened up shop across town the rest is just another sorry chapter in the history books. The dregs of Ferranti's semi biz now lingers on as part of Diodes Inc. Some would say: "an IC firm based in Oldham, Lancashire ? Well, what would you expect ?".
Our company was using the same accountants, Coopers and Lybrand, to audit our books at the time of the Ferranti/ISC/James Guerin debacle.
When I mentioned the fact that they were being sued by Ferranti he was quite blasé about it "Oh, we've got indemnity insurance to cover things like that".
It seems that the money men, with their braces and filofaxes, have moved on to bigger and better things. Ferranti is now small beer compared to AIG losing $60Bn in just one quarter.
Well DS, some would say the seeds of disaster were planted by Ferranti's semiconductor management with their refusal to invest in CAD and a refusal to invest in CMOS. Then along came LSI Logic with a massive investment in mainframes for CAD and the use of Toshiba's CMOS process - at that time the best CMOS process in the world - which did for Ferranti's ULA business.
Chris, you're right, the money men just don't seem to care because the guy who pays the fees usually gets what he wants and, if there's a cock-up, the insurance company pays. Mind you that didn't stop Arthur Andersen going under. But look at these guys who ran the ratings agencier who certified all the toxic debt 'AAA'. Who paid the ratings agencies their fees for doing the rating? The answer is the people trying to sell the debt. It's a system which is almost guaranteed to be corrupt.
Thanks DS. Dregs here reporting in for duty from his hotel room in chilly Shanghai.
I and many of my colleagues lived through the wole Guerin Debacle and took the opportunity it opened up to create something good from the ashes. Still taking on and beating the big guys, still providing employment for a few hundred people in Oldham, and still designing, building, and selling some of the most elegant discrete and analogue devices on the planet- it wasn't only about the ULA.
Well, what would you expect with a British engineering tradition like that behind you?
Well said Jon well said indeed
Hindsight is a wonderful thing, and now it is clear that the CMOS thing was a lead indicator of things to come for Ferranti. We did try but only in one of those typical British half-hearted ways. CAD was only just emerging back then, but yes it was all very cack-handed. More blame there at middle-mgmt than the top guys, I guess. They say most engineers, if they could be bothered to make the effort, would call their memoirs "I Told You So !" I'm up to chapter 38 with my mine.
I just googled Derek Alun-Jones wondering if he would rise to the bait but seems he died last yr. He actually managed to get a knighthood before it all unravelled. Apparently he enjoyed shooting, fishing & golf in his retirement. One can only wonder if the idyll was ever disturbed by the occasional sleepless night...
I expect Alun-Jones had as many sleepless nights as George Simpson is having or as many as Fred Goodwin is going to have. These top guys don't seem to give a monkey's for the opinion of 'ordinary' people.
The wheel seems to have come full circle. What remained of Ferranti Semic, after the takeover of the US company ISC had finished it off,was called Zetex. Zetex has now been taken over by a US company called Diodes Inc.
All the signs are that this will be a much happier marriage. We bought product from both companies before the takeover and are continuing to do so after. The lower volumes of late are for credit crunch reasons, nothing to do with their products.
For Jon in Shanghai. Dregs = last remaining part. Was meant as a statement of fact, nothing more, nothing less. Survival brings its own rewards. Hurrah for that. Stay warm.