What must Lord Simpson, the reluctant chief executive of Marconi, do to return the company to its former glory? This is the question being debated in the City as Marconi faces relegation from the FTSE 100. But hang on a minute – when were Marconi's golden days?
Formerly known as GEC-Marconi and plain old GEC before that, the company was run between 1963 and 1996 by Lord Weinstock, who built it into a powerful conglomerate. At the last annual general meeting, the current board was reminded time and again of how it had turned a cash-rich business into a flaky, debt-ridden one. As one former executive put it, under Lord Weinstock GEC wasn't afraid to keep its money in the bank. This is true, but there is a tendency for people to view the past with rose-tinted glasses.
Miles Saltiel, a former executive at GEC-Marconi's head office during the Eighties who now runs WestLB Panmure's London technology research team, offers a different view. Lord Weinstock, a cautious man by nature, built up a huge cash mountain, which Mr Saltiel argues was one of the factors that led to GEC's "alienation from the capital markets".
This, Mr Saltiel claims, combined with the fact that many government customers were disappearing at the end of the Cold War, led to GEC's share price being depressed for 15 years.
Today, however, Marconi, is in worse shape that it ever was in the old days. At the mercy of hungry hedge fund managers who are selling its stock short every time bad news hits the wires, the company's share price is a shadow of its former self.
Marconi has hit a low ebb. It should, therefore, use this opportunity to splurge the City with its bad news: discounted rights issues, write-offs, dividend cuts and disposals – as much crud as Lord Simpson can throw at the market.
Year-end results to March 2002 will be bad. We all know that. So if Marconi packs in all the painful restructuring now, then next year it will have the opportunity to rebuild its reputation. Just don't judge it on the GEC of old.
Inefficient, unreliable and ruled by the unions: you'd have thought Labour would be itching to break up one of the last bastions of unreformed nationalised industry. No so, it seems, with mail delivery.
As we reveal today, the Department for Trade and Industry has turned a blind eye to Consignia's shenanigans, which could potentially put off real competition from entering the market – at the taxpayers' expense, too.
Consignia, the new name given to the Post Office, is owned by the state. Some 40 per cent of its profits go directly into Treasury coffers. The rump is meant to be reinvested in its business, presumably to do something about the shocking number of letters that go astray every week.
But recently Consignia has been spending the money on other things – most blatantly by hiring City law firm Clifford Chance to sue rival Hays, which it claimed was in breach of the Postal Services Act. The case hasn't been settled, but whether or not Hays is in the wrong isn't the point.
The services of top-flight lawyers don't come cheap. An hour of their time costs around £400. So it is fair to assume that Consignia has spent thousands, if not millions of pounds, to scare off a rival.
There's more. Wednesday was the deadline for comments to be posted on Hays' proposal to take on three licences. Consignia won't talk openly about what it told PostComm, the regulator. But we have learnt that it was far from complimentary.
Consignia claims that it is concerned about maintaining a "universal service", and I don't doubt this for one moment. But from the outside it appears to be acting like a playground bully, hitting out at its adversaries. The Department of Trade and Industry couldn't give two monkeys, it seems. "Day-to-day running of postal businesses is a matter for the board of Consignia," it says rather limply.
Companies wanting to take advantage of the market feel understandably let down by Patricia Hewitt's department. So why has the Government turned a blind eye? Answers on a postcard, please.
Speaking to staff at brewer and pub owner Wolverhampton & Dudley last week was an uplifting experience. From the receptionist to the chief executive, Ralph Findlay, there was a sense of triumphant relief, having at last seen off a painful hostile bid.
But the hard work doesn't end there. Shareholders who backed the management want their reward. Mr Findlay must now look seriously at a break-up of the businesses to unlock value.
Clayton.email@example.com Jason Nissé is awayReuse content