Lucas will seek GEC payback

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The Independent Online
Lucas Industries will seek compensation from GEC over George Simpson's move to replace Lord Weinstock as managing director.

As speculation began that John Grant, the Lucas finance director, was a possible replacement for Mr Simpson, the company was yesterday trying to put a brave face on the departure of its chief executive.

Sir Brian Pearse, chairman, said the Lucas lawyers were working out exactly what they might claim from GEC. "I have never been in this sort of situation before," Sir Brian said.

Mr Simpson's contract runs until March 1997, though he is expected to leave well before that date as Lucas is keen to ease the uncertainty that has dogged the company for months.

Any claim would involve GEC having to buy out the remainder of Mr Simpson's contract, and include the cost of finding a successor. Sir Brian said the bill was likely to run into "tens of thousands" of pounds. He hoped that a replacement might be found by the autumn.

Mr Simpson, speaking after announcing a 38 per cent rise in profits to pounds 61.6m, said he had mixed feelings about leaving and accepted there was still much to do at the company. "There is still a long way to go because Lucas is competing in a very tough and competitive environment. But Lucas is in much better shape than it was a year ago," he said.

Sir Brian pointedly emphasised that Lucas would be considering internal, as well as external, candidates, and analysts identified Mr Grant as a front-runner.

Mr Simpson said he did not believe a bid for the company was a possibility, but analysts said Lucas remained a takeover target as the worldwide consolidation of automotive component makers gathers pace.

Sir Brian repeated that the aerospace division was not for sale, despite Lucas sources having told the Independent that a management buy-out had once been considered. He said the division, which would improve as the market picked up, would act as a counter to the expected decline in the growth of the car market.

The collapse of Fokker would have only a minor impact. "We are a small creditor," he said.

Lucas has ruled out buyingCarlo de Benedetti's 28 per cent stake in Valeo, the French car components group. But Mr Simpson conceded that Lucas would have to make another major acquisition to become a leading player in the global automotive market.

Investment Column, page 20