View from City Road: Steady as she goes with Weinstock

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The Independent Online
Two hands popped up yesterday at GEC's annual meeting to vote against the re-election of Lord Weinstock, just turned 70, as managing director. The resolution went through anyway of course. No individual shareholder so much as spoke to oppose the resolution, while institutional shareholders with strong objections to the continuing reign of Lord Weinstock - invited by the GEC board to stay on for two more years - had doubtless restricted themselves to making their views clear in private.

The City has a love-hate relationship with GEC. The company's inherent strengths - conservative accounting, cash generation and robust market positions in areas of advanced technology and the success of the GEC-Alsthom joint venture - are unequivocally admired. There is, though, disappointment at recent share price performance, the lack of any strong earnings momentum that could boost GEC's rating, and the unproductive pounds 2.8bn cash mountain. Professional investors are restless and want excitement.

Despite speculation that GEC is on the verge of a big acquisition, nothing material is in the offing. Similarly, ailing companies in GEC's newly designated industrial division are unlikely to be sold at this stage of the cycle while recent talk that GEC Plessey Semiconductors is to be sold to Rockwell International for pounds 150m is wide of the mark. Yet GEC is Lord Weinstock's personal creation over the past 30 years. It is hard to believe he will not bow out on a rousing note before his final two years at the helm are up.