The Bizarre Demise of Ferranti

Panorama of Middleton, Manchester, 1981

Panorama of Middleton, Manchester, 1981

The photo above shows a panorama of Middleton, a suburb north of Manchester, one summer afternoon in 1981, while I was living there, and working as an apprentice at a famous British electronics company, Ferranti. For a few summers during my engineering training, I did indeed find myself working in some of the “dark satanic mills” of Manchester! I couldn’t have foreseen at the time that, within about 10 years, Ferranti would go out of business in a spectacular collapse, induced at least partially by an international fraud.

I mentioned in a previous post that, having decided during 1980 that I should try to obtain a degree in Electronics, I began searching for an employer who could sponsor me for what was called a “sandwich course”, which interleaved periods of industrial work with the academic study terms. My efforts to find such a position eventually paid off, and I was offered a Student Apprenticeship with Ferranti, commencing in July 1981, whereby I would work for the company each summer while at university. Thus, I lived and worked in Manchester for 3 summers, from 1981 to 1983, but, for reasons that I’ll explain below, I did not return there after graduating in 1984.

Live by the Sword…

In those days, Ferranti was, although not one of the largest electronics companies in Britain, certainly one of the best-regarded (the “Big Three” electronics companies were GEC, Marconi and Plessey). Ferranti had pioneered the development of computers in Britain.

When I received the offer from Ferranti, it caused some discomfort among my family and friends, because the company had a justified reputation for deriving much of its income from military contracts. However, not all of Ferranti’s work was for the military, so I was given the option to work for the company only in civilian product areas.

As things were to turn out, Ferranti did indeed “live by the sword and die by the sword”.

The Boys (& Girl) of Summer

Ferranti’s Student Apprenticeships were arranged so that we were employed by the company directly during each summer break from university. We then attended university for a normal academic year, from October through to the following June.

In July 1981, I presented myself at Ferranti’s Training Centre, at the so-called Avenue Works in Chadderton (sometimes referred to as the Hollinwood plant), to begin my apprenticeship. Most of my fellow apprentices were male, but there was (apparently for the first time ever) one girl in the group.

The first summer consisted of the “EP1” practical training, which was required by the Institution of Electrical Engineers. We learned technical drawing, soldering, welding, metal fabrication, machining, and many other practical skills. This was very intensive training; for example, we spent 4 weeks learning to solder, and were required to pass precision tests.

Our fabrication, welding and machining skills were tested by an assignment to build a toolbox from steel. The diagram below, which I drew in my Ferranti log book, shows how the toolbox was constructed. I still have that toolbox, which is far stronger than similar shop-bought items.

Diagram of the Toolbox I Constructed at Ferranti, 1981

Diagram of the Toolbox I Constructed at Ferranti, 1981

Wafers at Gem Mill

My second summer at Ferranti involved more uncertainty about what my assignment would be. Initially, I was told that there was actually no assignment for me, and that I should return to the Training Centre. After a short time there, several of us were assigned to a photoelastic stress analysis project at the Van Carrier manufacturing division of Ferranti Engineering plc, which was situated in the front offices of what had been the Avenue Works transformer factory.

The project was quite interesting, but obviously it didn’t have anything to do with electronics. I was thus relieved when, about half-way through the summer, an opportunity arose for me to be transferred to the semiconductor manufacturing plant at Gem Mill, Chadderton, to write some software.

Description of Silicon Wafer Test Software, from my Log Book, Gem Mill 1981

Description of Silicon Wafer Test Software, from my Log Book, Gem Mill 1981

Sadly, I took no photos of the Ferranti sites at which I worked, most of which have now been demolished. Therefore, I’ve used a Wikimedia Commons image of Gem Mill below.

Chadderton,Oldham - geograph.org.uk - 1547

Thanks, But I Won’t Be Back

As I discussed previously, my goal in obtaining an electronics degree had always been to get a job with the BBC. It may seem surprising that the terms of Ferranti’s apprenticeship did not impose on us any obligation to work for Ferranti after graduation. Similarly, Ferranti were under no obligation to offer me a job. Both parties were free to terminate the arrangement at any time.

During the Spring 1984 “milk round” (when employers visited universities searching for promising new graduates), I applied to the BBC and, after several interviews, I was hired.

As a result, I had to write to the Training Officer at Ferranti, to tell him that I would be accepting the BBC’s offer and thus would not be returning to Manchester. I expressed my gratitude for the “leg up” that Ferranti had given me when starting my new career. I wasn’t really expecting a reply, but, to my surprise, he did write back, indicating that he was very happy that Ferranti had been able to help me along.

I did feel a little guilty about walking away from Ferranti at that time. I was all too aware that this was the one company that had given me a second chance, at a time when no other engineering employer was interested in me. I had also gained some valuable experience in the electronics industry, which did indeed open the door to other employment opportunities later on. It turned out to have been a “wise” decision on my part, but few could have foreseen that at the time.

Like a Bad Spy Thriller

When I worked there, Ferranti always had the “big company feel”. Everyone was expected to slot obediently into predefined roles, and there was little room for individuality or special skills. (As an engineering student with artistic skills, I was always regarded as a very odd creature!) When I made the decision not to return, however, I certainly had no forewarning that Ferranti might not even exist much longer!

I heard the astonishing news of Ferranti’s demise only after I had moved far away to California, and, in my busy new life, I had almost forgotten that I’d ever worked there.

What I heard sounded so much like the plot of a bad spy thriller novel that I had to double-check the details to be sure that it was true. This story has been told in great detail elsewhere (particularly in the book Ferranti A history: Volume 3, by John F Wilson), so I will just summarize the main points here.

Cover of John Wilson's Book about the Demise of Ferranti

Cover of John Wilson’s Book about the Demise of Ferranti

It seems that, amid the Thatcherite business hubris of the 1980s, Ferranti’s management had become convinced that they needed to expand the company in the United States, and that the best way to do that would be to merge with a US defense electronics company. Unfortunately, when selecting a company, they made an appallingly bad choice. They selected a Pennsylvania-based company called International Signal & Control (ISC).

There were warning signs that ISC was a suspect operation, which Ferranti’s management and their auditors managed to miss. (For example, although nominally a US operation, ISC had chosen to register in Britain, simply to take advantage of relatively lax regulation of businesses in Britain.)

Soon after Ferranti merged with ISC, it began to become apparent that some of ISC’s major contracts actually didn’t exist at all, and that ISC’s management had engaged in elaborate deceptions to maintain their fraud. The CEO of ISC, James Guerin, was actually circulating money through front companies to give the impression that progress payments were being made on the fictitious contracts, but he couldn’t keep that up forever, so when he was no longer able to borrow more money, the whole fraud was exposed.

To be fair, though, the ISC fraud wasn’t the sole cause of Ferranti’s demise. This was the time of the end of the Cold War, when defense budgets were being slashed and contracts canceled. As Wilson mentions in his book, Ferranti had for some time been too dependent for its income on military projects, so these cutbacks exacerbated the company’s already-serious predicament, and led to its bankruptcy.

Look Back in Astonishment

It seems astonishing, and quite sad, to reflect that, that, only 35 years ago, I was working for a British company that was not only designing integrated circuits and computers, but also manufacturing them in Britain. Additionally, at that time Ferranti was designing and manufacturing many other kinds of engineering products, including some that I worked on briefly, such as telephones and van carriers. I’ll probably write more about those other products in future posts.

Whatever bad managerial decisions led to Ferranti’s demise, it still seems tragic that so much world-class innovation and effort came to so ignominious an end, and of course it was particularly disastrous for the all the highly-skilled and hard-working staff who lost their jobs when the company folded.

One thought on “The Bizarre Demise of Ferranti

  1. What a fascinating story, and another sad example of how Britain was once in the forefront of some new technology, only to lose the initiative. I was also in Manchester in 1981 taking a masters course in computing. There were still people there who talked of the Atlas collaboration between Ferranti and Manchester University and its pioneering contribution to the development of computers and computing.

    Like

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