Associated Electrical Industries

Associated Electrical Industries (AEI) was a British holding company formed in 1928 through the merger of the British Thomson-Houston Company (BTH) and Metropolitan-Vickers electrical engineering companies. In 1967 AEI was acquired by GEC, to create the UK's largest industrial group. A scandal that followed the acquisition is said to have been instrumental in reforming accounting practices in the UK.[1]

Associated Electrical Industries
TypeHolding company
IndustryElectrical engineering
Founded1928
Headquarters
United Kingdom
ParentTelent

Main subsidiaries

Takeover and restructuring

Rivalry existed between Metrovick and BTH brands in the Electrical Engineering field, resulting in internal competition and duplicated management. In 1959 AEI decided to remove those brands and consolidate both as AEI brands, resulting in internal problems and a fall in sales and market value. The abandonment of two well known trademarks and the replacement with the unfamiliar AEI branding lost the company significant work to competitors and resulted in a market weakening of the company.

These problems paved the way for a takeover in 1967 with the recently restructured General Electric Company plc (GEC) under Arnold Weinstock. The following year GEC merged with English Electric. GEC took over AEI Cables and Hackbridge Cables Co. in 1967, forming the company AEI Cables Ltd. in 1968.[2]

GEC also went through substantial restructuring, including in 1989 forming GEC ALSTHOM and Cegelec Projects. GEC ALSTHOM was created from the GEC's Power and Transport businesses (originally AEI (previously BTH and Metrovick) and English Electric) and the French Compagnie Générale d'Electricité (CGE). The merger was to enable both companies a gain a greater export potential into Europe.

The GEC facilities in Rugby were split into GEC Alstom and Cegelec Projects, but in 1998 the two companies were reunited under the Alstom banner.

An issue relevant to UK employment and insolvency law arose in 2011, when there was a steep increase in the price of copper; AEI Cables Lid. experienced difficult trading conditions and declared itself insolvent. Considering making some staff redundant, they were challenged in the Employment Tribunal for failing to comply with the requirement for 90 days of consultation under TUPE law (section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992). The Employment Appeal Tribunal ruled that it was not reasonable to expect an insolvent employer to continue trading for 90 days in order to accommodate this legal requirement and in these particular circumstances ruled that 60 days was sufficient.[3]

References
  1. Rutherford, Brian A. (28 July 2006). "The AEI-GEC gap revisited". Accounting, Business & Financial History. 6 (2): 141–161. doi:10.1080/09585209600000036.
  2. AEI Cables Ltd., About us - Celebrating 175 glorious years, accessed 5 February 2021
  3. Employment Appeal Tribunal, AEI Cables Ltd. v GMB and others, 5 April 2013, accessed 5 February 2021
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