George Simpson, Baron Simpson of Dunkeld
Encyclopedia
George Simpson, Baron Simpson of Dunkeld (born Dundee
, 2 July 1942) is a Labour
member of the House of Lords
. He was made a Life peer
as Baron Simpson of Dunkeld, of Dunkeld
in Perth and Kinross
in 1997. In the late 1980s and early 1990s Simpson gained a reputation for turning around struggling companies. However, as CEO of Marconi plc he presided over one of the largest collapses in British corporate history. He has been on leave of absence from the House of Lords since 2004.
from its subsidiary Leyland-DAF
in 1988 and took over as managing director in January 1989. Simpson reorganised the company, replacing the three boards of Austin Rover, Land Rover and the Rover Group with one single board. By this time Rover had been privatised and sold to British Aerospace
(BAe) and by early 1990 Simpson had been appointed to the BAe board. In September 1991 Simpson also assumed the role of Rover chairman when the previous chairman, Sir Graham Day
, was appointed as BAe's interim chairman. Day promoted Simpson to deputy chief executive of British Aerospace in December 1991 to "toughen up" the company's management. He remained executive chairman of Rover but was replaced as managing director.
In November 1993 he was announced as CEO of Lucas Industries. At this time Simpson was admired for his role in turning the struggling Rover business around. Before he assumed his Lucas role he was part of the sale of Rover to BMW. He had been part of negotiations which would have seen Honda increase their 20% share in Rover to 47.5% with the aim for a stock market flotation. However BMW offered £800 million for the Rover Group which would free BAe from Rover's "quite large appetite for cash", average daily debt of £200 million and £700 million of other commitments. Simpson travelled to Japan to ask if Honda could match the offer, which they refused to do.
On 18 March 1996 Simpson was confirmed as managing director of GEC as replacement to Lord Weinstock
. In reporting the appointment The Independent
said, "Some analysts believe that Mr Simpson's inside knowledge of BAe, a long-rumoured GEC bid target, was a key to his appointment. GEC favours forging a national 'champion' defence group with BAe to compete with the giant US organisations." In 1999 he sold GEC's defence business, Marconi Electronic Systems
, to BAe for £7.7 billion and repositioned the company as a major player in the telecommunications industry as Marconi plc.
Marconi borrowed heavily to finance expansion into this market and was especially vulnerable to the burst of the dot-com bubble
. After a "botched" profits warning in July 2001 Simpson's deputy chief executive, John Mayo, resigned. A second profits warning in September 2001 saw Simpson and chairman Sir Roger Hurn resign.
The effect of this collapse was felt long after Simpson's resignation. Despite a major restructuring the company continued to struggle until 2005 when the loss of a major BT
contract forced the company to seek a buyer. Marconi was purchased by Ericsson
in 2005: several businesses not acquired by Ericsson formed Telent plc.
Dundee
Dundee is the fourth-largest city in Scotland and the 39th most populous settlement in the United Kingdom. It lies within the eastern central Lowlands on the north bank of the Firth of Tay, which feeds into the North Sea...
, 2 July 1942) is a Labour
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
member of the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
. He was made a Life peer
Life peer
In the United Kingdom, life peers are appointed members of the Peerage whose titles cannot be inherited. Nowadays life peerages, always of baronial rank, are created under the Life Peerages Act 1958 and entitle the holders to seats in the House of Lords, presuming they meet qualifications such as...
as Baron Simpson of Dunkeld, of Dunkeld
Dunkeld
Dunkeld is a small town in Strathtay, Perth and Kinross, Scotland. It is about 15 miles north of Perth on the eastern side of the A9 road into the Scottish Highlands and on the opposite side of the Tay from the Victorian village of Birnam. Dunkeld and Birnam share a railway station, on the...
in Perth and Kinross
Perth and Kinross
Perth and Kinross is one of 32 council areas in Scotland, and a Lieutenancy Area. It borders onto the Aberdeenshire, Angus, Dundee City, Fife, Clackmannanshire, Stirling, Argyll and Bute and Highland council areas. Perth is the administrative centre...
in 1997. In the late 1980s and early 1990s Simpson gained a reputation for turning around struggling companies. However, as CEO of Marconi plc he presided over one of the largest collapses in British corporate history. He has been on leave of absence from the House of Lords since 2004.
Career
Simpson joined The Rover GroupMG Rover Group
MG Rover was the last domestically owned mass-production car manufacturer in the British motor industry. The company was formed when BMW sold the car-making and engine manufacturing assets of the original Rover Group to the Phoenix Consortium in 2000....
from its subsidiary Leyland-DAF
Leyland Trucks
Leyland Trucks is the UK's leading medium & heavy duty truck manufacturer and is based in the town of Leyland, Lancashire. It emerged from the bankruptcy of DAF NV as the result of a management buy-out in 1993, and was acquired by PACCAR in 1998, of which it is now a subsidiary...
in 1988 and took over as managing director in January 1989. Simpson reorganised the company, replacing the three boards of Austin Rover, Land Rover and the Rover Group with one single board. By this time Rover had been privatised and sold to British Aerospace
British Aerospace
British Aerospace plc was a UK aircraft, munitions and defence-systems manufacturer. Its head office was in the Warwick House in the Farnborough Aerospace Centre in Farnborough, Hampshire...
(BAe) and by early 1990 Simpson had been appointed to the BAe board. In September 1991 Simpson also assumed the role of Rover chairman when the previous chairman, Sir Graham Day
Graham Day
Sir Judson Graham Day ONS is a Canadian and British business executive, lawyer and corporate director who lives in Hantsport, Nova Scotia....
, was appointed as BAe's interim chairman. Day promoted Simpson to deputy chief executive of British Aerospace in December 1991 to "toughen up" the company's management. He remained executive chairman of Rover but was replaced as managing director.
In November 1993 he was announced as CEO of Lucas Industries. At this time Simpson was admired for his role in turning the struggling Rover business around. Before he assumed his Lucas role he was part of the sale of Rover to BMW. He had been part of negotiations which would have seen Honda increase their 20% share in Rover to 47.5% with the aim for a stock market flotation. However BMW offered £800 million for the Rover Group which would free BAe from Rover's "quite large appetite for cash", average daily debt of £200 million and £700 million of other commitments. Simpson travelled to Japan to ask if Honda could match the offer, which they refused to do.
On 18 March 1996 Simpson was confirmed as managing director of GEC as replacement to Lord Weinstock
Arnold Weinstock
Arnold Weinstock, Baron Weinstock was an English businessman whom The Guardian newspaper called "Britain's premier post-second-world-war industrialist."...
. In reporting the appointment The Independent
The Independent
The Independent is a British national morning newspaper published in London by Independent Print Limited, owned by Alexander Lebedev since 2010. It is nicknamed the Indy, while the Sunday edition, The Independent on Sunday, is the Sindy. Launched in 1986, it is one of the youngest UK national daily...
said, "Some analysts believe that Mr Simpson's inside knowledge of BAe, a long-rumoured GEC bid target, was a key to his appointment. GEC favours forging a national 'champion' defence group with BAe to compete with the giant US organisations." In 1999 he sold GEC's defence business, Marconi Electronic Systems
Marconi Electronic Systems
Marconi Electronic Systems , or GEC-Marconi as it was until 1998, was the defence arm of The General Electric Company . It was demerged from GEC and acquired by British Aerospace on November 30, 1999 to form BAE Systems...
, to BAe for £7.7 billion and repositioned the company as a major player in the telecommunications industry as Marconi plc.
Marconi borrowed heavily to finance expansion into this market and was especially vulnerable to the burst of the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
. After a "botched" profits warning in July 2001 Simpson's deputy chief executive, John Mayo, resigned. A second profits warning in September 2001 saw Simpson and chairman Sir Roger Hurn resign.
The effect of this collapse was felt long after Simpson's resignation. Despite a major restructuring the company continued to struggle until 2005 when the loss of a major BT
BT Group
BT Group plc is a global telecommunications services company headquartered in London, United Kingdom. It is one of the largest telecommunications services companies in the world and has operations in more than 170 countries. Through its BT Global Services division it is a major supplier of...
contract forced the company to seek a buyer. Marconi was purchased by Ericsson
Ericsson
Ericsson , one of Sweden's largest companies, is a provider of telecommunication and data communication systems, and related services, covering a range of technologies, including especially mobile networks...
in 2005: several businesses not acquired by Ericsson formed Telent plc.