Born: 29 July, 1924, in London
Died: 23 July, 2002, in Wiltshire, aged 77
ARNOLD Weinstock was one of the most charismatic and adventurous industrialists of the postwar era. With much determination and foresight he created an international conglomerate whose core business was electrical goods. By the time he handed over a much changed GEC, its interests spanned fridges, torpedoes, petrol pumps and telephone exchanges. Weinstock ensured that GEC was a world-beater.
After 33 years’ stalwart service, in his retirement, he witnessed the collapse of the once proud house of GEC (renamed Marconi) and the share price tumbled dramatically. Weinstock, a most successful owner and breeder of racehorses, accepted the sad turn of events with an air of sanguine resignation.
Arnold Weinstock was the youngest of six children of Polish refugees. When he was ten his parents died and he was educated in North London and at the LSE. Called up in 1944, he worked in the Admiralty. After the war he started a property development company. In 1949 he married Netta Sobell, the daughter of the owner of an electrical goods company called Radio and Allied Industries.
His father-in-law went into hospital in 1954 and Weinstock supervised things while he was away. This short stay was to last a third of a century and the much fractured electrical industry was never the same again. Weinstock soon proved he had a talent for spotting a business opportunity and pressing on relentlessly until he won.
The company accepted a bid from GEC in 1955 and Weinstock became in overall control of the enlarged company. In the next five years, by prudent management and aggressive selling, GEC’s profits rose by 200 per cent. The shares, and Weinstock, were the investors’ darling.
Weinstock believed that Big is Beautiful. He had seen how large companies in the United States could create economies of scale and enhance profit margins. He set about consolidating the UK electrical industry. His dynamic and far-reaching proposals were put into action in 1967 when GEC launched a bid for its principal competitor, AEI.
The bid, by the standards of the day, was massive: 120 million. It was viewed with much scepticism in the City. Weinstock lobbied the big investors in London and around Charlotte Square most persuasively: after all, he had one trump card up his sleeve. GEC’s profits record under his stewardship were superior and Weinstock was palpably go-ahead and wanted to rationalise a sleepy industry. Institutions and private shareholders backed him almost to a man.
But Weinstock did not rest on his laurels. By 1968 he had bought both English Electric and Elliot-Automation. He now had to reorganise and restructure the new company and mould it into a cohesive industrial force. Factories had to be closed and work forces reduced. It was something that Weinstock approached with a cool reality. For him, the bottom line was all-important.
He achieved this vast programme with unflinching efficiency. GEC now had an annual turnover of 1,000 million. Weinstock, typically, refused to move to some specially built office block on the Thames. Instead he continued to manage this expanding empire from a relatively insignificant office in Mayfair. He firmly believed in maintaining a tight grip on expenditure and executive perks were at a minimum.
Nothing typified his parsimony more than his love of cash in the bank. In the Eighties this had grown to a staggering 1.5 billion. Institutions raised worried eyebrows that instead of sitting on this mound of gold Weinstock should be investing it in new products, plant and machinery and research and development.
But this Midas man of industry carried on regardless. In 1973 he had secured a deal with the Tory government that gave a virtual monopoly to GEC for the creation and supplying of the UK nuclear industry. In 1974 he came to Scotland and added to the GEC portfolio of companies by buying outright Yarrow Shipbuilders. In 1979 he took over and then transformed Avery, the weighing machine company.
There were, however, some clouds on the industrial horizon. Two setbacks occurred in the mid-Eighties when GEC was not awarded the Nimrod early-warning contract and in 1985 its bid for Plessey was blocked by the Monopolies Commission. Although he rebid successfully for Plessey in 1989, Weinstock, having been the blue-eyed boy of Whitehall and financiers, was now having to face some harsh economic changes.
Many thought that by 1987 he should have reduced the workload. He didn't. He persisted with complex takeovers and bought an American petrol service chain for $240 million. Like many before him, Weinstock, perhaps, lingered too long before (reluctantly) departing. The industry was coming to terms with modern technology and a young breed of executives were snapping at the Weinstock heels.
In 33 years, Weinstock had seen GEC’s profits grow from 4 million to 980 million. He retired in 1996, but then saw GEC’s shares face a turbulent few years. Now called Marconi, the company tried to become a telecoms equipment maker. Personally, he saw millions of pounds wiped off his investment. He is thought to have held 40 million shares in Marconi. From a peak of 1250p, Marconi are now around 4p. A savage blow, but particularly so for a man who all his life had been financially cautious and weighed up any risk with a steely determination.
Weinstock had two other passions. Opera and horses. He owned a string of thoroughbreds and was one of the most successful owners of recent years. He saddled two majestic classic winners in Troy and Ela-Mana-Mou. The jockey, Willie Carson, who was on Troy at Epsom, recalled Weinstock as someone "who loved his racing and his horses. It really revved him up especially seeing a good horse."
Pilsudski proved to be one of Weinstock’s most prolific winners with victories in the 1996 Breeders’ Cup, the 1997 Dubai Championship Stakes and the Japan Cup. His last classic winner in those famous pale blue, yellow and white colours was Golan in the 2001 2,000 Guineas. The horse is due to run in the King George at Ascot this Saturday.
Weinstock was often seen in his familiar front-stalls seat at Covent Garden - where he had a somewhat irritating habit of beating time to the music. He was a passionate lover of Wagner and admired great conductors. Riccardo Muti was a particularly favourite and Weinstock often travelled to Milan when he was conducting at La Scala.
He always wanted to share his passion for music and quietly helped the Royal Opera over the years with funding the live relays from Covent Garden into the Piazza.
He was knighted in 1970 and made a peer in 1980. He was a trustee or sat on the board of numerous charitable and educational institutions and was an honorary fellow of the lSE and a Fellow of the Royal Statistical Society. His son died of cancer in 1996 and he is survived by his wife and daughter.
Called in for a drubbing
LORD Weinstock’s drubbings were memorable, and I was on the receiving end of two. The first was over an article I had written attacking him for not spending GEC’s legendary 2 billion cash pile. I was summoned to the nondescript head office at Stanhope Gate. As I sat in the chair in front of his desk, where GEC divisional managers had trembled as their careers rose and fell by the monthly figures on the most clinical calculating machine in industry, Weinstock countered that likely takeover candidates were far too expensive, he would never take the company into volume consumer electronics, that saving money was every bit as entrepreneurial as spending it, and that the cash pile was an enormous positive for the company, not a negative. It was penny-watching, not corporate vanity, that was good.
How true that proved, as his successors launched Britain’s landmark business on a massive spending spree that ended in utter disaster. Shares in Marconi (the renamed GEC) now stand at just 4.04p, valuing the debt-saddled business, once worth 35 billion, at less than 113 million.
The second memorable occasion (sitting in the same electric chair) was to receive a stunning lecture on opera. Ten minutes into an intensely detailed explanation of GEC’s financial year, he suddenly broke off for a discussion on the performance of a soprano at a Covent Garden opera we had both attended the previous evening (Weinstock usually sat in the same stalls seat, six rows from the front).
I had made a mad error in complimenting her performance. "No voice! No vocal presence at all!" thundered the tycoon. "Saw her at La Scala last month - could barely be heard. And caught up with her again at the Staatsoper Berlin last week. Very disappointing!" He proceeded to describe in critical detail the performances of half a dozen top sopranos in the role and what made them great. He also converted me to the work of the La Scala conductor, Riccardo Muti.
How even his harshest critics now wish he could have kept the baton for longer at the opera that was GEC.