VICKERS, LTD.

Hawera Star, Volume XLV, 11 December 1925, Page 5

VICKERS, LTD.

FIVE UNLUCKY YEARS.

HEAVY LOSSES SUSTAINED.

THE CAUSER GIVEN. BY CABLE—PRESS ASSOCIATION—COPYBIGHT. (Received Dee. 11, 10.10 a.m.) LONDON, Deie. 10. Sir R. McKenna \s committee attributes Vickers' huge loss to- — (1) The world reduction of armaments expenditure. (2) To foreigners manufacturing their own armaments. (3) To the decline in shipbuilding. (4) To foreign competition in world markets. (5) To financial stringency and European political unrest restricting credit. The company has experienced five unlucky years. The management had not the special experience necessary to direct such large industrial undertakings, particularly during the period of protracted and severe depression. Sydnev Sun Cable.

DRASTIC REORGANISATION

POST-WAR DEPRESSION. LONDON, Dec. 9. A drastic reconstruction of Vickers, Ltd., is recommended by the commission appointed to inquire into the company’s financial pisition in consequence of the reduced earning power arising from the post-war depression. The commission -advises that the capital be written down by £12,500,000. Ear-reaching changes in the methods of control are recommended, including the dismissal of redundant officials, shutting down plants, and winding up all unprofitable subsidiary affiliated enterprises. The commissioners aTe of opinion that the foregoing will enable the company to resume dividends. The chairman of Vickers, Ltd., in circulating the report, points out that the reduction of capital is essentially a book entry, and does not affect the intrinsic value of the firm’s assets.

The scheme of writing down the assets makes £1 shares worth 6s Bd. The Daily News says this drastic pruning of capital merely means a reduction of £1 shares, which touched 57s in 1919, and are now £7, to their nominal value. The deficit will he further met by an appropriation of £3,600,000 from reserve, and taking £632,000 from the profit and loss account. Three management hoards, dealing respectively with industrial, armament and shipbuilding finance, will he established.

Owing to the criticism that the management is inadequate to control the vast organisation, the report has caused a sensation in the business world. It is signed by Mr Dudley Docker, the Rt. Hon. Reginald McKenna and Sir William Plender. It gives among the main causes of the huge loss the world reduction of armaments, necessitating the development of the production of peace products, in consequence of which important participations have been taken in various industrial enterprises. The experts affirm that the management did not have the special experience required to direct the control of so_ large and varied a body of industrial undertakings, and recommend that some of the present directorate be reolaced bv new ones, and that all officials who hold unjustified ' engagements he dismissed.