Corporate restructuring in the telecommunications equipment industry: The case of Spain in the late twentieth century

Abstract

AbstractA new technological paradigm coupled with a powerful wave of deregulation and liberalisation that was unleashed worldwide from the 1980s onwards acted as a catalyst for profound transformation in the telecommunications equipment industry, which was dominated at the time by large multinational corporations. These developments, in turn, led to worldwide restructuring in the sector. The present paper hypothesises that the sector’s oligopolistic structure remained, but that it did so under the leadership of new global players that sought to impose their strategies in response to the prevailing conditions. The paper also aims to explain the reasons for the global restructuring in the sector by looking at the strategies, choices, and decisions of the involved multinationals from the viewpoint of the nation-state. Based on the assumption that a separate analysis of one national unit can help to understand the process as a whole, the paper draws on primary sources to describe and analyse the adjustment path within Standard Eléctrica, a Spanish subsidiary first of IT&T and then of Alcatel.Keywords: IT&TAlcatelStandard EléctricaAmerican telephone and telegraph Cotelecommunications equipment industryrestructuringoligopolies Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 European Commission (Citation1997), p. 39; Crandall and Flamm, eds. (Citation1989); Feldstein (Citation2007), p. 420. Heated debates preceded the AT&T break-up: Agnew and Romeo (Citation1981), pp. 273–288. In their influential report to President Valéry Giscard d’Estaing, Nora and Minc (Citation1978) coined a new word – “télématique” (télécommunication + informatique) – and proposed as a cornerstone the strategy of “marrying” computers and communication technologies. Some years later, Spanish President Felipe González commissioned the prestigious sociologist Castells (Citation1986) to undertake a similar study, which inspired the Socialist attitude of putting pressure on multinationals to negotiate industrial restructuring.2 IT&T had technological problems, was oversized from the legal and financial point of view, and had an inadequate technical and commercial structure: Suard (Citation2002); Zanfei (Citation1992), pp. 83–105. The multinational openly regarded SEL as a German firm because of its manufacturing capacity and independence research (Ziegler, Citation1997, p. 84).3 The ERI, created in mid-1983 in Amsterdam, consisted of half a hundred of European entrepreneurs working at both national and European level to strengthen the competitiveness of the European economy, which was then lacking in dynamism and innovation compared to those of Japan and the United States.4 Quatrepoint (Citation1986), p. 8.5 Batt and Darbishire (Citation1997), pp. 59–79; Baskoy (Citation2008); Thatcher (1999), p. 199. The chronology matters to some extent: Spain joined late processes such as the Italian; for the Italian firms, see also Colli and Vasta (Citation2010).6 Becattini (Citation2009), p. 343; Kaldor, Selchow & Murray-Leach (Citation2015), p. 120.7 Ethier (Citation1997), p. 2.8 OECD (Citation1993), pp. 27–28. It is worth noting that in the 1980s the EEC has not adopted yet the European Works Council directive, which favoured the re-emergence of transnational labour relations in the 1990s: Erne (Citation2008), p. 134.9 The liberalisation of telecommunications in Spain was a process with negotiated delays compared to Europe as a whole and gradual implementation. It began in the mid-1980s and culminated in 1998 with the opening of the fixed-line telephone service to the competition. Europe was the driving force behind the way forward, but it was targeted outside the sector - control of inflation - that led the government to accelerate reform. From 1987 to 1993, the socialist government prioritised regaining control of telecommunications policy, modernising the service and universalising access to fixed voice telephony. Subsequently, between 1993 and 1996, the Executive sought to use liberalisation politically as an incentive to reduce telecommunications prices and to contain inflation close to the Maastricht Treaty requirement. Finally, in the short period 1996 to 1998, the right-wing PP government accelerated liberalisation and established the new regulatory framework: Calzada and Costas (Citation2016), pp. 3–55.10 By 1970, SESA ranked third among the IT&T largest manufacturing units in Europe: United States Congress (Citation1971), p. 81. Despite acting in a smaller domestic market than that of the large European countries, the Spanish subsidiaries of the IT&T group accounted in 1985 for 4.83% of the group’s sales (Standard Eléctrica S., 2016a, 1987, p. 24) and forecasted proportionally higher growth than the rest of the group.11 Canalejo (Citation1993); Rama and Holl (Citation2009), pp. 182–204. As a successor of Manuel Márquez Balín, Miguel Canalejo, an industrial engineer, belonged to the third generation of SESA managers, already in Alcatel’s era.12 Llerena, Matt & Trenti (Citation2000), pp. 223 and 226; Edquist, Hommen & Tsipouri (Citation2000), p. 226.13 Sáez, Ángel and Morlán (Citation2009); Valdaliso (Citation2003), pp. 52–67; for a classic text on the industrial policy debate, see Johnson (Citation1984); for a compelling argument on industrial policy in the US, see Cohen and DeLong (Citation2016), p. 103. Unlike other former IT&T subsidiaries, SESA already counts with some studies, such as Chakravarthy (Citation1996, pp. 529–539) from the management standpoint and Kippenberger (Citation1998, pp. 37–40) for corporate changes in general.14 It connects with the debates of the 1980s on the relationship between Governments and multinationals, reflected by Poynter (Citation2013); it is also close to Colli and Piscitello (2014, 487–508), who analyse the interplay between incumbent telecommunications operators and their homegrown Administration, claiming the role of governments as goal-oriented strategists. The ceding of sovereignty by the nation-state to institutions and markets along with the acquisition of new spheres of control to foster “national competitiveness” and influence the pace of globalisation is controversial: Cable (Citation1995), pp. 23–53.15 Parliamentary sources, both Spanish and foreign, stand out as well. Generally, the press received information directly from the interlocutors, so their data could be considered reliable. However, some of them had to be cleared up, as it happened, for example, when UGT was forced to amend the erroneous figures provided by the press: UGT Metal press release to all media, 16 November 1983, Archive of the Largo Caballero Foundation (AFLC in its Spanish acronym).16 Department of Commerce (Citation1986), p. 53. Companies need to ground rapid innovation with financial soundness to withstand intense competition in a setting of sharp price falls and dependence on state research subsidies: Baskoy (Citation2008), p. 148.17 Commission of the European Communities (Citation1990), pp. 28–30; Grupp and Schnöring (Citation1992), pp. 46–66. Telecommunications equipment comprises three types of products: switching, whether public or private; transmissions to generate and receive signals, and support cables (where necessary); terminals, to send and receive voice, data, text or image communications. Switching, the bulk of the telecommunications equipment market, accounted for 17% of the industry’s sales in the US in 1989 and nearly half of European production: Sutton (Citation2001), p. 137; BIPE. (Citation1991), p. 12/19.18 In 1990, worldwide communications equipment production increased by 1.68 from nearly $38 billion seven years earlier: Butcher (Citation1991), p. 2/11.19 Brown (Citation1994), p. 3. Segments such as mobile and space communications, as well as optical transmission and some business communications, were expected to boost total demand for telecommunications equipment by 7.7% in real terms until 1992: BIPE. (Citation1991), p. 12/19.20 Some countries, including France, practised a ‘buy national’ policy: Department of Commerce (Citation1986), pp. 51–52. The benefits comprised sharing product development costs with other countries, achieving technology transfer more easily, and cutting the cost of capital investment: European Commission (Citation1997), p. 97. Two large groups of suppliers were present, the largest being made up of telecommunications specialists with the dominant activity in the production of equipment. These, in turn, were rather generalists within the telecommunications equipment sector (Alcatel, Ericsson and Italtel, to which AT&T and Northern Telecom were added worldwide). The second large group consisted of electronics generalists (Siemens, Bosch and Philips): BIPE. (Citation1991), p. 12/23.21 Eurostrategies ESTEL, Eurostat (Comext): https://ec.europa.eu/eurostat/data/database, accessed on 15/3/2018.22 Cross-specialisation was encouraged in telecommunications, railways, power generation, medical equipment, and urban transportation: Foundations for the future of European industry, Amsterdam meeting, 1/6/1983.23 Hamann (Citation2012). The Union of the Democratic Centre (UCD in its Spanish acronym) agreed with opposition parties the so-called Moncloa Pacts (October 1977), a consensual attempt to confront the catastrophic economic situation. Paradoxically, nationalisations, striking in the context of UCD’s centre-right governments, actually served the interests of majority shareholders and financial institutions, threatened by considerable outstanding claims. By way of comparison, a financial restructuring with layoffs occurred at AEG-Telefunken: Le Monde, 11/3/1983.24 Recio and Roca, in Glyn (Citation2001), p. 174; this programme was inspired by Mitterrand in its consideration of industry as a lever for development (Mauroy, Citation1981), but it was linked to Nordic social democracy in its withdrawal from nationalisations.25 A technical team under the future minister of Industry, Carlos Solchaga, sketched the White Paper before the Socialists took office.26 EEC.27 The interest on debt multiplied by five percentage points and social spending also grew by almost five: Recio and Roca, in Glyn (Citation2001), p. 193.28 Solchaga (Citation1997), p. 57; El País (hereinafter referred to as ElP), 9/6/1983. The basic agreement on the industrial reorganization of the IT&T group of companies in Spain was in January 1984: Minutes of the final meeting of the working committee set up for the industrial reorganisation of the IT&T group of companies in Spain (from here on Minutes), Madrid, January 24, 1984, Dossier, AFLC. The PSOE of the transition to democracy stemmed from the political and organisational restructuring brought about at the Suresnes Congress 1974. With Felipe González and Alfonso Guerra at the head, two sensibilities coexisted inside socialist government, not without tensions: the social one, the majority in any social democratic party, which was inclined to fulfil the aspirations of the party’s bases (Guerra), and the liberal one (Miguel Boyer, the minister of Economy and Finance of the first socialist government). The latter, close to the ­macroeconomic views of the OECD and the Bank of Spain, advocated deficit reduction and a certain control of public spending.29 Catalan (1999), pp. 365–366.30 Unemployment reached 22% of the active population; a net employment increase was only generated when growth was above 3%: Sudrià (Citation2013), pp. 193–220.31 Aranzadi (Citation1989), pp. 258–261. The privatisation of SEAT resulted in an employment cut of almost 30 per cent.32 Modernising the Spanish productive apparatus meant industrial restructuring to bring it up to date, according to the socialist leader Felipe González: Bitar and Lowenthal (Citation2015), p. 371. For an international institutional reference, see OECD (Citation1988), p. 33.33 Luis Solana Madariaga, conversation with the author, Madrid, 8/3/2016; Calvo (Citation2016). Solana (1935) graduated in Law in Madrid and studied Business Economics in London and Paris. His professional career began at Banco Urquijo, where he became deputy general manager. He played a major role in reshaping the defence industry as a congressional defence spokesman. After leading attacks as a trade unionist (UGT) on the flimsy telecommunications policy of the centre-right Government, he was appointed chairman of CTNE, still a semi-public monopoly. It was Solana who gave it the new name Telefónica and who, with the acquiescence of Prime Minister González but without the unanimous support of the Government’s economic ministries, promoted the international expansion of the company, especially in Latin America.34 Calvo (Citation2017), pp. 51–62; New York Times (hereinafter NYTimes), 5/12/1985. Multinational corporations strove to enter European markets: AT&T Annual Report, 1986.35 ACE, 23/2/1983.36 Spanish Marconi specialized as well in railway and airport traffic safety and control facilities with a factory in the vicinity of Madrid: Calvo (Citation2020), pp. 113–150.37 ElP, 8/5/1976. The rate of phone penetration in Spain was only 24 per 100 inhabitants, ten points below the EEC average; R&D had reached 1,100 million pesetas in 1977: ElP, 24/6/1978; the ferrite is a ceramic-like material useful in many types of electronic devices because of their magnetic properties, according to Encyclopedia Britannica.38 IT&T controlled the bulk of SESA’s capital (65%) and the rest was distributed between CTNE (20%), the Luxembourg-based SOLIMO (10%), and private investors (5%); data from the operator revealed SESA’s attachment to traditional technology and non-competitive prices (Annexe 2): ElP, 16/5/1978 and 1/11/1983.39 Standard Eléctrica S.2020A. (1987), p. 7; BIPE. (Citation1991), p. 12/19. SESA attributed the crisis to the cut in demand due to zero growth in CTNE’s investments in real terms from 1975 and to the change in the structure of such investments because of the allocation of proportionally decreasing resources to the purchase of equipment. IT&T declared losses of 1,600 million pesetas in 1980 and estimated those of the following year at 1,500 million pesetas. At the same time, it pointed to a considerable increase in bank debt from around 2,000 million pesetas in 1975 to an estimated 21,500 million pesetas in 1982: BIT, March 1982, pp. 11–13.40 Sisaye (Citation1998, 231–255) defined the period from the mid-1970s onwards as one of consolidation/stability.41 Gambardella and Malerba (Citation1999), p. 142. The Electronic Switching System No. 2 (ESS2) was the first electronic switching system (distributed microprocessor control) designed specifically for the suburban community. A more powerful and flexible processor provided the platform for a large increase in processing capacity and a continuous modernisation of the system structure: The Bell System Technical Journal, 62, 6, July-August (1983), pp. 1,455–1,466. In France, the first operational ESS (1968) was installed in the service of the Ministry of Defence.42 In this regard, it was determined to maintain the permanent group of analysts it had organized as a guarantee of future results: Workers Commissions meeting with the central representation of personnel delegates from Standard Eléctrica, Madrid, 4 May 1979, AFLC.43 Workers Commissions meeting with the central representation of personnel delegates from Standard Eléctrica, Madrid, 4 May 1979, AFLC. The need for diversification and horizontal growth outside telecommunications and electromechanics led to the creation of specialised divisions. They include these of Audiocommunications, which integrated the design, manufacture and marketing of telephone terminals, and of information technology division, covering voice, text and data communications systems: SESA, Annual Report Citation1983, pp. 24 and 26. By 1985, SESA had the worst performance in the group on a sales per-employee ratio - at 41.18% of the level of SEL, 35.45% of the Italian FACE and the French CIT-Alcatel and 55.7% of the Belgian BTM-: Standard Eléctrica S.1999A. (1987), p. 9.44 The then Socialist MP and UGT member Luis Solana added several reasons for IT&T’s attitude: a wish to irritate the unions and deflect pressures towards CTNE, giving rise to more orders and higher prices; finally, he alluded to the search for Government support to cut IT&T workforce, with the externalization of costs: ElP, 22/1/1981.45 IT&T considered cutting over 6,000 jobs. There were some differences in the trade unions’ approaches. UGT insisted on an aggressive import substitution policy in the electronics sector, based on CTNE’s demand for compensations from IT&T. CCOO demanded diversifying the range of products and a treatment for Spanish subsidiaries similar to that of European ones - the German and, surprisingly because of the bulldozer character, the Belgian- as well as a viability plan that combined public and private financing. In particular, the union called for a capital increase and a four years investment of more than three and nine billion pesetas, respectively; at least one-fifth of sales to be exported with the support of IT&T; and a halving of the royalty fees during the period 1982-1985: Stance of CCOO, Dossier, AFLC; CCOO at Standard Eléctrica, Datasheet, Madrid, 18 May 1982, AFLC; ElP, 12/9/1983.46 Industrial restructuring plan of the group of companies Standard Eléctrica.1999A. November 1983 (in Spanish), INI Archives, Folder 1,672, Box 549. The last agreement proposed by the Government included incentives for early retirement and for workers who transferred to CTNE. For the sake of accuracy, UGT considered the plan presented by Standard Eléctrica-IT&T to be positive, although it called for greater precision in the products to be manufactured, speed in the creation of jobs and rapidity in the transfers to the CTNE. At the same time, the union asked to examine the possibility of taking advantage of the industrialization law for the benefits it could bring in retirement and pre-retirement for the personnel: Stance of the union UGT, Madrid, 15 November 1983, Dossier, AFLC. SA. 1999.47 ABC, 30/9/1983.48 BOE [Official State Gazette], 177, 25/7/1984, pp. 21.876–21.877. IT&T considered its expensive System 12 a success, even though it was rejected in the US market. By the end of 1984, IT&T had sold 2,105 System 12 exchanges and almost eleven million equivalent lines worldwide. Five European centres - ATC (Shelton), ESC (Harlow), BTM (Antwerp), SEL (Stuttgart) and SESA (Madrid)- and three more in other regions -USA, Mexico and Asia- contributed in the specific developments and country adaptations; the International Telecommunication Center in Brussels coordinated the tasks of some 2,000 engineers: Electrical Communication, 59, 1–2, 1985, p. 8. For the European prototype of System 12: Ziegler (Citation1997), p. 84.49 CITESA was not explicitly included because of its affiliation to SESA. As Alcatel-CITESA, it did not take long to agree with the workers to further reduce staff and an industrial project for the manufacture of digital mobile phones, with investments in its vast majority destined to R&D for the development of this product: Calvo (Citation2020a), pp. 1–25. The autonomous community of Andalusia in the south joined the State in financing investment in the new Alcatel-CITESA factory: Parliament of Andalusia, Journal of committee sessions, Documentary Fund No. 74, III Legislature, 19 May 1993.50 Details of the agreement from IT&T: a five-year investment plan of 49,000 million pesetas in Spain and the creation of 2,250 new jobs to manufacture high-tech products for exports as well as the waiver of dividends between 1984 and June 1987. Details of the agreement from the CTNE: to bring its orders to the IT&T group during 1984-1986 at least to the same level as in 1983 and to take on 300 employees per year in 1984–1985. The operator was to pay an indemnity corresponding to six monthly allowances up to a maximum of half a million pesetas to all those workers who joined it: ElP, 24/9/1984. The plan was approved by referendum and endorsed only by one of the unions (UGT): Minutes, Madrid, 24 January 1984, Dossier, AFLC. The agreement included terms affecting the future of Marconi.51 Rama and Holl (Citation2009), pp. 182–204; Canalejo (Citation1993); LACA, 19/12/1984, 27/3/1985, and 30/1/1985. SESA signed a contract (framed within the socialist industrial policy) with the Digital Equipment Corporation (USA, 1957) to manufacture computer terminals: ElP, 18/5/1985. As an indicator of the restructuring in the sense of manufacturers/component provider integration, the electronics generalist. Siemens planned to acquire the SESA cable factory and put it to the optical fibre to diversify the cable supply and reduce IT&T’s market share: LACA, 4/10/1985. Spain had a special feature in the technology transfer of System 12 on the demand and supply side. To begin with, the operator CTNE was the first customer of the system. Besides, it took an active part in the development of the system by moving a team of a dozen engineers from its Research Centre in Madrid in an eye-catching action of so-called reverse transfer. For its part, SESA brought in the capacities accumulated in previous technological developments. In 1982, the subsidiary repatriated its team from the USA to Europe, partly to Madrid to continue the work on the switchboard commissioned, and partly to the Belgian BTM, reinforcing this second group with some engineers trained in Paris on the transition (Metaconta) semi-electronic system, already obsolete in the period under study: Luis Méndez, Communication to the author, 13 September 2020.52 Capital injections amounted to pesetas 5.26 billion. The SESA’s R&D activity embraced both the basic technologies of the sector and the products and systems demanded by the market using an advanced offer: Industrial reorganization plan of the SESA group of companies, November 1983, Dossier, AFLC, p. 28.53 Rapport d’information fait par M. Jean-Marie Rausch, Sénat de la France, 2 June 1987, p. 29.54 ElP, 29/10/1986.55 ABC, 8/1/1987, p. 23.56 Le Monde, 27/12/1986; Worldwide Report: Telecommunications policy, research, and development, National Technical Information Service. SGB’s involvement was encouraged by the former European Commissioner Étienne Davignon, CEO candidate for the company; the conservative Government replaced Pierre Suard, representative of oligarchic capitalism controlled by the public sector elite, for George Pébereau, the signatory of the CGE-IT&T agreement: Araskog (Citation1999), p. 199; Pébereau (Citation2005), pp. 96–104; NYTimes, 18/2/1982. As an interesting comparative note, the Italian foreign minister Andreotti was unaware that the Italian subsidiary, FACE, would continue to be bound to IT&T, which had retained a significant interest in the joint venture: Araskog (Citation1999), pp. 208–209.57 Details in ElP, 17/9/1986. As a new indicator of the strong political content of the CGE-IT&T consortium, the French prime minister Jacques Chirac pushed Telefónica to participate in it: Palmer and Tunstall (Citation1990), p. 151; ElP, 6/11/1986.58 Rapport d’information fait Par M. Jean-Marie Rausch, Sénat de la France, 2 June 1987, p. 29. CIT-Alcatel resulted from the purchase of Alcatel, the French communications pioneer, by CGE, which integrated it into CIT (Compagnie Industrielle des Téléphones).59 Chandler Jr, Amatori, and Hikino (1999), pp. 236–237; Gambardella and Malerba (Citation1999), p. 142; Hulsink (Citation2012), p. 261. ALCATEL: Alsacienne de Constructions Atomiques de Télécommunications et d’Électronique. As the Government pointed out, for the first time a French company acquired a North American one.60 Here is a French manager’s assessment of the decision-making centres: they determine locations, investment policy, the development of research laboratories and recruitment issues. As they are of a particular nationality, they have the power to argue with the relevant political power and thus to address national interests: Jean Peyrelevade (Toulouse & Associés), Sénat de la France, N° 347, September 20, 2006.61 Calvo (Citation2014). CGE inspired Alcatel’s name: Araskog (Citation1999), p. 221. There were immediate symbolic measures such as the choice of name and the use of the ECU (precursor to the euro) in accounting, budgeting, and planning: Réponse du ministère de l’Industrie, Journal Officiel du Sénat, 14/4/1988, p. 513. While the job cuts affected Querqueville factory, one of the two key producers of digital switching plants facing fierce competition, at other plants, specifically Eu and Cherbourg, ALCATEL CIT preferred to increase competitiveness by streamlining corporate services.62 JPRS, 21, 1987, pp. 29–32; Le Soir, 18 February 1989. In 1990, BTM reduced by a quarter the over ten thousand workers; it justified this decision on the falls in the domestic market but above all on the grounds of technological developments: Le Monde, 7 October 1987; Noam (Citation1992), p. 181. BTM strengthened its position in the domestic market thanks to an agreement with the Belgian RTT; and it succeeded in penetrating the external market, substantially in the immediate geographical area: Commission of the European Communities (Citation1988), p. 140. As an example of how to deal with subsidiaries, Mietec was integrated into Alcatel in 1987, four years after its incorporation as a joint venture between BTM and GIMV, a regional investment company in Flanders: Okada (Citation2006), p. 189.63 Électronique Actualités, 30 October 1987. BTM was the strategic leader of Europe’s S12 project and SEL, responsible for ITT’s worldwide entertainment electronics business, was crucial in the development of this system, which was called “my baby” by the CEO Araskog (Citation1999, p. 175); Smidt and Wever, Citation2013, p. 84; New York Times, 29 April 1985.64 At a nation-state level, as in Spain for instance, Alcatel gave responsibility for the system to the head of the public network group of the parent company: Standard Eléctrica S.1999A. (1987), pp. 34-35; Standard Eléctrica S.1999A. (Citation1987a), pp. 10–12.65 Edquist, Hommen & Tsipouri (Citation2000), p. 213. As an example of movements in the market, Nokia, which specialized in transmission, aspired to enter the switching market through a manufacturing agreement between its affiliate Telefeeno (Nokia and the state-owned TEBVA at 50%) and CIT-Alcatel: Le Monde Diplomatique, October 1977, p. 25.66 In 1985, a 2.8 percentage point increase over five years was forecast for Alcatel’s 4.3 per cent of the market and near profitable returns for 1988: Araskog (Citation1999), p. 221; ElP, 23/6/1987. For the evolution and globe-wide strategy of Alcatel, see Calvo (Citation2019), pp. 130–152.67 Eurostrategies ESTEL, Eurostat (Comext). In 1970, IT&T’s tentacular network comprised 331 subsidiaries, of which more than a third were European: United States Congress House, Citation1970 p. 41.68 Électronique Actualités, 30/10/1987.69 SESA, Annual Report Citation1986, p. 9; ABC, 8/1/1987. The CCOO union equated sale of SESA to Alcatel with the progressive dismantling of the electronics industry and the restructuring of the telecommunications sector. In terms of staffing adjustments, the figures reveal a change of structure with tendency towards the strengthening of university graduates in the group, at the expense, above all, of the technicians.70 Le Monde, 2/6/1987; ElP, 30/3/1987 and 2/4/1987. CTNE agreed to increase its purchases to 32,000 million pesetas, an amount that it later increased again to 50,000 million pesetas. This demand-pull for telecommunications equipment would benefit SESA, INTELSA and Telettra Española in the domestic market, but it could damage SESA’s exports. Unlike the overview from OECD (Citation2007, p. 152), INTELSA was not a state-owned company but a joint venture of Telefónica with Ericsson. Telettra Española was a joint venture between Telefónica and the Italian Telettra SpA, the latter engaged in the supply of radio and electronic components for the telephone operators (Colli & Vasta, Citation2010, p. 235); the Amper and AT&T-Philips subsidiary also negotiated its share in the new market: ElP, 5/10/1987.71 UGT asked for a salary increase over three-years and considered early retirement as the only way to reduce the surplus of some 2,500 people; as appeasement signal, CCOO cancelled a call to strike against the staff reductions and the delay in the viability plan: ElP, 9/4/1987.72 Minutes, Dossier, AFLC; Official Bulletin of the Cortes Generales (Official Gazette of the Spanish Parliament, BOCG), 288-1, May 13, 1980, pp. 597-598; 88, 30/4/1987, pp. 3,541–3,542; SESA, Annual Report Citation1986, p. 22. The official figures set the investments of SESA in 1982-1987 at 25,220 million pesetas and the one planned for 1988-1990 was estimated at 27,621 million pesetas, well above those estimated for Spanish Marconi: de Industria y Energía (Citation1987), p. 68.73 Standard Eléctrica S.Citation1987A. (1987), p. 7; Calvo (Citation2020a), pp. 4–46; the secondary sources reflect well the strategy: Kippenberger (Citation1998), pp. 37–40; Palmer and Tunstall (Citation1990), p. 152; Computer Business Review, 5 July 1989; ElP, 2/5/1988 and 24/10/1988.74 The aims were to concentrate the production of transmission equipment and virtually all of the large plants of digital System 1240 - the medium and large capacity digital control switching- in the centre of the country -Toledo and Villaverde (in the vicinity of Madrid)-; to achieve a capital increase at Alcatel-Ibertel until 2,500 million pesetas, a turnover of some 8,000 million pesetas, employment for 600 people at the factory in Madrid; and a share capital for Reyssa of 250 million pesetas: ElP, 2/5/1988 and 13/9/1988; ABC, 5/10/1988.75 ElP, 24/10/1988; ABC, 5/10/1988.76 The group was formed by AT&T-Lucent, Motorola, Siemens, Alcatel Alsthom, Ericsson, NEC, Nortel Nokia, Fujitsu and Bosch: Dörrenbächer (Citation2000), p. 13; see also Commission of the European Communities (Citation1992).77 Calvo (Citation2019), pp. 130–152. Nokia initially limited his aspirations to acquiring the mobile phone business from Alcatel but, after being rejected, agreed to buy the entire company: Forbes, 16 April 2015.