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A Long Time in MakingThe History of Smiths$
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James Nye

Print publication date: 2014

Print ISBN-13: 9780198717256

Published to Oxford Scholarship Online: October 2014

DOI: 10.1093/acprof:oso/9780198717256.001.0001

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Shocking the Markets

(p.202) 8 1976–1990
A Long Time in Making

James Nye

Oxford University Press

These are the Roger Hurn years. A large evolutionary change is the decision to abandon two of the original core businesses—motor and clocks/watches—shocking the City, and leading to job losses. Yet Smiths emerges significantly stronger. With a long-standing management team, Hurn emphasizes: (i) cash generation; (ii) shareholder value (with a commensurate decline in paternalism, commenced under his predecessor); and (iii) M&A activity, under a simple model, with profits each year split between shareholders, reinvestment, and bolt-on acquisitions. The medical division becomes more efficient and profitable, growing also by acquisition, while various non-core businesses are sold off. A major advance is the 1987 acquisition of various Lear Siegler businesses, propelling Smiths to tier-1 supplier status at Boeing. With the industrial division also boosted by acquisition, Hurn assembles his ‘three-legged-stool’ of aerospace, medical, and industrial

Keywords:   Bolt-on acquisition, British Leyland, Lear Siegler, Lucas Industries, market shock, medical devices, talking dashboard, three-legged stool, Tier-1 supplier, UK motor industry

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