Employees become owners
When Cedergren set up in competition in 1896, Lars Magnus took the measure of incorporating the company as a limited liability corporation, Aktiebolaget L.M. Ericsson & Co.
Johansson has recounted a conversation he happened to hear between Cedergren and Lars Magnus some time in 1894 or 1895. Cedergren wondered what the whole factory would be worth. Rather than answering directly, which Lars Magnus probably could not, he put any further discussion to an end with the words: “Bah, I’ve written off the whole thing anyway.”
The share equity, of 1 million Swedish crowns, was a purely arbitrary figure. The company had no debts and was worth a great deal more. Lars Magnus divided the million into 1,000 shares, of which he retained 900. He gave 50 of the others to Carl Andersson; Gabriel Bildsten, Axel Kniberg and Axel Boström received five each. The remaining 35 were shared by 28 employees, including a woman, Alma Lindberg, the supervisor of the winding department.
Lars Magnus also donated 15,000 crowns to a “sickness benefits fund” to assist employees in case of accidents and “for stays in the countryside for those who could be most in need of them”.
Many have wondered how Lars Magnus could walk away from the work of his lifetime so early and so completely. He may have been thinking of his father, who died at the age of 54. Part of the answer is certainly that he wanted to do something else with his life. He had been working hard from the age of 12, first to earn a living and then for his company. He felt worn out. “And he longed to go back to the countryside,” according to Harry Kolare, a magazine editor who has also written a book about Lars Magnus.
Lars Magnus had bought a country estate, Alby Manor, back in 1895. He may have been inspired to do so by Gustaf de Laval, whose company, AB Separator, had bought the neighboring Hamra Manor the previous year. In a way, this was a return to his roots: Lars Magnus after all had grown up on a farm. In the autumn of 1903, he moved out to the manor with his family and devoted himself to it and to farming; he sat down at his drawing board when he felt like it, designed new devices, read books, studied philosophy and religion, and spent time with family and friends.
Johansson points out that the company had become so big that it was no longer possible for Lars Magnus to keep track of every detail of its work “as had been his custom, which for a man of his disposition was a sine qua non [an essential]”.
And there may have been another reason. Members of the family believe he was sick and tired of trade union demands, says Nils Adler, whose grandfather Lars-Erik Adler knew Lars Magnus, his uncle, well and met him often. “My grandfather said that one reason Lars Magnus left the company relatively early was that he had come into conflict with the trade union. He felt that the union was ungrateful as he had always shown great concern for his employees and considered the trade union’s demands unreasonable.”
Author: Svenolof Karlsson & Anders Lugn