The competitors make up
Later that same day, November 1 in the Russian calendar, Johansson arrived at the Hôtel de l’Europe, where Lars Magnus was waiting nervously to hear what had transpired. Cedergren, who was staying at the same hotel, also turned up. After a few vague comments, Cedergren bid them farewell with the words: “We’ll meet in Stockholm.”
And meet they did. After the victories in Moscow and Warsaw, Cedergren came to the conclusion that his factory, even if it expanded, would not have a reasonable chance of supplying all the equipment required for the two cities. This paved the way for an agreement with Lars Magnus, who had both the expertise and the capacity.
At the end of the year, L.M. Ericsson & Co. took over AB Telefonfabriken for the nominal price of SEK 400,000. This was more than it was worth, but Lars Magnus, the principal shareholder, took the decision himself, seeing the chance to rebuild a relationship with his former partner.
With everything once again in balance, Lars Magnus, now 54, obviously felt that it was time for him to resign from the management of the company. He had already taken the first step on November 1 (Western calendar), 13 days before the decisive events in St. Petersburg, when he asked the board to relieve him of the post of managing director. One of the reasons he offered was his health.
The board appointed Axel Boström, who had managed the successful foreign agreements, to be managing director until the next shareholders’ meeting, with the assistance of Hemming Johansson. But the board also offered Lars Magnus the right to change his mind: he could return to his previous post whenever he liked.
There were very few involved in this decision: the board consisted of Lars Magnus Ericsson, Carl Johan Andersson and Axel Boström.
Lars Magnus never did change his mind. On the contrary, he even resigned as chairman of the board on February 26, 1901. On Lars Magnus’s recommendation, Wilhelm Montelius, a senior judge, was elected as the new chairman; he had also been the intermediary in the agreement with Cedergren and AB Telefonfabriken. Boström’s appointment as managing director was confirmed.
Lars Magnus remained the principal shareholder for some time, but eventually sold his shares. His last initiative in the telephone business was taken early in 1902 in Riga, where the concession had been won by a local consortium led by Baron E. von Rücker. Lars Magnus made contact and then became a significant stakeholder in a newly established company to manage operations in Riga, a city the same size as Stockholm. Lars Magnus devoted a lot of time to constructing relays and other details for this new system, which was partly based on a central battery.
“Ericsson’s role was not restricted, as one might wish to believe, to that of a passive onlooker; rather he took an active part in both discussions of the various problems that arose and also in the testing and fault-finding this gave rise to. In the evenings our discussions continued over a tankard or two of beer at the Hôtel de Rome.”
(As told by Hemming Johansson)
But immediately afterwards, in 1903, Lars Magnus left both the board and the company for good. Gustaf Collberg, an employee for many years who recorded stories about the company, has described how Lars Magnus stood with some of the foremen in the yard at Tulegatan when a large draw press was being installed. “After some discussion of the press and its size, Lars Magnus said: ‘I’m leaving. Thank you and goodbye.’ That was the last time Ericsson was seen at his own factory.”
Early in 1905, Lars Magnus sold the last of his shares in the company, 597 of the original “A series” of 1,000 shares, to the head of Stockholms Handelsbank, Louis Frænkel.
Author: Svenolof Karlsson & Anders Lugn
The plant foremen of Ericsson visit the villa of the president Axel Boström.