By 1976, a century had elapsed since Lars Magnus Ericsson had started his workshop on Drottninggatan in Stockholm. As part of the centenary celebrations, an AXE prototype was installed in Södertälje. The company had prepared a magnificent centenary celebration but in view of the economic crisis at the time, this was toned down considerably. Lundvall at one stage described 1976 as “one hell of a year.”
The year brought a political upheaval in Sweden: the Social Democrats were voted out of office after 44 years in power. During the election campaign, eventual victor, Thorbjörn Fälldin, had promised 400,000 new jobs. The new bourgeois-bloc government decided on massive support for many companies in crisis (shipyards, textiles, steel) – but was later forced to acknowledge that these measures had only a moderate effect.
The following year, Lundvall was succeeded as CEO by Björn Svedberg, who had to start by defending the company’s decision to close down its operations in Örebro and Olofström, and move to shorter working hours at the other plants. Olof Palme, now leader of the opposition, declared on television that the time had come for the government to “put its foot down.” Olofström, which was also affected by a crisis at Volvo, became a symbol of the times, and much media attention was devoted to the mood of desperation there.
This negative publicity had a major impact on L.M. Ericsson and the company reversed its decision, continuing with the loss-making operations in Olofström until 1982.
ERICSSON INFORMATION SYSTEMS
The word “convergence” almost became a mantra during the 1970s. At L.M. Ericsson the AXE project had functioned as an enormous skills-enhancement project and produced a great many skilled development engineers. The next major initiative was dubbed Ericsson Information Systems (EIS), with the objective of creating a complete information system for offices.
EIS could, perhaps, be described as the IT bubble that preceded the much larger one at the turn of the century. Regular technological advances were still being made but now it was time to leap to a higher level. Extremely rapid progress in both computer technology and telephony meant it should be possible to combine both, leading ultimately to the paperless office. The goal was described within L.M. Ericsson by saying that the company wanted L.M. Ericsson equipment to occupy one square meter of space on each employee's desk at every customer.
L.M. Ericsson’s competitors adopted the same approach. Siemens, Philips, AT&T and Northern Telecom all started work on convergence, making acquisitions to supply the expertise and manufacturing capacity they lacked. L.M. Ericsson’s major acquisitions were Datasaab (1981), which was well placed where computer terminals were concerned, and Facit (1983), once at the forefront of mechanical office equipment.
Author: Svenolof Karlsson & Anders Lugn
