Associated Electrical Industries Limited (AEI) originated in 1929. The Company began as a financial holding company for a number of leading electrical manufacturing and trading companies in the United Kingdom. These included British Thomson-Houston, Metropolitan-Vickers, Edison Swann and Ferguson Pailin. As the diversity and extent of AEI’s products expanded the Company was joined by Sunvic Controls (1949), Birlec (1954), Siemens Brothers (1955), W.T. Henley (1958) and London Electric Wire Company & Smiths (1958). In 1959 AEI became a trading company and the AEI symbol began to replace the brand names and trademarks of companies within the group (except Lewcos and Birlec).

Sir Felix Pole had been chairman of AEI since its foundation. His years as chairman proved difficult as he was head of a company which lacked solidarity, especially regarding its activities and board of directors. One of Pole's primary concerns was the competition between British Thomson-Houston and Metropolitan Vickers. Such rivalry had been present before the merger with AEI in 1928 and was to continue long after. The slump of the 1930s was to significantly affect AEI and measures were taken by the company to reduce the cost of administration. The subsidiary companies of B.T.H. and Metrovick were large exporters during the recession. One notable activity of Metrovick, begun in 1922, was the export of electrical apparatus and machinery to the recently established Soviet regime. This association ended in controversy in 1933 when six Metrovick engineers were tried in Moscow on spying and sabotage charges. Intervention from the British Government resolved the affair and trading with Russia eventually resumed.

If the depression of the 1930s had affected AEI unfavourably, then the Second World War proved economically beneficial for the company. AEI’s productive competence was thoroughly tested as the War progressed. Many factories worked seven-day weeks. The most beneficial aspect for AEI was that it was primarily a war of scientific growth and innovation. The company’s electrical engineering products assisted the Government's military projects during the 1930s. Significant contributions to the war effort included automatic pilots for aircraft , radar, guns and gun mountings. However the continuing competition within AEI was underlined by the fact that B.T.H. and Metrovick published separate books detailing their contribution to the war effort. AEI’s technical excellence was highlighted in 1935 as Metrovick and B.T.H. became the first two firms in the world to construct jet engines (independently from each other). AEI’s greatest work during the War years was its aircraft. In 1938, Metrovick entered into a joint venture with A.V. Roe to manufacture aircraft. Metrovick assembled 'Manchester', 'Lancaster' and 'Lincoln' bombers for A.V. Roe at Trafford Park.

At the end of the War in 1945 Sir Felix Pole, now blind, who had been chairman of AEI since 1929, was thought to be too old to lead the company into the anticipated post-war boom in electrical equipment. A successor was to be chosen from outside the company with the resulting appointment of Captain Oliver Lyttelton in the autumn of 1945. His major policy was to reinforce the ‘higher direction’ of AEI. Uppermost on his agenda was to improve the productivity and "organise the company along modern lines". Lyttelton managed to transform the holding company itself into a more proficient organisation during his first six years as chairman (1945-1951). The Conservative victory in the general election of 1951 resulted in Lyttelton receiving the post of Secretary of State for the Colonies. In his absence, Sir George Bailey was appointed Chairman. During his three years in charge, Bailey expanded the company’s sales and profits, his main achievement was ending the association with G.E. of America, turning AEI into an entirely British company. In 1954 Oliver Lyttelton returned to AEI as the first Viscount Chandos of Aldershot. Lord Chandos was regarded as an expansionist who was to dominate AEI for a further nine years. He became Chairman of the four groups - B.T.H., Metrovick, Ediswan-Hotpoint and AEI Overseas. Under Lord Chandos the company moved its headquarters to 33 Grosvenor Place, Belgravia, overlooking Buckingham Palace. The most successful achievement of Chandos’ second reign was at Larne in Northern Ireland with the completion of a vast works (the largest in Europe) for constructing turbines.

During the mid-1950s AEI was to focus primarily upon domestic appliances and lighter engineering products. The company discontinued its production of valves and cathode ray tubes and in 1961 merged with Thorn allowing the latter to manage its interests. AEI purchased Siemens in 1955 thus owning four independent lamp businesses: B.T.H., Ediswan, Metrovick and Siemens. In subsequently dropping these names AEI’s lamp business suffered badly. Thus AEI formed a joint company with Thorn again in 1964 and another with EMI in 1966 allowing these companies to manage its domestic appliance businesses. 1959 proved to be a boom year for domestic appliances. Hotpoint, which had been made a separate group in 1955 with Craig Wood as chairman, helped to contribute to AEI’s success in this field.

The greatest challenge faced by Lord Chandos, which had also plagued Sir Felix Pole was the restructuring of AEI’s governing and functioning structures. One of Lord Chandos’ preoccupations with AEI was his ‘divide et impera’ strategy. His divisionalisation policy for AEI was designed to mobilise the company’s huge assets more effectively and to become more commanding in the markets. After several attempts at revitalisation, Lord Chandos was still unable to prevent the eventual unprofitability of AEI and its organisational problems. The years 1960-1963 were particularly bad for him and the company as the serious problem of "overlapping and competition between the constituent companies" was never overcome. Lord Chandos left AEI in March 1963, aged seventy. He had contributed greatly to the Company’s ascent since the end of the war and, like Hugo Hirst of GEC, believed in the policy of ‘Everything Electrical’. The legacy he wished to leave for his successors was one of a "streamlined company" which would "survive and prosper in the highly competitive world" which challenged it.

The two men who were to dominate the Company until 1967 were Sir Charles (‘Mike’) Wheeler and Sir Joseph Latham. In 1964 the Company’s problems were focused upon in a paper entitled ‘The State of the Company’. The Wheeler-Latham regime set about altering the hierarchical structure of the company but progress was minimal. During the first two years of the Wheeler-Latham reign, profits were encouraging but it was the disastrous year of 1966 which was to bear more significance. The Company had been in need of drastic revitalisation and needed decisive action by the people at the top. In 1967 GEC’s Arnold Weinstock and the Chairman of the Industrial Reorganisation Corporation, Ronnie Grierson, proposed an instant solution to the company’s problems. This was to culminate in the historic £120 million bid by GEC for AEI, resulting in the merger on Thursday, November 9th, 1967.

Source: web.online.co.uk