Etheinian Manufacturing
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Formerly | Etheinian Manufacturing Industries |
|---|---|
| Public limited company (formerly State-owned enterprise) | |
| Industry | Industrial conglomerate |
| Fate | Liquidated after bankruptcy |
| Founded | February 21, 1971 |
| Defunct | September 5, 2013 |
Area served | Worldwide |
| Products | - Heavy industry - Defense - Vehicles - Electronics & computers - Materials |
Etheinian Manufacturing (EM) was a major Etheinian manufacturing conglomerate that produced industrial machinery, automobiles, aircraft, weapons systems, commercial & consumer electronics, appliances, and optical devices. It was also involved in metal refining and semiconductor production. The company was originally founded in 1971 as Etheinian Manufacturing Industries (EMI), a state-owned enterprise formed out of the nationalization of several private businesses. It grew steadily over the next two decades to become the third-largest industrial company in the United Federation of Etheinia, and the country's fourth-largest overall employer.
Despite its size (or perhaps because of it), by the mid-90s EMI was operating at a consistent loss in terms of net annual revenue, relying on government subsidies to keep itself afloat. It became a key target for restructuring under President Alejo Ibáñez's economic reforms, with the goal of making the company more efficient & profitable. Under the direction of chairman Keir Aitken, EMI was privatized in 1997 to form a public limited company. Although profits briefly rebounded during the 2000s, increased competition in the marketplace combinded with a heavy debt load and criminal misconduct by executives led the company to declare bankruptcy in 2011. Etheinian Manufacturing was eventually liquidated in 2013, with most of its former operations being split up and acquired by other companies.
History
Formation
Etheinian Manufacturing Industries was one of 14 state-owned companies created by the 1971 National Enterprise Organization Act, which replaced the informal state management scheme that had been implemented during the Etheinian unification process. Under the 1971 Act, smaller businesses were nationalized and integrated into a single large company based on economic sector. EMI was formed to produce industrial & electrical equipment, trains, and automotive parts, as well as tanks and artillery for the military. The company was formally incorporated on February 21st, 1971.
Expansion
In 1976, as the Etheinian government was slashing the budget for rail transport in favor of road infrastructure, EMI requested to close its unprofitable passenger train division and expand its automotive parts division to produce actual automobiles. This request was approved, and by 1977 the first EMI-built cars were rolling off the assembly line. Also in 1977, the company purchased a small airplane factory in Kiraz, which would eventually become the central production hub for its aerospace division.
EMI's expansion increased greatly under the leadership of chairman Liam Haugseth, who was appointed in 1981 and remained in power for 13 years. Haugseth, who had a close friendship with President Andrés Sandalio Gérard, held significant influence over Etheinian industrial policy at the time. He was a major proponent of "sectorization", a process in which state-owned companies were allowed to expand outside of their original legally-defined scope in order to diversify their operations. Chairman Haugseth took advantage of the new sectorization laws he helped pass, as well as generous defense spending and the increased availability of foreign capital, to grow EMI into a massive industrial conglomerate.
One of the biggest areas of growth was in electronics and computing, which Haugseth saw as the way of the future. EMI invested heavily into electronics manufacturing as well as R&D over the next decade, quickly becoming the largest technology company in the nation. To keep costs down, it pursued vertical integration by building its own semiconductor refining facilities, which allowed EMI to sell its products at a price affordable to the average Etheinian. Aerospace was another area of success; in 1985, EMI scored a 10-year government contract to produce military aircraft, which would eventually prove to be one of the most lucrative deals in the company's history. The profits from this contract were used to further expand the company's aircraft manufacturing facilities.
Eventually, EMI would grow large enough to begin acquiring foreign businesses. In 1987, Liam Haugseth bought a 51% stake in Uchiyama Scientific (a manufacturer of high-end optical instruments) and LuckStar Home Products (a domestic appliance company). Both companies would eventually be purchased outright and merged into EMI. Minority stakes were also acquired in rare earth mining, aluminum smelting, and composite materials businesses. In September 1990, Haugseth entered into a partnership with William Nieves, - founder of Riduur Corporation in Makko Oko - agreeing to assist him with operations in exchange for a 30% share of the company.
Privatization
Although EMI's spectacular growth in the 80s had turned it into a global titan of industry, by the 1990s it was seemingly being crushed by its own weight. One reason for this was the fact that the Etheinian government had, for two decades, prioritized maintaining high employment over economic growth. This meant that EMI, as a state-owned enterprise, could not easily close or relocate its plants. Old, unprofitable factories were kept operating at a loss, creating inefficienies and waste in the supply chain. Additionally, the general slowdown of the Etheinian economy reduced demand for industrial machinery (one of EMI's core business sectors), while soaring fuel prices hurt its automotive sales. Finally, the creeping stagnation that was pervading Etheinian society meant that many of EMI's products were being technologically outmoded by foreign companies.
The end of Liam Haugseth reign as chairman of the company came in March of 1994, when 26,000 workers in Kiraz and Beimer went on strike to protest wage cuts and poor working conditions. After failing to surpress the strikers, EMI was forced to appease them by making concessions. This came as a major embarrassment to the government, leading then-President Renato Chavarría to ask Haugseth to resign. As a compromise, Haugseth was allowed to remain on EMI's board of directors, letting him maintain considerable influence within the company.
Upon taking power in 1996, President Alejo Ibáñez vowed to reverse Etheinia's economic decline. One of his main objectives was to privatize the big state-owned corporations in order to shift the country towards a market-based economy. Etheinian Manufacturing Industries, which was operating at a net loss of $1.8 billion per year, would be one of the first targets for privatization. Ibáñez ally Keir Aitken was appointed as chairman of the company and tasked with preparing it for the transition. On December 31st, 1996, the President signed an executive order that decoupled EMI from all government funding and control. A day later, on January 1st 1997, Aitken registered EMI as a public limited company.
Restructuring
Kier Aitken's first major action as chairman of the now-independent EMI was to order the immediate closure of 20 factories deemed to be "inefficient, unprofitable, or otherwise underperforming". A further 35 factories were slated for closure within the next two years, which would result in more than 90,000 workers being laid off. In response, workers at other facilities threatened a repeat of the crippling 1994 strike; this was narrowly averted after the company launched a smear campaign against radical labor leaders, resulting in their replacement with moderate figures who were more compliant with EMI's management. This downsizing, combined with general improvements to supply chain logisitics, did help reduce losses at the company. However, the layoffs had devastating consequences for the communities previously employed by EMI - particularly Beimer, Dzefel, and Korista City, where unemployment rose as high as 30% in some areas by 1999.
Emboldened, Aitken wanted to further downsize the company by selling off some of its business divisions, in order to raise additional capital and to make EMI leaner & more efficient. However, he would be opposed at every turn by Liam Haugseth, who accused the chairman of trying to destroy the company he had built up. An internal power struggle was brewing between the old guard of Haugseth loyalists and the neoliberal acolytes brought in by Aitken. The two factions deadlocked for years; Chairman Kier managed to achieve some minor successes(such as selling off EMI's alumnium company shares), but found himself slowed at every turn by Liam, whom he could not dismiss for fear of repercussions from the board.
This boardroom war would finally come to a head in 2001. After Riduur Corporation announced an IPO in January, Haugseth secretly met with representatives from the investment bank KaderSamara, seeking to organize an LBO of the Makko Okoan company. EMI's board was not notified of the meeting. The reason for this radical action by Haugseth is still unknown, but some sources report that the former chairman believed a successful takeover of Riduur would impress key swing votes on the board and prove to them that downsizing was not the answer. The operation was nearly successful, with a team of corporate raiders from KaderSamara snapping up 23% of Riduur's shares over a period of six months (in combination with Haugseth's original 30% share, this would have been enough to wage a proxy battle against CEO William Nieves). However, his plans were foiled at the last minute when securities regulators in Makko Oko filed suit to block the takeover, obtaining a legal injuction that forbade EMI from further involvement with Riduur. With Haugseth's skullduggery now exposed, Aitken had the excuse he needed to fire him; EMI's board voted unanimously to force the now-digraced former chairman into retirement. Shortly therafter, the company was renamed to Etheinian Manufacturing, dropping "Industries" from its title - this was seen by commentators as symbolic of the end of the Haugseth era.
Now in total control, Chairman Aitken was free to restructure EM as he saw fit. The company's defense and aerospace divisions would be spun off to form Federal Defense Industries, while its composite materials and semiconductor refining businesses were sold to Etheinian Chemical Industries. Its automotive division was also heavily downsized, with most production being outsourced to NAC Motors. Aitken would concentrate EM's production towards its core competencies of industrial equipment and electronics, with a particular focus on turbines, fiber optics, industrial automation, enterprise computing, and consumer devices. He would also invest heavily into modernizing their own factories in order to further reduce labor costs.
Decline & Bankruptcy
Kier left Etheinian Manufacturing in late 2004 to become an economic policy advisor for the Etheinian government. Although his tenure had reversed the company's fortunes and made it profitable again, he had also saddled it with a considerable amount of corporate debt which had been borrowed to fund advanced R&D projects. In addition, the removal of price controls and lowering of trade barriers meant that there was now increased competition in the marketplace. Neither of these issues were necessarily unmanageable, but incompetent actions by Aitken's successors would eventually send EM back into the red.
Two major blows to the company were the disastrous launch of the Tellurium Neo computer system in 2005(see below), and the discovery of major security vulnerabilites in its SCADA controllers in 2009, which led to lawsuits from its customers after a number of costly hacking incidents. In 2010, financial regulators discovered that EM had been misusing Mark-to-market accounting to overstate the value of its assets, which it then used as collateral to borrow more money. This led to a criminal investigation that resulted in the resignation and eventual imprisonment of several EM executives. The company was fined $1.5 billion for its involvment in the accounting scandal.
With a diminishing market share, tarnished reputation, and crippling debt load, Etheinian Manufacturing filed for Section B bankruptcy protection(reorganization) on May 13th, 2011. The company continued to slog along for a few more years, but once auditors had made it clear that EM had no hope of ever repaying its creditors, the government ordered their bankruptcy case to be converted to Section A(liquidation) on September 5th, 2013. Most of its assets & operations were purchased by other Etheinian companies. Some of EM's old brands continue to be used today under different manufacturers.
Products
Automobiles
Unity
The Unity marque was used for licensed copies of foreign car models manufactured by EMI. It was phased out during the late 80s as the company shifted its focus towards production of domestic models.
- Unity Concordia 100: Rebadged copy of Ford Cortina Mark III, produced 1977-1982
- Unity Concordia 200: Rebadged copy of Ford Cortina Mark IV, produced 1982-1988
- Unity Progress: Rebadged copy of Fiat 126, produced 1977-1986
- Unity Fellowship: Rebadged copy of Citroën CX, produced in limited quantities from 1979-1981
Vantage
The Vantage marque was used for domestic car models designed and produced by EMI. Some Vantage models continue to be manufactured today by NAC Motors.
- Vantage Lazuli: C-segment car, built in sedan and hatchback styles. The first wholly original car made by EMI, the Lazuli was highly successful in domestic markets on launch and was exported widely. Produced 1986-2011, with a facelift in 2000.
- Vantage Expo: B-segment five door hatchback, designed to be a more fuel-efficient car for city dwellers. Produced 1988-1998
- Vantage Aëdon: D-segment car, built in hatchback and estate styles. Noted for its innovative active suspension system. Produced 1993-2005.
- Vantage Sfaíra: B-segment car, built in sedan and hatchback styles. Sucessor to the Vantage Expo. Produced 2000-2013 by EM; it continues to be sold by NAC Motors as the NAC Marten.
- Vantage Erato: D-segment car, built in sedan, hatchback, and estate styles. The intended sucessor to the Vantage Aëdon, it suffered a troubled production and initially struggled on launch, although it was later a modest export sucess. Produced 2005-2013 by EM; it was sold by NAC Motors as the NAC Emerald until being discontinued in 2020.
- Vantage Alpine: C-segment crossover utility vehicle, featuring 4-wheel drive for offroad performance. Produced 2001-2013 by EM; it continues to be sold by NAC Motors as the NAC Alpine.
Computers
- EM-GX: IBM PC clone, released in 1984.
- EM-GXL: Upgraded model with 1 MB of RAM and a color monitor, released in 1986.
- EM-GC: Cheaper downgraded model, intended for use by schools and as a home computer.
- EM V/32: IBM PS/2 clone, released in 1989
- EM V/32 Notebook: Laptop version of the V/32
- EM V/32 Network: Modular server version of the V/32
- EM Vizistation: High-end graphical workstation computer, designed to run a port of NeXTSTEP OS. Released in 1991.
- Tellurium series: Line of 32-bit computers based off the VAX architecture. First introduced in 1982 with the Te/840, the Tellurium series was considered revolutionary by Etheinian standards at the time and was widely adopted by businesses, universities, and the government. More than 350,000 units in 11 different models were eventually produced.
- Tellurium NextGen series: Line of 64-bit computers based off the DEC Alpha architecture. Introduced in 1994 as a sucessor to the original Tellurium series, the NextGen series was again widely adopted among domestic customers; it was also one of the few truly competitive Etheinian computer systems on the export market.
- Tellurium Neo series Line of 64-bit computers designed around a custom EPIC architecture and high performance chipset. Compared to the prior two series of Tellurium systems, the Neo series was considered a flop; its development was beset with delays and huge cost overruns, and despite boasting impressive performance when introduced in 2005, it failed to capture a signifigant share of the enterprise computing market compared to x86 or RISC-based systems.
Consumer Electronics & Appliances
- LuckStar TVMate: Line of videocassete recorders. Produced in both VHS and Betamax versions.
- LuckStar DVDMate: Line of televisions with integrated DVD players, a licensed copy of a product originally made by Riduur. Discontinued in 2001 due to legal issues.
- Akio: Brand of personal cassette players, later expanded to CD and MP3 players.
- Opitka: Brand of rangefinder cameras
- Fourier: Brand of programmable & graphing calculators