Brown, Boveri & Cie
| Company type | Corporation |
|---|---|
| Industry | Electrical engineering |
| Founded | January 1, 1891 in Baden bei Zürich, Switzerland |
| Founder | Charles Eugene Lancelot Brown, Walter Boveri |
| Defunct | 1988 |
| Fate | Merged with ASEA to form ABB |
| Headquarters | Baden bei Zürich , Switzerland |
Area served | Europe, Middle East, Africa, North America (limited) |
| Products | Electric motors, power generation equipment, traction equipment, industrial machinery, electronics, power distribution |
Brown, Boveri & Cie. (also known as Brown, Boveri & Company or BBC) was a Swiss-based electrical engineering corporation established in Baden bei Zürich in 1891 by Charles Eugene Lancelot Brown and Walter Boveri, both formerly employed by Maschinenfabrik Oerlikon. In 1988, BBC combined forces with ASEA to create ABB.
Early development of BBC Brown Boveri
Founded in 1891, BBC was distinctive among multinational corporations for having subsidiaries that were often larger than its Swiss headquarters. Given Switzerland’s small domestic market, BBC quickly set up European branches, occasionally facing challenges in maintaining effective managerial oversight over its extensive international operations. The 1988 merger with ASEA—recognized for its strong management structure—was intended to enhance operational control and optimize the global network of BBC.
Operations in Britain
At the outset, BBC manufactured electrical products such as electric motors for trains and power generation equipment used by European rail systems. In 1919, the company granted British firm Vickers a license to produce and distribute BBC products throughout the British Empire and parts of Europe. This licensing deal injected significant capital and ongoing income, supporting BBC’s international expansion despite widespread protectionist trade restrictions.
Operations in Continental Europe
By the early 1920s, Brown Boveri had diversified with subsidiaries across Italy, Germany, Norway, Austria, Czechoslovakia, and the Balkans. However, it suffered financial setbacks due to the devaluation of the French franc and German mark. Additionally, increasing production expenses within Switzerland combined with stagnant sales contributed to these difficulties. To counterbalance losses, Brown Boveri reduced its capital valuation by 30% in 1924. The licensing agreement with Vickers ended in 1927 and was not renewed. The company also maintained a longstanding partnership with a Netherlands-based firm instrumental in establishing Holec (Holland Electric) during the early 1960s.
Expansion
Brown Boveri’s subsidiaries experienced rapid growth amid Europe’s industrial development, fueling strong demand for heavy electrical machinery. In particular, Italy’s expanding railway industry significantly benefited the Italian branch, while the German subsidiary outperformed the Swiss parent company. Over subsequent decades, growth kept pace with technological progress in electrical engineering. Each subsidiary operated with considerable autonomy, functioning similarly to local companies. This geographic diversification helped protect the parent firm from economic downturns concentrated in specific regions.
Nazi period 1933-1945
Growth continued throughout World War II. During this time, a German subsidiary—Stotz-Kontakt GmbH based in Mannheim—utilized forced labor to boost production capabilities.
Post-World War II
After World War II, the onset of the Cold War opened opportunities for electrical contractors involved in defense industries; however, Brown Boveri’s subsidiaries were frequently regarded as foreign firms, complicating access to classified government contracts. Nevertheless, the company achieved notable success in power generation projects, including those involving nuclear power, and earned considerable profits from electrification initiatives across the Third World.
Reorganization of Brown Boveri in 1970
In 1970, Brown Boveri took over Maschinenfabrik Oerlikon and restructured its subsidiaries into five distinct groups: German, French, Swiss, "medium-sized" (comprising seven manufacturing sites across Europe and Latin America), and Brown Boveri International. Each of these groups was organized into five product divisions, specifically power generation, electronics, power distribution, traction equipment, and industrial machinery.
The United States
Throughout the 1970s, Brown Boveri faced challenges entering the US market. A joint venture with Rockwell collapsed due to financial disputes. Nevertheless, the company retained several important American customers, including major utility companies such as the Tennessee Valley Authority and American Electric Power’s DC Cook Unit 2 steam turbine project. Despite these relationships, sales in North America remained modest—accounting for only 3.5% of total revenue during 1974–75—as Brown Boveri continued its attempts to grow its footprint in the region.
Great Britain
In the early 1970s, Brown Boveri contributed traction insulators for the electrification of Britain's West Coast Main Line. In July 1974, the company proposed acquiring a 53% majority stake in British controls and instrumentation firm George Kent, Limited. Initial apprehensions about foreign control of sensitive technology emerged; however, Brown Boveri suggested separating George Kent’s scientific and medical divisions. In September 1974, a rival bid from the General Electric Company (GEC) gained favor with both the British Government and The Rank Organisation. Ultimately, Brown Boveri secured a 49% share by increasing its cash offer and winning support from George Kent employees concerned about GEC ownership. The business was rebranded as Brown Boveri Kent, with The Rank Organisation acquiring nearly 9% of the enlarged entity.
The Middle East and Africa
By the mid-1970s, escalating demand for large-scale power plants in the Middle East prompted Brown Boveri to redirect focus away from North America. Additionally, oil-rich African countries such as Nigeria, aiming to expand their manufacturing sectors, created fresh opportunities for the company’s expertise in heavy electrical engineering.
The 1980s
During the early 1980s, Brown Boveri experienced stagnant sales alongside declining profits. In 1983, its German subsidiary based in Mannheim, which contributed close to half of the parent company’s revenue, saw a recovery. Although order volumes increased, high operational costs constrained profitability. By 1985, cost reduction measures enhanced subsidiary results; however, falling international prices and adverse currency fluctuations diminished overall gains. In 1986, Brown Boveri raised its ownership stake in the Mannheim unit to 75 percent.
Unification of research
Later in the decade, Brown Boveri consolidated theoretical research activities within the parent company to minimize redundant R&D efforts among subsidiaries while permitting localized product development tailored to specific markets—thereby optimizing investment in research.
Supercharger development
In 1987, Brown Boveri introduced the Comprex supercharging technology for diesel engines, which improved horsepower by 35% and increased torque by up to 50% at lower engine speeds. Japanese automobile manufacturer Mazda planned to incorporate this innovation into its diesel passenger car lineup.
Merger
In January 1988, Brown Boveri combined forces with ASEA, resulting in the establishment of Asea Brown Boveri, which emerged as a worldwide frontrunner in power and automation solutions.