Ericsson becomes a truly national company

Ericsson started the process of relocating to other parts of Sweden in 1946, when the main plant's coil-winding operations were transferred from Stockholm to Katrineholm, in central Sweden, where the company leased production facilities from the local municipality. Traditionally, coil winding was a job for women, and there were plenty of female workers in Katrineholm as a result of the textile crisis.

Contacts with the authorities indicated that Ericsson would be encouraged to continue to relocate jobs to other parts of the country where there was considerable unemployment, for example the southeast, Söderhamn and Sundsvall on the eastern coastline, or the northernmost parts of the country. The National Labour Market Commission presented proposals for suitable locations, and a delegation of Ericsson representatives visited Frövi, Sundsvall, Söderhamn, Kalmar and Karlskrona in the autumn of 1946. Ericsson opted for Söderhamn and Karlskrona.

The company immediately started to build a plant with a floor space of 6,500 square meters in Söderhamn, and simultaneously initiated training of the workforce. The plant commenced operations in 1948 and, in organizational terms, was virtually a branch of the main plant in Midsommarkransen. In Karlskrona, Ericsson took over 3,000 square meters from the state-owned tobacco monopoly, which transferred its manufacturing operations to Nässjö. The Karlskrona factory started to assemble telephones on a relatively independent basis in 1947.

The reason for this initial postwar wave of relocation was the shortage of labor and housing in the Stockholm area. The labor force in other parts of the country was less mobile than in Stockholm, where the economy was overheated, and wages were also lower. Another advantage was that sites and construction costs were also more reasonable.

But central government soon wanted to influence developments. After peace was declared in 1945, Sweden was unexpectedly struck by an economic boom, which resulted in raw material shortages and inflation. As a result, stringent building regulations were introduced in late 1946. The main aim was to restrict investment in major urban areas.

Ericsson needed to have good arguments to support the expansion of its operations in the Stockholm area, and following its establishment of new facilities in the provinces it was able to persuade the authorities to approve improvements to its main plant in Midsommarkransen by extending the southern façade and building a 100 meter tower for radio communications experiments. Following extension of the Ulvsunda plant, the parent company was able to double its gross floor space in the Stockholm area from less than 70,000 square meters to almost 140,000 square meters. This meant that in 1950 only some 15 percent of Ericsson's employees and 18 percent of the factory floor space were located outside Stockholm.

The first wave of relocations was not really followed up until the early 1960s, although some there were some initiatives in the 1950s. Ericsson acquired premises in Örebro as a result of its purchase of Svenska Bandspelaraktiebolaget (tape recorders), for example, and in 1955 bought the Örgryteverken plant in Mölndal, near Gothenburg, which proved to be a more significant move in the long run. Ericsson transferred its production of defense electronics to Mölndal, and recruited employees in 1956. Subsequently, Mölndal became a center for areas such as space electronics (particularly radar), computer hardware, road and rail equipment, and laser and IR products. Ericsson claimed that the primary motive for locating this type of production in western Sweden was the security aspect, since it was not appropriate to site crucial defense production close to the main plant or in the Stockholm area.

But other factors were probably more important. The Gothenburg region was less overheated than Stockholm, with easier access to housing and labor resources. The Chalmers University of Technology was also located in Gothenburg, and access to qualified engineers for the extensive research and development tasks involved was an essential requirement for defense-oriented, advanced manufacturing operations. Gothenburg was the only realistic alternative to Stockholm.

Author: Ulf Olsson

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