Intense competition from continental manufacturers had cast a shadow over business for many years, and there came a time when only drastic price reductions could enable the Company to maintain its position in foreign markets. But this in the long run would inevitably eat into the resources available for developing markets and products: for a single concern the position would become untenable, As long as individual firms continued to parallel each other's activities and developments there would be ever-growing expenditure in competition, and an unsatisfactory situation would continue. On the other hand, cooperation within the industry would eliminate unnecessary duplication of effort and expenditure and effect the necessary economies in research, engineering developments, manufacturing processes, and materials. Then would come the answer long sought for— lower selling prices and larger turnover.

It was in pursuit of this policy that in 1927 the control of M-V, which had recently passed from Vickers to the International General Electric Company, was acquired by F. Dudley Docker. Once more Docker was a deciding factor in the affairs of a great electrical concern, and now he could promote his plans for rationalization; his ultimate aim was to establish a British electrical engineering corporation resting on sound foundations and organized to compete on equal terms with similar undertakings abroad. By the spring of 1928 negotiations were in train with the British Thomson-Houston Company, the Edison Swan Electric Company and Ferguson, Pailin Limited. In the last months of the year they were successfully concluded, and the decisive steps taken to effect a scheme of consolidation. For convenience the Metropolitan-Vickers business was transferred to an existing subsidiary, and the old Company renamed was used as a holding company for the group. Thus Associated Electrical Industries Limited employing 30,000 people came into being.