Founding of a company
1873-1890: An impressive beginning
According to the first company charter from February 21, 1873, AB Atlas’s objective was to manufacture and sell all types of materials for the construction and operation of railways, as well as establish the necessary workshops. When first established, AB Atlas had an unusually high number of shareholders – 50 – none of whom held more than 10% of the share capital. The largest shareholder was the Wallenberg family, which through its bank, Stockholm’s Enskilda Bank, also provided substantial loans to the company.
The initiative to start the company was taken by a 36-year-old engineer named Eduard Fränckel, who also became the company´s first managing director. He shared his vision with the large-scale industrialist D.O. Francke and the financier A.O. Wallenberg, both of whom became interested in the project. A large plot of land in Stockholm was purchased and the construction of an impressive plant was started. In contemporary industrial reporting, the Atlas plant was praised for its spaciousness and advanced technical equipment.
At the very beginning Atlas acquired one of the country’s largest railway-car makers, Ekenbergs söner in Södertälje. In 1875 production totaled MSEK 4 and the company had 780 employees. Manufacturing operations were, by Swedish standards, substantial. Atlas was the largest engineering operation in Sweden at the time.
Even though results during the first years indicated a bright future for the company, severe problems lay ahead. It soon became clear that Atlas had been set up on too big a scale. Its products could not be sold at a profit in competition with smaller but more efficient wagon builders. Atlas management took a number of steps to develop more profitable replacement products. Standing constructions such as bridges, building structures and church towers were examples of such products. The Vasa Bridge in Stockholm, opened to traffic in 1878, as well as the St. Erik Bridge, inaugurated in 1906, were built by AB Atlas.
In 1883 the 30-year-old Knut Wallenberg replaced his father on the Atlas board, as well as director of Enskilda Banken. By now Atlas had suffered losses for a number of consecutive years. In 1887 Eduard Fränckel was forced to leave the company and Oscar Lamm was appointed the new managing director. It was evident that the economic situation is untenable and in 1890 AB Atlas went into liquidation. The company is, however, immediately restructured, again with the financial help of Wallenberg and Enskilda Banken.