By the late 1920s the company was in a parlous financial state and a complex financial reorganisation, apparently backed by American Westinghouse interests, was required to save the company. The man most associated with the company, George Nelson, became managing director in 1930. During the 1930s the company became associated with the electrification of the Southern Railway of England's system, which gave it a strong position in the traction market.
English Electric made a substantial contribution to the British war effort during the Second World War. It took over, in 1942, Napiers the aero-engine company, and this helped establish the company's aircraft division. As well as the company's traditional markets in heavy electrical engineering, the post-war era saw developments in aircraft, along with the railway traction business and a foray into domestic markets through the acquisition of the Marconi Company in 1946. Further important companies acquired in 1955 included Vulcan Foundry, and Robert Stephenson and Hawthorns, all with substantial railway engineering pedigrees.
The early 1960s saw the company rationalise, under government pressure, its aircraft division. This was to become part of the new British Aircraft Corporation. In 1960 English Electric attempted a takeover of one of the other major British electrical companies, GEC. This failed but the rest of the decade saw the merger first of GEC with the British AEI company in 1967, and then in 1968, in the face of a bid for EE from the Plessey Company, the takeover of English Electric by the new GEC conglomerate.