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The Zenith Story – Part 2

April 29, 2011

From “the Zenith Story: A history from 1918 to 1954″ Zenith Electronics Corporation, Glenview

Click here for part 1

THE DEPRESSION YEARS

Zenith retrenched savagely. The Michigan Avenue offices were shut fast, and all operations were consolidated in the plant at Iron Street. Product planning was regeared to meet the times. Large sets were replaced in the line by smaller, lower-priced models, but the emphasis on quality was not relaxed. Employees, imbued with fierce pride and loyalty, tightened their belts along with management.

Zenith forged its way through five years of losses without borrowing and emerged from the depression with meteoric speed.

The company reported sales of about $81/2 million in the 1935-36 fiscal year. The following year they were almost double that amount. And Zenith’s report for the year ending April, 1942 revealed a sales total of some $34 million.

That recovery was made possible by foresight, conservative management, business drive, and inventiveness. Much of the credit for Zenith’s weathering the storm and making its meteoric post-depression recovery is due to Hugh Robertson, who joined the company in 1924, became treasurer in 1926, and took the post of executive vice-president in 1934.

Among Zenith’s depression weapons was a new line of low priced table model receivers introduced in 1931. These sold in great volume. Another was a 110 volt DC radio operating directly from the electric line. This model was very popular in such cities as New York and Chicago, where large areas still had direct current, particularly in business and apartment hotel districts.

It was in the depression year of 1931 that the Phonevision idea was born. Commander McDonald, convinced even then that advertising sponsorship alone could not provide the kind of television programming the public would demand, urged other radio manufacturers to work on the problem of providing television with a home box office. Zenith laboratories began their first research at that time on developing the technical means for providing a home box office.

ECONOMIC UPTURN

The economic turn for Zenith began in 1933. Deficits had been running at the rate of half a million dollars a year, but there was a fifty-thousand dollar profit for the year ended April 30, 1934.

At the beginning of the year 1934, Zenith was the lowest priced radio stock quoted on the New York Stock Exchange. At the end of the year it was the highest.

In 1934, Zenith introduced an auto radio which had the tuning control on the steering column in easy reach of the driver. In subsequent years Zenith became one of the largest suppliers of automobile radios to the industry. Zenith’s financial recovery assumed spectacular proportions in 1935 when net earnings pushed through the million dollar mark again to a total of $1,213,000 for the year ended April 30, 1936.

FREE POWER FROM THE WIND

One of Zenith’s recovery tools was a legacy from McDonald’s voyages to the Arctic. Along the route he had presented radio receivers to a number of missionaries and government officials, with what he believed to be an ample supply of batteries. But he had forgotten the loneliness of the six month long Arctic night, when these remote spots were completely out of touch with civilization. Radio was like a new breath of life to these isolated people, bringing them news and entertainment from all over the world. As a consequence, supplies of batteries that should have served for three years were exhausted in less than one.

McDonald did the best he could for his Arctic friends by sending them new batteries as needed. At the same time he began wondering if there were not some other method of supplying them with dependable power. One day while sailing a boat it occurred to him that the one great source of power that was available almost everywhere was the wind.

In 1935, with major depression problems solved, he asked Zenith engineers to find out if there was in existence a practical device for translating free power of the wind into electricity.

Within 24 hours the engineers reported back that there were two Iowa farm boys, John and Gerhard Albers, who were associated with the Wincharger Corporation in Sioux City, which was building wind driven generators for charging 6-volt storage batteries. They had solved the problem of getting their generators to work in light winds by using two airfoil sections for blades on their “wind mill.” The wind pulled these air-foils around, as compared to the way wind pushed the multitude of blades on the low-speed windmills used for farm water pumps.

The Albers boys had done all of their development work without the aid of wind tunnels. Instead, they mounted Winchargers on automobiles; on calm days, the speedometer reading gave them the wind velocity.

Zenith, meanwhile, had developed an efficient battery radio that operated on a single 6-volt storage battery, without need for bulky, expensive B and C batteries. When used together, this radio and the Wincharger unit could provide unfailing radio operation, with a total power cost of about fifty cents a year. Moreover, it had enough reserve power to operate a few lights from the storage battery, a Godsend to farms that had no electricity.

Zenith bought control of Wincharger, which then acquired a larger factory in Sioux City, and started mass production. The first order from Zenith to Wincharger called for fifty thousand units.

The 6-volt Wincharger was sold for $10 to purchasers of Zenith radios who wanted the power unit. It was an outstanding commercial success. Sales were counted in tens of thousands, and since each $10 Wincharger sale usually resulted in the sale of a Zenith radio, the com-pany soon became the industry’s leading supplier of farm radios.

Wincharger’s next development was a 32-volt genera-tor for farm lighting plants. Thousands of these were sold as replacements for the gas engine generators used in farm lighting plants, which were very costly to operate. Other thousands were sold, together with batteries and controls, to supply a complete unit for providing farms with light and enough power to operate cream separators, refrigerators, washing machines, etc. These outfits were so efficient that one of the larger models would provide 250 kilowatt hours per month with an average wind velocity of 10 miles per hour.

The unfailing dependability of Wincharger power soon made the company known all over the world. Anybody traveling through Canada, Alaska, South Africa, South America, the Alps, almost anywhere that men live be-yond the reach of power lines, will come across these devices, merrily whirling away to provide free power from the wind. Travelers throughout the vast reaches of the remote Arctic regions sec them there, supplying light and power in the very land where the idea for them originated.

No measure can ever be put upon the contribution Wincharger made to better, more comfortable living for rural America and throughout the world. All told, Wincharger brought the blessing of electricity to more than half a million isolated homes.

In 1937 Zenith purchased all outstanding stock to make Wincharger a wholly owned subsidiary.

A NEW LOOK

Preoccupation with the development of Wincharger did not prevent Zenith from making major progress in other lines. One 1935 innovation was as simple and obvious as the eraser on a pencil, but it had been completely overlooked by the entire industry. Prior to 1935, the dials on all makes of radio receivers were small and difficult to read. Zenith changed all this by adding to its 1935 line a large, black dial, with figures so distinct that they were easily read even without glasses by most people. This dial became a tremendous sales feature, and was widely copied by other manufacturers.

Even during the emphasis on low priced receivers in the depression years, Zenith had not forgotten its devo-tion to quality. Consequently, it found a ready market for its 1935 line of feature-laden receivers. One model, selling at $750, incorporated Zenith’s largest chassis in a massive cabinet, with 50 watt audio output, variable selectivity, 3 speakers, and other exceptional features.

EMPLOYEE LOYALTY

When depression clouds began to lift, Commander McDonald called all employees together to personally thank them for the loyalty they had shown, and for the sacrifices they had made to help the company survive the depression years. He then promised them that henceforth they would share in the prosperity of the company. That promise was kept with a direct bonus plan which has been superseded by a profit sharing retirement plan.

In 1936 company employees surprised the management by the presentation of a bronze plaque which read:

TO THE DIRECTORS AND OFFICERS of the ZENITH RADIO CORPORATION
We believe in your wisdom and fairness. We assure you of our loyalty and effort. We are proud of this partnership.
THE EMPLOYEES of the ZENITH RADIO CORPORATION
December 1936

In 1937 Zenith had completely outgrown its Iron Street factory, and purchased a large building at 6001 West Dickens Avenue, with 392,458 square feet of floor space, and another 225,000 square feet of unoccupied land. The factory was completely renovated and equipped with the most modern production equipment available, to make it one of the most efficient production units in the radio industry.

PRE-WAR DEVELOPMENTS

The ensuing years were marked by steady progress. In 1937, for example, the radio industry as a whole showed a 15% drop in sales, but Zenith sales increased. New developments prior to American entry into World War II included a new chairside radio phonograph combination, a Radio Nurse which permitted nurse or parents in one room to hear every sound from the baby’s room, and a line of portables that catapulted Zenith to its position of unchallenged supremacy in this field.

A RADIO HEADLINER

An outstanding feature of Zenith portables was the detachable Wavemagnet® antenna that could be attached to the windows of planes, trains, or steel buildings to give good reception in these difficult locations.

Headline star of the portable radio field was the TransOceanic® shortwave, longwave portable which was put into mass production some months before the factory converted 100% to war production. This set had been several years in the making before it went into production, and has been thoroughly field tested in every type of climate from the Arctic to the Tropics.

When civilian production stopped, Zenith had unfilled orders on hand for more than one hundred thousand TransOceanic portables. It was unable to fill these. but tens of thousands had already been produced and shipped. These sets were carried to every war theater by American soldiers and officials, and earned a reputation for outstanding performance and rugged durability that has never been approached by any other portable radio receiver. Some of the reports the company received about the TransOceanic radio are almost unbelievable; sets that were fished out of water-filled shell holes, dried in the sun, and put into service; sets that were blasted by bombs and still worked, etc., etc. In many locations around the world the Trans-Oceanic portable proved to be the only radio receiver that could give dependable reception of American and other short wave programs. For thousands of our soldiers this radio was for long periods of time the only source of direct news from home.

Demand for the TransOceanic portable became enormous, and sets commanded fantastic prices on the black market, because none was to be had through regular commercial channels. Zenith, of course, sold none, but the management had kept a small inventory. These sets were presented, from time to time, to American ambassadors, and to other officials who had urgent need for them. It was a favorite saying around the plant that there were two things at Zenith money could not buy: Zenith friendship and TransOceanic portables.

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One comment

  1. […] (Click here for part 2) […]



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