--war on two formidable cartels. Zenith won the first war, but lost the second.
THE FIRST WAR. Zenith launched a legal attack on the RCA (Radio Corporation of America) patent cartel that was extorting exorbitant royalties from the American radio industry. The cartel was operating in criminal violation of the Sherman Anti-trust Act. Zenith fought this war single-handed, and won it for the benefit not only of Zenith, but also for the entire American consumer electronics industry.
But it was a short-lived victory, for another and more formidable competitor was in the offing, this one inexplicably supported by the government of the United States. This was the war against another cartel which RCA also instigated--a RCA-Japanese cartel. Zenith lost this war. Zenith was not the only loser for hundreds of thousands of American manufacturing and related jobs were lost when production was transferred out of this continent. In the end, the entire American radio and television industry was wiped out. Zenith was the last of the American companies to go under. It was declared bankrupt in 1998.
The story of Zenith's initial victory and eventual defeat is told brilliantly in a book by Philip J. Curtis, a Zenith attorney, who was the Zenith "point man" is the two battles. His book is titled The Fall of the U.S. Consumer Electronics Industry . . . An American Trade Tragedy. (The publisher is unreachable and has apparently gone out of business.) The book is being "remaindered" by Amazon. com at a price of $114. In his Foreword to his book,
Curtis writes: "Dedicated to the thousands of American workers who lost their jobs as a result of the predatory attack of a foreign cartel described here—an attack made possible by heavily lobbied law enforcement failures.”
Curtis casts as the villain in both wars (to quote) ". . . the brilliant and ruthless David Sarnoff who seized control of the RCA patent pool . . . and who controlled the lucrative industry for over 40 years by means of a scurrilous patent-packaging licensing scheme."
Curtis did not mince words.
And so it can be assumed that he (Sarnoff) is the reason why you cannot buy an American-made radio or television set, nor any of the hundreds of other revolutionary electronic devices such as iPhones and iPods. Now they are all manufactured overseas--not here; not in America. The American worker has lost all the manufacturing work on those devices.
The story of the first war will begin in Post 5 of this weblog, and carried on in installments in subsequent posts. And thereafter, and in further posts, the story of the second war will be told , the war that Zenith lost. Until then, let's look into some of the aspects of Zenith that made it the great company that it (sadly) was.
It was traditional for Zenith to throw a big party every year for the benefit of the "Zenith Pioneers"--those who had been employees for 20 years. Here follows a page from the booklet designed for the 1993 /Zenith Pioneer banquet.
The booklet lists 1,250 active Pioneers, 682 retired Pioneers, and 330 in Memorial.
Let the Party Begin!
Let the Party Begin!
Everyone checked in at a long table near the door. Zenaida Rodriguez and Patty Czerkies signed you in and you wrote your name on a stick-on tag. The tag was needed during the greeting period, a stage where everyone wandered about to meet old friends—in case you forget the name, you sidled up to them, shook their hand, and surreptitiously read their name tag.
Everything was free--the drinks, the dinner, and orchestra, and other amenities. The two bars opened at 5 p.m. sharp, and long lines formed immediately. It was best to order two drinks at a time, for you were likely to go dry before you got through the lines again. The bar closed at seven sharp, which provided two hours to get well-oiled if that was one's inclination.
Promptly at Seven o’clock, the president of the Zenith Pioneers called time and requested (several times!) that people “please be seated . . .be seated, please.” If you had wanted to sit at a table with friends, you signed up for the privilege weeks in advance.
Then there would be a brief speech which included a tribute paid to those who had passed on during the past year. It was followed by a prayer, often said by Bill Signer, who had worked for Ray Hunt before he retired. Bill had married a widow with four children and had become a lay preacher.
The food was good and plentiful: mushroom barley soup, roast beef with gravy, Lyonnaise potatoes, Polish sausage with kraut, roast barbeque chicken , pierogi, dessert, and milk, tea or coffee. The food was served cottage-style, with serving plates passed back and forth and refilled immediately. Carafes of white and dark wine were stationed at each table, also refilled immediately .
After dinner, cruising around the tables began again--another tradition. Then at 9:30, the band struck up, with dancing to the Hokey-Pokey and other Golden oldies. At midnight, the band played Auld Lang Syne, and packed up its instruments. The parking lot became alive with cars starting up, and last cries of farewell were called out. The party was over for the year.
It was all quite warm and wonderful
The yearly celebration went on for many more years. But all parties must come to an end. Through the years, Zenith had borne the expense, but when Zenith began to run out of money, a charge was assessed: first $15, then $30. Attendance fell off, and as bankruptcy approached, the party was over. Pryzbylo's saw Zenith no more, nor did America.
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Gene Polley (1913-2009 ) Certain employees seem to typify a company: Gene Polley was one of those. He started with Zenith in 1935 and worked there for 47 years, retiring in 1982. He was granted 18 patents, three from the “Flashmatic” invention, a system for controlling a television set remotely, and for which he won a Emmy Award from the National Academy of Television Arts and Sciences. He had built up a small fortune of $50,000 primarily growing from purchase of stock initiated by a grant of $1,000 from McDonald for his invention of the Flashmatic. And he rode his $50,000 down to near-nothing when Zenith went bankrupt. Like so many Zenith employees, his faith in, and love for Zenith never faltered.
Gene Polley at his retirement dinner. George Hrbek (right) director, video systems engineering, said "Polley is more than a company man . . .In a larger sense, he and others like him are the Company."
Polley was interviewed in his 80th year, and after he had retired from Zenith
Q. How did you get started with Zenith?
“I knew Walt 'Sports' Herman, who was a well-known sportsman and a great friend of McDonald. Herman got me an interview with Zenith in 1935, right in the middle of the great depression. I went in with a letter from Herman, and guess who interviewed me? –Hugh Robertson! He asked me if I knew anything about radio and I said I built radio sets at home. ‘What kind of a job would you like?’ he asked. I said 'any kind of a job.' He said 'how about a job in the factory?' So he gave me a job in the factory as a stock boy. I was only 20 years old.”
[Side note from RC: Hugh Robertson was President and Chairman of the Board of Zenith, Earlier, he was the Zenith treasurer, and he did what all good Scotsmen do: He saved Zenith’s money, and it eventually amounted to about $650 million. He loved what Zenith was doing, and would say happily: “Isn’t it wonderful that we can supply jobs for all these people.” At Christmas time, he would visit various Zenith plants and wish everyone a Merry Christmas. It happened to me shortly after I had started with Zenith: he appeared at the door of Zenith’s Plant 5, shook my hand, and wished me a Merry Christmas. I had no idea who he was, other than he was kind gentleman who seemed to appear from nowhere.]
Polley’s Memories of McDonald
“McDonald lived on the near north side and he used to drive every morning to our first plant on Iron Street. That was a dreary old hole! It was in back of the stockyards, and when the wind was right, it –boy! But they had a good cafeteria there. The apple dumplings were out of this world!
“As he drove by, the traffic cops all saluted McDonald because at Christmas time, he gave them all gifts “ (Note: This was before stoplights became numerous, so traffic police directed traffic at intersections of main streets.)
“McDonald had an old Ford remodeled and restyled so that it had two hoods--a double hood! We built an FM radio for him with a special antenna that looked like the thing they had on steamships nowadays—that was on his Cadillac. We also built him a special FM radio for his car because he listened to classical music on the Zenith radio station he set up—Radio Station WEFM. The 'EFM' part was of course the initials of his name. He used to call the guy who ran the station to criticize the selections.
“He also had ideas to help the police department because they were all his friends. He asked me to make disappearing squad lights for them, and I did. And he got a patent on it! Probably the only patent he ever got. The lights would rise out of the trunk.”
Polley’s major contribution to Zenith was his invention of the Flashmatic, the very first remote control for the television set. It consisted of a hand-held flashlight shaped like a gun which the viewer used to selectively activate photocells located at each corner of the set, which in turn activated a motor-driven switch to change channels. In addition to changing channels, it turned the set on and off, and most important, it muted the set.
The Flashmatic was also given the name Lazybones, probably by an ad agency. Polley tells how it came about, and what became of it. It was the first of the remote devices device that soon became so beloved by couch potatoes.
“We always delivered a TV set with all the advance developments to the Commander every Christmas. The electrical group was getting his set ready for delivery to his home and they came to me and said ‘could you put a LazyBones unit on it.‘ About a month later, the Commander calls and says “put it into production.” He loved the Flashmatic, especially because it was like shooting a gun so he could ‘shoot off’ shows he didn’t like, and it could mute the set during advertisements, which he hated. McDonald recognized the value of new products immediately. He had a flair for that.
“Then we found we had a big problem: The guy that had given us the samples of the photocells did not know how to make them in quantity. Instead of an order for 10 or 15 of them, he got an order for 20,000. He went crazy! But without the photocells, what could we do? We had a hot item with publicity all over the country such as articles in the paper about the ray gun that “shoots off shows.” As a result of all of this, my invention became known as ‘Polley’s Folly.” (Below is shown a copy of the award to Polley from McDonald.)
[Note: That $1,000 in 1958 is nearly $29,000 in today's money.]
“Bob Adler was head of the research group then, and he was assigned to rescue the Flashmatic project. Adler came up with this ultrasonic way of doing it. He had worked on ultrasonics doing the war.”
[Note: I tried to get up an image of Adler's Space Command television remote control system, but it wouldn't come. I am in continual combat with this blog, and in fact, every computer system. But you probably recall what it looks like--a gizmo with four big buttons which you pressed to operate the set.) The push-buttons clicked on tuned rods which emitted a supersonic signal which was tuned to other rods in the TV set, which in turn caused an associated channel to respond. It was sensitive to interference from a set of jingled keys, for example, which would cause the channels to turn over. Polley’s system was also sensitive to interference: it could be lights from a passing automobile outside the house. Now, the signal medium is neither sound waves nor visible light, but invisible infrared light sent in coded pulses between the remote control handset to the television set. It is relatively immune to interference.}
Zenith Gets Into Television
“The only sets in the early days were put together by skilled individuals,” Polley continued, “with parts they had access to, and they could build their own TV sets, like the first radio amateurs did. It was after the war that Zenith got into the TV business. The programs were so bad, all home-made programs at that time. McDonald was worried about how the better television programs would be supported. He came up with a system for scrambling the picture, with a de-scrambling signal coming over the phone line. Called it Phonevision; I worked on it for a while. This was a fore-runner of cable TV. But ATandT wouldn’t go along with it. Now ATandT has most of the cable stuff in the country.” [Note: Google blog does not like the symbol "&;"--the "ampersand", so the "and" symbol has to be written out ATandT. Gad!]McDonald’s Profit-sharing System
“McDonald instituted a bonus system; I remember one year, after I had worked there a year and a half, we got a ten percent raise and a ten percent bonus. He realized that it was the ‘people in the plant’ that were doing this for him, and he rewarded them.”
Q. How much was that as a percentage of what you earned?
“It was 15% of your salary at one time, when we had a good year. Six percent, if not.”
(Note: When John Nevin took over, he learned that a factory worker had retired with $100,000. ($787,776 in today’s money. ) He apparently considered that to be excessive and reduced the profit-sharing plan to a range of 4% to 8%, with the return depending on the Zenith’s profitability. It never exceeded 4% from that time on.
Gene Polley died of natural causes at the age of 96. He was an avid and skilled golfer. Ten years before, at the age of 86, he “shot his age” with a score of 86. Always the achiever, and forever “a Zenith man.”
Farewell, Gene and all the Pioneers and other employees who are now “In Memorial.”
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The Mizpah. Being naval-centered, the Commander had a yacht on Lake Michigan. He named it the Mizpah. It had traveled as far as the Galapagos Islands. The Mizpah was used for McDonald’s honeymoon with his bride, Marianne. They cruised about Lake Michigan, and there is an inlet far up the Wisconsin Lake Shore named Marianne Harbor. When a celebrity came to town--whether movie star, politician, or other “name”— they were invited onto the Mizpah and were overwhelmed with hospitality--free food, drinks, and whatever. Actors such as John and Lionel Barrymore came aboard, as did the Wright Brothers.
Brian Marohnic, who later became Zenith’s National Service Manager, was the radio operator. He was kept busy sending and receiving messages for the guests. He recalled the voyages on Lake Michigan and being as liquid as the lake itself, but of a different composition.
The Mizpah served as a training vessel for the Coast Guard during the Second World War. Eventually it became outdated and was sunk in the ocean to serve as a reef for fish propagation.
Like all men, the commander loved a pretty face and a pretty body. The following story may be apocryphal, but it is worth the telling. McDonald invited a group of chorus girls for a cruise on the lake , and when they were far out in the Lake, suggested that they all go for a swim.
“Oh, no," they protested. "We have no suits.” “No problem," said the commander, " I just happen to have some.” With happy cries, they donned the suits and went for a swim. They quickly learned that the suits were made of a substance that dissolved upon contact with water.
When they clambered back aboard, the Commander was of course at the rail to welcome them.
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Now let’s prepare for the next Post, Post 5, where start of the story of Zenith’s First War will begin. First, a review of the Sherman Anti-Trust Act, a law which was the basis for Zenith’s winning the First War. (Unfortunately, a corrupt interpretation of the law by the Supreme Court is also the basis for Zenith losing the Second War.) It is a simple law and easy to remember:
Sherman Anti-Trust Act. Federal legislation passed in 1890 prohibiting "monopolies or attempts to monopolize," and "contracts, combinations, or conspiracies in restraint of trade" in interstate and foreign commerce. The major purpose of the Sherman Antitrust Act is to prohibit monopolies and sustain competition so as to protect companies from each other, and to protect consumers from unfair business practices. The act was supplemented by the Clayton antitrust act in 1914. Violations were at first considered to be misdemeanors, but later, criminal offenses. The act is enforced by the Federal Trade Commission (FTC), and the Antitrust Division of the U.S. Attorney General's office. (Source: Answers.com)
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HELP! HELP! Comments needed! If you can add a memory of Zenith, correct a mistake, or just complain, please do so! Let’s make this an interchange of memories and facts about Zenith, a great company that is no more. (We’ll soon find out why.)
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--Goodbye until next time. Ralph Clarke, April 21, 2014, for Post 4. (And please excuse any errors in spelling, grammar, etc.)