--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.
PARTY TIME!
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.
* * * *
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.”
* * * * *
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.
* * * * *
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)
*
* * *
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.)
HOW TO COMMENT on this blog. Just click on the pencil symbol shown
at the end of the blog. A box will open that
is anxious to receive your comments and will treat them with the esteem they deserve.
You can also
comment on the special Zenith Facebook page.
The address is https://www.facebook.com/pages/Zenith-Book/298032167011629
You may, or may not, have to sign in and all that usual stuff.--Goodbye until next time. Ralph Clarke, April 21, 2014, for Post 4. (And please excuse any errors in spelling, grammar, etc.)
