[Carmine]

Originally Posted by andy

I would argue that Zenith's decline started in the 60's when they refused to move to circuit boards. I know they advertized it as a feature, but they must (should) have known that designs would soon be too complex for point-to-point assembly. I assume the real reason they stayed with hand wired is that they didn't want to invest in new production lines. From what I've seen in 70's-90's sets, Zenith never did quite get the hang of soldering circuit boards.

I know their point to point sets hold up better than circuit board based sets of the same period, but I can't imagine there was much difference over the normal lifespan of a TV. Even decades later, I rarely run into serious problems caused by these old circuit boards.

You're nuts.

Zeno and Dishdude are spot-on.

Here is a small sampling of the 18-page (and counting) book chapter I've written on the subject. If anyone here hasn't read “The Fall of the U.S. Consumer Electronics Industry, an American Trade Tragedy”, a little-known book written by Phillip J. Curtis in 1994; you should.

The consumer electronics industry is still going strong nearly 100-years after transitioning from a handful of tinkering inventors to a multi-billion dollar annual industry. While small North American companies continue to innovate on the research and development side of electronics, there hasn’t been a meaningful American player on the consumer side of this industry for more than a generation. Quite simply the average person knows nothing of how and why thousands of U.S. jobs in the consumer electronics industry vanished. Despite all of the American innovation in broadcasting, color television, transistors, memory chips, etc.; it is as if we all woke up one morning and the biggest, most highly regarded names in electronics were all from Asian nations. Yet it wasn’t always this way.

How does this relate to the auto industry? There are a great number of parallels and lessons to be learned, and they can be applied to most any manufacturing industry that wishes to export its products into other markets, or any which suffer from subsidized imports. Perhaps “wishes” isn’t the correct word… Selling all over the world is more of a requirement in this day and age to achieve the necessary economies of scale.

Thus the story of American electronics manufacturing has a conclusion: It doesn’t exist. While the domestic automobile industry is still breathing like a wounded grizzly-bear, the “small game” of the electronics industry is extinct. The auto industry is a much larger and far more complex beast that will require proportionately more time to bring down, and accordingly may die a slower death.

I’ve also devoted some time to the subject because many rightfully wonder why American manufacturers don’t speak up more stridently… If in fact they are being so disadvantaged by imports and exclusion from foreign markets. It’s possible that they may have looked at the outcome for Zenith Electronics Corporation, which did choose legal remedies, pleading (and suing) for the enforcement of internationally recognized anti-dumping laws, anti-monopoly laws and prosecution for U.S. Customs fraud; only to be repeatedly undermined by involvement from the State Department, Justice Department and the Executive branch. As you’ll see, the waters of international law enforcement get very murky when politics are involved. Zenith demonstrably resisted off-shoring manufacturing, research and development for decades after its competitors had moved their manufacturing to Asia, or closed their doors entirely. By the early 1990s, this industry-leader was reduced to a shell of its former self. Zenith’s ace-in-the-hole, a compatible system of HDTV was their only proprietary asset of any value. When the FCC dropped its requirement for a new HDTV system that would work with existing sets, The devalued stock was ultimately acquired by the Korean company LG (Lucky Goldstar) which by then was simply shopping for a well-regarded brand name to apply over their own lower-end products.

At the end of this chapter you should also feel outraged at the American officials, elected and appointed, who failed to enforce internationally-accepted rules of law in the face of foreign lobbying efforts. Finally it’s an important lesson because it shows how foreign industrial cartels are organized and work in partnership with their respective governments.

Later:

On Sunday evening, September 7, 1957 attorneys representing RCA presented Zenith counsel with a hastily prepared settlement, designed to prevent the opening of a civil litigation trial the following morning. The initial draft gave Zenith a royalty-free license for radio-television manufacture. Other manufacturers had refused to join Zenith’s suit, and RCA was not about to give up its patent-pool revenue from other builders without even being challenged. More relevant to our discussion of trade was a $10-million payment made as compensation for the estimated loss in revenue as a result of Zenith’s exclusion from the Canadian market.

The victory would be short-lived, because the groundwork was being laid for a far more devastating attack on American electronics manufacturers. But first Zenith would see further success, overtaking RCA to become the number one seller of black & white television receivers in 1956. Meanwhile, Time magazine described RCA’s early color televisions as “the most resounding industrial flop” of 1956. When the first color receivers designed to be compatible with existing B&W broadcasts were demonstrated to the FCC in October 1953, Zenith was one of only three manufacturers capable of building their own color Cathode Ray Tube (CRT). By far, this was the most complex and expensive color TV component. However, Zenith’s Commander McDonald cautioned that color television was still in a prototype stage and not yet suitable for the consumer. Many other manufacturers started; then stopped color set production in the mid-to-late 1950s because of their poor reliability and a high dissatisfaction rate among consumers. Thus, Zenith did not market a color receiver until 1961, when they felt their product was reliable and simplified in its operation. Zenith’s color sales were an instant success, in part because so many loyal customers had been waiting for Zenith’s “seal of approval” on what was then viewed as an expensive and trouble-prone gadget.

During the course of taking depositions and examining documents from RCA for the European-civil court attempts to open closed markets, it became apparent that David Sarnoff was focusing an inordinate amount of attention on Japan beginning in the mid-1950s. Teams of Japanese researchers and engineers were making regular trips to RCA headquarters, laboratories and factories. At the same time, RCA’s patent experts and technical staff were making frequent trips to Japan. As far back as 1921, in a memo dated December of that year, Sarnoff had recommended a “consolidation” of competitors in Japan, modeled on the way RCA had been doing business in the United States. Sarnoff’s interest was in the lucrative foreign patent licenses and is plainly revealed in this quote from his memoranda:

“RCA would be glad if such a group in Japan would be its representative in that country and would be pleased to represent the Japanese group in the United States.”

Owen D. Young, another Sarnoff mentor at GE during the creation of RCA, followed up with a letter to “Doctor Dan” a Japanese contact, urging them to “stabilize” the electronics industry in Japan and stated:

“I explained to you that we had mobilized in RCA the patents and technical resources of AT&T, Western Electric, United Fruit, Westinghouse and GE and that to make such a mobilization effective all of these concerns have taken a substantial financial interest in RCA.”

With RCA’s patent licensing scheme finally coming to an end in the U.S. as the result of Zenith’s litigation, Sarnoff focused on replacing the lost American licensing revenue with a generous percentage of the revenues of a Japanese cartel which would enjoy a protected consumer market in Japan; while beginning to export successfully to the United States. When GE purchased and reabsorbed RCA in 1985 (largely for the NBC network which it owned), the Japanese licensing agreements were bringing in as much as $200-million in annual income. With amazing speed, Japan was building its electronics industry, and targeting the US market. By 1960, Emperor Hirohito conferred on David Sarnoff the Order of the Rising Sun, the highest decoration that can be awarded to a non-Japanese born person. The Japan Times called him the hero of the Japanese television industry.

...and then a lot more stuff happened in the 60s, 70s and 80s. But you'll have to buy the book (when finished) to get the rest.