Television digest with electronic reports (Jan-Dec 1954)

12 Topics & Trends of TV Trade: Industry’s war on discount houses picked up momentum this week — with Magnavox disfranchising each of its 1600 dealers and NARDA rallying to the support of Philco’s disfranchising & refranchising of its distributors 2 weeks ago (Vol. 10:32). Magnavox’s Frank Freimann, blasting dealers generally a few weeks ago for giving aid and comfort to discount houses (Vol. 10:31), took steps to make sure his dealers weren’t part of the scheme — announcing plans to refranchise only those dealers “who have demonstrated their adherence to the Magnavox merchandising policy . . . and are able to follow a policy that prescribes price integrity and sound merchandising.” He didn’t reveal specific terms of refranchisement. In letter to its dealers, Magnavox said that “in the process of refranchising our dealers, some will undoubtedly fall by the wayside. Though we can ill afford to lose such meager distribution as we now have, we nevertheless are determined to maintain dealers who have an appreciation of the true value of Magnavox.” Using some strong language to support his action, Freimann said: “Price cutting, whether from discount houses, chiseling dealers or back door selling, has become the accepted practice in our industry. It has become both a way of life and a scandal. While no doubt a large segment of the public believes that these shoddy practices are to the consumer interest, we believe there is strong enough evidence to show that it’s a destructive force in our economy.” In its Aug. 16 newsletter, NARDA said Philco’s action in forcing distributors to adhere to stricter policies on trans-shipping “speaks well” for new pres. James H. Carmine and exec. v.p. John M. Otter. NARDA reminded its dealers that challenge of discount houses means: “We must sell those brands that cater to us, concentrate our salespower so that it’s bright and evident, just as our type of operation’s stability is. We must merchandise honor and integrity, fair dealing and the value of customer satisfaction. It means getting away from ads that overemphasize trade-ins and price and getting onto quality and features and our own places of business as the best of all places to deal with.” Same issue of newsletter also contains straightforward article, “I Can Get It For You Wholesale,” by Harry Alter, Crosley-Bendix Chicago distributor, telling dealers some $50,000,000 worth of TV-appliance business is funneled out of regular retail channels in Chicago each year by “back door selling.” He wrote, “You can improve conditions for yourself and other dealers by pushing product brands that protect you against these evils, and by awarding your business to distributors who play fair with you.” 4: Competition of discount hou.ses, low profits and no protection on franchises are 3 biggest reasons why fewer furniture stores in Chicago area are carrying TVs, radios & appliances, according to Retailing Daily’s series of 3 articles this week, based on survey. Out of 100 stores surveyed, 21 have dropped TV & major appliances, 20 more have reduced stocks of both categories. GE awarded average 5^ wage increase this week to 84,000 employes represented by International Union of Electrical Workers (lU E-CIO) in 40 plants. New contract, subject to ratification by union’s conference board, runs to Sept. 15, 1955. Inciease brings average wage of GE’s lUE members to $1.93 an hour. Meanwhile, Westinghouse resumed negotiations with lUE, which represents about 42,000 workers in 47 plants. Union had previously rejected offer of be* hourly wage increase. Sylvania gave 4-7^ hourly wage increase to unorganized employes, offered same increase to lUE. SHIPMENTS of TVs to dealers in first 6 months totaled 2,667,603, compared to production of 2,845,147 in that period, according to RETMA state-by-state report released this week. They compared with 3,022,250 shipped in first 6 months of 1953, when production was 3,834,236, and shipments of 2,118,510, production of 2,318,236, in first half of 1952. New York led, with 252,952; California second, 189,153; Illinois, 165,380. June shipments were 297,505, compared to 304,227 in May and 326,394 in June 1953. Here’s state-by-state report for 6 months (countyby-county tables available from RETMA upon request) : State Total Alabama 40,998 Arizona 12,605 Arkansas 40,155 California 189,153 Colorado 22,046 Connecticut 36,915 Delaware 5,431 District of Columbia ^ 16,219 Florida 76,823 Georgia 68,756 Idaho 18,918 Illinois 165,380 Indiana 78,281 Iowa 57,492 Kansas 42,310 Kentucky 29,668 Louisiana 58,291 Maine 43,159 Maryland 30,709 Massachusetts — 73,046 Michigan 105,022 Minnesota 45,440 Mississippi : 25,344 Missouri 76,433 Montana 11,258 Nebraska 25,648 Nevada 2,683 State Total New Hampshire 13,109 New Jersey 76,997 New Mexico 9,433 New York _ 252,952 North Carolina 68,849 North Dakota 9,481 Ohio 127,604 Oklahoma 37,719 Oregon 30,939 Pennsylvania 166,783 Rhode Island 8,636 South Carolina 35,460 South Dakota 8,410 Tennessee . 58,195 Texas 150,968 Utah . 9,836 Vermont 7,646 Virginia 44,832 Washington 45,156 West Virginia . 30,601 Wisconsin 65,479 Wyoming 3,605 U. S. TOTAL 2,660,873 Alaska 1,556 Hawaii 5,174 GRAND TOTAL 12,667,603 Distributor Notes: Hoffman Radio appoints Treasure State Gas & Electric Co., 827 S. Montana St., Butte (John J. Kirby, pres.) . . . CBS-Columbia appoints G. Fetter Puthuff Co., 2231 W. Beaver St., Jacksonville (G. Fetter Puthuff, pres.) . .. . Emerson appoints Dauphin Electrical Supplies Co., 825 Paxton St., Harrisburg, Pa. (Andrew J. Musser, pres.) . . . Olympic appoints Lenihan Distributing Co., Seattle, replacing Olympic Northwest, factory branch . . . CBS-Columbia Distributors Inc., N. Y., appoints Sidney Kaplan, ex-Gerald 0. Kaye Assoc. (Crosley-Bendix), as service mgr. . . . Hoffman Sales Corp. of Oregon, Portland, appoints Thomas Mumford gen. mgr., replacing Norfleet Callicott, now gen. mgr. of Hoffman Sales Corp. of Missouri . . . Edgar Morris Sales Co., Washington ( Westinghouse) appoints Wm. Wiley TV-radio mgr. . . . Ludwig Hommel & Co., Pittsburgh (Raytheon) appoints Irwin Rosenberg sales mgr. . . . Zenith of New Jersey announces resignation of sales mgr. John H. Hocter . . . DuMont appoints E. T. Donohue Inc., 13 Canal St., Rochester, N. Y. (Edward T. Donohue, pres) . . . Motorola appoints Gas Engine & Electric Co., Charleston, S. C. (Paul M. Minus, pres.), replacing McElmurray Distributing Co. Westinghouse cut price of 15-in. color set from $1100 to $595 this week, following RCA’s reduction from $1000 to $495 and Emerson’s pricing at $695 of color sets previously leased (Vol. 10:33). Action is designed to clear way for merchandising of larger-screen sets. Like RCA, Westinghouse is giving full rebates to distributors, dealers and consumers who had purchased sets. Bill to give $7 excise tax credit for uhf-equipped sets (HR-6440) died in the rush towards adjournment Aug. 20. Effort to pass bill by unanimous consent failed in last days of Senate on objection b3' Sen. Bush (R-Conn.), former CBS director, who reportedly wanted to amend bill to include tax relief for Bridgeport Metal Co. Electronic Tube Corp., Philadelphia, was purchased this week by Kenneth C. Meinken, ex-pres. of National Union Radio Corp., who said he plans to expand plant and set up special section to engineer and produce color tubes. Former owners of Electronic Tube Corp. were Matthew H. McCloskey and associates.