Television digest with electronic reports (Jan-Dec 1959)

VOL. 15: No. 30 17 Where labor isn't big percentage of cost of a part, Japanese are at a disadvantage. Muter points out, for example, that first U.S. speakers for transistorized miniature radios cost manufacturers $1.06 each — then along came the Japanese with a unit for 53^5 (plus duty & shipping charge). "But they still can't compete in the field of large speakers, where materials represent most of the cost and shipping charges are high." Not that components business is suffering — it isn't. Spurred by military orders plus brisk consumer demand for TV-radio-etereo, parts makers are enjoying healthy upsurge. But there is concern about future. EIA parts div. v.p. Russell E. Cramer Jr., v.p.-secy. of Radio Condensor Co. (tuning capacitors, etc.), put it to us this way: "We are seriously alarmed about what can happen. The threat is there, and we are not going to get any help from our Govt. So we are fighting with our best possible tools — 'buy American,' with service and engineering quality the Japanese can't touch, and with salesmanship." His company is "loaded with orders" now, says Cramer, and aim is to get as close as possible to complete automation. Labor represents 30-35% of cost of a tuning capacitor — "but nevertheless our cost is only about 18% higher than the Japanese for equivalent capacitors." Similar sentiments came from Ray F. Sparrow, exec. v.p. of big capacitor-maker P. R. Mallory & Co. "The Govt, in the long pull can't do anything about the situation. The competition now is primarily in the field of radios & transistors. Sooner or later, the manufacturers are going to have to mechanize as completely as possible. Then foreign competition will be less & less effective." "We haven't felt the competition in our business," said Sparrow. "Labor isn't nearly the same percentage of cost in capacitors as in transistors. The only effect we've really felt is in finished products which are made in Japan and therefore don't use American parts." "I don't see that any component makers have been suffering," said v.p. Jesse Marsten of International Resistance. "The radio manufacturers are hurting — they're first in line. But I haven't seen any Japanese resistors coming in — not like they did during the stratospheric rise of TV in the early '50's when U.S. industry didn't have the capacity to supply the parts. Of course the transistor situation is the worst, because of the high labor content . . . Automation is the answer." OPTIMISM HIGH DESPITE STEEL STRIKE: If steel strike lasts more than 6-7 weeks, consumer electronics industry will feel its impact strongly — along with rest of economy. That's conclusion of TV-radio & parts manufacturers with whom we discussed situation last week. Barring long strike, however, general economic indicators point to continued consumer spending. TV-radio-phono and electronic parts manufacturers, who don't depend heavily on steel anyway — using only about 100,000 tons of cold rolled sheet a year — have generally stocked up on their steel requirements into Oct. or later, in anticipation of the strike. "If it's a 3-month strike," one manufacturer put it, "we won't need any steel, because nobody will be buying anyway." Business barometers are all to the good — again barring long strike. Gross National Product rose to record level during 2nd quarter. Govt, estimated. Personal income after taxes also set record, even after discounting reduced value of the dollar. Consumer spending increased sharply. More people are in mood to buy, U. of Michigan's Survey Research Center reported. May-June study showed consumers' desire for new appliances was at least 10% greater than year earlier. It foresaw no buying spree, but reported that people generally feel they are better off than year ago, that many more are looking forward to "good times in the year ahead" and that increasing number believe now is "good time to buy." TV-RADIO PRODUCTION: EIA statistics for the week ended July 17 (28th week of 1959): July 10-17 Preceding wk. 1958 wk. ’59 cumulative ’58 cumulative TV 83,907 73,087 56,130 2,945,939 2,305,430 Total radio 198,703 198,096 161,756 7,507,557 4,915,651 auto radio 59,425 71,369 49,771 3,031,415 1,557,709 Average TV set price declined from May to June — one of few categories to show a drop as Labor Dept.’s Consumer Price Index climbed to all-time high in biggest monthly jump since March 1958. The index as a whole went up 0.4%, while consumer durables climbed 0.1%. In addition to TV, price declines were registered by new cars, fuel oil, plumbing & heating equipment, some apparel. Many TV set owners think they’re buying all-new picture tubes when they’re getting rebuilt ones, Kimble Glass Co. v.p. J. P. Kearney says, citing a survey made for Kimble by National Family Opinion Inc. He said the survey showed that 79% of families interviewed thought they had bought “new” tubes, although only an estimated 20 '"/o of replacement picture tubes sold actually are all-new.