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(For other Trade Reports, see pages 10-11. For Report on Color, see pages 5-9)
THE SHORTAGE BLOW FALLS-BUT HARD: TV-radio industry will be lucky indeed if it's merely obliged, by defense demands, to cut back only the 20-25% predicted for 1951. Civilian cutbacks may run to 100% for some I There could even be a "freeze” on civilian production, forced by materials limitations — but just as limiting, for all practical purposes, as the one enforced by fiat during World War II.
That dismal picture emerges from the cobalt shutdovm (see story below) — rendering problems of prices, credit controls, FCC freeze, color, uhf quite trivial in face of a possible struggle for simple survival.
"This is a war economy," is the Washington production officials' refrain.
At moment, the industry's best efforts are being exerted to obtain assurances of "mere trickle" of the precious cobalt, to say nothing of other restricted or soonto-be-restricted materials. Main effort is to keep production and manpower going until defense orders can catch up.
The honeymoon's over, apparently, and the lush 200, 000-per-week TV and 550, 000-per-week radio pace simply can't be maintained. Talk-talk about defense needs must give v;ay soon to cold tough facts of raw materials and components shortages and/or restrictions, possible clampdowns on "non-essential" industries, even perhaps direct price and wage controls later.
From now until end of year, TV-radio output will to great extent represent "living off inventory." At least, that was the lugubrious prospect at week's end.
COBALT CRISIS COULD STOP TV-RADIO: A sudden cobalt famine threatens to strangle TV-radio production before 1951 is a month old.
Vital ingredient in alnico, predominantly used for TV-radio magnets, all available cobalt is being snapped up by Govt, to harden steel for jet engines and tools. Entire November supply — and most of December's — is reserved under backlogged "DO" (defense priority) orders, even before it arrives on docks from Africa.
Some small relief is in sight next month, but next year's outlook is bleak.
Component makers will feel bite in matter of days, set manufacturers in weeks, with sharp cutbacks and even stoppages likely next month. RTMA general manager James Secrest calls present outlook for set production most critical since reconversion period after last war.
Production of speakers and picture-tube focusing units may be snuffed out, on basis of glum predictions by fabricators of alnico (aluminum-nickel-cobalt) magnets. Of the 4 leading magnet firms, one is shut down completely; the others have sharply curtailed production, foresee complete stoppage by early December.
Dominated by cobalt crisis, RTMA board meeting in New York Nov. 16 set up emergency Electronics Parts Mobilization Committee to seek Govt, release of sufficient quantities of cobalt and other scarce materials to prevent complete shutdown of electronics industry. Committee is headed by alnico-producing Indiana Steel Products' A. D. Plamondon Jr. and General Instrument Corp.'s R. E. Laux.
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On basis of cobalt crisis alone, hopes of sustaining even major fraction of this year's receiver production in 1951 are now apparently out the window. TV-radio industry is appealing to National Production Authority on this note;
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Copyright 1850 by Radio News Bureau