Western Electric Company (WE, WECo) was an American electrical engineering and manufacturing company that served as the primary supplier to AT&T from 1881 to 1996, and to the local Bell Operating Companies until 1984. The company was responsible for many technological innovations and seminal developments in industrial management. It also served as the purchasing agent for the member companies of the Bell System.
|Western Electric Co., Inc.|
|Fate||Absorption, remnants operating as Nokia|
|Defunct||February 7, 1996|
|Headquarters||Manhattan, New York City, US.|
|Products||Telephones, Central office switches, computers, electrical and electronics parts, and all other telecommunications related products supplied to Bell System companies|
In 1856, George Shawk purchased an electrical engineering business in Cleveland, Ohio. On December 31, 1869, he became partners with Enos M. Barton and, later the same year, sold his share to inventor Elisha Gray. In 1872 Barton, and Gray moved the business to Clinton Street, Chicago, Illinois, and incorporated it as the Western Electric Manufacturing Company. They manufactured a variety of electrical products including typewriters, alarms, and lighting and had a close relationship with telegraph company Western Union, to whom they supplied relays and other equipment.
In 1875, Gray sold his interests to Western Union, including the caveat that he had filed against Alexander Graham Bell's patent application for the telephone. The ensuing legal battle between Western Union and the Bell Telephone Company over patent rights ended in 1879 with Western Union withdrawing from the telephone market and Bell acquiring Western Electric in 1881.
Western Electric was the first company to join in a Japanese joint venture with foreign capital. In 1899, it invested in a 54% share of the Nippon Electric Company, Ltd. Western Electric's representative in Japan was Walter Tenney Carleton.
In 1901, Western Electric secretly purchased a controlling interest in a principal competitor, the Kellogg Switchboard & Supply Company, but in 1909 was forced by a lawsuit to sell back to Milo Kellogg.
On July 24, 1915, employees of the Hawthorne Works boarded the SS Eastland in downtown Chicago for a company picnic. The ship rolled over at the dock and over 800 people died. (See The Eastland disaster.)
In 1920, Alice Heacock Seidel was the first of Western Electric's female employees to be given permission to stay on after she had married. This set a precedent in the company, which previously had not allowed married women in their employ. Miss Heacock had worked for Western Electric for sixteen years before her marriage, and was at the time the highest-paid secretary in the company. In her memoirs, she wrote that the decision to allow her to stay on "required a meeting of the top executives to decide whether I might remain with the Company, for it established a precedent and a new policy for the Company - that of married women in their employ. If the women at the top were permitted to remain after marriage then all women would expect the same privilege. How far and how fast the policy was expanded is shown by the fact that a few years later women were given maternity leaves with no loss of time on their service records."
In 1925, ITT purchased the Bell Telephone Manufacturing Company of Brussels, Belgium, and other worldwide subsidiaries from AT&T, to avoid an antitrust action. The company manufactured rotary system switching equipment under the Western Electric brand.
Early on, Western Electric also managed an electrical equipment distribution business, furnishing its customers with non-telephone products made by other manufacturers. This electrical distribution business was spun off from Western Electric in 1925 and organized into a separate company, Graybar Electric Company, in honor of the company's founders, Elisha Gray and Enos Barton.
Bell Telephone Laboratories was half-owned by Western Electric, the other half belonging to AT&T.
Western Electric used various logos during its existence. Starting in 1914 it used an image of AT&T's statue Spirit of Communication.
In 1915, the assets of Western Electric Manufacturing were transferred to a newly incorporated company in New York, New York named Western Electric Company, Inc, a wholly owned subsidiary of AT&T. The sole reason for the transfer was to provide for the issuance of a non-voting preferred class of capital stock, disallowed under the statutes of the state of Illinois.
All telephones in areas where AT&T subsidiaries provided local service, all components of the public switched telephone network (PSTN), and all devices connected to the network were made by Western Electric and no other devices were allowed to be connected to AT&T's network. AT&T and Bell System companies were rumored to employ small armies of inspectors to check household line impedance levels to determine if non-leased phones were in use by consumers.
Western Electric telephones were owned not by end customers but by the local Bell System telephone companies—all of which were subsidiaries of AT&T, which also owned Western Electric. Each phone was leased from the phone company on a monthly basis by customers who generally paid for their phone as part of the recurring lease fees. This system had the effect of subsidizing basic telephone service, keeping local phone service inexpensive, under $10 per month, including the leased phone. After divestiture, basic service prices increased, and customers were now responsible for inside building wiring and telephone equipment. The Bell System had an extensive policy and infrastructure to recycle or refurbish phones taken out of service, replacing all defective, weak, or otherwise unusable parts for new installations. This resulted in an extraordinary longevity of Western Electric telephone models and limited the variety of new designs introduced into the market place.
AT&T also strictly enforced policies against using telephone equipment by other manufacturers on their network. A customer who insisted on using a telephone not supplied by the Bell System had to first transfer the phone to the local Bell operating company, who leased the phone back to the customer for a monthly charge in addition to a re-wiring fee. In the 1970s when consumers increasingly bought telephone sets from other manufacturers, AT&T changed the policy for its Design Line telephone series by selling customers the phone housing, retaining ownership of the internal mechanical and electrical components, which still required paying AT&T a monthly leasing fee.
Until 1983, Western Electric telephones or their components could only be leased by subscribers and never resold, and were repaired by the Bell System operating companies at no charge to the customer. This led Western Electric to pursue extreme reliability and durability in design to minimize service calls. In particular, the work of Walter A. Shewhart, who developed new techniques for statistical quality control in the 1920s, helped lead to the legendary quality of manufacture of Western Electric telephones. Starting in 1983, Western Electric telephones could be sold to the public under the brand name American Bell, a newly created subsidiary of AT&T. One of the terms of the Modification of Final Judgment in the Bell System divestiture procedures prohibited AT&T from using the name Bell after January 1, 1984; prior to this, AT&T's plan was to market products and services under the American Bell name, accompanied by the now familiar AT&T globe logo.
In 1905, Western Electric began construction of the Hawthorne Works on the outskirts of Chicago and which, by 1914 had absorbed all manufacturing work from Clinton Street and Western Electric's other plant in New York City. Later large factories included the Kearny Works in Kearny, New Jersey, Columbus Works in Columbus, Ohio, and Kansas City Works in Lee's Summit, Missouri. By the time AT&T was dissolved in the early 1980s, more than twenty production plants around the country ("Works" locations) had been established. Locations of these facilities included:
In 1926, Western Electric issued the first Bell System telephone with a handset containing both the transmitter and receiver in the same unit. Previous telephones had been of the candlestick type which featured a stationary transmitter in the desktop set or the wall-mounted unit, and a hand-held receiver to be placed on the user's ear. The first version of the desktop unit was constructed by shortening the candlestick shaft to about an inch in height and placing a handset cradle on the top. This was the A-type handset mounting, which was replaced by 1928 by the B handset mounting, which featured a streamlined shape integrating the shaft as a short neck for the cradle. It still had the same circular footprint of the candlestick, which proved too unstable when dialing numbers, and was henceforth replaced with a wider design using an oval footprint, the D-type base in 1930.
Concurrently to the mechanical advances, the electrical circuitry of Western Electric telephones saw advances in sidetone reduction. Sidetone is electronic feedback by which the users of the telephone can hear their own voice in the receiver. While a desirable property, this feedback, when too loud, causes most users to lower their voice volume to unacceptable levels. Until after the introduction in 1930 of the D handset mountings, sets still contained no active sidetone compensation. Such handset telephone types were designated with the assembly code 102 (model 102 telephone), while later models containing anti-sidetone circuitry were the model 202 telephone set. These early desktop telephones relied on an additional desk set box or subscriber set (subset) containing the ringer with gongs, the induction coil, and capacitors to interface with the telephone network. These subscriber sets were typically mounted on a wall near the operating location for the phone.
The year 1936 brought the announcement of the model 302 telephone, the first Western Electric instrument that combined the desktop telephone set with the subscriber set and ringer in one unit. It became the mainstay of American telephone service well into the 1950s, and was followed by the model 500 telephone starting in 1950, which became the most extensively produced telephone model in the industry's history. The 500-set was continually updated over time, reflecting new materials and manufacturing processes, such as quieter and smoother dial gearing and a printed circuit board for the network electronics. The model 500 was discontinued in 1986, in favor of the type 2500, that had been available since 1969. The 2500-series employed dual-tone multi-frequency (DTMF) signaling for transmitting digits to the central office, replacing the rotary dial. DTMF technology was referred to by the trademark Touch-Tone.
Western Electric's switching equipment development commenced in the mid-1910s with the rotary system and the panel switch, later several generations of cross-bar switches, and finally the development of several generations of electronic switching systems (ESS). The No. 1 ESS was first installed in 1965. The 4ESS was the first digital toll switching system, implemented in 1976. Finally, in 1981, the 5ESS was implemented throughout the United States.
In 1929, Western Electric entered as a market competitor for early cinema sound systems. It created the Western Electric Universal Base, a device by which early silent cinema projectors could be adapted to screen sound films. Western Electric designed a wide-audio-range horn loudspeaker for cinemas. This was estimated to be nearly 50% efficient, thus allowing a cinema to be filled with sound from a 3-watt amplifier. This was an important breakthrough in 1929 because high-powered audio valves (tubes) were not generally available.
For these reasons, many American films of this period feature the Western Electric logo in their on-screen credits.
In 1950, at the start of the Cold War, Western Electric was selected to build the first demonstrator for the SOSUS anti-submarine sound surveillance system. Later, the company was prime contractor for the Safeguard anti-ballistic missile system, which operated briefly from 1975.
Western Electric also invested heavily in improving processes and equipment to manufacture their products.
In 1958, the company established the Engineering Research Center (ERC) near Princeton, New Jersey. With a charter distinct from Bell Labs, Western Electric's ERC was one of the first research organizations solely dedicated to the advancement of manufacturing-focused, rather than product-focused science. Here, more than 400 researchers and engineers worked to bring new manufacturing technologies into the company's production environment. Their developments included computer-driven mathematical models and related statistical quality-control systems to improve production flow and logistics, novel metal-forming techniques, circuit board assembly automation, fiber-optic waveguide manufacturing techniques, application of lasers for industrial processes and early efforts in cleanroom robotics for semiconductor production. In the early 1970s, some of the first practical Ion Implanters to make integrated circuits were also developed at ERC and later deployed at Western Electric's chip-making factories.
Although the ERC was later integrated into Bell Labs, it - along with AT&T's nearby Corporate Education Center - was closed by the late 1990s, victims of the deregulation of telecommunications, shrinking revenues from long-distance calls and accelerating innovation in telephone equipment by an increasing number of global manufacturing players.
In 1960, NASA awarded Western Electric a contract for over $33,000,000 for engineering and construction of a tracking system for the Project Mercury program. As part of this effort, Western Electric engineers trained remote-site flight controllers and Project Mercury control center and operations personnel.
As of January 1, 1984, a newly formed company, AT&T Technologies, Inc., assumed the corporate charter of Western Electric, which was split into several divisions, each focusing on a particular type of customer, e.g., AT&T Technology Systems, and AT&T Network Systems. Telephones made by Western Electric prior to the breakup continued to be manufactured and marked with the company emblem, however, lacking the Bell System logo, or having it hidden by metal filler inside of all telephone housings and most components, including new electronic integrated circuits with the initials WE. Electronic switching systems, outside plant materials, and other equipment produced for the consumption of the RBOCs continued to be marked "AT&T Western Electric" well into the 1990s.
Cost-cutting measures resulted in the consumer telephones being redesigned and modernized in 1985, as well as more plastic being used in place of metal in the 500 & 2500 series phones, as well as the Princess. In 1986, the Indianapolis Works telephone plant closed, and US production of AT&T single-line home telephones ended. Business telephones and systems continued production in the Shreveport Works plant until 2001. Home telephones were redesigned, and production was moved to Hong Kong, Singapore, China, and Thailand. Western Electric no longer marked housings of telephones with "WE", but continued to mark the modular plugs of telephone cords with "WE".
Western Electric came to an end in 1995 when AT&T changed the name of AT&T Technologies to Lucent Technologies, in preparation for its spinoff. Lucent became independent in 1996, and sold more assets into Advanced American Telephones, Agere Systems, Avaya, and Consumer Phone Services. Lucent itself merged with Alcatel, forming Alcatel-Lucent, which was acquired by Nokia in 2016. Western Electric's structured cabling unit, once known as AT&T Network Systems or SYSTIMAX, was spun off from Avaya and became part of CommScope.
Since the demise of Western Electric, telephone equipment design and manufacturing is an open market place in which numerous manufacturers compete. As a result, modern telephones are now manufactured in Asia, generally using less expensive components and labor.
Some telephone subscribers never purchased their existing telephones after the AT&T breakup, and continue to lease their existing Western Electric models from QLT Consumer Lease Services, formerly known as AT&T Consumer Lease Services. Such subscribers have paid leasing fees for their telephones far in excess of the purchase price, but the phones are perceived by some users to be superior to telephones commonly made today in aspects of durability and sound quality. Today, many of these Western Electric telephones have become collector's items.
Western Electric's audio equipment from the 1920s and 30s, designed to be used in movie theaters, is now prized by collectors and audiophiles due to its quality construction and sound reproduction. This includes its massive horn loudspeakers designed to fill a large theater with sound from a relatively low-powered tube amplifier.
As of 2013, the stylized Western Electric brand name survives as the trademark of the Western Electric Export Corporation, a privately owned high-end audio company in Rossville, Georgia.
During the span of its existence of over a dozen decades, Western Electric published a variety of publications for various audiences, including periodicals for employees and customers.
The first employee magazine was Western Electric News, commencing in March 1912 (Volume 1, Number 1) under company president Harry Bates Thayer. Its purpose was to provide a forum where ideas could be exchanged, the company events and activities could be recorded, and to serve as clearing house for technical and commercial information of value to the employee.
Nokia Bell Labs (formerly named AT&T Bell Laboratories and Bell Telephone Laboratories) is an industrial research and scientific development company owned by Finnish company Nokia. Its headquarters are located in Murray Hill, New Jersey. Other laboratories are located around the world (with some in the United States). Bell Labs has its origins in the complex past of the Bell System.
In the late 19th century, the laboratory began as the Western Electric Engineering Department and was located at 463 West Street in New York City. In 1925, after years of conducting research and development under Western Electric, the Engineering Department was reformed into Bell Telephone Laboratories and under the shared ownership of American Telephone & Telegraph Company and Western Electric.
Researchers working at Bell Labs are credited with the development of radio astronomy, the transistor, the laser, the charge-coupled device (CCD), information theory, the Unix operating system, and the programming languages C, C++, and S. Nine Nobel Prizes have been awarded for work completed at Bell Laboratories.Bell System
The Bell System was the system of companies, led by the Bell Telephone Company and later by AT&T, which provided telephone services to much of the United States and Canada from 1877 to 1984, at various times as a monopoly. On December 31, 1983, the system was divided into independent companies by a U.S. Justice Department mandate.
The general public in the United States often used the colloquial term Ma Bell (as in "Mother Bell") to refer to any aspect of this conglomerate, as it held a near-complete monopoly over telephone service in most areas of the country, and is still used by many to refer to any telephone company. Ma Bell is also used to refer to the various female voices in recordings for the Bell System: Mary Moore, Jane Barbe, and Pat Fleet, the current voice of AT&T.Breakup of the Bell System
The breakup of the Bell System was mandated on January 8, 1982, by an agreed consent decree providing that AT&T Corporation would, as had been initially proposed by AT&T, relinquish control of the Bell Operating Companies that had provided local telephone service in the United States and Canada up until that point. This effectively took the monopoly that was the Bell System and split it into entirely separate companies that would continue to provide telephone service. AT&T would continue to be a provider of long distance service, while the now-independent Regional Bell Operating Companies (RBOCs) would provide local service, and would no longer be directly supplied with equipment from AT&T subsidiary Western Electric.
This divestiture was initiated by the filing in 1974 by the United States Department of Justice of an antitrust lawsuit against AT&T. AT&T was, at the time, the sole provider of telephone service throughout most of the United States. Furthermore, most telephonic equipment in the United States was produced by its subsidiary, Western Electric. This vertical integration led AT&T to have almost total control over communication technology in the country, which led to the antitrust case, United States v. AT&T. The plaintiff in the court complaint asked the court to order AT&T to divest ownership of Western Electric.Feeling that it was about to lose the suit, AT&T proposed an alternative — the breakup of the biggest corporation in American history. It proposed that it retain control of Western Electric, Yellow Pages, the Bell trademark, Bell Labs, and AT&T Long Distance. It also proposed that it be freed from a 1956 antitrust consent decree, then administered by Judge Vincent Pasquale Biunno in the United States District Court for the District of New Jersey, that barred it from participating in the general sale of computers. In return, it proposed to give up ownership of the local operating companies. This last concession, it argued, would achieve the Government's goal of creating competition in supplying telephone equipment and supplies to the operative companies. The settlement was finalized on January 8, 1982, with some changes ordered by the decree court: the regional holding companies got the Bell trademark, Yellow Pages, and about half of Bell Labs.
Effective January 1, 1984, the Bell System’s many member companies were variously merged into seven independent "Regional Holding Companies", also known as Regional Bell Operating Companies (RBOCs), or "Baby Bells". This divestiture reduced the book value of AT&T by approximately 70%.Hawthorne effect
The Hawthorne effect (also referred to as the observer effect) is a type of reactivity in which individuals modify an aspect of their behavior in response to their awareness of being observed. The original research at the Hawthorne Works in Cicero, Illinois, on lighting changes and work structure changes such as working hours and break times was originally interpreted by Elton Mayo and others to mean that paying attention to overall worker needs would improve productivity. Later interpretations such as that done by Landsberger suggested that the novelty of being research subjects and the increased attention from such could lead to temporary increases in workers' productivity. This interpretation was dubbed "the Hawthorne effect".Michigan Bell and Western Electric Warehouse
The Michigan Bell and Western Electric Warehouse is a former commercial warehouse building located at 882 Oakman Boulevard (also numbered as 14300 Woodrow Wilson) in Detroit, Michigan. It was listed on the National Register of Historic Places in 2009. It is now known as the NSO Bell Building.Standard Telephones and Cables
Standard Telephones and Cables Ltd (later STC plc) was a British telephone, telegraph, radio, telecommunications, and related equipment R&D manufacturer. During its history, STC invented and developed several groundbreaking new technologies including pulse code modulation (PCM) and optical fibres.
The company was founded in 1883 in London as International Western Electric by Western Electric, shortly after becoming the telephone equipment supplier for the Bell System in the United States. In 1925, Western Electric divested itself of all foreign operations and general electric supply units, other than telephony, and sold International Western Electric to International Telephone and Telegraph (ITT). In mid-1982 it became an independent company and was listed on the London Stock Exchange. At one time it was a constituent of the FTSE 100 Index. It was bought by Nortel in 1991.