Western Electric Co., Inc.

Company type	Subsidiary
Industry	Telecommunications
Founded	1869; 155 years ago (1869)
Defunct	February 7, 1996; 28 years ago (1996-02-07)
Fate	Absorption, remnants operating as Nokia
Successor	AT&T Technologies Lucent Technologies Alcatel-Lucent Nokia
Headquarters	Manhattan, New York City, U.S.
Products	Telephones, Central office switches, computers, electrical and electronics parts, and all other telecommunications related products supplied to Bell System companies
Parent	AT&T Corporation (1881–1996)

The Western Electric Company was an American electrical engineering and manufacturing company officially founded in 1869. A subsidiary of the American Telephone and Telegraph Company for most of its lifespan, it served as the primary equipment manufacturer, supplier, and purchasing agent for the Bell System from 1881 until 1984, when the system was dismantled. The company was responsible for many technological innovations, as well as developments in industrial management.

History

In 1856, George Shawk, a craftsman and telegraph maker, purchased an electrical engineering business in Cleveland, Ohio.^[1]

In January 1869, Shawk had partnered with Enos M. Barton in the former Western Union repair shop of Cleveland, to manufacture burglar alarms, fire alarms, and other electrical items. Both men were former Western Union employees. Shawk, was the Cleveland shop foreman and Barton, was a Rochester, New York telegrapher.^[2] During this Shawk and Barton partnership, one customer was an inventor sourcing parts and models for experiments. That inventor was Elisha Gray, a former physics professor at Oberlin College. Barton thought of future growth in electrical apparatus potential for the company and shared a common enthusiasm with the inventor, who was interested in leading a manufacturing plant capable of long-term developments. Shawk found those plans were beyond his business goals and offered to sell his half-interest partnership to Gray. Anson Stager, a former Chief of the U.S. Military Telegraphs during the Civil War, advanced money for Gray to buy the half-interest and become a partner when Gray and Barton moved operations to Chicago. Gray and Barton previously knew Stager and an agreement was signed on November 18, 1869, to launch the company as Gray & Barton. The firm was open for business by the end of the year in Chicago.^[3] In December 1869, the location was at 162 South Water Street in Chicago.^[1]

On December 31, 1869, he entered a partnership with Barton, and later sold his share to inventor Gray. In 1872, Barton and Gray moved the business to Clinton Street, Chicago, Illinois, and incorporated it as the Western Electric Manufacturing Company.^[4] 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.^[5]

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.^[6] This purchase was a crucial step in standardizing telephone instruments and concentrating manufacturing in a single entity.^[7]

In the company's first few years as Western Electric, there were five manufacturing locations located at Chicago (220-232 Kinzie St.) New York, Boston, Indianapolis and Antwerp, Belgium. The locations were not permanent, as the headquarters in Chicago had moved to a new building on Clinton Street, the New York shop had moved two city blocks to a new building on Greenwich Street, and both Boston and Indianapolis factories closed. The Antwerp location was at the same location under Western Electric operations until sold in 1925 to ITT.^[8]

In April 1879, the New York shop was located at 62-68 New Church Street, Lower Manhattan, New York. Western Union had a factory at that location and the Western Electric company known as W.E. Mfg. Co., at the time, had purchased Western Union's New York Factory to continue the increase of phone production. This site would also place the end to Western Union factories.^[9]

The Boston shop was located at 109-115 Court Street and it was previously known as the Charles Williams, Jr factory that was purchased by Western Electric in 1882. The consolidation of operations was done in 1884 to Chicago and New York factories by Charles Williams becoming a Western Electric Manager.^[10]

In 1888–1889, Western Electric built a 10-story factory building at 125 Greenwich Street in Lower Manhattan, to manufacture some of the first telephones. The New York shop that was renting the Western Union building moved to this building.^[11]

In preparation for the Chicago Worlds Fair of 1892, Western Electric was responsible for the organized Bell System sales activities and merchandising of apparatus for the 900 long-distance circuit from New York to Chicago.^[12] In 1897, the building at 463 West Street, New York was constructed and housed the New York shop as well as the company Eastern headquarters.^[13]

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.^[14] The company, later known as NEC, would eventually become a major international manufacturer of electronics equipment including semiconductors and personal computers.

In 1901, Western Electric secretly purchased a controlling interest in a principal competitor, the Kellogg Switchboard & Supply Company,^[15] but in 1909 was forced by a lawsuit to sell back to Milo Kellogg.^[16]

The Manufacturers Junction Railway Company was incorporated in January 1903 to provide rail connections to major railroad systems. There were approximately 13 miles of track in and out of Hawthorne Works for rail freight of inbound materials and outbound finished products. Western Electric had a tenure of 50 years up to 1952, in the responsibility and operation of its use for Hawthorne and other nearby industrial companies.^[17]

Also, in 1903, the construction of Hawthorne Works first buildings were authorized by Barton.^[13]

In 1907, the research and development staffs of Western Electric and AT&T were consolidated to 463 West Street, New York. The location served the newly Western Electric Engineering Department for the responsibility of the testing and inspection of its telephones and equipment. AT&T's Engineering Department retained the responsibility for the growth of the Bell System with compatible equipment and service. Gradually the consolidation improved and advanced the telephony response to expanding use.^[18]

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.^[19]

In 1920, Alice Heacock Seidel was the first female Western Electric employee 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.^[20] 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. The policy was expanded quickly, so that a few years later women were given maternity leaves with no loss of time on their service records."^{[citation needed]}

Western Electric was expanding beyond making telephone equipment and American Bell noticed its division from a manufacturing business to a supply business. Western Electric decided to split in 1921, the supply department from the manufacturing business and this led later to a separate entity.^[1]

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.^[21]

Early on, Western Electric also managed an electrical equipment distribution business, furnishing its customers with non-telephone products made by other manufacturers^[22] 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.^[23]

Bell Telephone Laboratories, created from the engineering department of Western Electric in 1925, was half-owned by Western Electric, the other half belonging to AT&T.^[4][5]

The company began to increase its presence in other sectors of industry for new products. In September 1931, the Teletype Corporation headquartered in Chicago on Wrightwood Ave, became a subsidiary of Western Electric and it was a manufacturer of teletypewriters for TWX services.^[24] There was the acquisition in 1931 of the Nassau Smelting and Refining plant located in Totenville, Staten Island, New York to recycle Bell System scrap wire, metal, and becoming a subsidiary of Western Electric.^[25] The acquisition of the Queensboro factory in Middle Village, New York became a Western Electric Shop in the 1930s to produce wooden telephone booths.

In 1974, the IBEW members at Western Electric's 16 plants went on strike over improved benefits, cost‐of‐living adjustments, and pay increase for up to three years. The ratified contract was agreed on September 3, 1974, with employees at 13 plants returning to work. Only the company's subsidiary Teletype Corporation plant in Little Rock, Arkansas and two plants, the Columbia River Switching Equipment factory in Vancouver, Washington and in San Ramon, California were subject to ratification or in negotiations to settle local agreements.^[26]

In 1983, corporate announcements were made at the three oldest manufacturing facilities for product manufacturing transfers and employee expected layoffs. The Kearny Works facility that made systems to convert commercial power to run various telecom equipment, would transfer remaining work to Dallas Works. The shutdown of the plant would eliminate 4,000 jobs. The Baltimore Works facility that made connectors and protectors for wire and cable had work moved to Omaha Works. A total of 2,300 jobs were potentially eliminated after that announcement. The Hawthorne Works facility, had the operations for pulp cable relocated to Phoenix Works. A loss of 400 positions were expected eliminated in the process.^[27]

After the Bell System breakup, Western Electric facilities were known as AT&T Technologies facilities in 1984. The three largest and oldest facilities, Hawthorne Works, Kearny Works, and Baltimore Works were closed shortly after due to "excess space".^[28]

Company logos

Western Electric used various logos during its existence. Starting in 1914 it used an image of a statue originally named Electricity, but later renamed Spirit of Communication, which was raised to the roof of 195 Broadway on October 24, 1916.^[29]

• 
  1914 company masthead logo (Spirit of Communication)
• 
  Logo until c. 1969
• 
  Logo 1969–1984

Presidents

Development of a monopoly

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,^[34] 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.^[35]

In the Bell System, telephones were leased by the operating companies to subscribers, and remained the property of the Bell System. Service subscribers paid a monthly fee included in the service charge, while paying additionally for special types or features of telephones, such as colored telephone sets. Equipment repair was included in the fees. This system had the effect of subsidizing basic telephone service, keeping local telephone service inexpensive, under $10 per month. After divestiture, basic service prices increased, and customers became responsible for inside building wiring and telephone equipment. The Bell System had an extensive policy and infrastructure to recycle or refurbish equipment taken out of service, replacing all defective, weak, or otherwise unusable parts for new installations. This resulted in extraordinary longevity of Western Electric telephones, and limited the variety of new designs introduced into the market place.^[36] 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 quality of manufacture of Western Electric telephones.^[37]

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.^[38] 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.^[39]

Starting in 1983 with the breakup of the Bell System, 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;^[5] 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.^[40]

Manufacturing plants

In 1903, Western Electric began construction of the first buildings for Hawthorne Works on the outskirts of Chicago.^[13] In 1905, the Clinton Street power apparatus shops moved to Hawthorne.^[41]

Further expansion of large factories began in the 1920s. In 1923, construction began on the second factory located in Kearny, New Jersey. The location was known as Kearny Works and in 1925 began telephone cable production.^[42] In June 15, 1928, Western Electric employees, photographed by Rosenfeld and Sons, were pictured, in a groundbreaking ceremony, for their expansion of the Kearny Works manufacturing facility at 110 Central Ave, Kearny, New Jersey. Kearny Works would achieve the largest square foot size of 3,579,000 throughout the years and be the second largest plant for Western Electric manufacturing plants built before the 1930s, only second in size to the Hawthorne Works at Cicero, Illinois. Here is an aerial image of Kearny Works, between 1925 to 1930, held in the Library Company of Philadelphia. with the picture of the entire plant and railways. In 1929, work began at Point Breeze, Baltimore, Maryland as the third manufacturing location, Baltimore Works, began its occupancy by 1930 for various cable and wire production.^[43]

Two manufacturing plants in Lincoln, Nebraska were leased in 1943 to Western Electric to manufacture signal corps equipment and later production demands from Hawthorne Works. The Eighth Street building, known as "Lincoln Shops," and the 13th Street building were the locations, the latter was sold in 1950 for $500,000 to Western Electric. The plants were closed after the Omaha Works opened in 1958.^[44][45]

Western Electric acquired in 1943, the old Grad and Winchell buildings located at Haverhill, Massachusetts. New Jersey supervisors taught former textile and shoe workers the manufacturing process of coil winding. The employees' acquired skills demonstrated their versatility in this new manufacturing process for a Western Electric decision to join Haverhill and Lawrence locations in 1956 as the Merrimack Valley Works.^[46]

In 1944, Western Electric purchased a factory in St. Paul, Minnesota to restart manufacture of telephone sets for civilian installation as authorized by War Production Board. By 1946, some of these facilities were relocated to the Hawthorne plant as space became available from war-production scale down.^[47]

Also, the reduced production of home telephones because of the war, began to have a backlog of two million orders in late 1945 for the Hawthorne plant. Western Electric had acquired a former Studebaker plant on Archer Avenue (Chicago, Illinois) for assemblers that produced out one hundred thousand Model 302s telephones by March 1946.^[48]

After World War II, the National Carbon Company left a facility that had manufactured United States Navy submarine batteries and underwater detonators in Winston-Salem. This facility at 800 Chatham Road, was passed to Western Electric Company and operated until 1966 for production of national telephone companies' switches and circuits. Additionally, the location complex was one of three nationwide Western Electric field engineering sites.^[49]

The mid 1940s brought occupancy to locations. A plant was established in 1946 at Tonawanda, New York to produce equipment wiring cable, telephone cords, enamelled wire, and insulated wire. This plant was called "Buffalo Plant." A satellite shop was established in Jersey City, New Jersey called "Marion Shops" and occupied in 1947. This location produced portable test sets, rectifiers, and power equipment for the main plant known as the Kearny Works.^[50]

In July 1948, the equipment plant at Duluth, Minnesota was involved in the National Labors Act with bargaining units of IAM and IBEW.^[51]

After 1947, eight Works locations were built and occupied by 1961 at Allentown, Indianapolis, North Carolina, Merrimack Valley, Omaha, Columbus, Oklahoma City, and Kansas City for the high volume of manufacturing products.^[52] The North Carolina Works was located in Winston-Salem, North Carolina. The Merrimack Valley Works location was in North Andover, Massachusetts. The Kansas City Works location was in Lee's Summit, Missouri.^[53]

A Lawrence, Massachusetts factory opened on November 13, 1951, and was called the "Garfield Shops." The location started with as a wired units job and there were thirteen workers with a section chief and one maintenance man. In 1955, the Lawrence plant reached its peak employment at more than 2,000 employees. This Bell Labs research and development satellite had 40 Bell Telephone Laboratories engineers and 25 Western Electric employees. Carrier equipment used filters made with Polystyrene condensers at this Garfield Shops or later referred as Lawrence Shops.^[54]

In 1952, the Reading plant began when Western Electric converted an old Rosedale knitting mill in Laureldale into a factory. On August 22, 1952, the facility opened to produce new electronic components for the U.S. government for use by the military and the space program.^[55]

In the mid 1950s, Western Electric established several more satellite "Shops" that were smaller locations reporting to the larger "Works" locations. The "Montgomery Shops" were occupied in 1955 to produce Data-Phone data sets, wire spring relays, and test sets. Although, it was located in Montgomery, Illinois, it reported and supported production of the main plant, Hawthorne Works in Cicero, Illinois. The Kearny Works facility had satellite shops that were apart from its location but were part of the manufacturing process. Located in Fair Lawn, New Jersey and occupied since 1956, the "Fair Lawn Shops" produced coils, resistors, transformers, and keys under Kearny manufacturing. The Indianapolis Works facility was producing telephone sets and components with a satellite shop. The Indianapolis shop known as "Washington Street Shop" produced miscellaneous subscriber apparatus since its occupancy in 1957. The "Lawrence Shop" that was occupied in 1957 produced BELLBoy receivers, telephone repeaters and carrier products under Merrimack Valley Works. The "Clark Shop" was occupied in 1959 at Clark, New Jersey and manufactured submarine cable repeaters and components. The satellite shop was under Kearny Works.^[50]

The 1960s and 1970s had various new facilities built and occupied by Western Electric to produce new technologies such as electronic switching equipment (Dallas and North Illinois), fiber optic cable networks (Atlanta), power systems (Phoenix), business equipment (Denver), and telephone equipment (Shreveport).^[56]

In 1970, Western Electric purchased land in Bishop Ranch, San Ramon, California for a permanent plant. The 200,000 square-foot leased plant began in June 1971. In 1974, there were 490 IBEW employee members on strike over local agreement issues.^[57] In 1975, this San Ramon Valley Plant announced a September 30 closure of its telephone transmission equipment manufacturing operations.^[58]

On January 27, 1983, the Kearny facility was announced for closure due to technology changes, underutilized, and too costly to maintain.^[59] The phase out of the facility jobs started in fall of 1983 and the 59 year old, 3 million-square-foot, 144-acre facility was sold officially on May 21, 1984, with nearly 1000 last employees left at the plant.^[60] The former facility was purchased and later existed as warehouses, distribution, research and light manufacturing facilities.

As modern facilities around the country were used for the operations of Hawthorne and its productions distributed, announcement was made on June 24, 1983, for closure.^[28] Between 1975 and 1983, the Foundry and most of the Telephone Apparatus buildings were demolished and in 1986–1987, the remaining Telephone Apparatus buildings and the Executive Tower were demolished.^[61] The Hawthorne facility was in operations for 83 years when it closed its doors in 1986 and torn down for a shopping center. Another building was demolished on April 10, 1994, for a shopping center parking lot, with a remaining two buildings converted. A water tower is the remaining physical association of the industrial research complex where telephones, electronics, military equipment and business management innovations were produced by a facility that once existed.^[62]

The Baltimore facility closed on February 28, 1986. The facility, which had once employed 6,200, was staffed by 65 employees on the closure date.^[63]

By the time AT&T was dissolved in the early 1980s, more than twenty production plants around the country ("Works" locations) had been established.^[64]

In 1967, a telephone directory provides the following snapshot of manufacturing facilities:^[56]

Distribution houses

Western Electric had nine divisions in the mid 1960s. Manufacturing was one division, service was another, and there was also the distribution division. The distribution division was important for supplying the Bell System with day-to-day supply or emergency needs of the telecommunications supply chain. In 1964, there were 35 Distribution Houses that stocked equipment and supplies. They were the supply centers and repair shops for the Bell System. The distribution houses were established as east and west geographical zones in similarity to the service division. The following table showed the distribution houses at that time.^[95]