A BRIEF HISTORY OF PHILCO

by CARLOS A. ALTGELT

 

THE LONG ASSOCIATION of Philco and the Ford Motor Company goes back many decades.  But while Ford was founded in 1903—thus the “nearly 100 years of automotive experience” that you might have read in press releases recently—Philco began its prestigious and long history eleven years earlier.

      This is the story from its humble beginnings until today’s multinational coverage.

 

A Shaky Start

Born in Philadelphia in the spring of 1892 as the Spencer Company (after Thomas Spencer, one of the founders), its main purpose was the manufacture of carbon arc lamps.  Frank Marr, Thomas Spencer, and three other business associates completed the board of directors.  The company changed its name to Helios Electric Company that same year with Mr. Marr as the president.

      With an initial capital of $10,000 (mostly used to pay a German firm of the same name to use that company’s patents and processes), the American Helios limped along and went almost bankrupt when the carbon arc business came to a standstill.  Lack of business forced the directors to shut the plant for two weeks in August 1893.  By 1899 the directors were forced to sell certain assets to a new company, Helios-Upton Company of New Jersey.

      Five years later, Frank Marr and the other directors were told that the remaining Helios Electric assets would bring only 20 cents to the dollar at a receiver’s sale (and I don’t mean radio receivers!).  Rather than sell at that price, the directors liquidated some receivables and managed to keep the company afloat.

      By 1904 Helios had resumed manufacturing.  Two years later, the company entered the electric storage battery business under the name Philadelphia Storage Battery Company.  Philco historians consider July 25, 1906 as the date when Philco per-se began.  (The name Philco first appeared in 1919 as the trademark on a battery but did not become the company’s official name until incorporation in 1940.)           The idea was to supply batteries to electric automobiles, trucks, and mine locomotives. 

      Expanded business led to the purchase of a factory site at Emerald and Tioga Streets in 1907.

      Frank Marr continued as president after the name change, a post he was to hold until his death on Dec. 1, 1916.  He served as sales and advertising manager as well.  Mr. Davis held the offices of secretary and treasurer, while Mr. Everett was super-intendent of the plant.  Messrs. Yarnall and Witmer completed the group of 5 directors, whose charter gave them the powers of “manufacturing, contracting for, and furnishing material and appliances relative to the use and application of steam, electricity, water, heat, power, natural and artificial gas.”

      The plant had an overall area of 20,000 sq ft, including the yard.  The office consisted of one desk, two chairs, and a letter press. The very first battery contained twenty-four 9C cells and was installed in a brougham ⁽¹⁾ owned by Dr. Woodward and built by the Baker Motor Vehicle Company, of Cleveland, Ohio.  It was shipped from the Emerald Street plant on August 10, 1906, and remained in service for five full years.

      As early as 1907, a factory expansion caused the office to move to the opposite side of Emerald Street (one would have thought that with such a small office they would have found some room somewhere).  At that time, the use of storage batteries was for the most part confined to electrically-propelled vehicles, both passenger and trucks, and electric boats.

      By 1909, new developments in the automobile field gave the company added momentum.  Electric lights in vehicles began to replace gas lights; the advent of the gasoline engine dictated electric starting by means of storage batteries.

      It was also in 1909 that the entire plant moved to a building which came to be known as Plant No. 1, bounded by Arbor, Ontario, and “C” Streets ⁽²⁾ establishing the famous “C & Tioga Street” headquarters for decades to come.  (I bought a huge wooden desk there for $10 when the plant closed permanently in 1974.)

      By 1910, the company showed a profit of over $30,000, most of which

was distributed to the directors of the company themselves (a move certainly not the forerunner of current thinking in profit-sharing plans!).

 

The Lines Must Roll

The cry from the start was “production in spite of everything!”  It wasn’t rare to see Mr. Everett, superintendent of the plant, take extreme actions when backed into a corner.  He believed in leading by the example, as when during a shortage of lampblack (used in the manufacture of the negative battery plates), he climbed up the inside of the smoke-stack and, risking abraded knuckles and shins, brought down by hand a rain of soot and brick dust so production could go on.  In later years, the company wouldn’t hesitate to charter an airplane or a taxicab to rush material to the plant so not a single conveyor belt will be halted for lack of raw stock.

      The following years saw the company expanding at a tremendous rate in parallel with the phenomenal growth of the automobile industry.  Not even the fire that broke out on March 20, 1920, at 4:30 in the afternoon, would bring production to a standstill.  An entire section of the new building was burnt to the ground, but by the very next day a big tent was pitched on the lot south of Ontario Street, west of “C” Street, and business proceed as usual.

      It was during the 1910-20 decade that Philco laid out the foundation for the world-renowned distribution system that became its greatest advantage to market

their products.  

    

Early Products

According to Don Matteson in his The Auto Radio: A Romantic Genealogy, “the man responsible for Philco being in the battery eliminator business and the man with the faith and enthusiasm to see them through this trying period was James M. Skinner.” 

      The first major product made by Philco was a rectifier known as “Socket Power” that enabled radios to be plugged into the mains instead of having to use batteries¾selling batteries ironically being the main business of Philadelphia Storage in the first place!

      Unfortunately, the invention of alternating-current vacuum tubes made the rectifier obsolete, and Philco almost went bankrupt once again.

      Rather than facing total extinction, the company decided to manufacture radios in 1926 and, within a single year, had sold 96,000 radios and was 26th among about 800 radio manufacturers in the United States.  Two years later, in 1929, the company was number two in the nation  helped by the introduction of  the cathedral-looking “Baby Grand” radio developed by designers Ed Combs and Clyde Shuler.  In 1930, it became the leading radio manufacturer in the world.

      Part of Philco’s success as a radio manufacturer was the 1930 purchase of the famous Transitone firm, a pioneer in the development of car radios in the United States.  With that move, Philco began to pioneer in most of the significant auto radio developments of the time. 

      The potential catastrophe of 1926 became a blessing in disguise.  According to a later story in Fortune magazine, the only thing that saved Philco that time was “its ability to turn on a dime while its big competitor was attempting to turn on a dollar.”

      At that time radios were handmade (no PC boards or SMDs then!) and priced for the wealthy.  The “Baby Grand” radio, for instance, was priced at $49.50, less tubes, in 1929 (about $1,000 in today’s dollars).  With tubes (and what good would it do without tubes?) it wiped out a week’s salary.

      The company decided that those prices could be scaled down by incorporating assembly line techniques then being used by the automobile industry.  In fact, management was so convinced that Henry Ford’s assembly line idea was the way to go that it borrowed $7 million to retool, renovate, and equip the plant for mass production.

      Quoting Fortune once again,  “Philco had outlasted and outfought literally hundreds of other firms in radio competition.  The company had gained a reputation of being the hard-hitting, price-slashing wild man of the radio industry.”

      By 1930, the “wild man” had repaid its entire $7 million loan and grossed $34 million.  All that at a time when four and a half million workers—almost 10 percent of the entire US labor force—were unemployed.

      Philco’s first sales thrust was to sell the product on the merits of its fine cabinetry.  After calling in designer Norman Bel Geddes to create the best-looking cabinets on the market in 1930, the entire advertising budget was used to promote radios costing up to $150.  With the depths of the Depression still to come, those high prices scared dealers away.

      Sales in 1932—when the unemployment rate hit its all time high of 25 percent—plummeted to 600,000 sets, about two-thirds of the 1931 total.  Dollar volume was cut in half to $17 million.  To make matters worse, in 1942 Philco lost the contract they had with Ford since 1934 to supply them with auto radios. Fortunately, no one was doing much better either and suffered similar losses, leaving Philco at the top of the heap.

      Some of the car radio products offered were antennas (Philco introduced the first telescopic rod antenna in 1934), ignition suppression, circuitry, and electronic components.  In 1940, Philco developed and introduced the first car radio in the world incorporating permeability tuning, a standard of the industry until the mid 1980s.

      In 1934, Philco perfected and advertised “High Fidelity” sound for the first time and sold 1,250,000 radios, while RCA, its closest competition  that year, sold 500,000.  Philco laughed all the way to the bank to the tune of $33 million.

      And with radio sales booming, the company was quietly working on television research.

 

Television

Philco started experimenting with television in the early 30s and financed for a while the experiments of Philo T. Farnsworth, considered by many as the “father of television.”

An experimental TV station was licensed to Philco in 1931, one of the first all-electronic ⁽³⁾ television stations operated in the United States.

Granting of such experimental broadcasts by the FCC was common practice at that time, as television took its first tentative steps in New York City, Schenectady, and Philadelphia.  While the rest of the country remained oblivious to the new medium, viewers in those cities bought several thousand sets to watch the limited schedule of programs transmitted by pioneering broadcasters of the East Coast who jumped at the opportunity to go from experimental to commercial television broadcasting.

By 1937, Philco was using an experimental 441-line television system which utilized a 12” television receiver—a direct, but bulky competitor to David Sarnoff’s RCA 12” set.

Along with the stations that would become WNBC-TV and WCBS-TV in New York City and WRGB-TV in Schenectady, WPTZ-TV, Philco Corporation's station in Philadelphia, gravitated to sports to fill air time.

On October 5, 1940, when there were about 700 sets scattered throughout the Philadelphia area, Philco broadcast the University of Pennsylvania's Quakers 51-0 victory over the University of Maryland at Franklin Field.

  It was the first game of an 11-year series.  WPTZ-TV was the first in the country to carry a complete football schedule—all Quakers’ home game.

      Even as the war halted the production of television sets and prevented the medium from spreading to other parts of the country, Philco’s Saturday afternoon telecasts continued to a tiny universe of receivers.  In the emerging world of televised sports, Philco’s Philadelphia station was a pioneer without peer.

      In those days television was not considered the monster advertising medium that it is today.  For instance, the alleged first TV commercial occurred in 1941 when the Bulova watch company paid the outrageous sum of $8 for an ad of their watches over RCA's New York City station.

      Beginning in 1941 and up to 1953, Philco operated station WPTZ in the Philadelphia area. 

      On April 17, 1945, Philco launched the expanded operations of WPTZ-TV, the first multiple-relay television network in the country.  The new network broadcast vaudeville, drama, news, movies, and sports.  The NBC-affiliated network pioneered in rebroadcasting programs originating in New York.         

      In 1948, the company entered the television receiver business and advertised a 61-square-inch black-and-white set, about the equivalent of a 7-inch screen, at $349.50 ($2,500 in today’s dollars).  A similar, but better set, would cost you $150 today.  The following year the company was producing black-and-white receivers at a rate of 800,000 a year and was having trouble filling orders.

      Philco became a very popular brand of TV sets during the post-war television boom.  Starting with attractive sets designed by Emil Harman, Philco marketed a wide variety of models.  These sets incorporated many technical advances from tubes to circuits to cabinet design.

      Some of their experimental designs were ahead of their time, like the famous “banana” CRT.

 

Rapid Growth

Philco began exporting batteries to Great Britain and Latin America as early as 1916 through the American Steel Export Company.  In the 20s and 30s, Philco’s business expanded so rapidly that it became a multinational company before “multinational” was a buzz word.  Manufacturing licenses mushroomed across the world when subsidiaries opened in Argentina, Canada, and Great Britain.

      The company officially changed its name to Philco Corporation in 1940 and in 1943, the Philco International Company was established.        Just before World War II, Philco entered the refrigeration and air conditioning business.  When production was halted in 1941 due to the war, Philco had joined the leaders in the refrigeration industry and was outselling two-to-one its competitors in air conditioning.

      During the war, Philco stopped the manufacturing of consumer products and changed its operations towards communication receivers for the military, radio receivers for tanks and aircraft, radar, ammunition, artillery fuses, and industrial storage batteries. 

      When the hostilities ended in 1945, Philco went back with full force into the business of selling refrigerators, air conditioners, and home and car radios.

      Philco became renowned the world over for its inexpensive table radios, stylish and innovative Predicta TV sets, the first hermetically-sealed room air conditioners, and the use of foam as insulation in refrigerators.

      To add a laundry line and advance the design of refrigerators, Philco bought two appliance pioneers in 1954: the Bendix and Crosley companies.  Four years later, Philco established a foot-hold in continental Europe with the creation of Philco Italia.

 

 

 

Enter Ford

During the late 1950s, things began to turn for the worse.  Earnings had plummeted from $335 million in 1950 to $2.3 million in 1960.  Seeking the opportunity to buy a technically competent but financially ailing company, on December 11, 1961, the Ford Motor Company bought Philco, which in 1966 became a wholly-owned subsidiary known as Philco-Ford Corporation.

      The purchase injected new life into the company and helped make Philco one of the world’s most highly diversified electronics companies, including sophisticated aerospace tracking systems and artificial satellites (the original NASA Mission Control Center in Houston was designed and built by Philco-Ford), refrigeration, air conditioners, home entertainment products, automotive electronic controls, and car radios.

      In 1963, the Philco plant in Don Mills Road, Don Mills, Ontario, Canada, started producing automotive radios for Ford.  The plant, at the corner of Don Mills and Barber Greene Roads, opened in 1954.  It moved to near-by Markham thirty years later, in July 1984.  The original building is still standing, although Buildings 1 and 2 now house two large and three small restaurants, a small night club, a real estate agent, law offices, a fitness center, and, being in Canada, several stores for hockey gear.  Building 4 is now host to a Chrysler dealership and a banquet hall.

      The following year, in 1964, Ford Motor Company awarded Philco in Lansdale, Pennsylvania, a contract to build auto radios.  It was in December of that same year, that unbeknown to most, a skinny, crew-cut electronics engineering student, joined Philco Argentina in Buenos Aires¾yours truly.

 

Lansdale

The Lansdale plant in Church Road was built in 1942 by the National Union

Radio Corporation to manufacture cathode ray tubes and was purchased by Philco in 1947.  The first Philco-Ford car radios were manufactured there in 1964.

      The Lansdale plant audio engineering group moved to near-by Blue Bell in December 1975 and to Willow Grove, a northern suburb of Philadelphia, in the spring of 1978. The whole plant was torn down in September 1994 while its facilities moved two miles away.  The brand-new manufacturing formed the foundation of what it became to be known as Ford Electronics and Refrigeration Corporation, or FERCO for short.  (Before that, Philco-Ford went through a couple of name changes in the late 1970s: Aeronutronic Ford; Ford Aerospace and Communications Corporation, or FACC.)

 

Some Firsts

Philco had a long history of firsts in car radios, such as the introduction of the first telescopic rod antenna in 1934 (to replace the running-board antenna), push-button permeability tuning in 1941 (to replace capacitive-tuning), the first commercial use of miniature tubes and search-tune radios in 1948, and the first all-transistor commercially produced auto radio in 1954.

      In 1963, Philco-Ford offered an AM head unit, along with an AM radio with 8-track tape player.  AM/FM with pushbutton search tuning came in 1966, AM/FM Stereo in 1968, AM/FM Stereo with built-in 8-track player in 1973, Premium Sound with matching speakers in 1978.

     

Dearborn

In August 1980, the car radio engineering group, based by then in Willow Grove, moved to Dearborn, Michigan, home of the Ford Motor Company.

      Headquartered at the then Diversified Products Technical Center (DPTC, now Electronics Technical Center, or ETC), the group became part of the Electrical and Electronics Division—or EED.  In 1989 the radio group moved to the Regent Court Building in Dearborn and, as of this writing, we are in the process of moving ten miles south to the Danou Technical Center in Allen Park.

 

Staying Alive

The name Philco is still going strong in South America, with manufacturing plants in two exotic and geographically opposite parts of the world: Manaus, Brazil, at the heart of the Amazon jungle, and at “the end of the world” in Ushuaia, Tierra del Fuego, Argentina.

      The reason for those locations is quite simple: both are “duty free” zones and manufacturing is highly encouraged by the local governments.

     

 

 

 

Philco Brazil

In Brazil, Philco was bought in 1989 by the Itaúsa holding group, which belongs to Bank Itaú, Brazil’s third largest bank after Banco do Brasil and Bradesco.  Its local history actually starts in 1934 when the brand arrived in Brazil through a radio receiver imported with the name of Capelinha—an instant success.

      Philco opened its first plant in Rio de Janeiro in 1948.  Two years later, the manufacturing operations were transferred west to São Paulo.  The 10,000 sq ft plant was located in Borgues Figueredo Street and employed 98 people.  That was indeed a modest beginning for a brand that became well-known and respected throughout the country.

      In 1952, all operations were centralized in Tatuapé, first at João Fernandes Street, then at Santa Virginia Street.  The plant had grown to 60,000 sq ft by then.  And, in December 1961, Philco Brazil became part of the Ford Motor Company.

      Here’s where the story gets complicated.  For a while, they were—to a certain extent—two Philcos in Brazil: PHIBRASE and PRETSA.  PHIBRASE was a joint venture between Ford and RCA to manufacture semiconductors in Belo Horizonte.  Ford had control of the finances and RCA of the technical aspects of the operation.  Unfortunately, things didn’t work out and Ford withdrew.  As for PRETSA, which stood for Philco Rádio e Televisão S.A., that was Philco per-se operating from Tatuapé.

      When Philco-Ford opened the Arbor plant in Guarulhos in May 2, 1973, ⁽⁴⁾ the Philco radio group remained in Tatuapé until 1987, when they joined the Arbor engineering groups under Lim Pao Chie as chief engineer.  The plant was sold to Itautec when Philco-Brazil became Itautec Philco.  It currently manufactures television sets and PC monitors.  

 

The Grandchildren

As you can see from what you read so far and the insert on the left, Philco has gone through a lot of changes.  Visteon’s Multimedia, currently located at the Danou Technical Center in Allen Park, Michigan, was born from the Philco-Ford people that moved from Pennsylvania.  They are truly Spencer Company’s direct descendants.  

 

ACKNOWLEDGMENTS:  This article was based on a 75th anniversary brochure published by the Philco-Ford Corporation (November 1, 1967), a news release by the News Department of the Philco-Ford Corporation (August 13, 1973), and knowledge in the public domain.  Advertisements from THE SATURDAY EVENING POST © 1920 The Curtis Publishing Company.  My thanks also to Germán Altgelt, João Amoedo, Don Beaudoin, Max Behrens, Marcello Ciarloni, Heidi Diebol-Hoorn, Ed Everhart,  Paul Gackenbach, Bill Hurr, Howard Kell, Juan Martinez Casas, Mas Miyazaki. Ricardo Oberst, José Pinho, Celso Ridolfi, Francisco Sánchez, Al Schaller, Julian Semple, and Alan Taylor for the information they provided.

ABOUT THE AUTHOR:  Carlos A. Altgelt has written over 50 articles and papers about the history of car radio in several magazines in Argentina, Brazil, England, and the United States.  He received his Master’s Degree in Electromechanical Engineering at the University of Buenos Aires, Argentina, in 1966.  After working for a couple of years at Philco-Argentina, he emigrated to the United States in 1967 where he joined Philco-Ford in Lansdale.  After a couple of stints with Lear Jet Stereo in Arizona and Lloyd’s Electronics in California, he returned to Philco in 1972.  He worked for Ford in England (twice) and in Brazil.  He holds a patent in car radio styling and is currently an advanced audio engineering supervisor at Visteon (a Ford Motor Company enterprise).   

NOTES:

 

1    A brougham was a light closed horse-drawn carriage with the driver outside in front.  Named after Henry Peter Brougham, its name was also used for a coupe automobile, especially for electrically-powered ones.

2    Some people think that our Arbor plant in Brazil established by Philco Lansdale employees who had worked in Philadelphia, was named after Arbor Street.  Actually, the Arbor plant was named as an acronym for Automotive Radio Brazil Operation (the R was added for ease of pronunciation).

3    As opposed to the mechanical system investigated by Philco in previous years.

4    Philco-Ford of Lansdale had temporary quarters in Tatuapé since 1972.