History
The company was co-founded by Ralph Matthews and Karl Hassel in Chicago, Illinois, as Chicago Radio Labs in 1918 as a small producer of amateur radio equipment. The name "Zenith" came from ZN'th, a contraction of its founders' ham radio call sign, 9ZN. They were joined in 1921 by Eugene F. McDonald,[4] and Zenith Radio Company was incorporated in 1923.
The fledgling company soon became known for its high-quality radios and electronic innovations. Zenith introduced the first portable radio in 1924,[4] the first mass-produced AC radio in 1926, and push-button tuning in 1927.[4] It added automobile radios in the 1930s with its Model 460, promoting the fact that it needed no separate generator or battery, selling at US$59.95.[5] The first Zenith television set appeared in 1939, with its first commercial sets sold to the public in 1948.[4] The company is credited with having invented such things as the wireless remote control and FM multiplex stereo. For many years Zenith used the slogan "the quality goes in before the name goes on". This phrase was used by the Geo. P. Bent Piano Company of Chicago as early as 1906.[2]
Zenith established one of the first FM stations in the country in 1940 (Chicago's WWZR, later called WEFM, named for Zenith executive Eugene F. McDonald), which was among the earliest FM multiplex stereo stations, first broadcasting in stereo in June 1961. The station was sold in the early 1970s and is now WUSN. Zenith pioneered the development of high-contrast and flat-face picture tubes, and the multichannel television sound (MTS) stereo system used on analog television broadcasts in the United States and Canada (as opposed to the BBC-developed NICAM digital stereo sound system for analog television broadcasts, used in many places around the world.) Zenith was one of the first companies to introduce a digital HDTV system implementation, parts of which were included in the ATSC standard, starting with the 1993 model Grand Alliance. They were one of the first American manufacturers to market a home VCR, selling a Sony-built Betamax video recorder starting in 1977.
By 1960 Zenith was with RCA among the two largest US television manufacturers, each with more than 20% of the market; 25 other companies had the rest of the market. The 1962 Illinois Manufacturers Directory (50th Anniversary edition) lists Zenith Radio Corporation as having 11,000 employees, of which at least 6,460 were employed in seven Chicago plants. The corporate office was in plant number 1, located at 6001 West Dickens Avenue (north of the Chicago, Milwaukee, St. Paul and Pacific railroad tracks), where 2,500 workers made radio and television sets and Hi-Fi stereophonic phonographs. Plant number 2 was located at 1500 North Kostner Ave., where 2,100 employees made government electronics, radio and television components, transistors and hearing aids. Plant number 3 was located at 5801 West Dickens Ave. (also north of the Milwaukee Road tracks), where 300 employees made electronics and did servicing. Plant number 4 was located at 3501 West Potomac Ave., where 60 employees handled warehousing. Plant number 5, located at 6501 West Grand Ave., employed 500-600 workers and manufactured government Hi-Fi equipment.
A subsidiary of Zenith, the Rauland Corporation, located at 4245 North Knox Avenue, employed 850 workers who produced television picture tubes. In the mid '60's, Rauland produced the RCA 21" round color CRT; in 1965 it added a 21" rectangular 21" color CRT. In 1966, Rauland bought the Keebler cookie plant in Melrose Park, Illinois for production of color CRTs. Rauland's Niles, Illinois, plant made flat-face radar picture tubes, night vision microchannel image tubes for the military, and many specialty tubes. The other Zenith subsidiary in Chicago was Central Electronics, Incorporated, located at 1247 West Belmont Ave., where 100 employees made amateur radio equipment and performed auditory training. Another Central Electronics plant was located at State Route 133 and Grandview in Paris, Illinois, where 500 employees made radio receivers, with the total Zenith work force in Illinois being thus at least 6,960.[6]
In December 1970, National Union Electric ("NUE") sued most of the Japanese television manufacturers for violation of the Anti-Dumping Act and a conspiracy they alleged violated American antitrust laws.[7] During the pendency of that suit, Zenith Radio Corporation encountered increasing financial difficulty as its market share progressively went to Japanese companies.[8] Zenith joined two other U.S. companies—Sears, Roebuck and Co. and Motorola, Inc.—as co-plaintiffs.[9] The NUE suit was transferred to the Eastern District of Pennsylvania, and the two suits were consolidated for pretrial proceedings and trial.[7] The suit, styled In re Japanese Electric Products Antitrust Litigation, sought $900 million in damages.[10]
By the end of 1983, Zenith had spent millions of dollars in connection with the litigation.[11] In 1981, the trial court entered summary judgment on the antitrust and antidumping claims and dismissed the lawsuits.[12] Plaintiffs appealed, and the appellate court affirmed the summary judgment for Sears, Roebuck and Co., Motorola, Inc., and Sony.[13] The case was appealed, and in March 1986 the Supreme Court of the United States ruled in favor of the defendants on Zenith's antitrust claims.[14] Zenith's hopes to salvage a victory on the claims that the defendants violated the Antidumping Act of 1916 ended in April 1987, when the Supreme Court refused to hear an appeal from the U.S. District Court of Appeals in Philadelphia that upheld the ruling of the trial court in favor of the Japanese.[15]
In 1979, Zenith entered the computer market with the purchase of Heath Company from Schlumberger for $64.5 million, forming Zenith Data Systems (ZDS).[16] Jerry K. Pearlman said in 1981 that "there should be a big Z on the top" of anything electronic in the home, and Zenith wanted to prepare for additional competition from computer and electronics makers.[17] The company changed its name to Zenith Electronics Corporation in 1984 to reflect its interests in computers and CATV, having left the radio business two years earlier.
ZDS was very successful.[18] By the late 1980s its profits were sustaining its parent, while from 1987 Zenith's consumer business lost money. By 1988 the company was the last American television manufacturer, and reportedly decided to also exit the consumer market and sell its television business.[19] To raise money for HDTV research efforts and reduce debt, Zenith instead sold ZDS to Groupe Bull in October 1989 for $635 million.[20] By 1990, Zenith was in trouble and looking more attractive to a hostile takeover. To avoid this, Zenith sold a five-percent stake to the Korean company GoldStar (now LG Electronics) as part of a technology-sharing agreement. With its analog line aging (the last major update to the line had been the System³ chassis in 1978)), and the adoption of HDTV in the United States decades away, Zenith's prospects were poor.
In 1995 LG, increased its stake to 55 percent, enough to assume controlling interest. Zenith was too small to compete in the consumer electronics industry, which had become global in nature, and its high-quality products made it attractive for acquisition.[21] Zenith filed for Chapter 11 bankruptcy in 1999, and in exchange for its debts, LG bought the remaining 45 percent of the company, converting about $200 million of debt owed to it by Zenith into common stock in the revamped company. The shares of existing stockholders were rendered worthless.[22]
During this period, some of Zenith's products were being rebadged as OEM under the Admiral name. Certain products carried the Allegro brand, which had originated in the 1970s as a brand for Zenith speakers and other audio equipment. Their profitable Network Systems division, which produced set-top boxes for cable and satellite TV, was sold to Motorola in the summer of 2000 and became part of Motorola BCS (Broadband Communications Sector).[23]
The Zenith headquarters building was occupied by Aon and subsequently demolished in 2018 to create room for nearby Abt Electronics to expand.[24]
LG produced the Zenith DTT-900[25] and Zenith DTT-901[26] ATSC digital television converter box. LG offered some Zenith-branded plasma, LCD, and direct-view televisions through selected retail outlets.
