|1. Operator comfort,
2. Operator convenience,
3. Human engineering,
4. Operating efficiency,
5. Ease of maintenance,
6. Appearance design, and
7. High reliability.
Moreover, we did not design the encoder in a theoretical vacuum.
Rather, we took constant advantage of the expert consultation of bankers,
specialists in banking procedures, product planning, and your
communications and suggestions from banking circles across the nation.
The full field proof encoder is designed to be the finest piece of
equipment of its type ever produced. It will fill a very real need in our
banking processing systems. As with the other equipments I have described
today, we have done our utmost to provide you with the handsomest, most
compatible appearance design we would obtain, a good looking unit which
will earn a reputation for competence where ever it
Again, the most important news is last. The General Electric full field
proof encoder should be available some time in February.
A number of other products also are underway in the Peripheral
Engineering area. As Dr. Johnson has told you, it is most necessary that
we produce a large random access memory, a flexible
disk memory, printers, optical character readers, and tape transports.
These projects are under way as are other projects which we will bring to
your attention at the earliest possible time. Each of them, we feel, will
become an important part of a computer system, and each will give us a
fuller share of the computer business.
When the General Electric Company made the decision to enter the
computer field with the advent of ERMA, we were forced by circumstances to
concentrate on the electronics of the data processing field. In the early
days, the make or buy decision was often as simple as saying, 'If it's
electro-mechanical, we'll buy.' But now, the Computer Department has come
of age. Now, we have made a full-fledged entry into the peripheral field
and we mean to stay there, grow there, and to complement our computer
systems with every peripheral it is to our advantage to produce for
As I have shown you today, we have started with some big jobs to
fulfill major needs in our existing computer systems. Because of what we
have accomplished with our sorter, our card reader, our character reader,
and our encoder, we will have better banking and better business
electronic data processing.
The other new peripherals which are under development also have been
selected on the basis of value to our computers and your customers. We are
not in business to produce gimmicks or gadgets. What
we build must be of a solid and substantial value. Therefore, looking
ahead to 1962, 1965, 1970 and beyond, we invite you
to join us in our search for and evaluation of those peripherals which
would do the most to fill genuine data processing needs. The questions and
the requests, the complaints and the suggestions you receive from your
customers throughout the United States, properly sorted,
studied, and weighed well may furnish us with the requirements that shall
motivate many of our future peripheral equipment plans.
Thank you, Gentlemen for your attention.
K. R. GEISER
A few weeks ago in the Wall Street one of their
feature writers wrote, 'Overseas the sun never sets
on G. E.' s foreign operations.....' To those of us concerned
with the domestic consumption of electric ranges, or computers,
this innocent statement may have slipped by as
little more than a writer's paraphrase. For, as far as most of us are
concerned, the General Electric monogram is as much
a the trade mark of being American as apple
pie, as peanuts, popcorn, and the world series. Let those who must take
coals to Newcastle, owls to Athens, or refrigerators
to the Esquimaux, the General Electric Company has business enough
here at home to keep us busy the rest of our lives.
Gentlemen, that may be true to a degree, but at most, it
must be a half-truth.
Business we do have at home, and that business is important. Important,
yes, but not the whole story. As the United States has been pulled into
world affairs so has U. S. business.
Basically, there are two reasons for this migration, First, there are
those exceedingly attractive market areas which have broadened throughout
the world since the end of World War II, and to
compete with low cost goods and equipments shipped
into the country, we are going to have to move out into broader markets
with those products we can create competitively by virtue of automation
Regardless of typewriters, sewing machines and such, let's take a look
at the facts as they are pertinent to General Electric. Last year, sales
amounting to more than four billion two hundred million dollars placed us
fourth among the nation's industrial concerns.
This means that nationally we topped in sales such major corporations
as Socony Mobil, U. S. Steel, and Chrysler. The world picture was much the
same with only Royal Dutch stepping into the hierarchy above General
Granting that this is quite an achievement, the big question remains,
where do we go from here? What about 1962, 1965, and 1970. Does it not
occur to you that if our company is to continue its dynamic growth, we can
not concentrate solely upon the domestic market. That one computer in
every bank, two refrigerators in every home, and 'keep the light bulbs
burning' are not the sales philosophies which will provide the necessary
answers to the over-all future of General Electric.
Rather, we must broaden the scope of our thinking, and by our thoughts
and our actions, the scope of our markets. .. markets which must move
off-shore, and I mean a great deal farther off shore than Hawaii or
Alaska. Yes, gentlemen, the world has become much too small a place for
U. S. company to continue its growth by
catering only to a restricted market area encompassed by domestic
Moreover, in many lines where low foreign labor costs result in
sufficiently reliable products, a very significant trend has developed.
The sewing machine industry has to all intents and purposes
off shore and the typewriter business is showing strong indications of
following the same route.
Therefore, giving up certain major products as home-produced items, it
becomes increasingly important for us to concentrate upon the more
sophisticated products which may be subjected to the most advanced of
automation techniqueness with electronics as a prime example.
In the past few years, as you may know,
Lasher, Mr. Averitt, myself, and others in the
Department have made extensive trips abroad. The business planning
operation has established a permanent Computer Department office in London
under Mr. Jim Donovan who now has most of western Europe as his beat.
Within the last month, I have returned from a flight around the world in
connection with Computer Department plans, and I might mention in passing
that I found business conditions in general better than the jet transport
facilities which flew me here and there. For example, it took me longer to
get out of the Tokyo airport after arriving than it took me to get from
Hong Kong to Japan and a broken 707 windshield on an India bound jet set
us down in Cairo for two days.
All this, however, is beside the point, and our business here today is
to have a look at the foreign computer market, what our competitors are
doing, and what we intend to do. Now the logical starting point, is of
course, an estimate or prediction of what the computer industry outside
the USA will amount to over, say, the next ten years. This chart shows our
prediction of the world computer business. To get it in proper
perspective, we have shown it relative to the USA prediction. The lower
segment is the hardware prediction. . . and this includes maintenance,
parts, and supplies. The extreme top area of each curve entitled,
"Contract Applications" adds computing centers computing
services. . . including machine time, programming, analysis, and contract
The obvious question is, who is enjoying this business at the present
time? This chart shows the major companies participating in the 1960
business. And while the U.S. off shore bar shows Remington Rand, Bull, I.C. T., and others making a significant effort, as might be expected IBM is
getting the lion's share. Below this, on a world basis, the percentages
get pretty small and have to be analyzed on a country by country basis.
The next question is, in what countries is this
business going to exist in the future. . . and if we let 1970 represent a
typical year in the future, the computer business apparently resides in
the various countries shown in the bar at the right. The distribution
between countries does not show as much variation as might be expected and
this is partly due to the fact that the countries shown are those that
fall in the category of being the most industrialized, or most rapidly
developing. The size of the market, of course, is not the only criterion
that is important in determining whether or not a country represents
an attractive market area. Many other factors must be taken into
account such as the stability of individual currencies, cost of labor, the
ability to repatriate earnings, the risk associated with losing one's
capital investment. All of these have been gathered into a
single category termed monetary considerations.
Another category also representing a combination of many
considerations, we have labeled, national political and this includes such
factors as: the country's feeling concerning the acceptance of equipment
manufactured in or by another country, trade barriers designed to
eliminate equipment from other countries, whether nationals from other
countries would be tolerated working in that particular country, and other
conditions of a generally nationalistic nature.
The fourth criterion which has been applied to
each country is an estimate of how well competitors . . . that is,
competition from the U. S., or competition from companies of that country.
. . how well these competitors are entrenched, and how good a reputation
they already have established.
As you observe, this chart shows these criterion rated on a scale from
one to ten, where one is the least desirable and ten the most desirable.
to put these ratings in proper perspective, we must consider their
relative weightings. Market size, of course, is more important than either
monetary considerations or the national political factor, and
we have given it a weighting of twice as much. How well entrenched the
competition is, is of still greater importance, and we have given this a
weighting of three times as much. Summing all these up, Australia emerges
as the number one market, Canada as number two, Great Britain as number
three, West Germany as number four, Japan as number five, and Italy as
number six. With that covering the broad view of the world market and our
it might be of interest to you should we exchange our telescope for a
microscope and examine a couple of specific areas of the foreign market
problem in more detail.
First, considering General Electric's long relationship with Japanese
industry, it no doubt came as something of a surprise to you that Japan
showed up fifth on a list of six international markets. So, let's have a
look at some of the factors that made this occur. Peculiarly, Japan is one
of the few highly developed industrial countries where there is still no
convertibility of currency. There is, it is true, the bright note that
thinking people in Japanese banking circles believe this may be remedied
Currency problems notwithstanding, the data processing business in
Japan is getting a lot of foreign attention as the following chart
indicates. The first box, IBM Japan is of particular interest in that it
is ninety-nine percent owned by the IBM World Trade Corporation but is
validated to manufacture punched card equipment only. So, in the next
series of blocks with bird tracks between them, we note that IBM has
licensing arrangements with five domestic Japanese concerns, including
reciprocal arrangements with Toshiba for the manufacture of their
equipments. As will be noted, Remington Rand has invested in Toyo and Nru
as also have Toshiba and Mitsui. Nru will rent and sell imported Remington
Rand equipments and Toyo will manufacture. Meanwhile Mitsui is the
franchised distributor of General Electric process control computers while
negotiations are underway to establish a similar arrangement for Marubeni
to distribute our general data processing lines.
If this is not enough of an oriental maze, learned on my recent trip to
Japan that Nippon Electric, the most experienced electronic company over
there, is negotiating an exchange of know how agreement with Minneapolis
Honeywell. Hitachi whom we already have listed above in connection with
IBM has firmed an exchange of know how agreement with RCA while Oki is
working out the same sort of arrangement with Burroughs.
As the gentlemen from Japan themselves would admit, or perhaps, it was
the King of Siam, the whole affair is a 'puzzlement. ' Nevertheless,
the further industrialization of Japan is progressing at a phenomenal
rate and the ministry of international trade and industry which
essentially dominates the industrial scene has laid out a five year plan
Japanese industry into the electronic data processing business. So far,
in the first year, they have accomplished more than they had planned to do
and they are now making a vigorous entry into their second year.
Now, let's do a little continent hopping to glance at the most advance
data processing complexes as they exist in Europe. In the British Isles,
for example, there are eleven major companies well entrenched who have
produced to date some 397 computers and computer systems with ICT
responsible for the lion's share of 225, or somewhat more than half. It is
interesting to note here that ICT is the result of a 1959 merger of Power-Samus
and the British Tabulating Company, the latter of which was formerly a
part of the IBM World Trade Corporation who chose to break away from IBM
and IBM patents, know-how and sales facilities. . . only
to beat them at their own game. So note, gentlemen, that regardless of
any thoughts to the contrary, that beating IBM not only can be done, it
has been done by at least one British company.
Other important British concerns include Elliot Brothers, Emi and
Ferranti, all of whom produce excellent computer equipments for the
European market, the latter under such colorful names as Perseus, Pegasus,
Orion and Sirius, perhaps so the Greek gods can help them.
In Germany, there is also a strong computer picture. Telefunken, a
subsidiary of Aeg, is a strong contender who will become stronger,
particularly in view of their contract to automate the West German postal
system. The TR-4 is a good system and the TR-5 will be better, although
some of their handcrafting, point-to-point assembly systems seem fantastic
to those of us who have visited their operation. Standard Electric at
Lorenz, a subsidiary of
I.T.and T., also is producing strong, effective products as is
Olympia to whom we should pay particular regard for their relatively
small, low cost computers of good reliability.
So much for our brief leap-frogging between countries. We'll return to
specific foreign markets later. But now, let's take a look at one of our
competitors in the world market. . . the one, IBM.
The IBM World Trade Corp. operates in 87 countries with 36 served by
nationally incorporated companies and the rest by branch offices and sales
agencies. With some 33, 000 employees, only about 370 are located in New
York. And that, Gentlemen, means that nearly 99 percent of IBM's foreign
operation is overseas with its effective power where it belongs in the
various market areas. As a measure of its effectively, we may observe that
for the last five years for which figures are available, IBM's World
Trade's growth has averaged more than 22 percent per year.
IBM's World Trade Organization is a very well thought-out, well
implemented setup. They are manufacturing and buying in many countries,
and they are selling almost anywhere a computer may be
sold. For a given market in a given country, they are assembling
components and peripherals from the nearest possible locations thus
of the lowest possible manufacturing costs for a given market area. And
this gentlemen, should interest you, for, in spite of such low cost maneuvers, they are continuing to sell at New York prices, and firming
their sales with a maintenance and computer services backup comparable to
that which they maintain in the United States. Laid out in chart form,
this presents a plan in strategy unparalleled by other manufacturing
companies of the world.
In fact, before we leave the subject, I can't resist mentioning that
so ingenious have been some of the efforts of IBM's applications people,
that Tom and Dick Watson, the presidents of IBM and IBM World Trade,
respectively, recently have received from Pope John XXIII, the Grand Cross
of the Equestrian Order of Saint Sylvester, for the use of IBM computers
to speed the indexing and analyzing of the complete works of St. Thomas
Aquinas. I further understand that while Tom and Dick were in Rome, they
also posed for their holy pictures. It's one of the facts of life of the
computer industry which we can not
ignore that IBM got there first with the most. As we have discovered,
it is just as true abroad as it is
with your home markets. The question is what are we going to do about
Before we get down to computers in particular, however, let's make a
brief survey of the General. Electric Company on the international scene.
For more than three-quarters of a century, General Electric has
participated in international business. First through exports from the
United States, then with investments in foreign enterprise, off shore
manufacturing operations, and licensings. During this long international
experience, world conditions, as we know too well, have faced continual
change. Industrialization from a few bright spots in the British
Commonwealth, on the continent, and in the United States, has come to
encircle the globe. Governments, national sentiments, economies, and
markets, all have changed, and changed again. And with these complex
evolutions across the face of the earth, General Electric's international
activities have learned to adapt to survive, and to grow.
In 1959, the increased importance of the world wide scope of the
company was recognized by the consolidation of all international
activities into a single company group under one vice president, Mr. James
Goss, at the president's level.
INTERNATIONAL GROUP LOCATIONS
The chart before you delineates the division by function of the
international group. These divisions consist of the major manufacturing
subsidiaries which report directly to Mr. Goss, and a component for the
development of existing and new manufacturing organizations through which
they report during their formative or transient periods. The international
group embraces a complete export sales operation capable of handling
anything in the General Electric business line form individual items to
complete systems and maintains sales offices and agents in the major trade
centers of the business world. Supporting functions include. . .
licensing, know-how and technical data service to licensees. . .
international finance, international portfolio management, and legal and
patent operations. Many off shore markets are growing even faster than U.
S. Markets in 1960, the company's foreign sales, including exports, the
sales of Canadian General Electric, Ltd., and other foreign affiliates,
amounted to $600, 000, 000. It is expected that the total sales of the
group will reach the $1,000, 000, 000 level. In 1960 more than $257
million U.S. export orders were received, representing a 23 percent
increase over 1959 in heavy equipment and producer goods, and
15 percent in consumer goods. The latter was achieved despite loss of
almost the entire Cuban market, and substantially reduced sales in
Venezuela as a result of economic conditions.
While we are starting to increase our export business, some markets can
only be reached by domestic manufacture. Where the exportation of U. S.
finished products is not practical in the face of such controls as high
import tariffs, quotas and currency restrictions, our investment in
foreign subsidiaries to serve their markets has grown substantially. For
many years, the General Electric Company has invested abroad in
manufacturing plants and sales subsidiaries. During 1960, we have stepped
up our investment in markets where the potential for local manufacturing
is good and where export sales to such markets are foreclosed. Our total
foreign investment exceeds $250,000, 000 on a conservative evaluation
basis and the number of employees is approximately 40,000, with
facilities located around the free world.
There are service shops in subsidiary companies and technical field
representatives in the
following countries. . . United Kingdom, Iceland, Norway, Denmark,
Germany, Belgium, Netherlands, Portugal, Spain, France, Switzerland,
Turkey, Italy, Greece, Yugoslavia, Morocco, Union of South Africa,
Formosa, Philippines, Japan, Australia, Mexico, Venezuela, Uruguay,
Brazil, Puerto Rico, and Argentina. It is estimated that some five hundred
General Electric personnel exclusive of any IGE employees are involved
abroad in service areas.
Major manufacturing subsidiaries are in operation in Italy where the
Compagnie Generale Elettricita and its subsidiary fair manufacture
apparatus, appliances, electronic equipment and lamps. In Canada some 13,000 people in five million square feet in eight communities are engaged in
manufacturing essentially the same broad complement of products.
The operations in Brazil (about 7000 personnel) produce small
apparatus, appliances, radios and television sets. Mexico, Uruguay and
Argentina with 1700, 1500 and 1700 people respectively manufacture similar
classes of electrical and electronic equipment. Smaller factories also are
operating in Portugal, South Africa, Turkey, England and Columbia. Our
total facilities outside of the continental U. S. occupy some twelve
million square feet of factory and office space. In addition to this, we
are represented by
over 200 independent agency and distributor outlets throughout the
At present, thirty manufacturing plants in ten countries will be
expanded and the volume of locally made General Electric goods will
increase substantially by the establishment of additional facilities in
these and other countries.
The General Electric philosophy is to form an integrated world
manufacturing and sales organization which is linked together by the total
General Electric resources and its patent and know-how strengths. The
strongest effort will be applied to the international needs for
technologies, processes and procedures emphasizing industrial automation
and all phases of data communications and computation.
Now, where do the Computer Department's plans fit into the
international picture of General Electric activities. First, let me point
out an important evolution which is currently taking place in the
company's world wide philosophy. This emerges from the fact that our
enormous diversity of products are not in many instances best served
through a single international agency. Granting the valuable know how the
international group possesses, its ability to act for the entire company,
its enormous and beneficial backup in strength of personnel throughout the
civilized world. There exist, nevertheless, certain specialized product
areas which may be better served at a department level.
The General Electric Company and its international group are well aware
of this condition. Vice President James Goss has a series of
organizational plans on his desk which he plans to implement progressively
in the interest of eliminating much of
the bottleneck which has existed. Generally, it is the intention of
these plans to put more and more of the responsibility on certain key
operating departments and allow them to take care of their own off shore
operation. The General Electric Computer Department is one such department
and toward that end we have been making substantial progress to begin
with, we have established our goal, and it's a good one. For, it is our
aim to obtain twenty five percent of the off shore computer business by
whatever means are required to get it. We have formulated a number of
steps for our master plan, and more are in progress. Moreover, it is our
intention to implement them as rapidly as possible. For example. . . as
you are no doubt aware, Canadian General Electric has made the decision to
go into the manufacture of electronic data processing equipments. These
will be computers generated by the Computer Department. In France, CFTH
has decided they are about ready to manufacture electronic data processing
equipments. As you may know, Compagnie Francaise Thomson-Houston is
essentially a sister organization as the result of
a 1918-1981 agreement with General Electric which gives them the right
to design and manufacturing know-how on any GE product delivered to a
customer. In return, they pay a fixed percentage to General Electric.
Under such circumstance, it is, of course, to the Computer Department's
advantage to work very closely with CFTH as they enter the electronic data
processing field, and this we intend to do. Before we leave the subject of
CFTH, one word of caution, gentlemen. The agreement of which I have spoken
does not obligate us to provide CFTH with financial, business, or
In Italy General Electric has its subsidiary company. Cogenal, and
although no firm commitments have been made in the area of computers, when
we are ready to take steps into the Italian market, the way is open to us.
In Australia, the Australian General Electric Company has been
reactivated, and the new president of this company will be moving there
from New York in the near future. Here IBM is not so well entrenched and
we not only have opportunity to be first, but are in an excellent position
to move forward.
These are some key areas. They represent concrete and successful
operations on which the Computer Department may depend. But they are by no
means our entire world plan.
Undoubtedly, for example, we will be able to sell a few Phoenix made
computers at New York City prices in many countries, but the disparity of
labor is such that we can not in the long run consider doing business with
American cost against foreign labor costs. This means that we must take
steps to manufacture in the various countries we intend to serve. And this
brings up one factor to which I have not given sufficient consideration in
my talk so far. This is that the problem of getting established abroad is
not so much that of adequate manufacturing facilities. . . I have already
mentioned a few of our ways to such an end. . . as it is. . . First, where
do we obtain the applications personnel, second, where do
we acquire programming experience capable of programming in the
language of the country, and third, how will we provide adequate service
backup for our equipments at an economical figure. We believe we have the
answers to these problems.
Two other items which have entered into our considerations are the
availability of established in-place sales and distribution organizations
the computer market than our own international group has been. And the
immediate need for a source of relatively unsophisticated tab equipments
to serve the potential customers of future computer systems.
Also, in the off-shore market area, there is a very definite
requirement for smaller size computers. For here, the ratio of small
businesses is larger than we usually find in the United States. And here,
too, we have made our plans.
Now, before I say, 'Good Morning', it is important that we both
recognize the fact that what I have shown you here of our plans is about
as much as you would see of an iceberg. . . that is the one-sixth you can
observe above the surface of the sea.
The important thing, however, is this. As our plans become accomplished
facts, you will be the first to know. Today, you are our representatives
across the face of the nation, tomorrow, no doubt, you will be
instrumental in helping the General Electric Computer Department to circle
I thank you now for the time you have given me on this spring day of
year one in the Computer Department's international operations.
B. D. CREEDE
Ken Geiser has given you an excellent survey of the computer world as
we see it at the present time.
It may seem so complete in fact, that you may wish to ask what we in
sales are doing and what our relationship is to this department planning
In my talk today, I will try to do two things.. first, to explain our
export sales plan and its relationship to the long range business
planning. Second, explain where we are in our sales program.
There are details where the business planning operation and sales
differ in analysis and approach, but in general this is due to the
different restraints under which we work.
We in sales are, I must say, a little jealous of business planning who
have seemingly boundless resources from our point of view since in making
their plans they can, conjure up wealth and facilities, assuming the
establishment of subsidiaries, acquisition of complementary corporations,
or a joint venture with a top notch foreign company.
We in sales on the other hand, are confined to the stark, gray realism
of available funds and recourses. Further, we must, in achievement of our
goals, avoid commitments which would prejudice the inconstant and
incomplete long range big picture. To do this we must work closely with
business planning so that we will know their thoughts and contribute to
them from our experience. . as we go ahead. As will be illustrated by our
foreign selling activities to date, our most powerful source of business
information is what we have learned by doing. We may get bruised a bit,
but we learn.
In the past we have made substantial contributions to the business
planning and in turn look to business planning to provide us with new
resources with which to work as we go along in the future.
In beginning our activities abroad about a year and a half ago, we in
sales took what we had to work with and with our understanding of the
foreign market and began with little steps.
Our neighbor, Canada, was obviously the easiest step, and we started
our efforts there in the fall of 1959. In Canada we had a wholly-owned
company which was interested in expanding its product lines for the
future. They had a mature organization with complete resources, trained
people, equipment facilities, a nation wide sales offices, stable
management, and a good currency. They did not however, know our business.
Our competitors were mainly American companies, some with substantial
Canadian operations. In spite of a preferential tariff, English
competition was low because of American technical superiority and
closeness. There was peripheral (tab and typewriter) manufacture in Canada
but no computer assembly.
I should, however, point out here that even in the case of Canada where
we can go on vacation without passport, visa or money problems (except the
problem of having enough). Even in Canada we are dealing with a different
country with its
different laws, money exchange fluxuations, tariffs and in most areas
markedly differing practices and traditions.
For instance, we tend to accept our banking system as the obvious way
to do the job, but really it is unique in the world. Other countries could
and some will follow our lead, but they do the job differently with
different controls and laws. In Canada, for instance, you can write checks
on your savings or interest account and for most small
short term loans you simply get the bank's permission to overdraw your
account to the amount needed. You thus have, in effect a plus and minus
interest and balances on a checking account. Checks are not normally
returned and must be physically retained as long as twenty years by the
bank. Trust work and home and automobile loans are not within the charter
of commercial banks.
The customer is a super king compared to the
U.S., because in effect, there are only five
banks in Canada each with hundreds of branches
all located across the street from one another. Lastly, even a lowly
adding machine is not normally seen around the teller's cages, and people
are used rather lavisly.
In Canada we can no longer deal in the same manner as we do at home
even though two markets may lie as close together as Windsor, Ontario
and Detroit, Michigan. Because the General Electric Company U. S. A.
dare not for tax reasons own property, lease equipment or solicit sales
in the dominion. Initially, Canadian GE had no computer organization,
but by virtue of receiving the cooperation we had expected from CGE, we
have been able to go ahead substantially meeting our goals for getting
them into business; handling their' own sales, applications engineering,
product service and financing, further, in accomplishing these objectives,
we learned a good deal and established many principles of operation.
Looking back, three things stick out. . . one we found that our
representatives management, although they may be "tops" in their
own business, must be shown the unique features of the computer business,
especially the traditional customer service requirements. two... because
of the pattern of leasing set in our business, a separate company
chartered in the country must normally purchase the imported equipment,
lease it, and service it. The normal IGE sell from New York approach
cannot be used. Three. . . . computer sales tend to be consummated more
slowly abroad than at home because,
acceptance of computer, is less complete than
in the U.S.A. for many reasons.
Our second project, early in 1960, was Australia, with the help of IGE
who had been studying the country for about two years, we in sales decided
to probe for opportunities.
I think a little historical background would be in order here. In 1953,
GE had sold its operation in Australia which was a joint venture owned by
its mature daughter, the Associated Electric Industries limited of
England and Australian General Electric. AGE then became only a
corporation folder in a lawyers file in Sydney and AEI carried on the
business and acted as our sales representatives. About 1958 it became
evident that the growth of the Australian economy made it an important
area for new General Electric effort and a thorough study was begun by
Late in the winter of 1960, the AGE was reactivated and we began our
by sending Jim Wylee down even before AGE actually had an office.
In Australia we found some conditions similar to Canada but there were
major differences. We had a more equalized position with our U. S.
competitors since there was no Australian manufacture of computer of
Here, however, we would really face the British preferential tariff
since we were about equal to their transportation distance. Money was more
tightly controlled and the Australians had a more pronounced
individualistic national and political position.
We have had a full-time man in this market since February this year
expect our first order within the next six months.
AGE now is going ahead with plans for an extensive marketing and
manufacturing build-up with headquarters in Sydney.
The Computer Department is a pioneer in the new Australian General
Electric Company, a company which is welcomed as a large step in
Australia's much needed industrialization.
Again we learned a few more important things in Australia. For
instance. . . . .
One. . . we found that sales could not be made
by sending even a top sales engineer into a market
for a few weeks of months. Sales were consummated too slowly for
trip-selling techniques and as soon as our man left the market even for a
brief return trip home, we, in effect, abandoned our prospect to
Two. . . we learned also that international computer customers demand
local roots as well as a local support organization.
In the spring of 1960, Bob Davidge, Far East power systems sales
specialist of IGE and
I planned to go after electrical utility computer business which was
seen to be coming up in Japan. We approached it by beginning with the
stimulation of GE' s traditional Japanese distributor, the very large
trading company named Mitsui Busan Kaisha. I can calibrate very large for
you by saying that their gross sales are two billion plus per year. After
discussions with Mitsui they agreed to send two men to Phoenix for
training, one for process
one for business data processing.
Our batting average on this project was only an even five hundred, but
in addition to this
we learned a lot about the business data processing situation in Japan
and made strong friends. The tangible results all accrued to process
computers ---four orders to date which total about a million dollars. We
learned from our contacts with one of our Japanese trainees that Mitsui
was a financial partner with Remington Rand in a computer venture in Japan
and because of this we dropped our business data processing plans with
Mitsui, at least for the time being. We goofed a bit here, but again we
You may have seen the two new Japanese visitors around our plant
recently. These men are from Marubeni-Iida Company, our new distributor
also a very large trading company. Mr. Honda is in our sales training
course. . . Mr. Ichikawa who has now gone back is an application engineer
here to help sell a GE 225 to his company's Osaka, Japan office, he will
return for further training to become an application engineer for GE
Again to illustrate the differences we encounter, I would like to
mention a few points
about the banking business in Japan. There is
no personal check transit between banks. Banking
is a trading function and your signature is an impression from a
personalized and unique carved ivory stamp. I got a kick out of this stamp
is about the size of the last two joints of your
index finger because its handle is hollow and inside it is a small stamp and handle, whose impression is about the size
of a lead pencil eraser.
On a contract the large stamp would be used for
the signature. . The little one would be used for changes. All legal
signatures are made with these stamps, even inter-office letters.
Japan is a different world for computers requiring the oriental
appreciation and understanding of his own business ways, and sales
benefiting from the help of American consultation in areas of advanced
WE are making progress in Japan now, in a market, which is as Mr.
Geiser pointed out, complicated by unique historic company relationships,
government intervention, currency nonconvertability, language difficulty
and oriental paperwork methods.
I see possible solutions for each of the above problems and possible
success if we make the correct moves.
In Japan we got our first good view of the problem of language and
customs and the need for us to consider them carefully in our planning. We
also got a better understanding of our two major competitors especially
the so- called international
B. M. In the Fall of 1960 as a result of a request for a proposal from
an old friend of General Electric, the Puerto Rico Water Resources
Authority, I looked at Puerto Rico as a market for us to consider, IGE has
a sizable marketing facility there. On the surface it looked easy to
reach, easy to support,
financially solid and an expanding market. I found, however, that our
two major competitors had substantially neutralized the market for the
present and the foreseeable future and this area was removed from our list
Our latest project Spring 1961 is Europe which is the most complicated
and expensive market to reach, but should be the most rewarding of our
foreign sales opportunities. You may think that the European common market
will simplify our efforts greatly, but generally it will tend to make life
easier for our competitors with local factories and more difficult for us
in the early stages of our getting started. This will be true because of
the rather limited European facilities which we have at the present time.
Here again a little more history. For some sixty years prior to 1953,
General Electric had major interests in European operations through
ownership, portfolio investment and licensing. By World War Two, however,
the growth of strong local manufacture of electrical apparatus, appliances
and lamps in Europe brought importation of
General Electric U.S. made equipment to practically zero. Anti-Trust
activity against General Electric caused the company to reduce its
ownerships of foreign companies, even those it founded, to minority
portfolio holdings, and previously broad licensing arrangements were
curtailed as a result of decentralization. This contraction of
relationships and European operations involving the company's traditional
product lines occurred concurrently with the growth of international
interest and a competitive European build-up in Europe in new product
areas such as computers.
Our major U.S. competitors have on the other hand concentrated on
their international penetration. I.B. M. for instance has factories
in Germany, France, Italy, and England, and its total European sales
and manufacturing personnel will run to more than 23,000 people. Strong
foreign competition also exists in Europe.
I believe that you see that we have here,
a challenging situation. It is much the same as your own with the added
features previously mentioned. On our side is the fact that all levels of
the company are interested in the development of international business in
our new product lines, jet engines, atomic energy and automation... the
latter including business data processing. We thus have top level support
for our war. Business planning is working on allies and we are carrying on
local actions with the volunteers we have and can recruit.
During the last year General Electric has purchased control of
Compagnia Generale Elettricita of Milan and we are presently trying to
work out a basis of cooperation with that Italian company. We also have
other approaches in process which are short of the alternative of just
buying your way in. That approach is, of course, very costly.
During the next few months we will be testing
|these methods and may at various times be
needing your help. We hope you will remember that you are part of a world-wide organization and that you will look for and
pass on opportunities you see in doing business with your own customers.
Lastly, our future abroad will rest on your success here at home and we
wish you great success...
BARTER WITH OTHER TRIBES
G. W. GAMBLE
By way of definition, the Special Accounts sales unit primarily serves
the OEM. . . he can be a big market. . . he is an important market. . . he
can serve us in a number of ways. the OEM is not to be over looked.
While most of our Department's sales activity is concerned with
providing end users like banks, with our standard products, we consider it
a definite advantage and plus business to provide the original equipment manufacturer
with some of our products with which we can make a definite contribution.
These include our standard products, with or without modification, sold to
other manufacturers for incorporation into their products and systems, or
even new or non-standard products sold to the original equipment
manufacturer for resale. These include a class of devices which utilize
our special engineering or manufacturing skills, which fit into out plans
for standard product line expansion, or provide manufacturing load where
Of equal importance are some special assignments which by their nature
require marketing and other backup skills similar to those employed in
selling to the original equipment manufacturer. I think this can best be
realized by considering a division of effort in which selling to an end
user is a more application oriented effort while selling to the original
equipment manufacturer is more engineering oriented.
For example, there is much circuit and operating technical details
which must be understood by the customer before he can integrate our
equipment with his to form a system. In almost every case some
modification is required of our equipment, and his to affect this
integration. The responsibility of applying the complete system is, of
course, his. There must be, therefore, a rather noise free communication
channel between customer and our Computer Department Engineering Section.
Ideally, there must be sound economic justification for our
relationship to a particular OEM to exist. We must complement their
skills. It also must be clear that our talents are sufficiently unique
that we can both take a profit at competitive prices for the final
equipment or system. Now for a few examples. . .
I believe most of you are familiar with our relationship with NCR. This
is typical utilization of skills which complement
each other in the end product. NCR has long experience in the manufacture
of equipment which is more on the mechanical side, such as their cash
register and other office equipment. General Electric brought the
electronic skills to the system. While NCR has gained some strength in the
electronics area and we plan to essentially conclude our deliveries of NCR
304 electronic units to them, by the end of this year, it has been very
important OEM business for us. We have enjoyed the leadership in magnetic
ink character recognition and associated electronics for controlling
document sorters as an outgrowth from its development for banking systems.
We have provided magnetic ink character readers to NCR, Pitney Bowes,
Ferranti Packard and others for their document sorting equipment, and we
are currently negotiating with Cummins Chicago to provide our magnetic ink
character reader and general purpose sorter control, to be used with their
PERF-O-DATA line of equipment. Here again mechanical and electronic skills
AUTOMATED POST OFFICE
The General Electric Company has long had an interest in the post
office modernization program. There is planned considerable data
processing and control equipment for post office automation, and while
little has materialized to date, we have been working with the food
machinery and chemical corporation on their project to automate the
Oakland, California Post Office. Letter, parcel and flat sorting machines
are each under the direct supervision of a separate electronic memory
control. An electronic directory contains the locations of some 14, 000
destination bins and performs the conversion from a code, which is an
abstract form of the address information and the proper destination bin
signals. In this manner 106 operators will sort 670, 000 pieces of mail
A general purpose computer will be employed to do overall production
scheduling, accounting and reporting. FMC is about to place an order for a
prototype of the electronic directory. We are in an excellent position to
receive this order.
The Bay area rapid transit district has been formed to develop plans
for a wide spread rapid transit system for the five county metropolitan
San Francisco area. A bond issue close to one and one half billion
dollars will be placed before the voters in November. Electronic data
processing techniques are being consider ed for. . . automatic train
control, dispatch, fare collection, general data processing for financial
accounting, operation scheduling and maintenance of inventories. Cities
such as L. A., Dallas, District of Columbia, Montreal, Boston,
metropolitan New York, Cleveland and others are actively considering
modern rapid transit systems.
As an example of bringing our special manufacturing skills to the OEM,
we are currently negotiating with Sperry Utah to provide magnetic core
memory planes for their Sargent Missile Guidance Computer.
Other departments of our company are an excellent source of OEM
business as well as an end user of Computer Department products. We have
supplied engineering assistance to the Specialty Control Department on the
logic design of a glass cutter control. They will use some of our printed
wiring boards in this equipment. The Industry Control Department and the
Communications Products Department will use units of our systems and
components, such as printed wiring boards, 225 tape systems and even a
complete GE 225 to complement their process control systems.
A good example of the development of a system which is the first of a
new product line for the Computer Department, is the advanced information
system for our Financial and Services Operation in Schenectady. Very
briefly this system consists of two General Electric 225' s located at
Schenectady and connected on line through wire links to remote file access
stations located at General Electric
sales offices and warehouses throughout the country. This will provide
direct and centralized order and financial reporting services.
Now a brief summary of our products and services of current interest,
for the OEM. We have magnetic ink character readers, and our general
purpose sorter control, printed wiring boards, special magnetic core,
tape, or other memories which require a minimum modification from our
standard units. Special engineering assistance to other General Electric
Now what part do you play in this area of our business.
Let us take the hypothetical Kolossal Mfg. Corporation within your
sales district which manufactures equipment for data handling. Up to this
time, their manufacturing skills have been mostly electro mechanical.
Competition in this age of automation forces them to improve the
versatility of their product.
They call the General Electric Computer Department sales office, and
ask you to talk with them about what GE products can do for them. Gather
all the facts you can, if you think we have an opportunity here, contact
me and we'll discuss it. If it develops that we can contribute we'll back
you with engineering help. . . while for certain marketing strategy
reasons it is not always clear that we want to do business with a
particular manufacturer, you can, through a knowledge of our standard
products and our engineering and manufacturing special capabilities
recognize business opportunities and bring them to our attention. They
then may be exploited by us. To give you the story first hand on the
special engineering capabilities that you can count on here is Bill
Bridge. . . . .
BARTER WITH OTHER TRIBES
W. H. BRIDGE
Thank you, George.
As you know, the Computer Department got started by selling things that
we didn't have. Then, a few engineers were hired to bail us out, and to
develop some new products to sell. Of course, this didn't discourage
our sales people, they kept on selling things we didn't have. . . and the
Computer Department kept on growing.
As Bob Johnson told you on Monday, Engineering has organized a group to
help you sell bird banders, fish counters, and other things we don't have.
is the Special Systems Engineering Subsection.
We have set out to accelerate the growth of the Computer Department by
doing engineering work
which is based on specific customer requests. By engineering special
modifications and attachments
to standard products we can help you increase sales of existing
products. By securing funded military development work you can bring in
profitable business and we can increase our technical know-how for
the development of new products. Even more important than this, we want
to help you bring in that 'big job', another ERMA or 304. We want to work
closely with you in seeking commercial opportunities to develop complete
new systems which will expand our product line and create completely new
businesses like the Computer Department.
From all of these special engineering activities, we want live
information on what customers need,
so that we can provide better products for you in the future.
To accomplish these objectives, we have organized three units in the
Special Systems Engineering Subsection. The Special Business Systems Unit,
managed by Paul Dodge, handles the modification of standard products. . .
bird banders, etc. Many of you already know Paul through the inquiries he
has answered for you. Paul, would you stand up so that the rest of the
group can meet you. . . Thank you. The Military Systems Unit is managed by
and I would like you to meet Bob. Thank you, Bob.
I would also like to introduce Norman Poole, who heads the Commercial
Systems Unit, but unfortunately I can't because Norm has just left Bell
Labs and is somewhere between New Jersey and Phoenix, on his way to join
The Commercial Systems Unit develops new systems for commercial
customers in which there is
a large amount of new equipment in comparison to
the amount of existing products used. An example of this is the order
processing system which we are developing for the Finance and Services
Operation of General Electric. This system includes a computer center in
Schenectady with two 225's and several peripherals, including mass random
access disc files. While this is a relatively large computer center with
monthly rentals of about $30,000 the computer center represents only
thirty per cent of the total system. Fifty per cent of the system consists
of special data communications equipment such as the file access station.
Seventy five of these units will be located
in 31 cities throughout the U. S. Another major
expense is the communication lines which will be
leased from common carriers such as AT&T and Western Union. This
system is one example of the
big jobs we are expecting from you in the future. We are also working
on bringing in big military jobs
which are related to our products.
We are interested in the big jobs, but we want the little jobs, too.
The ones that will help the orders-received budget today. To handle these,
we have set up the 'Spec' procedure. 'Spec.' is our answer to the IBM RPQ
system. It doesn't really change anything you are doing right now. What it
really does is set up a procedure for us to report to you what we are
doing. It also provides guide lines for giving us the kind of information
we need to
generate better quotations for you. A check off list of facts we need
to know to process a spec quotation in your box, at the front desk. In the
future we will publish lists of specs that we have completed. Options that
are available by special request will also be referenced in the data book
by spec number.
There are many things about Special Engineering that I want to discuss
with you, such as the costs of doing specials and the ways of getting a
quick answer from us. Some of these problems are outlined in the spec data
in your mail box. From this point on, we want to work closely with you in
developing the technique of getting the feature you need to make a sale at
the price the customer will pay.
BARTER WITH OTHER TRIBES
G. W. GAMBLE
Thank you Bill. . . in addition to this Engineering support, we can
keep you informed of special manufacturing skills, which we can and desire
to bring to other companies and too, while our policy concerning
particular OEM business opportunities will continue
to change, we can keep you informed of this policy. For example, both
Remington Rand and RCA have,
in the past, approached us with a proposal to enter into a joint
development of the document sorter. They could then supply this sorter
with their banking systems. We declined to accept this proposal, however,
there may be other similar proposals under different circumstances which
we would accept. These, of course, must be carefully reviewed by our
management. And finally, we can keep you informed of current activity with
OEM's and special customers,
in particular regions, as up to date examples of the kind of products
and services that we can and are interested in providing.
In summary, we can bring to the OEM our special skills and the
available facilities of the company as a whole as well as our Computer
Department. The OEM can provide an enlarged market for our standard
products. . . additional use of components of our standard equipment to
balance manufacturing loads where needed and provide a measure of future
product offerings by manufacturers who are in fields allied to ours.
NEW MOTHER LODES
D. F. CAYCE
This is blue sky. I show it here to remind you that there is no blue
sky law in the computer business.
Putting it another way 'the sky is the limit' to the possibilities for
serving customers with our products. Our own imagination and abilities are
the only limitations that will delay our providing equipments and programs
which are the opportunities that exist in this blue sky area.
Out of just such emptiness some six years ago came the idea and
opportunity of MICR to break the paper handling bottleneck in the Bank of
America. You all know how this has spread beyond the Bank of America,
throughout all banks, and is now beginning to undermine those piles of
punched cards that surround other customers.
The function of Advanced Systems Sales is to develop projects similar
to the Bank of America which will lead to additional new concepts in
equipment or programming which in a broad market. Because of the long term
headquarters follow up work associated with such projects, continuing
sales responsibility is usually retained at headquarters until the initial
contract is completed. For example, the sales responsibilities for the
Bank of America and Western Reserve University are handled in advanced
What types of advanced systems are we looking for?
We want, ideally, additional large scale projects which will provide
new system approaches, the development of new equipment and new
programming all of which will contribute to the advancement of the art and
expand the usefulness of computer automation to additional businesses.
An example of such a project would be a new approach to customer
billing for large businesses like the Bell System Companies.
Many projects will naturally be of much smaller scale and might involve
but a single area of development. Our information searching selection
using the GE 225 for Western Reserve University is an example in which
special programming is a new area.
Where will such projects be found?
Most will come from customers whose needs are expressed or developed by
growth, changing conditions or constructive analysis either on their part
or with our assistance.
Each of you has one or more customers that keep you on your toes with
questions on how to do new jobs which today may be impractical.
A second and a most constructive source of new projects exists within
our own organization. Ideas for equipment and programs constantly develop
within the Laboratory, Engineering, Application, Product Planning and
Sales. Many must be filed away for future use but the most obvious can be
matched with customer needs in one or many areas for development into the
A third source comes from ideas originating with other manufacturers.
Every group working with prospective or actual customers continually
develop new computer uses and as soon as these ideas become public we and
others strive to develop and improve the vest applications.
Who are the groups that develop new applications?
Quite naturally, product planning participates in the development of
any new system to lend their guidance for widest customer acceptance.
In the Applications Section, the Systems Research and Development
J. Levinthal provides research and analysis, and develops the new
techniques, system design and computer applications required for the
In Engineering we have the Special Systems Engineering Subsection under
Bill Bridge who work with the other groups to design and engineer the
special equipments which the new systems require.
While these groups share the responsibility for the development of
specific new systems and applications for customers they have the
assistance and cooperation of all others in the department for any help
How can you the salesman help in this area?
You are the primary contact with customers and can provide both
customer generated ideas and individual ingenuity for real advances.
We will appreciate --- we want --- your bird dogging of ideas and will
be glad to work with you in
the headquarters spadework needed to help you with your customers on
their unusual requirements.
Don't leave these 'far out' ideas in orbit.
Bring them in.
So our outer space will be turned into a galaxy of useful satellites.
ACRES OF DIAMONDS
V. L. SCHATZ
By now you fellows have all heard of the early history of the Computer
of the sizeable block of business we received from the Bank of America
contract and how this was followed by the National Cash Register contract.
You, of course, are also aware of the solid
block of support we received from our corporate funds. These three
blocks of business have been and continue to be vital blocks in the
financial foundation of the department. However, a fourth block is
necessary in order to complete this foundation and to assure ourselves of
a base from which we will grow to greatness in the Computer Business. Of
course, I'm talking about the General Electric Internal Market. You will
note that this foundation includes no block of business labeled
"Defense Development Contracts".
We can take justifiable pride in the fact that we are the only
manufacturers to become established in this business without significant
direct government aid. However, we are also the only manufacturer with the
broad array of sister departments from which to draw business.
Let's take a look at this GE market. . . This gold mine in our own back
yard. It has been and continues to be our biggest single potential
customer. To date, this market has provided
us with orders for 47 general purpose systems in 43 installations.
Certainly, these systems vary in configuration, but they add up to a
total monthly rental of approximately $528,000.
I am sure that by now you must be going through the mental
manipulations of subtracting
the sold installations from the number of departments in order to
arrive at a rough figure of remaining sales potential. You may even be
further reducing this figure by the number of installations you expect to
sell in the next month or two.
Let me make this job a little easier for you. Here is our immediate
potential in the GE market, as closely as we could determine it.
You all know what a 705 is. 705 times 2 is 1410. This makes it a half
1--- UNIVAC II
Let's take a look at these installations in terms which are easier to
understand. The GE general purpose lease dollars of $528,000. vs.
others of $1, 564, 000. per month. Even allowing for the fact that our
equipment is replacing existing equipment in many cases, this will still
leave an estimated competitive equipment lease rate of at least one
million per month probably closer to 1. 2 million.
That impresses me as a market still worthy of our best efforts. Thar's
gold in them thar hills, fellows, and that's no
Your competitor is not making it easy to replace this equipment. Just
about the time you think you have made our equipment attractive to your
customer, your competitor comes along with a used equipment sales price
which is also very attractive, particularly to the unwary buyer. Believe
me when he offers these low sales prices, he is not being overly generous.
He knows better than anyone else what his junk, pardon me, equipment is
worth. By no stretch of the imagination can this equipment be considered
as first class merchandise. Our customers need to be told this.
They should be made aware of the obsolescence problems, the service and
reliability problems, the high maintenance costs and the general problems
which can result from excessive down time. He also needs to be warned
about the difficulty of maintaining a qualified staff of people interested
in working around this obsolete equipment. . . computer people are
undoubtedly the most mobile of any professional group. This used equipment
has been a headache of major proportions to our competitor and
unfortunately our sister departments are too often supplying the aspirin.
Thus, these used equipment sales within GE cut us two ways. They represent
profits we don't receive and they solve a very sticky problem for our
Other than the pure dollar value of the GE sales, let's look at some of
the less obvious benefits. We have in GE the most knowledgeable
aggregation of systems people, data processing people
computations people in the world. Most of these people are anxious for us
to succeed. They can and will help up if properly approached. They want to
feel that they are making a contribution to the growth of the Computer
Department. I fully believe that one of our single greatest strengths in
this department is this vast reservoir of talent. We've been advertising
along these lines for several years, and rightly so. However, this
reservoir is no good to us unless we can tap it. Get
to these people... encourage their participation in users groups,
encourage an exchange of new applications and program concepts, encourage
then to talk up our equipment, get then on our
side by erasing their identity with the competitor. The GE users can
and will form the nucleus of the most proficient group in the business.
This will truly become an extension of the Computer Department itself.
These people represent the greatest proving ground in the world for our
hardware, software, applications concepts, programming concepts, etc.
Their applications cover the entire spectrum including manufacturing,
finance banking, engineering, utilities and you name. No other
manufacturer has anything close to such a laboratory at his disposal, nor
does he have the financial facilities to develop such a lab. Over the
years, our largest competitor has regarded this GE lab as his own private
domain and he has drained literally millions of dollars worth of direct
benefits from this lab. Like the farm girl who went to the city, we ought
to start selling what we used to give away.
As another benefit of this GE business, it's difficult to even evaluate
the influence our GE components have on other sales in a given
geographical area or industry. Our professional people are very active and
highly respected in local technical society meetings. Their decisions have
a profound influence on other people. There are 82
years of solid achievement standing behind that GE monogram. Sure it has
taken on a few nicks and dents over the years, but
name me a major corporation that age that hasn't. As a matter of fact,
real quick like name me another 82 year old major corporation.
In looking at the GE market it is easy to make the mistake of assuming
that the market is becoming saturated. This calls to mind the story
of the new salesman who was hired by the Simmons Mattress
people. After one week, he returned to headquarters with the story that
there was no sales potential in this field because everyone he talked to
already owned a bed. Certainly, we are not in a
position like the automobile companies where 'we can develop planned
annual obsolescence of computers, however, you can be certain that our
next generation will be on the market before we have converted all
existing installations to this generation of Computer Department
Our GE market will never be saturated!
Along with the danger of assuming saturation, we must never make the
mistake of assuming that this is a captive market. It's open to everyone
in this business, and that includes a number of companies. Your major
competitor is doubling and redoubling his efforts within GE. This is right
in line with his long standing policy of applying efforts where he hurts
the most. Right now, that is the General Electric Company.
Applying a few of the principles of SSM, let's analyze this customer
you are trying to woo. What does she look like?
First, you must recognize that five or ten or twenty years age, she was
wooed and won by our competitor. Surely, she was out of her class, but it
was the only man available.
This customer can be tough. She can not easily be encouraged away from
the man she has been sharing her bed and board with for all these years.
She's jealous of her independence and decision making responsibility.
As most of you have found out, she's not above needling salesmen from
other departments, such as the Computer Department.
She is, however, usually quite cooperative when the facts are fairly
In order to sell this customer, we will have to regard her pretty much
like any other customer. She must be sold. A salesman should be assigned
each GE account and all of the appropriate people
must be aware that our sales representative exists to help them. Don't be
afraid to call on all levels and types of management at the customer's
site. For example, just ask yourselves. . . in your GE accounts, in how
many cases can you identify the managers of manufacturing, marketing, and
engineering. Your competitors certainly has no such fears. Our customers
must be made to realize that our products are
competitive and will serve their needs.
We must point out the advantages of GE doing business with GE. An
obvious fact, you might say, but you will convince yourselves otherwise if
consider the cases you know where our Data Processing people identify
themselves with a competitor's equipment first and with GE second. If they
must be convinced, cash flow analyses can be made available to you.
Use other department and services people to help you sell. Many of
these people have demonstrated a willingness to help. They recognize the
benefits accruing to all of us when the business is kept within the
family. We have received some very effective assistance from such
Call on headquarters for support.
Use your high level management contacts. You all know the Cordiner
philosophy of 'every man a salesman'. Our management has demonstrated more
than a willingness to step in and help make a sale. Use these contacts
with discretion, but use them.' In other words, use the monogram as a
banner, but not a bludgeon.
Also, and very important, is the fact that you must follow up on your
sales before and after installation to assure satisfaction. Your customer
must be encouraged and assisted in using his machine to the utmost I think
it is safe to say
that no computer manufacturer will make a nickel in profits on any line
of equipment if no machines are used beyond one shift. A satisfied
customer is still our best salesman and a dissatisfied customer is the
salesman for our competitor. You know that all of our mistakes circulate
around GE at leased wire speeds! We must minimize the cause of complaint.
I've mentioned that you should call on headquarters for support. Our one
and only function in internal sales is to help you see the GE market. . .
now and in the future. Included in this support are such items as:
Answering questions from the field. Developing and demonstrating sales
tools and techniques such as the 225 slide presentation. Assisting with
feasibility studies. Assisting with sales calls, particularly by providing
answers developed during the feasibility studies.
Setting up and conducting visitor's tours at Phoenix. Incidentally, the
working equipment has been an extremely effective sales tool in convincing
our doubting customers. Developing better information sources and
reporting techniques. Extending sales training through on the job
assignments. Providing equipment for display at technical meetings. And,
of course, we could list a host of other items if time permitted.
At this point I'd like to just summarize my tale of the new west
concerning the GE market: Our GE customer is big and mighty important.
The GE market is not saturated and will not be. The GE market is not a
captive market, our GE customer must be sold just like any other customer.
Above all else, don't neglect her, your competitor doesn't.
In closing, permit me, if you will, to quote two brand "X"
salesmen. One... "Current relations
somewhat strained at blank department. We spent seven months trying to
make a sale. You people spent two hours and get the order. " No
comment. Two... "Even though we appreciate the GE business, GE is no
longer our biggest commercial customer. " I can only add to that
comment by saying 'keep up the good work fellows. We are shooting for last
place on the brand x sales chart.'
The original copy of the schedule for this sales meeting listed this
part of the program as 'Project X'. As we worked with this presentation it
became increasingly evident that Owen Lindley had been clairvoyant in this
designation since we found ourselves on the spot when it came to
adequately covering the broad areas involved.
I guess in order to set the stage for our talk I would like to tell you
about a set of twin boys that were causing their parents a great deal of
The boys were approaching their twelfth birthday and although they had
been born as identical twins, and had grown physically as identical twins
their natures had developed as exact opposites.
One boy was the eternal pessimist and the other was the eternal
optimist. In an attempt to achieve a more even balance in their sons
personalities, the parents enlisted the aid of a psychologist. The doctor
examined the boys together and then separately and at the conclusion of
the examinations met with the parents. He said, 'I believe we can help the
boys. They have a birthday coming up in a couple of weeks and I would like
you to try my first treatment. ' First go out and buy a dozen nice small
presents, wrap these in plain brown paper and put them in a room for the
eternal pessimist. Next get the biggest box and the brightest ribbon you
can find, fill the box with horseshit, tie it with the ribbon and put it
in a room for the eternal optimist. On their birthday let the boys open
these presents and I believe you will find a change in their nature.'
The parents followed the doctor's advice and on the boys' birthdays led
each boy to the room containing his present. They stayed to watch the
eternal pessimist. He entered the room with his customary gloomy approach
and looked over the table on which his gifts were placed. 'Well, here it
is my birthday again, , he said, 'and I won't get anything I like. Look at
that, this year they didn't even bother to wrap my presents in pretty
paper. ' With that he unwrapped the first small package and found a
beautiful watch, he opened the next package to find a pair of field
glasses and now he began to unwrap presents with anticipation and as each
new object was revealed he became more elated. When he had completed
opening his presents his whole outlook on life had changed.
The parents were happy with this result and hurried to the room with
the eternal optimist. Here the big red ribbon had been torn off the box
thrown in one corner of the room, in another
corner was the top of the box and inside the box tossing handsful of
horseshit out over his shoulder as fast as he could, was the son, as the
parents entered the room they heard him say 'There must be a pony in here
It is with this same spirit of optimism that we introduce you to our pony, the data accumulation and data
communication family of products. It is our desire today, to acquaint each
of you with our present products and plans and in so doing, to instill in
you a high degree of enthusiasm for this line and its potentialities.
For the past year there has been a program in General Electric to get
us into the data accumulation and data communication business. Some of you
may have come in contact with various aspects of this program and with
some of its products. To date, our sales, application and proposal
activity has been restricted to internal General Electric contacts.
As of today, the General Electric Company is launching itself across a
new frontier into the general marketing of a line of data accumulation and
data communication products.
We are announcing through the press and industry journals our entry
into this field with the 3100 "Shoptrol" Factory Feedback and
Control System and the 3101 Data Collecting System. Advertising is being
placed and will appear in July publications announcing these products.
Now that you are in a new business, lets find out something about it.
First, lets talk about our products. The 3100 "Shoptrol"
factory feedback and control system is in current production and the first
system has been partially delivered to the Metallurgical Products
Department of General Electric. This system provides a shop monitoring,
control and communication network to monitor and display at a central
production control center the status of individual work stations and/or
Located at each work station or machine is a sensing device and
operator control station. The operator control station transmits, to the
central production control, the condition of its workstation or
machine. This status indicates whether the machine or station is: shut
down, in set-up, running or in alarm. This display is initiated by the
rotation of a key operated switch at the operator control station. As each
piece is produced, the sensor transmits a signal to
the status monitor in the central control center where a counter is
updated. Associated with the monitor is a balance
counter which may be set to the desired quantity of
pieces on a job or to the total length of time the
job should take. As time elapses, or as pieces are produced, the balance
counter regresses to zero, and when it is reached a contact closure on the
balance counter causes a "job finished" or "time
expanded" alarm to be initiated.
The central control center is the location for the termination cabinet
which houses the master programmer, power supplies, a termination patch
bay, an audio amplifier and space for mounting twenty status monitor
panels per vertical bay. A maximum of 160 status monitor panels may be
associated with one system's central termination cabinet.
The system has a built in voice communication channel which is reached
through the telephone jack at each control station. This allows
supervisory or service personnel who have been dispatched to the station
to talk with the central control station dispatcher. Optional accessories
include a simple operator alarm station and an operator page station.
Where the full capabilities of the operator control station are not
required, this alarm station is used. This enables the operator to notify
the production control room of an alarm condition at his work station or
machine by flipping this switch. The dispatcher can then arrange for
assistance to be sent to the operator.
The operator page station can be used in conjunction with the operator
control station or by itself. The eight position switch allows the
operator to request specific service from the central control center. By
setting his switch to a predetermined number the operator could for
example request: more material, a maintenance man, crane service, a material handler, an inspector, a
foreman or even a relief operator. The setting of the switch at the
operator page station results in an appropriate
light indication at the production control center.
The inputs to the 3100 system are: sensed completion of operation and
operator originated station or machine status. The outputs are: visual and
audible displays of work station and machine conditions as well as visual
displays of production counts. With proper accessories the outputs may be
retained in punch cards or punched paper tape.
The 3100 system offers manufacturing management a tool to better
utilize the facilities of their shop. The 3100 can be used to control
material both inventory and in process, it can assist in the
level loading of men and machines, it provides the information to allow
proper mating of man to machine and finally the 3100 presents a current
display of all monitored machines and work stations thus allowing
decisions to be made on the basis of actual status of the shop rather than
on history. Since, labor, material and facilities are the basic elements
cost in any manufacturing operation, it follows
that the better management can control these these items the more
efficient and less costly their operation will be. In the 3100 system you
can offer your customers a tool to reduce the cost of their operations.
Just to be sure that each of you will be overweight in your luggage on
your return trip home, we are adding one more kit to your load. Among
other things in this kit you will find a sales brochure on the 3100, an
information manual on the 3100 and a price list covering all items in the
3100 system. You will find these kits in your rooms when you return there.
The 3101 system is a data collection system, designed to provide
transmission of fixed and variable information from various remote input
areas to a central accumulation point.
The remote input stations, called collectors, convert information from
punched cards and variable switch positions into electrical impulses which
are then transmitted over a communication channel to the central
accumulator. The collector station reads eighty column or shorter cards at
sixty characters per second and transmits this
information to the accumulator. Additionally, up to nineteen pieces of
information may be added to the punched card details or. and transmitted
to the accumulator where it becomes a part of the
stored data. This additional information is added by means of nineteen
rotary switches on the collector, that appear on the
face of the unit and eight which are behind the locked panel. The heart of
the collector station is the high speed card reader which is a General
The accumulator receives information via the communication channel from
up to ten collector stations in Hollerith card code. Internal logic in the
accumulator converts this information to punched tape code and checks the
tape code to assure that an acceptable character is
being punched. Additional logic in the accumulator controls the multiple
collector stations to assure that only one station transmits at a time and
further assuring that each collector station has equal opportunity to
transmit messages. To the received information the accumulator station
adds fiscal week and hour data thus chronologically identifying each
The inputs to the 3101 system are punched cards and variable dial
settings and the output is eight hole punched paper
tape. This paper tape maybe used to obtain hard copy by feeding it to a Flexowriter or it can become direct input to a computer.
The 3101 system is in final pre-production evaluation and shipments are
scheduled to start in July. The more we work with this system the more its
versatility of application becomes apparent.
Certainly in manufacturing operations such as: an inventory control
system, a production control system, an input system for payroll, a
quality control system and a sales and finished goods control system, the
3101 has a wide application. In addition, there are applications in chain
and retail store areas to control inventory and to order supplies from a
warehouse, in hospitals to keep patient and drug records, in service shops
to maintain work flow and to control inventory in
utilities to update customer usage and to generate statistical control of
facilities, and in small municipalities to handle tax records and for
Once again as in the case of the 3100 system the 3101 system allows
your customer to make better use of his facilities, manpower and materials
thus affecting a reduction in cost of operations, which leads to greater
An information bulletin on the 3101 and firm selling and lease prices
on both units of the 3101 system are included in your kits.
At the present time in the data communication field we are developing
equipment to satisfy the needs of General Electric ' s Financial and
Services Organization (FASO). This equipment allows communication between
machines in machine language using commercially available communication
One example of such communication equipment we are developing for
"FASO" is the data transmission controller. This unit will
unload stored information from a 225, or similar computer, and prepare it
for transmission over a communication channel. In the reverse direction it
will edit and prepare incoming messages for computer storage or inquiry.
This preparation for transmission and editing prior to computer entry
consists of: multiplexing, adding and checking parity bit for blocks,
adding and checking parity bit for individual characters, updating line
status in the computer, add blank transmission areas, compress out blank
reception areas, automatically interrupt at end of message and turn line
around for opposite mode of communication.
None of the data communication equipment is at this time ready for
external sale, by fall we should have information in your hands on the
first products in this line with early 1962 deliveries to customers. This
is an extremely important area for us. AT&T estimates that nearly 80%
of their communication traffic will be in the form of data in five years.
The data accumulation and data communication family of products are
being organized here at headquarters on a product line basis. An
engineering group responsible for development and, production engineering
is in place. Cess Krygsman is manager of a Product Planning group with
responsibility to round out this product line and to
provide us with a complete family of products which are competitive in
price and performance. A headquarters sales group has been organized to
give you the support needed to sell these new products.
In this area of support our first effort is the kit which you will
receive here. In June and July we expect to visit with you in regional
meetings to further acquaint you with these products and their
application. As prospects develop and you need additional assistance
headquarters specialists are available to you. We also plan to train
specialists in data accumulation and data communication equipment with an
eye toward establishing these specialists in the field to serve you in a
support area. By the end of the year we want to have in each sales region
at least one installation of 3100 and 3101 that can serve as a showplace
With this planning and with this backup we issue a call to action to
each of you. Learn about this new family - promote its sale in your area -
and use it to get your prospects machine oriented. These products should
take you into several new classes of customers. They can pave the way for
future computer sales - and in themselves they are big business. Don't
underestimate this product line and its business potential. A lot of
people are going to take their first steps toward machine control of their
business by installation of data accumulation equipment, others are going
to find that these equipments
SIMPLE AUTOMATION FOR NUT-BOLT BUSINESSES
satisfy their entire automation needs. Make no mistake - this field can
be an extremely attractive business. A market forecast indicates that in
ten years the served market in data accumulation area alone will grow from
approximately ten million dollars in 1961 to 500 million in 1970. I am
sure that you can see from this $2.5 billion potential that even
obtaining a modest percentage of this market results in a sizeable
business. Since we are entering the business with full intention of
becoming the leader, get on our pony and spread the word that General
Electric simple automation is here.