Frontiers of Progress - 1961 Sales Meeting part 3
Home ] Up ]


wpe1D.gif (35482 bytes)




Thank you, Bob... it is certainly a pleasure for us in the Manufacturing Section to welcome you to the Valley of the Sun. Also we are delighted to have this opportunity to tell you something about our Manufacturing Section, its facilities, people, and our growth.

The Manufacturing Section is responsible for achieving the optimum combination of men, materials, time, and equipment necessary to deliver the products ordered by marketing, in accordance with the drawings and specifications furnished by engineering. In performing this function, we must maintain consistently high quality levels, good working conditions, low costs, and short delivery times.

In our efforts to achieve this rather formidable aim, the Manufacturing Section does not stand alone. We avail ourselves, as necessary, of the vast knowledge and facilities of the company's research laboratories and the Manufacturing Services Division. This slide indicates our relationship with these components, and illustrates the organization of the Computer Department Manufacturing Section. We will briefly discuss each of these subsections. This slide illustrates the principle functions contained in the Materials Organization this sub-section is the principle contact for the Manufacturing Section with Marketing and is responsible for department hard

Page 30

ware schedules. As the name indicates, this subsection is concerned with our direct material starting with procurement, its movement through the factory, and finally shipment. From a supervisory standpoint, I am pleased to announce that effective May 22 I will no longer be an actor and this position will be filled by Neil Donovan. Although Mr. Donovan is not present today, he will be able to join us Thursday and Friday of this week. This sub-section is under the able guidance of John Sorauf and consists of the functions shown on this slide! A significant contribution to our product quality is through the design and construction of sophisticated test equipment which you will see in your factory tour. I will return to this subject a little later and discuss some of our quality concept philosophies. This sub-section is the heart of our Manufacturing Organization. It is ably directed by Bill Lord who has all the necessary supporting personnel to allow a high degree of flexibility and quality construction. This sub-section was directed by Bill Wells until the beginning of this month. Bill has been extremely successful in providing special equipment and techniques which has made our operation second to none. This function is primarily concerned with the future and is constantly striving to maintain our leadership position. Stan Schure, otherwise known as Mr. Landlord, has his hands full in this operation. At the present time, he has two buildings under construction. .. one at Phoenix and one at Palo Altohas six different leases around Phoenix to worry about, in addition to juggling personnel and equipment in our present crowded facility. Stan's organization is also available for consultation work outside the Phoenix area.

The area of product quality and reliability has long been a major strength in General Electric, creating for us customers who recognize the value of superior performance. We in the Manufacturing Section fully appreciate what a dynamic effect properly functioning equipment in the field can have on your prospective customers. You may therefore understand why we stress the importance of a total quality control concept in our manufacturing activities.

Manufacturing personnel are quality minded and enter the scene early in the life of a computer, beginning with product planning, following through the design stages, Manufacturing Operations, and into test. These same personnel are still concerned with the computer after delivery, to capitalize on field experience.

Our Quality Control philosophy assures product quality at the lowest practical level of assembly. In every phase of manufacture we point toward quality standards that are at least equal to and more often higher than those of our competitors. By way of illustration I'll mention just three of many examples: First, in the manufacture of our code memories we apply a very strict acceptable quality level to the initial inspection of cores. As each memory plane is completed it is 100% tested through every circuit loop. Again when the planes are later stacked and terminals connected the memory is given a complete check-out. Second, printed circuit board components must pass rigorous functional tests prior to assembly on the boards. Each completed board is further circuit tested and subjected to vibration test to weed out intermittent components or terminations. Third, our computers make extensive use of wire wrap termination. Here we have a much superior connection which is not subject to vibration damage or to soldering pitfalls. This method gives us a distinct advantage when comparing with competitors equipment and by the way it results in a savings of about $2, 000 per average system.

Our quality control program extends into the area of feed-back information. From regular defect reports generated in our manufacturing areas, combined with field service reports, provide the kind of information needed for corrective action. Detailed planning permits us to select for test and measurement, those elements which are going to seriously affect, in one way or another, the operation of the equipment as the customer intends.

Summarizing, we feel that our coordinated program has resulted in improved equipment being delivered. Currently we are pleased to note that customers are experiencing in excess of 96% good running time on their equipment. We see an improvement in the time required to get a new computer system running and available for customer personnel. Six months ago it was not unreasonable to expect total installation time to consume three or four weeks. Currently this same work can be accomplished in something less than two weeks.

This slide indicates the hardware output that we have produced in the last three years, and what we expect to produce during 1961. You will notice that in 1958 we produced one ERMA system for the bank, in 1959 we added three NCR systems and six more Bank of America systems for a total of $6, 800, 000. In 1960 we produced 33 computer systems at nearly four times the output of 1959. In 1961 the line has been increased substantially and we will produce better than $46,000, 000 billing. The hardware produced in 1962 will depend upon the orders you get.

This next chart shows our present facility. We are now utilizing 70,000 square feet of factory floor space and have a capacity of $50,000,000. When our new addition is completed as indicated on this chart we will have a factory square footage of 176,000 and a capacity of $116,000, 000 or almost one and a half times our present capacity. At the present time the entire Deer Valley Park Plant has over 200, 000 square feet of floor space. After January 1962, we will have nearly 400,000 square feet, or almost double what we have today. Furthermore, we are planning to make many of the mechanical components that we are now buying. This will give us better control over the manufacturing cycle and inventory levels. Flexibility in the manufacture of our products will also be improved. We will be fabricating, welding, and assembling doors and skins complete. We will be machining parts for our new peripheral line such as the sorter, the encoder, and the card reader. Furthermore, we will be fabricating all computer and peripheral frames. This means an additional investment of almost $600,000 in sheet metal and

Page 31

other machine shop equipment. The savings resulting from this additional machine shop activity versus vendor parts and assemblies will net us over $200,000 in 1963.

Your customers require high speed reliable systems to perform their task.

We have the facilities---we know how to produce the systems, we have as good or better quality than our competitors, and our capacity next year will be almost one and one half times what it is today. Therefore, we need the orders to maintain the increasing production trend, that has been evidenced by the last three and one half years.

We thought you might like to see some pictures we took the other day of some of the people and facilities we have been talking about.

This first slide shows our manufacturing facility, a paragon of modern architectural imagineering. It is newly constructed, completely air conditioned, and resides majestically amid elegant and lush outdoor gardens.

This next slide is our quality control laboratory. I told you that every part that goes into a computer is carefully and rigidly tested to assure customer satisfaction. Our chief quality control engineer has available all the latest precision test equipment to enable his staff to accomplish their analysis with extreme accuracy.

This is an example of our modern manufacturing equipment. When our multi-million dollar factory addition is complete, at the end of this year, modern automated manufacturing equipments such as those shown will be installed to further improve delivery to customers.

Just a little more on our manufacturing staff. Like all soundly managed businesses, our general manager delegated to a team of manufacturing specialists, the manufacturing staff, the responsibility of guiding the manufacturing function in its contribution to the attainment of overall department objectives.

Here is a picture of our shipping area. To assure that our precision equipment will arrive at the customer's site in perfect condition, our shipping unit practices extreme care. Here are two of our shipping specialists packing one of our more expensive computers.

Here is our quality control in action. Nothing but the finest components are incorporated into our systems. To guarantee this, all incoming materials are carefully inspected by our Quality Control people. These few scenes of manufacturing, of course, are satire. Now we would like to become serious again and show you in film some of our manufacturing facilities, processes, and people.

At this time we want to invite all of you to see the Manufacturing facilities. Our people will be on hand to meet you and to answer your questions regarding the manufacturing operations. Tours are scheduled on Thursday and Friday.



'Things sure go smoother when I let you know about my problems ahead of time. These words pretty well sum up the message of the skit you have just seen. We are here to do everything we can to help you in your sales efforts. It goes without saying that we can't help you if .we become aware of your problems too late to suggest possible alternative courses of action which may be more desirable to you r customer, to you, and to the department. You don't have to go it alone in the customer's office. Others can and will help you. These gentlemen you have just seen may be lousy actors but let me assure you that they are very competent in their respective fields. They are instructed to orient their efforts toward helping you make sales.

Bud Crutchley, our manager general, tax, and personnel accounting is expert at establishing simple workable routines for handling cash and other accounting items between headquarters and the field. Aside from helping you get rid of clerical burdens, Bud is the man to give you answers to your customer's questions about sales, use, excise and property taxes on our products and questions related to the billing he renders your customers. Another service that Bud gives you that means almost as much to you as an order is the prompt delivery of your own pay check. Payroll is the one schedule in the department that has never slipped.

Denny Peper, our manager cost accounting, directs his sales efforts in the field of cost estimating. Many of you become involved in this problem when special equipment or services are needed and no prices are available. Accurate cost estimates are then essential for establishing reasonable prices to your customer. The essential ingredients of an accurate cost estimate are (1) complete information and (2) reasonable time.

Page 32

Tom Hage, Manager Budgets and Measurements, serves you for the future. Tom's projections of growth, needs and timing for new facilities and manpower are only as good as your collective consensus of sales opportunities. If you are pessimistic . . . . facilities, manpower, and consequently equipment for your customer may not be available when you need it. If you are overly optimistic management may have to face the problems of layoffs in the factories and idle facilities. If your estimates of future orders obtainable are realistic equipment will be available when your customer wants it.

As to application in finance of our own equipment, we will not be shoemaker's children much longer. Bill Van Wagenen, Manager Procedures and Data Processing is rapidly programming department data processing work to go on our own computer. Payroll and some other work is presently being run on the 304 at Tempe and GECOM programs are being written to put this on the GE 225 in August.

Our total integrated system will follow this fall. Bill is often in a position to help your customers through Harold Weiss's group, with many conversion and procedural problems. As one of your customers, Bill's contacts with other customers in a user relationship can be a valuable assist to your sales efforts.

Contract accounting might be more aptly titled customer accounting. Cliff Steward, Specialist contract account, has the job of taking cost and other records we keep for our own uses and rearranging them in the format and manner requested by your customer. Cliff is concerned with all the ramifications of cost plus, fixed price, target ceiling, redeterminable and 'We'll work it all out at the end' kinds of contracts. He can give you counsel and advice in these areas. George Snively, Manager, Credit and Collection, is our gambler. He bets GE money, and his job, that your customers will be financially able to pay their equipment rent for six years down the road. However, you need not ignore any prospects because you believe they don't have sufficient financial strength. George's job is to find some basis on which to accept every order. He can only do this if you advise him of prospects early so he can obtain sufficient information. You will be interested to know we have never turned down an order for credit reasons. Time will tell us what our collection problems might be.

Frank Moran, our internal auditor, has assisted the internal auditors of several customer departments on questions of audit checks and audit routines involving computers. He is available to assist your customer or his auditors.

Lastly, all of us in Finance have a wide acquaintance among financial people in General Electric and with many financial people in outer companies through various professional groups in which we maintain an interest. For instance, I personally know all Managers Finance in General Electric Company and we generally have an annual meeting to discuss mutual problems. There are other meetings and contacts in the areas served by my associates we are always pleased at the opportunity of working with you on sales problems where you feel we can make a contribution.

Orders from customers are the big opportunity for all of us. Only you can bring them in and we are here to help you do it.



Gentlemen. . . The opportunity to be with you at this meeting is indeed a welcome one and while it may be true that the law doesn't help you sell computers, it's here to stay and we will not be long on the selling road unless you are aware of the proper course to take.

Most of you, I understand, have certified that you have read, understand and will comply with the company's policy on compliance with the anti-trust laws (commonly referred to as policy 20.5).

This policy will undoubtedly go down in the history of the General Electric Company as the most talked of and worried about policy that has come down the pike. At the time of its initial issuance, it was indeed a unique step on the part of the corporation but in the light of developments in the last year, the pattern undoubtedly will be followed by many others. Because of its importance to you and the impact it has upon the conduct of your daily business, it may be helpful to offer some explanation as to the purpose of the policy and give some indication as to how it might best be complied with.

To the uninitiated it may not readily be apparent that the Policy as written imposes limitations and restrictions upon General Electric employees which go beyond the requirements of the antitrust laws; This in keeping with management's decision to follow a very conservative course in this area. Basically, the policy is a recognition on the part of the company that it intends "To comply strictly in all respects with the antitrust laws. "

In addition to prohibiting employees from exchanging or discussing prices, terms or conditions of sale with competitors, it also provides that there

Page 33

shall be no exchange or discussion of any other competitive information with competitors. It is in this latter general category that the policy exceeds the presently established prohibitions of the antitrust laws. The reason for including the latter prohibition in the policy is because experience has shown that when such discussions are engaged in, they frequently provide a basis for a finding that competitors have conspired and agreed with one another in establishing prices, terms and conditions of sale. Up to this point I assume there is some confusion as to what is meant by the phrase 'any other competitive information'. I believe in general that phrase is intended to millrace any information upon which decisions as to prices, terms or conditions of sale may be based, such as the cost of producing a particular product. Activities similar ly prohibited would be the participation in price reporting programs of trade associations or programs which attempt to formulate for publication' standard production costs'. The policy also forbids company employees from responding to competitive advertisements which offer price information in response to a written request: This regardless of the fact that such publications are of a general or trade circulation.

The question might now be asked, just what can we do to get the job done and not violate the policy. Everyone recognizes that we must obtain competitive information but I hope at this stage all of you know what the sanitary sources of this information are. Under 20. 5 the fact such relationship exists does not foreclose those charged with the sales function of a particular component from doing business with that concern, nor from discussing prices, terms, conditions of sale or other competitive information to the extent the information disclosed is consistent with, relevant and necessary to the company's relationship as vendor to that competitor. Insofar as trade association activities are concerned, the policy does not prohibit participation in statistical reporting programs which require the reporting of sales in broad product or price categories as a means of surveying the industry, provided the statistics so gathered are published on an industry-wide basis without identification of the sales of individual companies. Similarly, exchanges of information such as engineering techniques, methods and forms of organizing work or techniques of production are not barred by the policy although, of course, every precaution should be taken to avoid disclosure or receipt of proprietary or confidential information.

A word now about the 'Philadelphia Story'. Some of you may have occasion to explain or answer questions regarding the recent plethora of adverse publicity given General Electric and other companies in the electrical industry with respect to violations of the antitrust laws. To my mind there isn't a more convincing reply than that recently given by Mr. Cordiner in a speech before members of the Computer Department: He said, most people don't stop to realize that General Electric has employees equal in number to one-half the population of Phoenix with its exploding population, yet Phoenix is not given a bad name because daily within its boundaries a variety of misdemeanors, felonies including murder are committed.

As background for a brief explanation of the major antitrust laws, I should point out they are by no means new in our society. Every political platform from the first to the present has contained an antimonopoly pledge: The avowed purpose being to prohibit 'corporate abuses'. You will recall reading about the formulation of trusts in the oil and tobacco industry: They were broken up under section one of the Sherman Act which reads:

"Every contract, combination in the form of trust or otherwise, conspiracy, in restraint of trade or commerce among the several states or with foreign nations is hereby deemed to be illegal. "

Section two of that statue provides: 'Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states or with foreign nations shall be deemed guilty of a misdemeanor. '

The decisions of the Supreme Court which atomized the Standard Oil and the American Tobacco Companies serve to focus attention upon the fact that Congress in enacting the Sherman Act left it up to the courts to interpret some very broad and sweeping language in reaching a decision as to what constitutes an unreasonable restraint of trade. This uncertainty incited a clamor for more and better antitrust laws. The year 1914 was a banner year for all political parties: the Federal Trade Commission Act and the Clayton Act were passed. The former statute again in very broad and general language made it unlawful to engage in 'unfair methods of competition' and 'unfair or deceptive acts or practices in commerce'. It is now well established that the FTC Act prohibits false advertising, selling below cost, disparaging competitors and their products, bribing customers, claiming testimonials falsely, giving secret rebates, acquiring a competitor's trade secrets unfairly and enticing an employee of a competitor to leave his employment.

Significant provisions of the Clayton Act were those prohibiting price discrimination (except when the action was taken to meet competition). Exclusive dealings, interlocking directorates and the purchase of stock of a competing company. Such conduct was forbidden where the effect may be 'substantially to lessen competition or tend to create a monopoly in any line of commerce'. Again the Congress left to the Federal Trade Commission and the courts the task of deciding what particular types of conduct were proper or unlawful. The principal attack of the statute was not on monopoly but against probable oppressive business conduct. It was designed to check practices in their incipiency, to prevent corporations from growing monopolistic in size and illegal combinations; These were the things the Sherman Act had failed to stop. IBM was found to have violated the Clayton Act by leasing its machines on the condition that only cards manufactured by IBM would be used by the lessee. The court held

Page 34

that this arrangement deprived other card manufactures of a market for their products.

Undoubtedly, all of you have heard of the Robinson-Patman Act. This statute was enacted in 1936 as an amendment to the Clayton Act and is commonly referred to as the price discrimination act. It makes unlawful the payment of anything of value for services or facilities or the furnishing of services or facilities to one customer without making them available to all competing customers on proportionately equal terms. The provisions of this law also contributed a new feature placing a buyer in violation if he knowingly induced or received a discrimination in pric(e?) For this act to be applicable there must be at least two independent sales of goods of like grade and quality to two different competing purchasers at different prices.

Time will not permit a more detailed discussion of the antitrust laws I have referred to, but perhaps it will be of interest to summarize the facts in one recent case. To me it is a vivid illustration of the extent to which courts will go in finding a basis for violation of the Sherman Act. I refer to a case brought by the Department of Justice against the Pittsburgh Plate Glass Company and several other manufacturers of mirrors. The chief government witness was a Mr. Jonas who testified that he had heard of a proposal to raise prices during a meeting of the Mirror Manufacturer's Association. Pittsburgh Glass was a principal supplier of plate glass and to a minor extent a manufacturer of mirrors; It was not a member of the association at the time of the meeting referred to; however, a Mr. Gordon, Pittsburgh's Sales Manager, was in town and attended some of the association meetings. Jonas testified that he called Gordon to ask him what he knew about the raise in prices. According to Jonas, Gordon replied that "In some of the rooms he had heard the fellows saying they would like to get their prices increased, and although he was not trying to tell Jonas what he should do or not do, he thought Jonas ought to be getting more for his product".

After the association meetings were concluded, representatives of the principal mirror manufacturers met in a hotel room and agreed to end price cutting and to simultaneously announce price increases. Pittsburgh Glass was not represented at this meeting. Jonas further testified that after the agreement had been made, he telephoned an assistant of Gordon's in Pittsburgh to report the outcome of the meeting. He requested the assistant to notify Gordon of the agreement. Jonas also testified that in a subsequent telephone conversation, the same assistant reported that the message concerning the agreement had been conveyed to Gordon. The assistant testified to the effect that he had received no calls from Jonas; however, the telephone bills of Jonas's company showed calls to Pittsburgh Glass on the two days which Jonas claimed to have talked to the assistant. The evidence was clear that all the manufacturers who had attended the closed meeting announced identical price increases on the same day. Pittsburgh Glass announced its price increases the day after. Despite the fact that the record showed that an up swing in price was imminent because of a shortage of plate glass, Pittsburgh Glass was convicted of violating the Sherman Act which conviction was upheld by the Supreme Court.

The remarks I have made concerning the antitrust laws would by no means be even partially complete unless you have some idea of the serious consequences that can befall a company or an individual unfortunate enough to fall within their clutches. Clear and effective affirmative remedies against violations are provided; They are both varied and extremely foreboding: 1. Valuable property rights become unenforceable. . . . . Meaning leases of property, patents and patent licenses. 2. Damages Competitors, customers suppliers and others are entitled to recover treble damages if they have been injured in their business or property as a result of the antitrust violation. 3. Judicial controls are exercised . . . . Courts are not limited to imposing a mere injunction; they have proceeded to order the disclosure of technology, compulsory sales of products and dedication of patents to the public. 4. Divestiture, divorcement and dissolution become a reality. . . . Stock holdings in other companies have been divested, manufacturing divisions have been severed from other divisions of a company, organizations have been dissolved and individuals ordered to resign as officers or directors. 5. Fines and jail sentences are imposed . . . . As recently demonstrated in the Philadelphia cases, perhaps the most painful consequences to an individual which can result from an antitrust violation are fines and jail sentences. Both are now very real to the individual corporate employee who indulges in prohibited practices. To digress for a moment, I should like to make brief reference to some of the problems which have arisen regarding letters of intent, contracts and lease agreements. Each of you should understand that a proposition letter submitted to a customer constitutes a valid offer and all that is required to bring a contract into existence is an acceptance of such offer. Should this occur, the company would not be in a very favorable position contract wise. To avoid this we have prepared various printed standard forms of agreements, one of which should be used in conjunction with each proposition letter by stating:

"This offer shall continue in effect for thirty days from date and is subject to the terms and conditions shown on the attached copy of equipment lease agreement form CK 30. "

In this fashion the details of a proposed definitive contract are made known to the customer and any reply which suggests changes in or additions to those provisions then becomes a counter-offer leaving the door open to negotiate the final agreement.

Both with respect to letter of intent and lease agreements, I strongly recommend that you do not undertake in the field to prepare new or revised terms and conditions, rather you should send to Phoenix a statement of the basis for agreement with the customer so that an appropriate legal document can be prepared. In other words, if any bad contracts are to be drafted, let me be the one to do it.

Page 35



'Legal aids in the selling area'

During our first national sales meeting in 1958 and many times since then in our sales training programs and elsewhere, I have spoken of the costly litigation that has resulted from failures of General Electric representatives to take appropriate safeguards required by company policy 6.1, for example, which applies to prohibition against, and approved ways and means of receiving confidential information from people outside General Electric. I have frequently spoken of other legal complications which arise in the selling area and fortunately most of you have escaped the consequences of what could have been dangerous situations, but, putting it mildly, it is risky business to rely on luck when legal matters and unlawful conduct are involved.

In view of this experience, my talk today will take a little different approach to that part of the sales effort which could involve grave legal consequences, and I have chosen this approach in an effort to explain more fully how your department's patent operation can help you avoid trouble and, at the same time, help you attain your sales objectives.

The dangers involving the receipt of confidential information are more serious than most people think and the generally relaxed attitude toward this is usually based upon a misunderstanding, of what is meant by 'confidential information' or ignorance of the consequences of improper use of competitor's customer's confidential information. Another reason for this relaxed attitude is probably because this type of information, or requests for such information, often comes from a customer. While it is recognized that we must satisfy a customer, there are certain safeguards which can and should be taken before adopting his suggestions. Confidential information comes in many forms and under many circumstances. One common example is where a customer has developed a systems approach to satisfy its own business needs or has employed a research institute to do it for him. He usually regards himself as a pioneer and wants to be the only one or at least the first business to use what he's developed. Bank of America is one case and Sears Roebuck is another. A second common example is where a customer requests us to supply equipment which will tie in with equipment of a competitor, thereby making it necessary for us to seek detailed technical information of that competitor.

With these generalities in mind, let me give you a little background information so you'll better understand what I am talking about. Then I shall give you a number of examples of ways in which we have avoided difficulties in our relationships with other companies, with our customers and with agencies of the government in an effort to show you how difficult situations can be avoided if you will let your patent and legal counsel know what you'd like to accomplish, as early as possible in your negotiations, and before you find yourself deeply involved in a situation which may be extremely difficult if not impossible to correct.

What is confidential information? The popular or layman's meaning is 'don't tell anybody', but the courts have given the terms "Confidential Information" and "Confidential Relationship, " a much broader meaning. In short, the terms mean, as you would expect, any information received in confidence must not be disclosed to anyone outside the recipient company , but the more serious restraint is that this information may not be used or incorporated in a product of the recipient company so long as the information remains confidential.

On other occasions I have mentioned my favorite candy bar case but, in an effort to give you something new to think about this year, I will only mention that in that case the defendant company adopted a cellophane wrapper suggested by the plaintiff and the court held that, even though the suggestion was not patentable, and even though the suggestion was not made with the specific statement that it was given in confidence, if the circumstances are such that a reasonable man would consider it confidential, then the defendant company must, and it so held, that it must share the profit which resulted in the adoption of this suggestion. This share of the profit was no small sum because if it was shown at the trial that sales of this candy bar had increased sixty percent starting immediately after adoption of the new wrapper Since that early case there has been an avalanche of suits brought by both individuals and companies against those who appropriate and use confidential information. Many of you may think a candy wrapper is so foreign to our business that it is not applicable to us so I will give you an actual case which is directly at point in our line of business.

A company which I shall call the 'plaintiff company' employed a research institute to develop a data processing system and in the course of this development they conceived a new recording medium which served as a source document. The plaintiff company then approached what I shall call the 'defendant company' and proposed that the defendant construct a number of systems for the plaintiff following the teachings of the laboratory model developed by the research institute. The defendant company

Page 36

finally decided it could not undertake this large project in the time required but, without the knowledge of the defendant company's top management or patent counsel, the manager of the data processing division of the defendant company appropriated the recording medium and incorporated it into the defendant's system. This system was then disclosed at a joint computer conference by the defendant company's representative. Immediately thereafter, scorching correspondence transpired between the managements of the plaintiff and defendant's companies and finally a letter was written by the general counsel of the plaintiff company threatening and promising legal action if the defendant ever sold a system incorporating this recording medium. Incidentally, and perhaps not so incidentally, the manager of the data processing division was fired and a year later the data processing division of the defendant company was dissolved. This is only one of many sad stories of those who have seen fit to appropriate confidential information. The Genera Electric Company has had many experiences similar to the ones I just gave, in fact there have been so many, a pamphlet entitled 'Watch That Submit' has been printed. A copy of this is included in the packet which was given to each of you. This pamphlet contains the text of company policy 6. I that I mentioned earlier, it is printed in large type and can be read in a few minutes, it gives some of the General Electric "sad stories" and describes how to handle submitted ideas from strangers, customers and the general public and it tells what to do with oral disclosures, those submitted by mail and otherwise. It is well worth reading and should be tucked away in your briefcase for reference when a need arises. There are two serious danger areas in addition to those given in 'Watch That Submit'. The first arises when we are seeking information of a competitor's equipment so we might tie in our own equipment with theirs at a customer's site, for example.

If this becomes necessary you should not receive any technical information unless and until you have a release from a confidential relationship by way of the following agreement:


To provide a basis for free and unrestricted discussions pertaining to certain technical developments of the __________________ Company

relating to ___________________ Product

It is hereby agreed by and between the parties signatory hereto that neither party will assert a claim against anyone based on the allegation or condition that information of any kind or type concerning such developments transmitted or received by either party in the course of, prior to or following, such discussions was of a confidential or proprietary nature, whether relating to design or use of the products involved.

Nothing herein, however, shall be construded (construed??)

so as to in any way prejudice the rights of either party under the patent laws of the United States or any foreign country.

General Electric Company By______________________ Company

By -----------------_ Six copies of this agreement are included in your packet for you use. Additional copies may be ordered from the department patent operation, as you need them. In using these forms, complete two copies by filling in the date, the subject matter of the meeting, the name of the other company, and have both copies executed by both parties, give one copy to the other party and return the other signed copy to the Computer Department Patent Operation, preferably with an explanatory letter. If you encounter difficulty in having the other party sign, you should immediately communicate with the Computer Department patent or legal counsel for advice and assistance.

The second source and form of confidential information arises when an employee leaves one company and goes to work for a competitor of that company. An employee in a responsible position often receives company confidential communications and manuals, and it seems to be the practice among the younger men today to take these manuals and communications with them when they leave the company on the assumption that they were issued to them personally. This could not be further from the truth because this material is the property of the originating company and if the information contained in them is used by the employee in his new position and adopted by the new employer, both of them are subject to a suit for 'breach of trust' and 'appropriation of confidential information'. If any of you have accidentally or unwittingly brought to the General Electric Company any documents or manuals or other written information which, by their very nature, or by printed notice on the document itself, contains confidential information, you are urged to either destroy them or to remove them from the General Electric premises and not to disclose this information to other General Electric employees. A department instruction will soon be issued making this action mandatory. This is a very serious matter and I urge you to take this advice seriously.

When it becomes necessary to disclose General Electric confidential information to a competitor, such as in the case where our equipment will be tied with theirs, you are again urged to seek the advice of your patent and legal counsel so General Electric's rights may be protected. Just such a case arose in the Medium A-C Motor and Generator Department in its relations with IBM. The letter agreement between General Electric and IBM was executed by both parties so as to protect General Electric against appropriation of its confidential information and at the same time it did not subject IBM to unnecessarily and unreasonable restraints.

Another sensitive area related to your sales effort is the unauthorized use of copyrighted material and by this I mean copying portions of a copyrighted work of another company and incorporating those portions in our own manuals. Another form of this same unlawful practice would be a case where a

Page 37

person receives a single copy of an interesting copyrighted work and other copies are not available through proper channels, and then in his effort to circulate this interesting information he reproduces it or authorizes or suggests its reproduction for internal or external distribution. These acts constitute copyright infringement and they would subject the General Electric Company and the individual to civil damages and furthermore they would subject the individual infringer, and others knowingly aiding the infringing individual, to a criminal fine of up to $1,000.00 and imprisonment up to one year, or both, under title 17, U. S. code... paragraph 104, just in case you would like to look it up.

Doing business with the government is getting more difficult as time goes on and the attitude of some congressmen is such that business relations with the government may become even more difficult. As in the case of different businessmen, different government agencies have radically different philosophies and practices. For example, those agencies which operate under the ASPR's such as the Army, Navy, Air Force, are quite reasonable, but the new agencies such as the AEC and NASA and the laws which created them, are such that the government retains the right, title and interest in all inventions made under a contract. Any R and D contract presumes a certain amount of special design and equipment development even though incorporated in a standard piece of gear and in any event the ASPR's provide optional clauses which must be negotiated: such as authorization and consent whereby the government authorizes the use of any patented invention in the equipment delivered under the contract. The government usually tries to include a patent indemnity clause, but this too can be negotiated out of the contract to relieve General Electric of its obligation to indemnify the government for damages and costs for patent infringement. Success in these areas is possible providing steps are taken early in the negotiations, preferably in the first negotiating session, to include authorization and consent and to exclude the patent indemnity clause.

A more difficult problem in government contract negotiations arises in excluding from the patent rights clause, those inventions which have been conceived prior to the date of the contract but embodying, for the first time, in the equipment delivered under the contract. So that the excluded inventions will not come as a surprise to the government in the late stages of contract negotiations, the sales representative should discuss the contemplated contract with the patent operation at the outset, preferably at the proposal stage so the research laboratory and other components of the company can be contacted to determine whether related work has been carried on elsewhere and whether the resulting inventions should be excluded. The letter accompanying the proposal can simply state, if the facts justify it, that related inventions are being investigated and exclusion of them may be requested if and when a contract is awarded.

Any proposal to the AEC and NASA should be cleared with the patent operation before it is submitted, because of the extremely severe contract terms imposed by these agencies.

Without going into details here, the best general advice seems to be, if you have a choice between different agencies of the government, it is much safer to deal with the Army, Navy and Air Force rather than NASA and AEC.

Contrary to most beliefs, your department attorneys try to help you accomplish your objectives in ways that avoid trouble and legal complications. If the course you have chosen is confronted with dangerous legal consequences we try to suggest other courses posing fewer and less severe dangers, but there are some things that are impossible, for example, suppose someone comes in and says:'1 want to do this legally, you understand, but I want to open a whore house on Central Avenue and Camelback Road. How do I do it?' Obviously, if you do it you'll end up in jail sooner or later. In all seriousness, if you propose a course of action that is destined for trouble, it is our responsibility to advise you of the consequence of this course, as against another which we may suggest. You, as salesmen, with the approval of your manager , have the power and authority, within well defined limits to take a calculated risk in the pursuit of your chosen course of action. When there is no known course that is free of risk, we try to give you advice upon which you may best judge the advisability of taking one calculated risk as against another.

In taking these risks, do not confuse power to do something and authority to do it. For example, Mr. Lasher as General Manager has the power to sell the Deer Valley Park Plant, but he does not have the authority to do it without board approval. You will all do well to learn the limits of your authority and to remember them at all times.



You've got it. . . . . . . . And it's got you:

Thank you, Bob. Gentlemen: You've got it ! and it's got you: Let me repeat that loud and clear. You've got it! And it's got you:

Page 38

On your 'Frontiers of Progress' today.. . It stands for General Electric and for that concrete symbol of quality that the name General Electric represents. It... or General Electric. . . all that. . . that name. . . stands for.. . can and does accomplish much on your behalf as salesmen. It helps to open the door for you. . and this in turn opens the way for sales!

Here the door to sales is being opened for you by 'Frontiers' and by 'Progress. ' This door to sales is also being opened for you constantly as sales representatives of the General Electric Computer Department. . . carrying on the long tradition of quality and progress. The welcome mat is yours because you have it. . . You have General Electric. Backing you in your sales effort is real depth of support available to you and administered in your behalf right from 570 Lexington Avenue New York, to 13430 North Black Canyon Highway. I am referring to probably the finest consulting services available to anyone anywhere. . . in Engineering, Marketing, Research, Finance, Manufacturing and Employee and Community Relations. As good as this support is, in the final analysis the sales responsibility is yours.

But this is not the only assist you receive.

Successful sales are made of many things. A part of the team assisting you that I want to discuss is Employee and Community Relations.

What is E&CR? And how does it assist you?

E&CR in carrying forward its functions contributes its own ingredients to the mortar binding together the structure of a sound Computer Department organization.

What are these ingredients? What does it mean in terms of Employee and Community Relations?

First, it means the careful selection and placement of employees. You, as the Department's contacts with King Customer, are subject to especially close scrutiny in the selection process.

This process of selection and placement is not a haphazard one. E&CR is on the move constantly to recruit only the finest. . . . . . Interviewing and seeking out only those who can and are willing to maintain the high standards represented by the name: General Electric. It is these people who day in and day out stand in back of. . . and ready to produce for. . . you. But to get the best, you must give the best; and this E&CR does by maintaining an excellent climate of employee relations that attracts and keeps good employees.

Manpower management will always be the most critical area in our corporate structure. This applies with equal force to the area of pay, benefits, good working conditions and other job satisfactions which are the more tangible parts of our job and in the far less tangible area covered by the highly variable factor called morale.

Close attention to these tangible and intangible factors is the principal function of E&CR.

It means. . . . in addition to recruiting and placement the administration of a comprehensive program of personnel practices covering. . . . . .

Maintenance of Personnel records. Attention to health, safety and security of employees.

The opportunity for advanced training and through special self-development courses. . . . . To illustrate, you will recall the course in effective presentation

The main purpose. . . to make you a better representative of GE. .. better prepared than our competitors.

What does it mean to you in the field of compensation and benefits? Simply this. It means compensation commensurate with the demonstrated contributions of the employee as constantly measured against community standards. It means the constant review of this program to determine proper position evaluation, and to insure timely performance review.

Under our insurance program, if serious illness, accident or death should strike you or your loved ones, you are relieved from the financial burdens and worries when you need this help most. For example, Insurance Plan: Life Insurance. . . 2X annual earnings. 3X for accidental death. Weekly sickness and accident benefits for you. Medical and surgical coverage for you and dependents. Personal Accident Insurance: Available to you at low 76 cents per $1, 000 per year. Savings and Security Program: Save from 1% to 6% of earnings. Company adds 50% of your contribution after 3-year holding period. Pension Plan: Normal retirement age 65. Pension.. 40% of total company and employee contribution. Has disability, early retirement and survivorship option. Emergency Aid Plan: Financial assistance in real emergencies. Tuition Refund Program: Reimbursement of tuition for college level, work-related courses.

Under our Savings and Security Program it is rewarding to save regularly now.

Under our Pension Plan you can establish a base for your financial independence upon retirement.

Your company has pioneered in many of these benefit plans and their continued improvement made them among the best in the industry.

In the field of community relations and communications, it means maintaining a position of leadership in the community.. . making possible the establishment of a community and business climate which is conducive to the successful operation of the business.

It means practicing good citizenship and accepting civic responsibility in all cities where our plants are situated or where we have other representation. It means encouraging local management and employees to take part in all worthy community

Page 39

activities, including contributions to charitable institutions, memberships in civic groups and in all ways showing that our employees are trying to be good local citizens and good community neighbors.

To accomplish our goal in this phase, it is necessary to develop and implement this climate by extensive internal and external communications. We must seek to inform our employees and the community of our program, plans, and position on matters affecting each of them.

In some 130 different GE locations throughout the nation this groundwork of good community relations has already been laid for you by the E&CR function in the area.

But you must also realize that community relations is everybody's responsibility. Each Computer Department employee. . . especially you. . . is a unit of community relations within themselves. This is the contact with the public that creates favorable or unfavorable impressions which may be an important factor in the sale of our product.

In the field of labor relations, it means the maintaining of a climate of employee satisfaction in the field of employee-management relations with the goal of continuing uninterrupted production to back up your sales effort. It gives you the assurance that the product you have sold will be delivered on schedule. . . without interruptions due to labor strife. The overwhelming rejection of union representation by Computer Department production and maintenance employees slightly over a year ago reflects credit on the effort of everyone in the Department to maintain and enhance employee satisfactions. Its continuation can give you a big plus in your sales effort.

Yes, all of these functions administered by E&CR. . . compensation, benefits, and personnel practices plus maintaining a favorable climate of employee and community relations. . . contribute in a significant measure to your success as a part of the Computer Department team. They are an important part of the over-all depth of support you have in your sales effort.

Gentlemen: You've got it !This means you have the Computer Department.. You have General Electric. .. You have all that GE represents. . . . . . on your side every time you make a call on a potential customer.

It's got you: This means that GE has selected you to be its sales representative and has placed you in this position of opportunity. . . on the' Frontiers of Progress''.

It is the combination of these two: You've got it. .. and It's got you. . . that makes for the fielding of a perfect, championship team. . . an unbeatable combination. . . that will enable us to reach the goal we will all accomplish in 1961 and in the future. . . Sales and more Sales!



Good morning, Gentlemen.

Y' know, one of the greatest assets a writer . . . or for that matter a speaker can have is brevity. Every time I get the urge to orate for a couple of hours I remember the story of Sandy. It was in an English class and his teacher was saying, "there are four requisites to a good short story. 'o'. These were, she said, "brevity, a reference to religion, some association with royalty and an illustration of modesty. Now with these four things in mind, I will give you thirty minutes to write a story." Ten minutes later, Sandy's hand went up. . . "That's fine, Sandy" she complimented, "and now read your story to the class." Sandy read. . . "My gawd, said the countess, take your hand off my knee:" Listening

Listening to the post-mortems at breakfast this morning about last night's happy-hour, I can't resist telling you the story about the man who was complaining about is new son-in-law: "He can't drink and he can't play cards." "That's the kind of son-in-law to have.!" said a friend. "Naw," said the man "He can't play cards. . . and he plays. He can't drink. . . and he drinks. "

Y'know the fast pace you fellows are going at in this computer business reminds me of the housewife who wrote to a big New York department store recently, "Dear Sirs, " she said, "Please cancel my order for maternity dress which you were supposed to deliver three weeks ago. My delivery turned out to be faster than yours: "

Well, at least that "boss" had a sense of humor. Now, before you tell me that I've got the customer and the boss mixed up, I want to ask a question. I'll bet I could ask it of a thousand working people and rarely get the right answer. The question: Who is your boss? And I'll put it to you who is your boss? Perhaps at this point you'll accuse me of not checking up on the latest computer department organization directory. So, I'll tell you I am well acquainted with Clair lasher, Lacy Goostree and Bob Sheeley.

Page 40

There's only one boss. Here is a quick story about an alert salesman who knew this and knew it well. Some years ago when Twentieth Century Fox advertised in the New York papers to fill a vacancy in its sales force, one applicant replied: "I am at present selling furniture at the address below. You may judge my ability as a salesman if you will stop in to see 'me at any time, pretending that you are interested in buying furniture. "When you come in you can identify me by my red hair. And I will have no way of identifying you. Such salesmanship as I exhibit during your visit, therefore, will be no more than my usual work-a-day approach to a customer, and not a special effort to impress a prospective employer. "

And from among more than 1,500 applicants, the redhead got the job.

As I said, there's only one boss. .. and whether a person digs ditches, washes shirts, or runs large corporations that boss is the same. He alone is the fellow who pays all of our salaries, and who decides whether we're going to stay in business or not.

This boss doesn't care much about the past. . . whether we've been on the scene a long time or a little while. The minute we start to treat him shabbily we're out of business. . . fired. The customer . . . the real boss. . . has bought and will buy everything we have or will ever own. He's bought our homes, our clothes, our cars. He pays for your education and mine and our children's education. He pays for all of our bills and he pays them in the exact proportion to the way we treat him.

The man who works here in your plant or the salesman who works out in the field may think that he's working for the fellow who signs his paycheck. He is not! His boss is the person who buys the product or service at the end of the line. And if the person doesn't like the product he won't buy it, and pretty soon if this keeps up he fires the man on the line or the salesman in the field. He is no respector of rank. This boss will fire everybody from top to bottom if he isn't treated the way he wants to be treated. And how does he do this. He just spends his money somewhere else. I've known this boss for nearly forty years. And the most important secret I've learned about him is that it is he who's in charge of the business. This secret. ., the biggest secret behind the success of a business. .. is the key to the marketplace. But even if you have the key, using it effectively is something else again.

Gordon Dean, the late former chairman of the Atomic Energy Commission said that the best way to be truly useful is to seek the best that other brains have to offer and then use them to effectively supplement your own.

Here is another secret about your boss. . . he continually expects you to satisfy him. He, as often as not, has no respect for the hour of the day or the day of the week. If you fill his needs the way he wants them filled you stay in business. . . if not. . .

you're fired. And all the short work weeks and trumped up make work schemes in the world won't help you one bit.

Before I give you a few of my suffestions (suggestions?) about how to use these secrets in turning the key to the market place, I'm going to point out to you one of the most interesting observations I've made in nearly forty years of selling. If you've ever been at all curious about men who became great successes in the world, and I for one have, then listen to this. Have you wondered what the difference is between a man who gets to the top. . . and the who does not? as far as I can see there is no single formula that you can put your finger on. . . except desire. . . and knowing where you're going. Some of the men at the top are graduates of our finest schools with top grades and near perfect scholastic records. . . men from old families. But some of our highest paid executives come from broken homes, worked their way through the mills, the mines and the farms, and had dirty fingernails for many years before they reached the filtered air of the executive suite.

But they all had a few things in common. . . and I think it would be stimulating for us to take a brief look, not at their differences, but at their similarities. For one thing, they all had that tiny, inextinguishable spark called desire. . . it :may have been money at first. . . but not always. . . and it always winds up as a desire for achievement. These men have never been satisfied with what they have accomplished no matter how great their achievements may have been. They are all men who realize you can't stop and coast. They long ago realized that you are either growing or dying in the business world. There is no such thing as sitting back and saying, "Well, we're in . . . now we can relax" There have been a lot of companies some of them giants at one time or another) that made that mistake. They are no longer around.

The second and important thing all these men have in common. .. is the ability and the personal incentive to work long hours. The man on the assembly line may come to work at eight and leave at five, but not the man in the front office with the private washroom. He may be at his desk at six or seven in the morning and likely as not on Saturday and Sunday, and he is still there many nights long after it's dark outside. I will tell you gentlemen here today, as I have many times before told my colleagues throughout my region that as a former engineer I know first hand of the professional demands upon your time. But I have often told them, as I will tell you now, that for a man who aspires to the top in his business, for a man who feels the responsibility and the need for putting something back into the community. . . forty hours a week is simply not enough.

To get to the top you have to live your job. It has to be so challenging and so interesting that it just about fills your life.

This has been my credo as a salesman. . . I commend it to you.

Page 41

And this brings me to the main point I want to make before you today. When you come into my region, or for that matter any region of the seven other regional vice presidents, we will not only help you in every way possible to advance you objective. . . selling computers. .. but will, as I have, continue to take a lively interest in your business, as we do in all of the company's businesses. The best analogy that comes to mind is drawn from football, and even though we're out of season, I think it will bet my point across.

The role of the regional vice president is not that of a quarterback, or ball carrier. You and your colleagues call the plays and carry the ball. My role comes closer to that of a combination of coach and scout. Any quarterback worth his salt wouldn't dare walk out on the field without a concise picture of the opposition's strong and weak points and any ball carrier who expects to keep his face out of the mud at the scrimmage line, better have a working knowledge of what the opposition is going to throw at him. In short, a front ranking team has a lot more going for it than eleven bruisers with grass stains on their seats. It has coaches, scouts, trainers and a host of others interested in its success. Where I make my contribution is back in the locker room before the game. And, While I'll be at your side when you're on the playing field, you're in command of the team and that's the way it should be. Now, just a word of caution. If you want me to be on the sidelines during scrimmages, you'd better have the foresight to call me in for the skull-sessions.

One fellow. . . he is no longer with us. . . came into my office several years ago and greeted me by saying, "Bill, I am mighty glad to knew you, and I would have come down and got acquainted sooner, but I've had to spend the last month trying to find office space and I finally got located yesterday!" I overcame the urge to throw him out and tried to explain as patiently as I could that it might have been helpful, if not courteous, to come in and get acquainted when he first came to town. It happened at the time our apparatus offices had over two thousand square feet of prime office space going begging right next door to me!

One of the most remarkable men of our time, Lem Boulware, said recently in what turned out to be his valedictory to his company officers that we have many advantages over competition. We have more products, more contacts, more people who want to buy from us. And thus we should have inescapably a very superior opportunity for highly profitable sales. Now, in order to take advantage of these opportunities we've got to have, as Lem said, a separate intelligence system for each customer. We need to know what is going on and what is the attitude of and our opportunities and problems with each person of influence in the customer's organization.

Here's how my intelligence system paid off' one time. Some years ago one of my Milwaukee salesmen dragged himself into my office, slouched down into a chair and complained that the turbine

order he'd been working on for months would probably go to a competitor of ours. Was there, he wanted to know, anything I could do to help. Price and shipments were in line, he declared and he said the customer liked our product. But somehow, the competition's salesman had got through to the top brass with a more impressive story than ours and it looked like he was going to score. An exhaustive check into our relationships with this customer over past years showed everything to be in good order, and yet, we were losing out.

Years ago I learned that there is a key to every sale. Although, if you sit around waiting for it to fall at your feet, you'll eventually petrify in your chair. It takes work to find it. Finally, late one Saturday afternoon after we'd plowed. through every scrap of paper we had about this customer we found the clue that led to the key. It was so simple that we'd overlooked it the first time. The clue? My brief longhand note of some months before tucked among the papers. It said. . . "Don't forget to call Mr. X (our customer) about the proxy solicitations." How did this tip us off?

Holders of large blocks of General Electric stock are contacted by top field marketing people prior to the annual meetings to urge them to sign and return their proxy statements. We reasoned that if this customer, a big owner of General Electric stock, would focus his attention on the inconsistency of holding vast shares of General Electric while at the same time giving a substantial piece of business to a competitor, we might get another chance. The net of this was that we met with the customer (after I had determined the extent of his holdings) and pointed out this inconsistency and asked for another chance. Because we had offered a quality product, because our price and shipment were right and because we took the trouble to know in depth all about the customer we got the business! This points up a fact that I have long observed, there are three kinds of people. .. those who make things happen, those who watch things happen, and those who don't know anything happened. Happily, which kind we want to be is entirely up to each of us. As far as I am concerned, I've always thought that the greatest pleasure in life is doing what people say you cannot do. (Witness the failure of prohibition). I suppose by now that the account of Ray Bowers' success at the First National Bank in St. Louis is common knowledge here. But every time I recall how we got this "impossible" sale I feel real good, and I'd like. to tell you about it because it may suggest ways in which my colleagues and I across the country can help you in similar circumstances. As you may know, I have no operating responsibility and indeed should have none. However, I make it a point to be readily available to guide and counsel any of the company components in this region on marketing, public affairs and other problems of mutual interest. Part of my job is to make top level friends before we need them. When Ray first came to St Louis less than a year ago, he checked in with me and we promptly helped him get located in our building and made available to him all of our services so that he

Page 42

could get right to work selling computers. One of his first goals was the First National Bank in St. Louis. It turned out to be a pretty bleak day for Ray when he discovered, after I had introduced him to the officers, they were about to sign with IBM.

I think it fair to say though, that had not the president and chairman been friends of mine and of General Electric for many years we might not even have been told of this. However, the officials of the bank, in order to be fair to their General Electric friends had decided that they would encourage Ray to make a proposition assuming that when it was compared with IBM's it would be self evident even to us that we were not in the ball park, and that our only alternative would be to drop out, meanwhile expressing our thanks for a "chance".

Well, Gentlemen, as you know Ray is not one to give up this easily, and I haven't been selling for nearly forty years without learning that man a "No" can, with intelligent hard work, mean "Maybe. "

Sure, we felt discouraged, but not for long.

Have you heard the fable of 'The Devil and The Dagger'? Let me tell it to you. It has meaning for situations like this.

'It seems that the Devil was having a sale of a lot of his wares. There was on sale the Rapier of Jealousy, the Dagger of Fear, the Noose of Hatred, each with its own high price But on a purple pedestal, gleaming dully in the light, was a worn and battered wedge. This was the Devil's most prized possession, for with this alone, he could stay in business.. . and this was not for sale. It was the Wedge of Discouragement. '

Sometimes fables like this have a way of showing the causes of our troubles in a kind of roundabout way that's a lot more interesting than having someone preach at us.

Now, I think discouragement comes from only two things. . . one. . . lack of information, or two. .. a situation over which we have no control. And I have found it's seldom the latter.

Surely, we felt there must be a key to this market. What was the information we needed that we didn't have? It proved elusive throughout all the phases of negotiation and, as it turned out, was not to be ours until a fateful luncheon in the bank's executive offices late last year. One Friday afternoon when the prospects of our selling the computer looked gloomiest I got a surprise call from my good friend the executive vice president of the First National' He said his top officers would like Ray and me to join them for lunch early the following week. Now, although our company keeps, with my endorsement, substantial deposits in their bank, it is rare indeed for a customer to throw so elaborate an affair as they were planning merely to award a letter of intent. Rather, I suspected, and rightly it turned om, that this luncheon meeting was, for the bank, to be the easy exit tempered with good cheer and fellowship.

This is an old trick, and I've seen it tried many times before. It quickly put me in mind of the two salesmen going home Friday night. "I had a marvelous day, " said the first, "Made lots of friends for the company. " "Me too", said the second salesman quite understandingly, "I didn't sell anything either. "

This kind of "marvelous day" we wanted no part of. As the lunch dragged on with none of our bank friends quite willing to come to grips with the issue, I told our hosts that I could see they were pondering a difficult decision. But, that if my years of experience had taught me anything it was that there is a key to every sale if we could but find it. To the executive vice president of the bank I said directly and simply, "What do we have to do to sell you a General Electric Computer?" He was glad we'd jumped in with both feet. .. it sort of took some of the pressure off him.

"Well, " he began, --and there was a long pause. This wasn't going to be easy for him. And then he said a perfectly astonishing thing. "We think and our consultants think that General Electric has the best computer system for our work." This was astonishing! In light of their intent to give the business to IBM, it was incredible!

Then Ray picked up the ball. "Have you signed the contract yet?" he asked. No, they hadn't. "If you like our system best, " he went on, "how about you and our key people getting together this week to iron out the details so that we can get the order?"

Obviously searching for any comfortable excuse to delay coming to grips with the issue, they told us they would be in New York at a bank meeting the rest of the week and wouldn't be able to see us.

Well, Gentlemen, the upshot of this was that our team of Sheeley, Prince and Bowers went to New York too! There, John Lockton and Paul Wallendorf lent impressive support to our presentations to the bank's officers, and we hammered home the idea that we wanted the business ,that we would go to any reasonable lengths to get it.

That G. E. got the order is now of course, a matter of record. But, let me point out how we used another key to the market place.

Sure, we had a better product, but that in itself wasn't enough. You can scarcely expect a computer salesman, even if he's as good as Ray, and Gentlemen, let me say he's tops in my book, you can hardly expect him to get a customer's top officers eating out of his hand in sixty days. I try to help bridge the gap between the "decision makers" among our customers and the "do it" people with whom you will normally be working.. I like to think that keeping the door to the bank's executive suite open so that Ray and his team could maneuver effectively, helped us in a significant way to get this sale.

Gentlemen, time, your patience and my en


durance happily combine to call a halt, and I will tell you no more stories of the big ones that didn't get away. If you like, we can "toss the hot rivet" during lunch and later this afternoon.

It's been a long morning, and at times like this I always remember the young minister who was invited to preach in a college town in Texas. He was young and more ambitious than wise and he used every illustration he knew that could possibly apply to his theme, and it was way after twelve when he finally said "Amen. "

After the service the college president grasped his hand and said, "You voice was clear and your thoughts were good, but I like to see a man have his had baled before he tries to deliver it. "

I want to leave this idea with you. I think that ringing the cash register is the single most important thing we have to do in our business! But don't try to do it alone. As Lem Boulware also said, any given G. E. salesman has a wealth of talent available to him: his fellow salesmen, we regional vice presidents, our suppliers, bankers, distributors, our dealers, and all of our associates from the home plants and offices. Don't struggle alone to find that you've "reinvented the wheel." Study you prospects, line up your allies in this, the greatest selling tram in the world -- and count on us to help you when and where you need us.

Again, let me underscore don't try to "go it" alone. If you do, you are about as short-sighted as the fellow who goes into the poultry business without a rooster -- and that's putting one hell of a lot of faith in the stork!

Gentlemen, thank you very much.



When the computer department was established in Phoenix our primary objective was to serve General Electric's traditional industrial customers and to serve the data processing market on a selected basis. Our strategy was to serve the banking segment of that market while building the necessary resources and know how to compete successfully in the total commercial electronic computer market.

Our conclusion of the ERMA contract and the crowd in this room today shows that our strategy to date has been successful. We have established a firm reputation in the banking field.

Please let me emphasize here that the company recognizes computers as a good business for the continued growth of General Electric. It is one of the five new growth areas in which the company expects to build a new General Electric extending well beyond its long established business. During a recent visit to Phoenix Mr. Cordiner said that by the end of this year General Electric will have invested $60 million in the computer business. He then went on to state that General Electric is committed to invest more money in the computer business than it has ever before invested in any other business in the past and any other currently planned. Thus, we have the tremendous resources of the General Electric Company backing us every step of the way.

The fact that Mr. Cordiner and the company places this amount of confidence in us is quite a compliment. At the same time it places quite a responsibility upon us. . . the responsibility to succeed. It means that we must help attain the objectives set down for these new areas of growth, which he described, as "the coming sources of economic growth, new employment and great profits for the General Electric Company!!

Our record to date proves that this confidence has been well placed. Let's look at the record. We have doubled our business every year since the computer department was located in Phoenix in late 1956. We see no reason why this year should be an exception.

Page 44

Just a couple of weeks ago almost five years to the date since we were awarded the bank of America's ERMA contract, we shipped the last system to complete that contract. We are developing new peripheral equipment which will surpass anything currently available. We are expanding our manufacturing area to handle the increased business expected from you. We are broadening our product line and will expand our marketing efforts, and we are increasing our headquarters activity to give you the support needed on the sales firing line.

From our past experience it is evident that to be a major factor in the computer business that we will have to enter other market areas than those traditional to General Electric. Our strategy calls for doing this on a selective and orderly basis. To confirm that we are really in the general purpose computer business let's hear from the O'Rourke gang and some of the jobs they are planning to pull.



Here's one of the famous cattle brands of the

Old West . . . . .


All right, you transplanted Texan, what does it mean? 


But. .. that's enough of the old West. . . Today we'd like to talk about one of the newest western brands, a brand that's even more famous. The 225. Yesterday, we told you about how the original Arizona Rangers fought the good fight. . . and made the frontier a safer place for customers who think for themselves. . . . . We showed how our original single-shot weapon, the GE 100 was the forerunner of the rapid fire 210, and how it has been augmented by the 210/225 double-barrel scatter gun. Both barrels are loaded. .. when you go out to rescue a "captive customer" from those Indian Bad Men. . .

You may wonder, which barrel do I use?

We can give you some rules to guide your thinking, but it depends on the particular competitive circumstances.

It's up to you to choose the correct barrel for each sales situation.

Yesterday, we covered some of those situations that are better targets for the 210. Today, we'll show how the Arizona Rangers can help you fire that other barrel.

Meet IGOR BEAVER, a brand new graduate of the Astronaut Program, as he is about to call on

Mr. Bigg Prospect, president of Far Flung Enterprises, Inc. and Limited. . . . . . . . . . .




. . . . . . . You bet he can solve your problems, Mr. Prospect; and you guys can too, because we are ready to actively go after the utility market!!! And how are we going to accomplish this? A new strategy built around:

MORE sales manpower in headquarters, 
MORE sales manpower in the field,
MORE and better customer -education. . .

Fellas, our friend prospect here has been talking too much and too long with the wrong people. These competitors are good salesmen and they have a good product. But, they can't begin to give him what General Electric can!

You know, our Company has been building equipment for utilities for more than eighty years. We have people today that have spent their entire business lifetime working with the utility problems. Our people understand these problems, and we have the best and most economical solution for them.

You'll all agree that to sell computers to utilities, we must have a "complete package to offer". We've had parts of this package so far, but now (or very soon) we'll have a complete "utility package". The complete 'Utility package".

Optical Reading
GE Card Reader
225 Off-Line Printer

Page 45

High-Speed Tapes

In addition, we are developing new applications . . . . in these areas. . . .

Heat Content Gas Billing 
Reduced Stores Inventory 
Land Use and Growth Studies 
Rate Studies

And, in these areas . . .

Operating Studies 
Plant Record System 
Payroll Analysis 
Meter Inventory

And these. . . . . . . . .

Meter Sample Testing 
Revenue Forecasting 
Payroll Forecasting 
Expense Forecasting

In addition to these new applications, we have come up with what is truly an "integrated accounting system".

New concepts. .. 
Integrated Systems 
Customer Accounting, 
Stores Accounting, 
Plant Accounting, 
Payroll Accounting, 
Engineering Accounting, 
General Accounting.

Here, in one system, are all the accounting functions.

In addition, of course, we will have our engineering. . scientific capabilities. Along with these new applications and concepts, we will use a new approach.

Our new approach will include both the top management level and the operating level.

We're going to use our regional vice-presidents and other top management people. We have a real asset here and are missing a bet by failing to use these people. . . . . Right along with this new approach, we're going to work with a new attitude. We're going to wake up to the fact that we do have the best total system to offer. It's logical that we be a major supplier of computer equipment to utilities and they are looking for us to do this.

You know, we're all guilty of cowering a little in front of the giant ONE-BM. They're tough to fight and they have good equipment worst of all, there's a million of them around! Look at Ray and Leo in St. Louis.. two of us against three-hundred of them in Ray's district alone. But that's it . . . . This fear of them and their masses is like a sacred cow and none of us is doing anything about it.

Well. . " let's kill this sacred cow. ., and be done with it.

There's no need to be afraid of them. We don't have to fight them. We have the most to offer!

Did you know. . . .

According to a survey of January first, considering both business and process computers, G. E. is second only to One- BM in this utility market:

We have the best to offer. .. all we need do is help our customer to realize this.

Finally, we are developing new sales aids. . . .

Generalized Proposal Sections System 
Chart Presentations 
Utility Advertising
Shows and Conventions
Sales Kit

Let me take a few minutes here, to tell you about our new utility sales kit. This will be distributed to all salesmen to use, as an aid in talking to utility customers.

Here's what the customer presentation binder looks like . . .

You'll notice it has a special cover that enables you to set the book up on your customer's desk and use it as a flip chart presentation for one, two or three people.

Following the first page which introduces the sales kit, are photographs of the 225.

Then we have a four-page presentation outline. Using the outline, you can discuss the topics you want; and then reference the appropriate pages for charts, figures, etc.

Following the outline is a series of charts showing various operations in customer accounting, including billing, cash posting, file updating, etc.

These charts have also been prepared in large form for group presentations and are being sent to each district office to aid you in your presentations to large groups.

Following the charts are some sample bill forms, meter reading forms and some sample reports. Extra copies of these reports and forms are included in the second part of the sales kit, which is left behind with the customer.

There is a timing example that illustrates the simultaneity of the 225. We've included the calculations so you can trace through the example for your customer.

Several system configurations, as they apply to various size utilities, are included.

Page 46



In case your customer is one of the uninformed few who isn't sure that we're out to capture this market, we've included some ad reprints. We realize that most of our advertising so far has been directed to other than the utility market. We're ready now to move with utilities and we intend to create a good splash. Keep watching the utility publications, you'll see G. E. systems advertised more and more in them.

Meanwhile, we've screened the ads we have and have included those that will be of interest to your utility customers.

We have a section on the engineering program that will be provided. It is important that you know these are not old programs simulated or converted for 225 use. These programs are brand new, written expressly for the 225!

There is also an outline of our Schenectady Engineering section. I'm sure that many of your customers' people have attended training courses put on by this group. Leon Kirchmayer and Frank Maginnis there have been working for a long time in this area of engineering programs. A real selling point is the fact that Maginnis and Company are replacing their 704/650 combination with a GE 225!

The kit has been designed to be flexible. The pages are not numbered and so may be added to or deleted from at any time. As additional aids are generated, they will be distributed and inserted into the individual kits.

I mentioned a second part of the sales kit that would include sample forms. This part is to be left behind with the customer. It will contain such things as the newest system manual, the new utility brochure, sample forms, etc. This will be a separate packet, sized so your customer can insert it right in his file drawer.

In addition to these, there will be a section for the salesman's use. It will contain such things as industry information, a list of terminology and a questionnaire.

Well, that's our presentation. What do you think of it ?



You have an interesting proposal, Mr. Richmann.

This utility market holds a real potential

for US!

But, we've got to start pounding on doors and writing proposals, if we're going to sell to these people. You know, we're expected to sell fifteen computers to utilities this year! To date, we've proposed two and sold none! We must get busy. .. the utilities are buying now! As of January first, 1961, there were seventy-eight computers scheduled to be installed in utility applications this year. Of these seventy-eight, only fourteen are being purchased. .. These seventy eight machines represent an increase in computer use from forty-four to seventy-six per cent. The utilities are rapidly becoming computer-oriented. It's up to us to get in there and get them G. E. Computer oriented!

Last Friday. . .. the whole package was mailed to your district office!! This is one of the ways that we, here in Phoenix, are helping you to get those orders now!

What else are we doing? You heard it straight from the fellows who are directly responsible for helping you sell. . . . . . You've got. . . . . Wells, Richmann, Scott, Kilfoyle, McPherson, Dodd, Pompa. You've got a double-barreled shotgun that's loaded and cocked. . . . let's use both barrels!!

Shoot with every-thing you've got. . . .




Well, gentlemen, let us now take a closer look at a market where the GE 225 is unmatched in its price class. The engineering scientific applications market offers you the opportunity to make quicker, easier sales than possibly any other market.

The decision here is much less apt to be made on the basis of the twenty pastel shades that can be specified for the covers, or the amount of gold leaf on the cover of a two hundred page proposal. Rather, you will talk to people who are trained to make objective comparisons, trained to reduce them to numbers, people who will study and compare equipment, feature by feature, in much greater detail than most prospects.

Some of you have already found the gate to these lush fields and have been busily bailing the hay. We might mention a few' scores' in the engineering. . . scientific applications market. Among these are Naval Avionics Facility, Atlantic Refining Co. , Sunoco Laboratories, and United Gas Research Lab.

Back to our friend Igor. He is about to make a mistake commonly made by computer salesmen

Page 47

talking to people like Dr. Bigdome. However, it really isn't Igor's fault.. he just doesn't know how much he knows. As a very young astronaut, he was frightened by an inverted matrix with polynomial overtones. For some time afterward he suffered from nightmares. You can readily see how this sort of thing might lead to a complex.

He could use a Metrecal shampoo. That's the new shampoo for fat heads

Actually, our friend Igor's fears are unfounded. He is a bright boy. He has all the necessary education. He studied faithfully as a young astronaut. He reads and understands the field mailings that come to him. So, he knows more about the 225 than Dr. Bigdome or any prospect he might talk to. The information he has is exactly what the good Doctor needs to decide that the GE 225 will do his job better than anything on the market.

That reminds me of the story about the tom cat crossing the railroad. He just about got across the tracks when a train came along and cut off the tip of his tail. The cat looked around and reached over the rail to pick up the piece of tail when another train came along and cut off his head! The moral of this story is .. don't lose your head over a piece of tail: Anyway, don't lose your head!

You don't have to be a mathematician or an engineer to sell the 225 to engineering-scientific people. You must know the 225, know what floating point is, know what binary arithmetic is, be able to answer specific questions about the machine accurately; things such as timing, why the twenty bit word, and other questions of this type.

Here at headquarters, we will keep you inform ed about hardware and software developments that will be of interest to people you will talk to in selling this market. First, by way of the field mailings you now receive and later by literature which you can take to your prospect. When in doubt, call us . . When you are sure you need help, ask for it.

And above all, don't improvise. If you don't know the answer.. say so .. and find out later. Be as factual as possible. These people will trip you up much quicker on exaggeration and mis-statement of fact than the people you talk to in other marketing areas.

For example, a meteorologist visiting the plant a few weeks ago, told us that his IBM salesman came out with the comment that 'the 1410' is at least five times as fast as the 225! This prospect had just spent several hours comparing the speed of the two machines on various types of applications. The meteorologist's response to this gross mis-statement of fact is probably typical of the people you will be selling in this market. He insisted that the salesman produce some figures to support his statement before discussing the 1410 any further. Several days later, by telephone, the salesman had to admit that IBM did not have figures to support him. He said that the figure quoted came from a General Electric Dept. that had compared the two machines.

I'll leave it to you. How much weight was given to anything that particular IBM salesman had to say from then on?

Now I would like to give you some success stories from the Engineering Scientific market. I'm going to draw on the experiences of one of your more modest members. I would give you his name but, I don't want to embarrass him by identifying him here. They tell me that he hasn't always been so shy. He probably picked up the quiet, retiring manner typical of the residents of the State in which he now lives. I understand they have become this way since their State was reduced to the second largest in the Union.

First, let's consider United Gas Research Laboratories. These people have used computers for years. They have mathematicians and engineers of various kinds, including electronic circuit designers, on their staff. These people specified in detail the features and price range of the computer they would like to have, before contacting any manufacturer. The GE 225 was the only machine that either met or exceeded their specifications on all points.

We now have the order. No elaborate proposal was submitted. They were given the facts about the 225, then their questions were answered promptly, they made their own comparison, then they bought the 225.

Atlantic Refining was given the facts and figures on the 225. An engineer from their research department coded up a short routine using the manual we supplied him. They had also submitted bench mark problems for timing estimates. We did not provide 'guesstimates' but frankly admitted that we could not give reasonable estimates on the problems they had submitted. We instead provided timings on various operations that we could guarantee to be reasonably accurate. Some of the competition looked ridiculous as a result of 'guesstimates' submitted on the same problems. Here again, no elaborate proposal was required. The GE 225 has been recommended over all others.

Sunoco Laboratory, no elaborate proposal, they were given the facts about the 225, their questions answered, the 225 has been recommended.

The Naval Avionics Facility in Indianapolis, technical people with extensive computer background; they were given the facts about the 225, they made their own comparisons, they bought the GE 225.

We all know the potential of the scientific and engineering market. Some of you have had success. You all have what it takes to get the sales. Good luck, and good hunting.


Page 48

Let's not invent the wheel when it comes to manufacturing systems know how.

You don't have to do it .. your customer doesn't have to do it.



This wheel of G. E. manufacturing systems know how is your wheel of fortune. Your potential customer like Mr. Bigg Prospect, is looking for a supplier who has applications know how, as well as a buffered computer.

Your potential competitor, the in-between Manuscripts Corporation, has relied very heavily upon our Company, General Electric, for examples of successfully developed and installed manufacturing management systems.

One example is the GEST Simulation Project. This project was developed by the Medium AC Motor and Generator Department of General Electric. It represented a successful application of computer simulation techniques to an existing job shop operation. Your competitor, the In-Between Manuscript Corp., is still talking about this as a successful application applied to his 704 computer.

Your competitor recommended GEST to one of his 704 customers. However, GEST was a specialized application and could not be applied successfully to the 704 customer's problem. Result: an unsatisfied customer.

What does your customer really want. .. a 704 computer or the GEST know-how? No question about . .. he wants know how.

Your headquarters staff is working currently to build upon our company's pioneering experience in the field of computer simulation techniques. Our objective is to provide you with an effective library of generalized simulator programs for G. E. computers.

Personnel of the Advanced Systems Group are working with the Internal Automation Operation and the Integrated Systems Project to develop these programs. Results to date can be seen in the development of TABSOL, the Tabular-Structure Decision Language Technique. AGE product, TABSOL was developed out of the Integrated Systems Project.

This powerful technique is now available to you as a sales tool because Programming Research has integrated TABSOL into GECOM.

Another result can be seen in the utilization, by our advanced systems group, of the techniques contained in GEMS, a more generalized job shop simulation. GEMS is a product of a Manufacturing Services Project. We are confident that we can develop generalized Simulation Programs that will certainly be equal, and very probably superior, to those which will be developed by our competitors. We expect to be second to no-one in the area of computer simulation techniques. Within a year, we will have demonstrated significant accomplishments in this area. And you will have another powerful sales tool in your support package.

Even more immediately, we will announce our application of the critical path method of optimizing techniques.

Page 49



A new frontier is developing in an area that has been quite secret. This is called Information Storage and Retrieval, and although this is a new area, we have already been prospecting and have established a good "reserve".

Western Reserve University in Cleveland has taken delivery on a 225 to use in its searches for articles and other publications related to metals.

On Wednesday of next week, May 24th, they will have a national press conference and release, telling all the city slickers and country folk about our 225 and how it is used at the University.

Here is a new sales brochure to give to your prospects to tell the story about our work in the field of I. S. and R. These are to be handed out to customers after the press release next week, not before.

Since this is a relatively new application for most of us, the question is often asked.. what type of organization is a good prospect to utilize a computer for storage and retrieval?

Most large organizations have one or more applications for file searches, although they may not recognize them as computer applications:

Searching personnel files for individuals that meet specific qualifications, searching blue-print records for prints on specific subjects. library searches for subject publications, and many other areas peculiar to a particular type of company.

Even in the banking field, there may be a fairly large demand for searches of past and present customer records, in order to answer credit inquiries and reply to internal requests. A mid-western banker has stated that he presently has fifty people assigned to this task.

Although in many instances these searches cannot in themselves justify a computer, they may help to keep Jessie James from robbing them of a computer installation. Now that we have done some searching and prospecting, let's dig a little deeper and see if we can find some specific jobs for our retrieval application.

Every large city has one or more title company ies which have the never-ending job of performing title searches for real estate. A 225 computer may well be the answer to their problems.

State Highway and Criminology Departments can make use of the search to help in investigations. For example, if a witness to a hit-and-run accident saw that the car involved was a 1959 two-door Chevy, and the last two digits of the license number were 'two-eight', the 225 would compile a list of all two-door' 59 Chevy's that had 'two-eight' as the last two digits, and Joe Friday would have the information to track down the culprits.

These are some ideas to stimulate your thinking and give you a general idea of what to look for in the area of 1. S. and R.

Many applications for this service are too small, (or too big), to be handled with present equipment. An example of this is a problem in the North Hills at Salt Lake City.

The Mormon Church has a large library where they do genealogical studies (I guess that means family kin). They now have 400-million pages of material, photographed in the form of micro-film. These represent birth records, death certificates, and other church and civil records from all over the world. In addition, they receive 250-thousand pages on micro film each day. These pages each contain an average of 10 names.

The Mormons want the ability to search this file for names, dates and places, and then develop family trees. To convert this file to magnetic tape would take many town folk. However, in the near future it may be feasible to handle this vast job with a GE 225.

Now that we have done our down-to-earth prospecting, let's see what is over yonder hill, up in the blue sky. W. E. Glenn, of the Research Lab in Schenectady, said (and I quote): 'the new recording system called Thermoplastic recording is at present in a developmental stage, but is believed to have potential use in the field of information storage. Thermoplastic recording combines the processing speed

Page 50

and versatility of magnetic recording and the storage capacity of photography: It can concentrate 100 times as much information in a given space, as can magnetic recording. Like photography, it records almost instantaneously and will produce pictures in color and black-and-white, but it does not require chemical processing and can be erased and re-used as desired! , Unquote.

These Thermoplastic recordings, combined with a computer and closed-circuit TV to observe the recordings, will be a big boon to information storage and retrieval.

What do we presently have to offer our customers?

We have an existing package program that will search for up to 100 inquiries, with 28 logic levels possible in each.

You will be able to show your prospects an operating installation in Cleveland. We have experienced technical people in Dr. Sassenfeld's Applications Section, who have worked on and are continuing to develop new 'advanced systems'.

We in headquarters sales will work closely with this group, in order to provide you field salesmen with material in a useable form.

A word of caution: the method used to abstract, record, and search for information by Western Reserve is only one of many techniques now in use or proposed. Your prospect may have developed his own system that he, of course, feels is superior.

Remember, we can provide the equipment, experience, and know-how to 'computerize' his system.

The Western Reserve announcement will create a lot of interest. Be prepared to sell the 225 for information storage and retrieval.




Where is the insurance industry? It is every where!

Life Insurance per family equals $10,000 today. If you'll think about your own situation. . . when times get tough, do you let your insurance lapse, or do you stop eating-out so often? Here is one industry that is among the last to be affected by a recession.

Companies in the old-time insurance industry filed their policies in ceiling-high racks and prepared their premium notices with pencils or bookkeeping machines.

Then the answer to the insurance man's problem came upon the horizon. . . . The Indian bad man and his hole punching monster. People no longer were receiving neat pieces of paper for their premium notices, but instead, requests like this. . .. were coming into people's homes. This partially answered the insurance man's problem.

More babies were born. . more cars were made. . . more cars were wrecked. . . . more fires were started. . . . more people died. . . . all of which meant more paper work for the insurance man.

The immense black monsters became grey and were augmented by other monsters with spinning drums, discs, and tapes. What started out as a simple card game has turned into a magnetic tape numbers racket.

So . . . where do we stand today? Here are the facts. . . . over three hundred computers installed.

The 1. B. M. 650 alone accounts for one third of these three hundred installations. Rem-Rand obtained a head start with their Univac One's, but were unable to capitalize on their advantage. If you subtract-out the seventeen Burroughs computers in Allstate, R. C. A. would be third, enjoying limited success with the 501. In fact, R. C. A. has Bismac's installed in two insurance companies so you can see these insurance people will buy anything.

Page 51

How can we obtain our share of this business? Before answering that question, let's take a look at this insurance business.

The insurance industry is broken down into these general categories. . . . one-half of the insurance dollar spent today is for life insurance. This is one of the markets you should aim for with the GE 225

The casualty, fire, accident and health, group, and others such as Workman's Compensation, are in business to serve their clients in their time of need.

The unpredictableness of a claim precludes a traditional sequential master policy file. If your insurance prospect is to serve his customers, and all they have left to sell these days is service, then you had better be able to satisfy his needs.

You, Mr. Igor Beaver, can satisfy these needs. . . . . with the GE 225.

With these facts in mind, let us return to our original question. . . . . . how may we obtain our share of the insurance industry's business? ? ?

Our appeal to the life insurance industry is that we can now "close the loop".

Our re-entry ability with the GE 225 allows us to go after an industry that knows computers, that uses computers, that is updating their present computers, and that will buy computers.

Some things that must be considered when selling to life insurance are:

The insurance industry is notorious for buying computers at the top.

Life companies are knowledgeable. among the first to install computers.

They were State insurance commission laws vitally affect the way insurance companies do business. For in stance, some states require retention of returned premium notices by either policy number or name. This could very well mean a twelve-pocket document handler.

The trend for premium notices is for shorter premium periods, even as often as monthly. This latest trend makes twelve times the amount of paper work that billing used to make.

The insurance company trend has been to buy, rather than lease. Our approach must reflect this.

As you can see by this slide, I am suggesting only those applications that really affect a large decentralized or smaller centralized life insurance company.

(Pause while they read slide)

Enough for the life man's problems.

What are a fire and casualty man's problems? How does the 225 solve his problems?


Rather than take on all the problems of a fire and casualty company, the automobile portion is the place to concentrate your efforts. Why do I say this?

Because auto policies are usually sold by the year. Therefore, renewal notices sent out in re entry form to expiring policy holders will bring in a lot of automatic renewal business without an agent taking his time to inquire.

Because automobile insurance is highly competitive, and service to a policy holder is really worth money to the insurance man. . . . . our M. R. A. F. will service a claim through a 225 system faster than any other random file on the market today!

Because the promotional minded auto insurance man is looking for reasons to lower premium rates to careful and safe drivers, all forms of point systems are being set up in various test states to tryout his ideas. The more ways we drivers are being coded and classified by our insurance agents, the more opportunities we computer salesmen have of including our 225 in this numbers game of highway statistics.

How can Phoenix support you in this appeal to the insurance industry?

A listing of all life insurance companies in your district that should be considered for the GE 225, giving vital statistics.

Com-pac. . . your sales kit to approach the automobile renewal business.

A summary of state laws affecting possible peripheral configurations.

Generalized proposals highlighting the features a 225 offers the insurance industry.

System brochures playing up re-entry and eliminating punched cards entirely.

Sample premium notices and reminder notices. .

Top-level presentation material. . software for the insurance man. . . . regional and district briefings on how to analyze an insurance company. . . what to look for and what to look out for . . . . .

A financial man's analysis of the merits of purchase over lease.

The GE 225 , through its complete flexibility of peripherals and balanced operation, can solve the insurance man's total problem. He can keep his master file in sequence or in random. . . . he can do all applications from premium billing to actuarial statistics. . . he has the ability to "close the loop" for posting premiums paid.

Page 52

So here is an industry that will be buying two hundred computers. Get your life and auto insurance prospects lined up early in order to get your piece of this business . . .




Mr. Bigg Prospects' request isn't an unusual request. Many prospects want answers they can give their management when they ask, 'why didn't we buy brand X?' Others just want re-assurance that they are making the right decision.

Igor should not be upset when questions are asked about competition. The important thing is that Igor has the answers or will get the answers for Mr. Prospect. If these questions are unanswered, it appears as if our equipment is deficient, and we don't want to talk about how it compares to other machines.

Many times our equipment can be sold by relating it to competition. If we understand a competitive machine which a customer knows, we can explain our equipment in terms of the common machine and point-out many of the areas in which we are more advanced.

This will usually create a favorable sales situation and the customer will respect the salesman's knowledge of the industry.

Let's take a look at some of the particular questions which Mr. Bigg Prospect asked Igor Beaver and see how Igor answered them. . First, Mr. Prospect said, "Igor, another manufacturer tells me that we don't need a large machine to solve our problem.

Their salesman said we can RPQ (request a price quotation) adaptors to make the machine do almost anything. Why should we pay more to General Electric if the smaller machine can do the job?" Igor was quick to answer, , Mr. Prospect, it sounds like you have been talking to the Itty Bitty Machine Company. We have looked at your problem and you can see it takes a machine as large as the 225 to do your job right. The important thing is to balance the job, machine, and results. The next factor to consider is the ability for the machine to grow with the job. This is very important to your company because with the high caliber of management like yourself, Mr. Prospect, your business will continue to grow very rapidly. If you have a machine which can't grow with the job, like the 1401, you will find, that as the job grows, your results will get smaller, and smaller, and smaller. Then you will be faced with the high cost of re-programming and installing a completely new system. On the other hand, Mr. Prospect, if you purchase a GE 225. you can increase the sys tem as your job grows and save the expensive costs of converting to an entirely new system. '

At this point, Igor Beaver took the opportunity to re-sell Mr. Big Prospect on the flexibility of the GE 225.

Mr. Bigg Prospect was convinced by Igor that the Itty Bitty Machine was too small to solve his future problems, but he wasn't yet sold that G. E. is the only manufacturer who can solve his problems. He asked Igor: 'What about this new machine everyone is talking about? Igor, this salesman tells me: why tape it? CRAM it! He says that his system is so flexible we can cram all our information into the registers and our answers will flow out with speed, flexibility and accuracy. He also said if our dataflow grows, we can cram more by just adding CRAM units'. Igor might have been stumped by this blue sky of speed, accuracy, and flexibility through some form of CRAM unit, but he was an alert beaver and had the answers.

He told Mr. Prospect; 'this CRAM unit is a new concept in the industry, but you don't want concepts, you want performance. The concept of the CRAM is both random and sequential storage in one unit. But for performance, the GE 225 random access memory has over fifty times as many addressable records as the CRAM. The average access time on the GE 225 is fifteen to twenty-five percent less. For sequential storage, our fast tapes are more effective because the record size is flexible, and all the records are on one continuous strip of tape. Thus, we don't have to access different cards when we want to proceed sequentially. Also, Mr. Prospect, there is much more than hardware to consider in a system. The software is very important. Anyone on this growing frontier can build a good shovel, but it takes a lot of thought and knowledge to know where to dig for gold. We at G. E. have built the best shovel available, but we also give our users the assistance necessary to locate the gold' .

Here's an example of some of our experienced application's engineers. ... We also have everything necessary to use on our GE 225 shovel.

'You can see Mr. Prospect, there are a lot of facts which must be explored before you can believe the story of speed, flexibility and accuracy by cramming everything into registers. We want to make sure you aren't 'short changed'.

Mr. Prospect finally began to see that it

Page 53

takes a flexible system of good hardware, complemented by software to solve his growing problem, but he didn't want to admit to Igor that he had been convinced.

In a last attempt to test Igor's knowledge, Mr. Prospect asked Igor what he thought of the real cool approach. Igor was quick to answer: 'What the real cool approach means to me is R.C.A. Their approach is to do everything slowly and not more than two things at one time. This way they don't get confused. Also the machine stays cool. The real cool approach doesn't mean much in the present market with many red-hot machines. A good example is the GE 225 which is very fast and can do twelve things at one time! That is the red-hot approach! ,

Mr. Bigg Prospect was finally convinced that Igor knew what the industry had to offer and saw that further questioning would only give Igor a chance to talk about how good his 225 was, in comparison to the other machines.

Mr. Prospect sat back and said to himself: 'I had better order one of those 225's in a hurry.'




Well, Mr. Prospect finally signed the order Now, let's advance the time-clock by one year. . . Mr. Prospect's computer has been delivered and installed. We see him as he is anxiously awaiting the first reports from the printer



Wait a minute.'.'! '. Stop... That's the old way! Here, to tell you about the new concept is Jay Levinthal.




You have heard the many wonderful things that a GE 225 can do for your customers. People sitting in this room have sold 225' s to such diverse customers as . . . . . Hurricane-Forecasters, Forecasters, Flour Millers, and Electricity-Generators.

Even within one installation, the GE 225 will be used for applications varying from customer billing. " to computing the effect of a short circuit on the system.

The GE 225, with its hardware and software is today ready to tackle all of Mr. Bigg Prospect's problems.

You should be sure that he does avail himself of the great-capabilities of the GE 225. For... as he places his reliance on the GE 225 . .. the GE 225 will handle more of the data of importance to Mr. Prospect . ., and this in turn will permit Mr. Prospect to get what he really wants from the computer . .. Information to solve his problems, not just isolated reports. For you may be sure that he wants answers, not just routine outputs.

This is the next stop, and the new frontier for maximum customer satisfaction.

Integrated data processing attacks Mr. Prospect's problem. .. not as a number of disassociated computer runs each operating on their own problem. .. but as an integrated whole in which all of the inter-relationships between the elements of the entire business are carefully preserved.

Thus, integrated data processing permits collecting of the significant data concerning a business in an economic way. " permits storing it for later reference. ., and then, drawing from it inferences that permit supplying answers when requested or needed.

As a typical example: Integrated data processing would permit an electric utility to store within a ram, all of the customer's status, his power usage,

Page 54

his bill, his payments, his requests for change-in-service and the utility equipment installed at the customer's location. It would permit the remote branches of the utility to make immediate inquiry and to immediately update the customer's account. Most important, the stored information would permit management of the utility to determine historical service trends, to inventory the equipment, and then to predict future needs for both power generation capability and for capital equipment such as meters and transformers. This can not now be done rapidly enough, or with sufficient accuracy, since branches are disassociated from the data-processing system and since the information is now contained in a number of different non-related files.

The very versatility and capability of the GE 225 that permitted swamping Mr. Prospect with reports. .. makes it the most useful computer on the market today for integrated data processing.

The tools needed for integrated data processing are known. They are real, and not just in the laboratory. They comprise the hardware and soft ware necessary to do an integrated data processing job. Marketing, engineering, and applications are all working here at headquarters to place the necessary ingredients in your hands. . . . so that you can go out and sell to a market that is eagerly awaiting your product.

Among the ingredients of integrated data processing are various pieces of hardware equipment that should be familiar to each of you. Equipment of particular significance to you includes:

1. Communication equipment, such as used in the FASO System.
2. Ram's.
3. The 3101 series of equipment.
4. Encoding equipment.
5. Character reading equipment.

To successfully market integrated data processing . .. you... the salesman. .. must have a thorough knowledge of the individual elements.

Software is also a key to integrated data processing systems. In this area, a number of steps are being taken. These include:

1. Studies of a number of typical applications for dissemination of information to the field. Such important areas as banking, utilities, insurance, and manufacturing are now under study. 
2. Inclusion of Tabsol, a systems-oriented language, within Gecom.
3. Work on techniques aimed at drawing the best
possible inference out of existing data. Among these techniques are: Critical Path Method, Simulation, Information Storage and Retrieval.

The tools for exploitation of integrated data processing are all within reach. However, the road will not be easy. I am reminded of our experience on ERMA In 1956, everything that is today in an ERMA or 210 system was known and demonstrable. . . including character reading electronics and document handlers. However, it was a long hard job to achieve our present dominant position in the banking business.

In integrated data processing, we have the hardware and we have the skills.

However, we must all work together to exploit the market and to achieve success.

Just as we worked diligently and exploited our lead in the banking field. .. let's make integrated data processing another Erma! '.

You've seen how the 225 can be applied in a wide variety of applications. . . . . Now, let's take a look at the features of the hardware itself. . .





What did you think of that hardware presentation? Would you like to show it to your prospects?

Page 55




Everyday we rescue items you see on these pages!
What do you have hiding in a closet or garage?
What could you add to the museum displays or the library?



DONATE! Click the Button Below!

Thank you very much!


Material SMECC 2007 or by other owners 

Contact Information for
Southwest Museum of Engineering,
Communications and Computation 

Talk to us!
Let us know what needs preserving!


Postal address - Admin. 
Coury House / SMECC 
5802 W. Palmaire Ave 
Glendale, AZ 85301 

Electronic mail 
General Information: