The following remarks, with some
editing, were published in the Annals
of the History of Computing, Volume 10, Number 1, 1988 with
the following Introduction:
"Engineers, managers, and salesmen often recall
the sense of excitement and uniqueness
in being involved in
the early development of the computer industry.
While time may color memories of past work,
there is no doubt
that something special transpired in this particular industry.
Nowhere is this more evident than in
the reunion of former employees of General Electric's computer
department. The group met
at the May 1987 annual sales meeting in Scottsdale, Arizona.
Since General Electric’s withdrawal from the computer industry
in 1970, most have gone on to other businesses.
In spite of this, over 150 attended the Scottsdale reunion to
meet with their former colleagues from the computer department.
While the shortcomings of General Electric's commitment to the
computer industry were readily acknowledged by most of the attendees,
there remained pride in their department's accomplishments.
The reunion featured a session
of 'Tall Tale' presentations, which included George Snively's
perspective of the origins of the computer department. He described the
role of H.R. (Barney) Oldfield, Jr. in moving General Electric into the
general-purpose computer business and the development of the successful
banking automation system ERMA (Electronic Recording Machine Accounting).
While the recollection is full of humor, Snively
believes it to be accurate with the possible exception of some of the
dates. Historical accounts of General Electric's computer business are
few, and Snively’s comments are particularly revealing"
amused that Historians appear to think that history is humorless!
many attempts to locate him, Barney Oldfield has since surfaced and
takes exception to some of my remarks.
In particular he wants it to be known that he was not fired but
resigned for personal reasons. Both
he and George Trotter dispute my "He's weakening" quote. I admit to a certain poetic license in not attributing the
quote "as I walked out of the meeting behind Barney" to Russ
Krapf who immediately told me of it.
Barney rightly points out that
George Haller was behind ERMA all the way.
I agree. However, he
was adamantly opposed to expanding the Microwave Laboratory as the
facility to produce it.
Barney is extremely modest and
objects to my casting him into a kind of "John Wayne role".
John Wayne was also modest.
Witnesses to any event disagree
about what happened minutes after the event.
Thirty-five years is a long time.
TRUE TALE OF THE COMPUTER
THE NAME OLDFIELD IS ASSOCIATED WITH RUNNING FAST
There is no
taller tale than the TRUE
tale of the beginnings of the General Electric computer business.
So throw away any business school concepts you may have of thorough
market analysis, careful planning and organizing.
Substitute instead a philosophy of IMPLEMENT - BEFORE THE PLANNERS STOP EVERYTHING!!!
histories of the computer business are written they will undoubtedly
mention a number of you gathered here. Unfortunately, they will likely
omit mention of one of the business' principal pioneers and promoter -- BARNEY
Barney there would never have been a General Electric Computer Business. In the face of severe and constant obstacles, Barney
single-handedly mouse-trapped GE into the computer business and then
bootlegged it's implementation while GE's management was distracted by a
major reorganization. To the extent that the GE computer business made a
lasting contribution to the industry, it is Barney Oldfield's legacy.
But I'm getting ahead of my story.
association with this story begins in 1952, when I was Supervisor of
Accounting in GE's Electronics Laboratory, which built ORAC, one of the
earliest digital computers, for Wright Field.
Wayne- later the Director of the Computer Science Laboratory at Syracuse
University- was in charge of this effort. One of his engineers was Curt
Cockburn who later came to Phoenix and now lives just north of here in
As a result
of ORAC's success, Business Plans were periodically prepared by various GE
departments requesting permission to go into the Computer business. I was
drawn into assisting in the preparation of these plans since I had what
few cost numbers were available on computers.
I did this reluctantly as the plans preparation required
considerable time and were consistently returned
from Ralph Cordiner, then GE's Chairman, with a big "NO!
RJC" scribbled over them in orange crayon.
Famous Metcalf Report on the future of the Electronics Business was
issued. This was a market research report on the future of the Electronics
Industry, prepared by George Metcalf, GM of the Electronics’ Division's
Commercial and Government Equipment Department. The Metcalf Report's
chapter on Electronic Computers, as we called them then, forecast that
electronic computers, believe it or not, would become commercially
feasible and would emerge as the fastest growing segment of the
chapter on Electronic Computers was authored by a Clair Lasher.
Lasher Business plan -late 1955
late 1955 the prescient Clair Lasher, under the auspices of the Technical
Equipment Department, located at Electronics Park in Syracuse New York,
orchestrated another business planning effort to go into the computer
Ralph Cordiner returned it with his customary, "NO!! RJC".
As part of
this effort Clair Lasher had asked the Manager of the Microwave
Laboratory, Palo Alto, California, to look into the work the Stanford
Research Institute ("SRI") was doing on the ERMA computer system
for the Bank of America. Remember that this was in the days of the
propeller driven DC 6 and the West Coast was a long way from Syracuse.
Oldfield, the Manager of the Microwave Laboratory, was a consummate
promoter and a man with a hearing defect - HE COULD NEVER HEAR THE WORD
whom Clair Lasher asked for help, was always looking for reasons to expand
the Microwave Lab. and thought he saw an opportunity, with a SRI
connection, to become the Computer Laboratory as well.
reported to Dr. Haller, General Manager of the Laboratories Department. Haller had a philosophy, and a plan, to build small
laboratories adjacent to universities with specific technologies. i.e. the
Microwave Laboratory at Stanford, the Electronics Laboratory at Syracuse
for advanced circuits and silicon and the Advanced Electronics Center at
Cornell for infra-red ray research and golf putters. (Putters,
incidentally, rank among the half dozen largest ventures to have emerged
from this group assembled here.)
1955 Barney sent an appropriation request to Syracuse that envisioned the
Microwave Lab expanded fourfold to produce the ERMA system for the Bank of
Dr. Haller, in what he considered a real coup, had hired Dr. Robert
Johnson - boy genius- to head up a Computer Laboratory to be established
at Penn State, where Haller had been Dean of
Chemistry and Physics.
Penn State plan foremost in his mind, Dr. Haller gave Barney's Palo Alto
plan to me, I was then Manager-Budgets, Measurements and Auditing for the
Department, with instructions to "make a list
of all the reasons to say NO!"
1956 Barney flew into Syracuse with George Trotter, his Administrative
Assistant, to get his plan approved.
Trotter, who was not invited into the meeting, waited outside.
Haller, normally a mild mannered man, did everything but jump up and down
on his desk saying NO, NO, NO, NO!!!!
As I walked
out of the meeting behind Barney, George Trotter grabbed his arm and asked
"How did it go?!". Barney
replied, "Very good, he's weakening".
period, Barney made a formal proposal to the Bank of America to finish the
development and manufacture the SRI ERMA
the bank. This inches thick proposal was made on the letterhead of a
non-existent Computer Department. It included plans for the
Lab. expansion, which Dr. Haller had so resoundingly rejected, and showed
Dr. Johnson--without his knowledge—,as Manager-Engineering.
George Trotter was listed as Manager Finance though he lacked the
required GE credentials for that position.
Other section manager spots were filled with Microwave Lab
personnel of doubtful pedigree. Pictures of the Microwave Lab., the
Advanced Electronics Center, and two of the Electronics Laboratory--one
taken from the front and another from the rear--were included to
demonstrate GE's facilities and manufacturing capabilities.
(These pictures-and Dr. Johnson's-were available in a Laboratories
I've never known how much Al Zipf of
the Bank of America was a part of this subterfuge, but I've got to believe
he was in cahoots with Barney all the way.
Industrial Computer Section
In February or early March 1956 Ralph
Cordiner, exhibiting a change in form, followed his NO! to Clair Lasher's
Business Plan with a letter of explanation. The key passage in that letter
"UNDER NO CIRCUMSTANCES WILL THE
GENERAL ELECTRIC COMPANY GO INTO
THE BUSINESS MACHINE BUSINESS. HOWEVER, SOMETIME IN THE FUTURE,
IN SUPPORT OF OUR HISTORIC BUSINESSES
IT MAY BE NECESSARY FOR US TO GO INTO THE PROCESS COMPUTER BUSINESS."
point Barney Oldfield flew into Syracuse with a letter of intent from the
Bank of America for $30 million of ERMA systems.!!!
hastily convened meeting of Dr. Baker, General Manager of the Electronics
Division, Dr. Haller, Ike Karr (Dr. Baker's Divisional Manager
-Engineering) and Barney it was decided the ERMA system was "A ONE
CUSTOMER SPECIAL-PURPOSE PROCESS COMPUTER FOR THE BANK OF AMERICA".
Thus, the letter of intent was accepted as being in line with
Cordiner's memo. This,
in spite of the fact that the letter of intent provided for substantial
royalties to the B of A from sales of computers to other banks.
accepting the letter of intent Dr. Baker told Barney that he, Barney
Oldfield, was to be held personally responsible for seeing that the ERMA
contract was fulfilled. The
letter of intent was accepted in the name of the Industrial Electronics
Section of the Technical Equipment Department headed by Clair Lasher, who
had fathered the business plan.
Barney took the warning about being held responsible as a go-ahead to head
up the effort and did not hear the word "Industrial" or
"Section" in the title. Besides,
he still had all that stationery which said Computer Department and
it would be a shame to waste it. In
addition there already was a Section head: Clair Lasher.
ASSUMED HE HAD BEEN APPOINTED TO HEAD A COMPUTER
and later graciously offered the position of Manager -Marketing to Clair
He then set
to work to flesh out his new DEPARTMENT. The first man put on the payroll
was Ken McCombs - Manager Finance, to whom Barney had already promised a
position with his expanded Microwave Lab.
Ken was a Californian, who as Plant Accountant for the GE flat iron
plant in Ontario, California had the only GE financial job west of the
Mississippi. His position had
been abolished and he was desperately trying to stay on the West Coast.
Barney told him the business was to be located in Santa Barbara.
Second on the payroll, as the National Sales Manager, was Owen
Lindley who also received a commitment he would become
Manager if Clair Lasher didn't accept the position. Barney, who liked to
neutralize his detractors by hiring them, asked Ken McCombs -who had
neither met me nor interviewed me- make me an offer I couldn't refuse.
I was the third person on the payroll as Manager- Budgets and
Measurements to legitimatize his ambitious forecasts.
think Barney ever had a meeting with Bill Morelock, the General manager of
the Technical Equipment Department, who he now presumably reported to as
the Industrial Computer Section. As
self-appointed General Manager of the Computer Department Barney set about
hiring section managers. Since time was of the essence in making this a
"fait accompli", opportunity's lighting struck several
individuals, who, because of their immediate "no questions
asked" availability, suddenly found themselves section or sub-section
managers. (At a later date I
overheard him remark to Audrey, his secretary who was annoyed by one of
them, "Don't worry Audrey, his job will soon outgrow him")
meantime, Clair Lasher, understanding the true meaning of Cordiner's memo
and the "tenuous" nature of the ERMA proposal, was trying to
distance himself from this activity.
Ultimately, Clair, faced with the "fait accompli" had to
decide to either join-up or sit by and not participate in the unfolding of
his vision of a computer business.
believed in "out of sight out of mind", (as you field salesmen
know, the farther from headquarters the better) and buttressed by his
sojourn in far off Palo Alto, immediately set up a site team to "get
the hell out of Syracuse". This
sat well with those who were suddenly propelled into positions above their
expectations and local reputations.
In fact, they immediately
running around the country like CIA agents, leaking the secret that the
mysterious company X was GE, and being royally wined and dined by Chambers
of Commerce, Realtors and other such community builders.
Clair Lasher, being the only experienced Section Manager, and well
aware that this fledgling could not survive without the infrastructure
provided by Electronics Park and of the over capacity existing within the
Park, stood aloof from this Keystone Kop activity.
this was happening, Dr. Baker reluctantly retired and his Electronics
Division was divided into three divisions.
The announcement of the Division breakup also announced a new
Electronics Laboratory reporting to Dr. Haller, Dr. Haller wanted Don
Garr, from the General Engineering Laboratory in Schenectady, to head this
new operation-- but did not want Ken Geiser to come as part of the deal.
I was in Dr. Haller's office when he gleefully told someone on the
phone that he had managed to sell Geiser to Barney for "that computer
fiasco". In any event,
Geiser, whose his wife Pat was deeply involved in community activities,
wanted to stay in Schenectady with his troops.
I will not
go into the comedy that was otherwise known as the "Site Selection
Study". While California
sites were preferred, the Bank of America, which was exempt from use taxes
but not sales taxes, did not want us in California at the cost of $1.2
million in sales taxes. Suffice
it to say, Phoenix won the wining and dining contest and Phoenix was
selected as the site for the Computer Department. An independent SRI study
was then commissioned to justify the selection of the Phoenix site.
Naturally, this study selected another site.
But, after SRI was informed our initial problem was to attract
experienced computer engineers, a follow-on SRI survey showed Phoenix to
be the preferred site by the engineers. (Which, incidentally turned out to
be true. Regardless of how
chosen, Phoenix proved to be a good site.)
was therefore chosen, much to the surprise of Bill Morelock, General
Manager of the Technical Products Department, to whom the Industrial
Computer Section was presumably reporting, who had no idea a site study
was needed, especially considering the excess capacity in Syracuse.
interesting aside to this was a turf battle waged against Harrison Van
Aken, the General Manager of the Communications Equipment Department, over
Colorado Springs as a site. It was high on the list of preferred sites for
the Computer Department but Van Aken advised us that he had "dibbs on
it" for his Communications Department and would block us from going
there. He was ultimately forced into some excess capacity then available
in Florida. When he later
became General Manager of the Computer Department it was in Phoenix -- not
All this was happening during the
changing of the guard triggered by Dr. Baker's retirement, the sorting out
of the pieces from the breakup of the Electronics Division and the coming
aboard of three new Division General Managers.
One of these was Harold Strickland to whom Bill Morelock reported
and Barney acted as if he also reported to Harold.
this moment of opportunity, Barney Oldfield prepared a very innocent
looking $5,000 appropriation request to cover some office space in Phoenix
for "liaison with the B of A" and a sales office.
While Harold Strickland was trying to get his feet under his desk,
Barney was trying to get this request on top of it.
trying to get a meeting with Harold Strickland, Barney put the
manufacturing people -Earl Kittle, Bill Lord, Don Reed and others- on the
road to Phoenix to set up facilities, make procurement arrangements, and
so forth. Meanwhile, others
involved in the plan were taking trips to Phoenix with their wives to
choose housing. The
manufacturing people drove 300 miles a day and would call in each evening
to get instructions on proceeding.
Each night they would receive the same instructions: "keep
going and call in tomorrow night".
Thursday afternoon in late November 1956 Barney called the Les Lee
Building in East Syracuse, where we had our offices, and Geiser's
Engineering group in Schenectady with the word that Harold had signed the
appropriation request. He instructed everyone to get on the road to Phoenix and not
to answer the phone after he hung up. He
declared that upon terminating the call he was going to be unreachable for
say, there was consternation in the Division staff for two weeks over the
sudden disappearance of the Computer Department.
This was partially cleared up when the Arizona
prematurely announced the selection of Phoenix by GE as the site for its
fill up the whole afternoon with "tall tales" about Herb, but
will only mention him in passing today.
before the site had finally been selected, Herb who was on his honeymoon,
made a deal with the Arizona State College at Tempe (now University) for
space for an IBM 702 computer (with a military priority which he had
diverted from the Jet Engine Department at Evendale, Ohio), purchased a
house and held a press conference to announce that "he" had
selected Phoenix and the rest would follow.
after Barney's call, when Harold Strickland stormed into Phoenix, about
150 GE people, formerly of the Industrial Computer Section, were in place
and calling themselves the Computer Department.
I was not there, but the story is that Harold refused to enter the
office until Barney had the sign on the door, which read “Computer
Department”, painted out and repainted as the "Industrial Computer
- the Firefighter
As I have
said, Barney's management style was to implement.
He would get his managers together, make a plan, approve their
budgets, issue instructions and delegate authority.
He would then go off by himself on a weekend and come back with a
different plan and budget and send it off to New York.
While he was spending time flying back and forth to New York
defending this later plan the original plan would proceed without
both an exciting and productive period in the GE computer business.
Very few people were aware of the fires-, which he himself had set-
that Barney was fighting in New York so things could proceed smoothly in
BARNEY AND ARIZONA STATE
COLLEGE'S GRADY GAMMAGE.
and Arizona State College's president Grady Gammage met, each immediately
recognized a kindred soul. Barney
allowed as how he would like to house his engineers on the campus until he
could get the Black Canyon plant built.
Grady allowed as how he would like to have them if he just had his
new engineering building. Barney
expressed a willingness to lease such a building on a five-year
full-payout net lease basis and in his usual fashion, immediately prepared
an appropriation request to erect a building on the Black Canyon site.
He leaked the Black Canyon building plans to the engineers, most of
who had purchased homes in Scottsdale in anticipation of a Tempe location.
These engineers, who were critical to a successful implementation
of the ERMA project, made unhappy noises that reached New York.
Meanwhile Barney and Grady prepared their lease.
Grady went to his Board of Regents and told them the General
Electric Company had generously agreed to finance a new Engineering
Building for him. Barney, in
the face of mounting opposition to his Black Canyon building plan,
withdrew the appropriation request, as, "fortunately he had found
some space to lease on the Arizona State campus".
know who that building is dedicated to but it should be called the Barney
By the end
of 1958 we had moved into the 50,000 square foot Deer Valley plant,
shipped the first ERMA system and were hard at work on the NCR 304
THEN, the B
of A held a dedication ceremony for the ERMA system at San Jose.
This was a big affair to which the Board of Directors of GE, as
well as the Bank's board, was invited.
A number of GE's Board and top management, including Ralph Cordiner,
attended this ceremony. Cordiner
took one look at ERMA, and said "My God we're in the Business Machine
business! How did we get here?"
He fired Barney on the spot and appointed Clair Lasher as acting
General Manager with the orders to phase out the ERMA and NCR contracts,
drastically reduce personnel and curtail all marketing and engineering
while developing a plan to create a modest Process Computer operation.
next 18 months, with a payroll of nearly 1,500 people, the Computer
Department was under orders to go out of business.
So far as I know only six people in the Department were aware of
this. The rest thought management was infected with some kind of
Barney's "modus operandi" was to implement, Claire’s was to
PLAN. He steered the entire
department into planning efforts in an attempt to affect a change in
Cordiner's decision. Finally,
in June 1960 he wrangled a meeting with the Executive Office of the
Company where he presented a plan called "The Big Look". This
plan envisioned an all out effort to go after the computer business and
was of such a magnitude that, other than IBM, none of our competitors
could match it. This
plan (which garnered considerable support from GE's Treasurer, John
Lockton, who enjoyed using his influence with the banks to get computer
orders, and from the Comptroller, Gerald Phillippe, who didn’t like
finding out about GE's plans from IBM salesmen before he knew them
himself) was enough of a challenge to convince Ralph Cordiner that GE
should be in the business.
Arnold Spielberg, later to become known as "Stephen's father"-
and whom I've often surmised was aware of the decision to go out of the
business (though not supposed to be),- had designed a drum memory based
process computer that could be readily converted to a core memory business
machine. When Lasher got the
decision reversed Arnold quickly slapped a core memory on his machine and
the GE 225 Business and Scientific computer was born. Of course there was
no software, no maintenance manuals, no user manuals or training manuals
of any kind.
It is about
here where most of you attending the second first annual sales meeting
came into the picture. It was called the "second first annual"
because the "first first annual" sales meeting had died a-borning
when a meeting at which Clair had hoped to get a positive decision never
materialized. Hence, that now
famous meeting was called the "second first annual" sales
you had too many challenges to spend much time pondering the apparent
contradictions of the then recent past. For until you came aboard,
everything had been done in a
mode and often contrary to direct orders.
some extremely dedicated people to persevere in those days and it is
unfortunate there has never been a fitting memorial to Barney Oldfield,
who single handedly -and without the usual authorizations-put GE into the
measures General Electric's success in the Computer Business far exceeded
even the wildest expectations. Our
fondest dream in 1956 was to become a legitimate Department with possibly
$80 million in sales. Unattainable
targets were set and consistently surpassed.
Even the most blue sky projections were always exceeded.
The 1956 projection for 1961 was for
$40 million in sales. That
was upped to $60 million in the 1958 projections - the actual turned out
to be in excess of $150 million. Clair's
1961 "BIG LOOK" plan, which assumed an all-out GE commitment to
capture 30% of the market, projected an unbelievable $900 million for
1967. This was cut back to
approximately $500 million to be "realistic".
The actual 1967 "if sold" volume exceeded $1 billion.
the general belief that the effort was unsuccessful?
I believe that there are three reasons for this widespread view.
(1) Since very ambitious
projections were always exceeded, additional resources were not
available when needed and existing ones were stretched and unbalanced.
To those in the trenches, nothing seemed to go right,
(2) From the beginning, when Harold Strickland had to race
out to Phoenix to find the Computer Department, management resembled a
Tolstoyian General desperately trying to keep up with his troops in order
to determine the direction of the battle.
The troops’ momentum carries them beyond their assigned positions
and extends their supply lines and for which they blame the Generals.
Forces in the marketplace demanded unattainable engineering,
software, and delivery commitments of which a surprising number were met.
But, when not met created an aura of failure,
Thirdly, the GE bookkeeping system reported greater and greater
success in a "rental" business as greater and greater PAPER
even sophisticated financial people confused these paper losses with
"real losses". Ultimately
these paper losses became, in a sense, real losses when their magnitude
began to impact the widows and orphans who are the principle owners of the
General Electric Company.
It was recognition of this basic incompatibility between
the owners of GE and a rapidly expanding rental business that led Reggie
Jones, when he became President, to wisely seek a buyer for the computer
THAT ASIDE, we are all now a quarter of a century older than we were at
the Second First Annual Sales Meeting.
I think you will all agree that in the interim we have learned that
the true measure of success,-the only one that counts- lies in making
THAT SCORE ALONE WE HAVE TO DECLARE THE GENERAL ELECTRIC
BUSINESS AN UNQUALIFIED AND INCOMPARABLE SUCCESS!!