HEATHKIT's Demise

[Jack Crenshaw]

----- Original Message -----
From: Larry Knapp <kc8jx at YAHOO.COM>
To: <HEATH at LISTSERV.TEMPE.GOV>
Sent: Tuesday, October 30, 2001 3:09 PM
Subject: HEATHKIT's Demise


> I believe, as a x-Heath employee, in all the "politically incorrectness"
of
> today, would disagree with Chuck's remarks and would agree with Dave
Kechkaylo.
>
> If the "economic, business and social" changes Chuck refers to is what
Dave
> wrote as "Steelworker's union trying to muscle their way in control of
Heath's
> factory in 1979", then I would agree that his ONE fact led Schlumberger to
> divest itself of Heath.  To my knowledge, Schlumberger was in no way
looking to
> divest itself of the cash (thus the company) Heath was generating at the
time.

Um ... that isn't true.  I was with Heath in 1977-78.  That's about the time
Schlumberger was deciding to divest
themselves of Heath, and the reason was very simple:  Heath was losing
money.  Schlumberger has historically
had a zero tolerance for subsidiaries that lose money, and Heath was no
exception.

We've talked about the reasons for Heath's demise on this list before.
IMOPO, it was a foregone conclusion after
the advent of machine-stuffed PC boards.  How could a company like Heathkit
compete in a market where it was
easier and cheaper to machine-stuff and wave-solder the boards, than to let
the customer do it?

Heathkits made sense in the days of vacuum tubes and point-to-point wiring.
In those days, most of the cost of a
radio, TV, or stereo was labor.  But once the assembly lines were automated,
that was literally the end of the line
for Heath.  In the old days, Heath gave good performance at a low price,
because they saved labor costs. Even as
early as 1970, this trade was beginning to switch the other way.  Who wants
to pay a premium price to get a product
that can't perform with what you can buy at Montgomery Ward?

Personally, I think Heath could have survived longer and done better by
seeking a niche market such as the high-end
audiophiles who still prefer hand-assembled units, and even to put together
their own kit. But if someone's going to pay
a premium for a kit, rather than get a discount, the product had danged well
better perform, and Heath's later products
generally didn't.

Zenith didn't want anything but the computer line, which turned out to be OK
for awhile, but eventually that ran out of gas, also.

Jack

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