Western Electric

Western Electric was the manufacturing and supply arm of the Bell System, the company that built the telephones, switches, cables and, from the early 1950s, the transistors that AT&T's operating companies and its research laboratory relied on. It was founded in 1869 in Cleveland by Enos Barton and Elisha Gray and soon moved to Chicago, and AT&T took control of it in 1881, tying together service, equipment and research under a single corporate umbrella. For about a century, anything bought for the Bell telephone network was in practice bought from Western Electric.

Western Electric's relationship to Bell Labs was that of a factory and a laboratory under common ownership. Bell Labs was formed in 1925 out of Western Electric's engineering department, and it was jointly owned by AT&T and Western Electric. The laboratory invented, the factory manufactured, and the arrangement shortened the path from a bench demonstration to a product made in the thousands. When Bell Labs demonstrated the point-contact transistor in December 1947 and announced it in June 1948, it was Western Electric that had to turn a fragile laboratory curiosity into something that could be manufactured, tested and guaranteed to work in a telephone exchange. That meant developing production crystal-growing, cutting, etching and packaging methods, and teaching workers to carry them out.

The Hawthorne Works in Cicero, Illinois, was the company's largest plant and gave its name to a famous series of workplace experiments. Opened in the first years of the twentieth century, it grew into an enormous campus producing telephone equipment for the whole system. In the 1920s and early 1930s, researchers studying how working conditions affected output there, including the Harvard researcher Elton Mayo and his colleagues, produced what became known as the Hawthorne studies. They examined illumination, rest breaks and supervision, and are often credited with showing that workers respond to attention and social relationships. The term Hawthorne effect, coined later, describes people changing their behaviour because they know they are being observed, although historians and statisticians have argued that the original data supported that conclusion less cleanly than textbooks suggest. The experiments belong to the history of management science rather than electronics, but they show how large a laboratory of its own the Western Electric factory was.

Transistor production moved to a dedicated plant in Allentown, Pennsylvania, from 1951. Allentown became the Bell System's centre for manufacturing semiconductor devices, starting with point-contact types and moving through grown-junction germanium devices and, later, silicon and integrated circuits. Western Electric's early devices were produced both for the Bell System and, as military contracts grew, for outside customers, and the plant's engineers were among those who passed on process learning to licensees after the 1952 symposium. The factory also illustrates the difference between a laboratory result and a product: the early point-contact units were notoriously variable, and yield, uniformity and reliability had to be won by systematic work on crystal quality and handling rather than by a single clever insight.

The 1956 consent decree explains why Western Electric stayed whole while its patents were opened up. The antitrust suit filed in 1949 had sought to separate Western Electric from AT&T, but the settlement of January 1956 left the manufacturing arm in place while confining the Bell System to regulated communications and requiring broad patent licensing. The company therefore continued as the monopoly supplier of equipment to the Bell operating companies, and its semiconductor work was constrained to what the decree allowed. The arrangement lasted until the larger breakup of the Bell System, which took effect at the start of 1984. In that divestiture the local operating companies were separated from AT&T, and the manufacturing arm was reorganised, with the Western Electric name falling out of use in the years that followed. In 1996 AT&T spun off its equipment and laboratory businesses as Lucent Technologies, and the microelectronics operation, including the Allentown legacy, later became Agere Systems.

The common misconceptions about Western Electric are that it merely sold what Bell Labs invented and that it was a minor part of the transistor story. In fact it was among the very first commercial manufacturers of transistors, and many practical manufacturing advances, such as better crystal-growing and device-packaging methods, were developed on the factory side. The opposite error is to imagine that it dominated the market: its transistor output was soon eclipsed in volume by the licensees it had helped create, including Texas Instruments, Philco and later Fairchild. What it did leave behind was a model of the large, vertically integrated technology company that combined research, manufacturing and service.

Read Western Electric as the factory half of the Bell System's invention machine: the unglamorous organisation that took laboratory results, from telephone switching parts to the first transistors, and made them reliably, in quantity, and under one corporate roof until the breakup of 1984 ended that arrangement.