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{{Infobox Defunct Company| company_name = Western Electric Co., Inc.| company_logo = | fate = Absorption| successor = AT&T Technologies| defunct = [1984, [USA, [Telephone Exchange, Wire, and all other telecommunications related products supplied to Bell Operating Company| key_people =| products = Telephones| subsid =-->

Western Electric (sometimes abbreviated WE and WECo) was an [United States electrical engineering company, the manufacturing arm of AT&T from 1881 to 1995. It was the scene of a number of technological innovations and also some seminal developments in industrial management. It also served as the purchasing agent for the member companies of the Bell System.

History In 1856, George Shawk purchased an electrical engineering business in Cleveland, Ohio. In 1869, he became partners with Enos M. Barton and, later the same year, sold his share to inventor Elisha Gray. In 1872 Barton and Gray moved the business to Clinton Street, Chicago, Illinois and incorporated it as the Western Electric Manufacturing Company. They manufactured a variety of electrical products including typewriters, alarms and lighting and had a close relationship with the telegraph company Western Union to whom they supplied relays and other equipment.

In 1875, Gray sold his interests to Western Union, including the caveat that he had filed against Alexander Graham Bell's patent application for the telephone. The ensuing legal battle over patent rights, between Western Union and the Bell Telephone Company, ended in 1879 with Western Union withdrawing from the telephone market and Bell acquiring Western Electric in 1881.

Western Electric Company was the first company to join in a Japanese joint venture with foreign capital. It invested in NEC Corporation in 1899. Western Electric held 54% of NEC at the time. Their representative in Japan was Walter Tenney Carleton.

A few years later WECO secretly purchased controlling interest in Kellogg Switchboard & Supply company, a principal competitor, but was forced by a lawsuit to sell.

Despite the existence of 1,300 independent telephone company, the Bell System, popularly known as "Ma Bell," had a near-monopoly on long-distance service in the United States from 1881 until nearly the time of its break-up in 1984, and monopolies in local service for most American regions during that same period. AT&T secured all U.S. urban areas in the early 20th century. The independent companies were left to serve less-profitable outlying areas and vast stretches of rural America.

The bulk of AT&T revenue came from the Bell System — Regional Bell operating company (RBOCs), such as New York Telephone, Pacific Telephone and Southwestern Bell Other divisions of AT&T and parts of the Bell System included Bell Labs (Bell Labs), AT&T Long Lines and Western Electric, the manufacturing arm.

Development of a monopoly All telephones in areas where AT&T subsidiaries provided local service, all components of the public switched telephone network (PSTN), and all devices connected to the network were made by Western Electric and no other devices were allowed to be connected to AT&T's network. To enforce their monopoly, AT&T and Bell System companies employed small armies of inspectors to check household line voltage levels to determine if non-leased phones were in use by consumers.

AT&T and the Bell System used its leasing arrangements for telephones and telephone equipment made by its subsidiary, Western Electric to increase its control over telephone manufacturing in the United States and Canada. Western Electric-made phones were owned not by individual customers, but by local Bell System telephone companies — all of which were in turn owned by AT&T, which also owned Western Electric itself. Instead, each phone was leased from AT&T on a monthly basis by customers, who generally paid for their phone and its connection many times over in cumulative lease fees. This monopoly made millions of extra dollars for AT&T and Western Electric, which had the secondary effect of greatly limiting phone choices and styles. Many phones made by Western Electric carried the following disclaimer permanently molded into their housings: "BELL SYSTEM PROPERTY—NOT FOR SALE." Telephones also labeled with a sticker marking the Bell Operating Company that owned the telephone. To increase revenues, the Bell System sometimes remodelled older-design returned phones with new housings, then leased them for use in new installations. The longevity of Western Electric phone models and the limited number of new designs was a direct result of AT&T and Bell System control of new phone sales in a monopolistic system.

AT&T and the Bell System also strictly enforced policies against buying and using phones by other manufacturers. A customer who insisted on using a phone not supplied by the Bell System had to first transfer the phone to the local Bell monopoly, who leased the purchased phone back to the customer for a monthly charge plus a 're-wiring' fee. In the 1980s, after some consumers began buying phones from other manufacturers anyway, AT&T changed its policy for its Design Line telephone series by selling customers the phone's housing, retaining ownership of the mechanical components — which still required paying AT&T a monthly leasing fee.

Until 1983, Western Electric telephones and/or their inner mechanical components continued to be leased by subscribers and never sold, and so had to be repaired at no charge if they failed. This led Western Electric to pursue extreme reliability and durability in design in hopes of minimizing service calls. In particular, the work of Walter A. Shewhart, who developed new techniques for statistical quality control in the 1920s, helped lead to the legendary quality of manufacture of Western Electric telephones. In 1983, Western Electric telephones began being sold to the public through the newly created American Bell subsidiary of AT&T, under the American Bell brand name. Prior to Judge Greene prohibiting AT&T from using the Bell name after January 1 1984 the plan was to market products and services under the American Bell name, accompanied by the now familiar AT&T globe logo.

AT&T's only serious competitor in providing phone service was General Telephone and Electronics (GTE), which operated its own manufacturing arm, Automatic Electric.

In 1905 AT&T began construction of the Hawthorne Works on the outskirts of Chicago and which, by 1914 had absorbed all manufacturing work from Clinton Street and Western Electric's other plant in New York.

In addition to being a supplier for AT&T, Western Electric also played a major role in the development and production of professional sound recording and reproducing equipment, notably the Vitaphone system which brought sound to the movies, the Westrex optical sound that succeeded it, and the Westrex cutter and system for recording stereophonic sound in a single-groove gramophone record that was compatible with monophonic equipment.

Technological innovations In 1928, Western Electric issued the first american telephone with a single handset, having both the transmitter and receiver placed thereon (previous telephones had been of the "candlestick telephone" type). This telephone was known as the Model 102 telephone phone, and had a round base; it was succeeded in 1930 by the Model 202 telephone phone, which was identical except for the shape of the base, which was oval.

The next significant upgrade came in 1937 with the introduction of the Model 302 telephone phone. Designed by the noted industrial designer Henry Dreyfuss, this telephone included the ringer within its rectangular housing; previous models (including the candlestick) had required a separate "bell box." The 302 was followed by the Model 500 telephone phone; initially released in 1949 and continually updated over time, reflecting new materials and manufacturing processes, such as quieter and smoother dial gearing and a printed circuit board in the "network" (the phone's circuit module). It was discontinued in 1986, in favor of a Touch-Tone version that also electronically emulated a rotary dial, the Western Electric Model 500 Phone, which would become the most extensively-produced telephone model in the industry's history.

Other innovations included the Princess telephone telephones of the 1950s and Trimline telephone telephones of the 1960s, and the development of touch-tone dialing as a replacement for rotary dialing.

In 1929, Western Electric was also a big player in early cinema sound systems. It created the Western Electric Universal Base, a device by which early silent cinema projectors could be adapted to screen sound films. It also designed a wide-audio-range horn speaker for cinemas. This was estimated to be nearly 50% efficient, thus allowing a cinema to be filled with sound from a 3-watt amplifier. This was an important breakthrough in 1929 because high-powered audio valves were not generally available back then.

Management innovations

Western Electric were pioneers of the scientific management of Frederick Winslow Taylor.
Walter A. Shewhart developed the control chart at the Hawthorne Works in 1924.
Western Electric was the location of the Hawthorne experiments in industrial Productivity (economics) from 1924 to 1936.

The end of Western Electric On January 1, 1984, Western Electric Co. was assumed under the corporate charter of the new AT&T Technologies, Inc. Western Electric was then split up into several divisions, each focusing on a particular type of customer (e.g. AT&T Technology Systems, AT&T Network Systems). Telephones made by Western Electric prior to the breakup continued to be manufactured and continued to be marked "Western Electric", with the Bell logo absent, or "hidden" by metal filler inside of all telephone housings and most components, including new electronic integrated circuits with the famous "WE" initials.

Cost-cutting measures resulted in the consumer telephones, including the Trimline telephone being redesigned and "modernized" in 1985, as well as more plastic being used in place of metal on the 500 & 2500 series phones, as well as the Princess. In 1986, the Indianapolis Works telephone plant closed, and US production of AT&T single line home phones ended. Business telephones and systems continued production in the Shreveport Works plant until 2001. Home telephones were redesigned and production was moved overseas to Hong Kong, Singapore, and Bangkok. Western Electric no longer marked housings of telephones with "WE", but continued to mark the modular plugs of telephone cords with "WE".

Western Electric came to a total end in 1995 when American Telephone & Telegraph changed the name of AT&T Technologies to Lucent Technologies, in preparation for its spinoff. All modular telephone plugs were now marked with "HHE" enclosed in an oval. Lucent would become independent in 1996, and sold/spun off more assets into Advanced American Telephones, Agere Systems, Avaya, and Consumer Phone Services. Lucent itself merged with Alcatel, forming Alcatel-Lucent. Western Electric's Structured Cabling unit, once known as AT&T Network Systems or SYSTIMAX, was spun off from Avaya and is now part of CommScope.

The assets once part of one Western Electric Co. now are in the hands of more than five companies.

Legacy Since the demise of Western Electric, telephones and telephone equipment have been made by numerous manufacturers. As a result of increased competition, modern telephones are now made in Asia, generally using less expensive components.

Some people never purchased telephones after the AT&T breakup and continue to lease their existing Western Electric models from AT&T Consumer Lease Services. Such people have paid for their telephones ten or more times over, but the phones are perceived by some users to be superior to telephones commonly made today in aspects of durability and sound quality. Today many of these Western Electric telephones have become collector's items, renowned for their reliability.

References

Adams, Stephen B., and Orville R. Butler. Manufacturing the Future: A History of Western Electric. Cambridge: Cambridge University Press, 1999. ISBN 0-521-65118-2.
Fagen, M. D., ed. A History of Engineering and Science in the Bell System: Volume 1 The Early Years (1875-1925). New York: The Telephone Laboratories, 1975. ISBN ?.
Fagen, M. D., ed. A History of Engineering and Science in the Bell System: Volume 2 National Service in War and Peace (1925-1975). New York: The Telephone Laboratories, 1978. ISBN 0-932764-00-2.