The New Age

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The house was like none ever built before. Its roof was a honeycomb of tiny solar cells that used the sun's rays to heat the house, furnish all the electric power. Doors and windows opened in response to hand signals; they closed automatically when it rained. The TV set hung like a picture, flat against the wall--so did the heating and air-conditioning panels. The radio was only as big as a golf ball. The telephone was a movielike screen, which projected both the caller's image and voice. In the kitchen the range broiled thick steaks in barely two minutes. Dishes and clothes were cleaned without soap or water. -The house had no electrical outlets; invisible radio beams ran all appliances. At night, the walls and ceilings glowed softly with glass-encased "light sandwiches," which changed color at the twirl of a dial. And throughout the house, tiny, unblinking bulbs of a strange reddish hue sterilized the air and removed all bacteria.

Such a house, fully described in fiction and partly pictured in ads, is today a reality in the laboratories that are moving deeply into the coming age of electronics -the age that is ushering in a second Industrial Revolution. The first revolution taught man to build machines to accomplish tasks far beyond the power of his own muscles. Now, through electronics he is learning to endow his mechanical monsters with a sensory complex something like his own--eyes, ears, even a brain of sorts--so that they automatically perform his workaday chores and take on thousands of complicated new tasks.

To most Americans, what makes an electronics device work is almost as baffling as the secret of life itself. Yet so great are its accomplishments that electronics * is the fastest growing major U.S. industry. From a gross of only $2 billion in 1946 it has become the fifth biggest U.S. industry, with 4,200 companies, a work force of 1,500,000, and sales of $11.5 billion annually. In the next decade the electronics industry will double again to at least $22 billion, and beyond that the horizons are limitless.

From coast to coast the speed of the new giant's growth is staggering. In Pinellas Park, Florida last week, General Electric just opened a multimillion-dollar X-ray plant. At St. Petersburg, Clearwater and Orlando, Minneapolis-Honeywell Regulator, Sperry-Rand and Glenn L. Martin Co. are planning three more plants and laboratories to produce guided-missile control systems and do advanced research in electronics. New England's electronics expansion has changed the name of Route 128 near Boston to "electronics highway" Massachusetts alone has some 500 electronics plants. And in Los Angeles, where a new electronics plant is built every fortnight, there are already 470 companies, which poured out products at the rate of $1 billion last year. Of them all, probably the fastest growing is Ramo-Wooldridge Corp., which is a bare three years, seven months old. When it was started in 1953, Ramo-Wooldridge had nothing except the brains of its brilliant founders. President Dean E. Wooldridge and Executive Vice President Simon Ramo. The company now has the vital task of running the technical end of the U.S. Air Force ballistics missile program, and its sales this year will hit $50 million.

Genius at Work. The face of this new industry is as different from old-line industries as a candle from electricity. New companies need little equipment or capital, but they need plenty of brainpower. In the air-conditioned calm of office cubicles, grey-flanneled young Ph.D.s sit sipping coffee and chalking abstruse formulas on a blackboard jungle of schoolmasters' slates. Though some production lines, such as those for radio and TV sets, look much like those of any other industry, most electronic lines are as peaceful as libraries; ranks of nimble-fingered women, carefully smocked and snooded to keep down lint, sit quietly assembling a mysterious array of small "black boxes" to do such tasks'as fly planes, guide missiles, run machines and whole plants, automatically and easily solve scientific and mathematical problems that were impossible to do only a decade ago.

Radar & the Breakthrough. The age of electronics, born of radio, was force fed by military necessity during World War II, when widespread use of radar and sonar extended man's eyes and ears far into the skies and deep into the ocean. With peace came radar's civilian counterpart : a vast new TV industry that has already put 42 million sets in U.S. homes. But the great breakthrough in electronics came in 1948. Bell Telephone Laboratories discovered the transistor, which took over many of the functions of temperamental glass vacuum tubes. Along with other new semiconductors such as power diodes and capacitors, some as small as a grain of wheat, it opened up a vast new field of miniature components for better machines. Made out of solid materials, the new components were less susceptible to heat, dust and vibration, had but a fraction of the weight and bulk of old-fashioned tubes. Equally important, science also learned to replace the familiar maze of soldered wires with new printed and etched circuits as flat as playing cards.

The new components--basis of a subsidiary electronic science called miniaturization--opened the way to an endless harvest of smaller, cheaper, more efficient labor-saving devices. The first digital computer in 1944 filled an entire room, cost around $1,000,000. Today an equally efficient computer fits in a 5-ft.-by-5-ft. filing cabinet, and sells for less than $200,000. Some day, soon, big computers will be reduced to the size of a shoe box and sell for several hundred dollars.

Brains for Automation. For industrial automation, the new computers can be hooked into other electronic-control devices such as servo-mechanisms, which sense and correct their own errors, run entire plants without human help. Beyond the computers, the age of electronics has produced hundreds of knowing gadgets for every use under the sun. There are electronic elevator systems with miniature electronic brains that automatically keep track of passenger demand, electronic "Ph meters" that can test with equal ease the acidity of California's lemon juice or the radioactivity of the AEC's plutonium, electronic "stopwatches" for industrial and nuclear use that can time movement down to one-billionth of a second v. one-hundredth of a second for mechanical watches.

In dozens of plants closed-circuit TV systems are used as watchdogs over machinery, note and automatically correct or forestall errors in operation. In hospitals doctors use closed-circuit TV to teach other doctors the intricacies of heart surgery, while dentists have electronic drills that do not build up heat, are less painful than ordinary drills.

Brains for Survival. Nowhere is the age of electronics more advanced than in the U.S. armed forces, currently the industry's biggest and most demanding customer. The electronics defense budget for the current year is $3 billion, more than any other single item except aircraft. The U.S. military establishment is rapidly becoming one vast electronics system, whose probing antennas and twirling radar reflectors are so sensitive that an upended card table floating off the Florida Keys was recently reported by a rookie radarman as "four unidentified submarines." Virtually every modern weapon depends upon electronics in some way, and the Army keeps track of its 100 million-item spare-parts inventory by electronic computers, which do the work of days in seconds. "Files," said one general, "are just things to keep your personal letters in today."

Of them all, the biggest and most important electronics project is the development of the Air Force's intercontinental ballistics missiles, the 5,500-mile Atlas and Titan and the 1,500-mile intermediate missile Thor. The heart, nerves and brains of the giant warbirds are fantastically complex electronic-guidance systems. That the job of" supervising this project, on which the survival of the U.S. depends, was not given to one of the familiar electronic giants--American Telephone & Telegraph, Radio Corp. of America, International Business Machines, General Electric, Sylvania, Westinghouse--but to Los Angeles' Ramo-Wooldridge is a perfect example of the way in which brilliant, little-known scientists are shooting up from obscurity to fame and sizable fortunes in the new age of electronics. The only atypical thing about Ramo-Wooldridge and its founders, Dean Wooldridge and Si Ramo, is the scope of their job and the size of their success.

The Paper Factory. R-W makes none of the actual hardware for the ICBM program. What it does is act as technical boss for a project rated twice as complex --and twice as costly--as World War II's Manhattan Project. With Major General Ben Schriever in overall command (TIME, April 1), R-W acts as his technical staff overseeing the 220 major companies in the ICBM missile program. So secret is the job that R-W's green-and-pink headquarters near Los Angeles International Airport is among the most closely guarded plants in the nation. So complex is the task, so voluminous are the analyses, reports, computations and recommendations that pour from its electronic brains that R-W is known in the trade as "the paper factory."

To analyze a single missile test, R-W must check over an entire planeload of complex data that would ordinarily take years to digest. By using a $500,000 computer that it built specially for the job, R-W boils down the information in a matter of hours, can tell exactly how the thousands of parts worked--or failed to work. R-W's taskmaster role does not make it universally popular with the many contractors over whom it sits in technical judgment. The arguments are long, the complaints bitter. R-W is criticized for being highhanded, for spurring contractors too hard. Another complaint is that R-W's role as technical boss gives it free access to electronic secrets of everyone in the program--secrets that may later have valuable commercial use. R-W vehemently denies that it plans to use its position to steal a march on the competition, points out that other companies benefit greatly from its technical help. Despite the complaints. General Schriever sturdily backs RW, holds that it is one of the big reasons why the program is solidly on schedule so far. Says Westinghouse Vice President John A. Hutcheson: "Sure they're tough. They've got to be. They're the glue that sticks all the pieces together."

The Payoff. The payoff for supplying the glue is growth and profits. The first headquarters of R-W was a one-room office in Los Angeles (now a barbershop), with a card table, a chair, a telephone, a rented typewriter. "When we started," says Si Ramo, "we thought that maybe, if we were greatly successful, we might eventually have a staff of 150 people." By last week R-W's security guards alone numbered 162, its total staff 3,040. From the original room the plant has expanded to 450,000 sq. ft. of modern buildings. This year a 140,000-sq-ft. manufacturing plant will be completed in Denver; two years from now a new $15 million headquarters in Los Angeles will give it another 900,000 sq. ft. of space. Its physical assets already amount to $16 million, and on sales of $28.9 million last year, R-W netted a healthy $2,716,600. Three more years should see R-W at the $100 million mark. R-W common stock, much of it sold at $2 a share to scientists as an inducement to join the new company, is estimated now to be worth several hundred dollars a share.

Unlikely Pair. On the surface a more unlikely pair of big businessmen could hardly be found than Wooldridge and Ramo. A trim (5 ft. 9 3/4 in., 155 Ibs.) man who looks out at the world through gold-rimmed spectacles, President Dean Wooldridge, 43, looks and acts the part of a professor; he is calm, introspective, plays the organ for relaxation. Vice President Simon Ramo is a striking opposite. Though equally trim (5 ft. 10 1/2 in., 158 Ibs.), he is flamboyant and mercurial, takes mambo lessons for relaxation. Wooldridge marshals his thoughts carefully, is all business and lucidity, can make abstruse technical problems easily understandable to a layman; Ramo speaks impulsively, lets his thoughts bounce around like an errant light beam.

The dissimilarities mask a pair of brilliant, happily meshed minds that operate effortlessly with talk that often runs to truncated sentences, single words, esoteric expressions. Ramo spends most of his time on missile work while Wooldridge handles the rest, but both decide company policy. So well tuned are the two, says one R-W executive, "that they seem almost twins. Working together, they are not the equivalent of two men, but something a little closer to ten."

The Ramo-Wooldridge intellectual parallelism is matched by their careers. Both were born in the same month of the same year--Wooldridge on May 30, 1913, at Chickasha, Okla., the son of an independent oil broker, Ramo on May 7, 1913, the son of a Salt Lake City store owner. Both skipped grades in grammar school, peddied magazines for pocket money and excelled in their classes. Wooldridge graduated from high school at 14 and with honors from the University of Oklahoma; Ramo graduated from the University of Utah. Both went on to Caltech, where they won Ph.D.s at 23.

Fiddles v. Physics. Heading east with his doctorate in 1936, Dean Wooldridge went to work for Bell Telephone Laboratories in Manhattan, helping to explore new frontiers in electronics. When World War II began, he was put in charge of work on the first crude airborne fire-control systems, later headed an Army Ordnance study that led to the development of the first Nike guided missile. By 1946 Wooldridge was chief of Bell's physical electronics department. Yet life in an ivory tower began to chafe. Says Wooldridge: "I began to realize that I was not cut out to be a scholar. I was much more interested in work that would lead to a practical application."

Simon Ramo had already come to the same conclusion. After Caltech he tried for a job with General Electric. Ramo was finally hired, but not because of his brain. The G.E. man chanced to hear him play the violin, hired him (at $28 a week) in the interests of the "very fine symphony orchestra'' in Schenectady, N.Y. Alternating between fiddling and physics, Ramo eventually became a section chief in the company's electronics lab. But, like Wooldridge, he yearned to apply science to the construction of products.

The Falconers. Both found what they were looking for in California's fledgling electronics industry. On a trip west in 1946, Ramo hired on as research director of a ten-man electronics section at Hughes

Aircraft Co.; a few months later Wooldridge left Bell to join the fun. In short order, Ramo and Wooldridge developed an electronic fire-control system for the U.S. Air Force which was so good that it became standard equipment on every first-line interceptor. Another spectacular coup was the air-to-air Falcon guided missile to track and destroy enemy planes. When the Korean war sent orders surging through the industry, Hughes was transformed into an electronics giant with sales of $200 million annually.

At the height of their success, Ramo and Wooldridge suddenly walked out. Partly, it was because of a bitter fight (TIME, Oct. 5, 1953) over how much authority they should have in company policy. Partly, too, they wanted to move on to bigger and better projects by themselves. Says Wooldridge: "Our product was scientific and engineering competence. What we hoped to sell was the ability to tackle some of the more difficult technical problems--not just establish that they were scientifically possible, but that they could be built within the state of the art."

In the Black. They rented their first office and sat down to draw up a list of possible financial backers. The first name was Cleveland's Thompson Products, Inc., which already had its foot in the electronics door with a parts subcontract for Hughes's Falcon missile. As soon as Thompson heard from Ramo and Wooldridge. it told them to look no farther--just hurry to Cleveland to work out the financing details. Though Howard Hughes offered to help finance their new venture, it was too late.

In exchange for 3,500 shares of preferred stock (87 1/2%) and 24,500 shares (49%) of Ramo-Wooldridge's common stock, the remainder of which the two scientists kept for themselves and future staffers, Thompson put an initial $400,000 into the baby corporation. Within a week R-W got its first Air Force study contract for a secret project, quickly picked up more such contracts. Three months later R-W was in the black.

Made to Order. Their technical reputations grew so fast that when the Government asked the late great Mathematician John Von Neumann to set up a committee to study the future development of strategic guided missiles, Ramo and Wooldridge were picked as members. The committee decided that the ICBM could be built, turned over its report to the Government which felt that it was too big a job for one company or for the Air Force to handle alone. What was needed was a unique setup--a new civilian technical group that could work under the Air Force and supervise the companies turning out the components for the missile. Ramo's and Wooldridge's new company seemed made to order for the big job. Today missile work accounts for about 50% ($13.4 million in 1956) of R-W's total business. Yet it is the least of Wooldridge's and Ramo's hopes for their company. Says Ramo: "You can't make money and you can't stay in business without production." To get the necessary production, R-W is diversifying with six divisions (and two laboratories), whose job is to conceive and produce everything from miniaturized components to pieces of equipment and entire electronics systems. A subsidiary, Pacific Semiconductors, 50% owned by Thompson Products, is in mass production of transistors and diodes for the component market. R-W's equipment divisions are producing airborne digital computers and ground instruments for testing missiles; its systems divisions are busy developing a line of data-handling systems for the military, the guidance control system for a new and as yet unannounced missile, a radically new communications system, and a series of electronic process controls to run U.S. factories in the coming age of automation.

So much of R-W's current work is military that the company's product line, like an iceberg, is 90% invisible. Eventually R-W hopes that almost everything will have a peacetime application. On its production line last week was what R-W claims is the most versatile airborne computer for its size ever built. Weighing only 175 Ibs., the transistorized brain can multiply as rapidly (4,000 calculations per second) and remember as many instructions (2,000) as a room-sized computer of 19 tons. Late this summer R-W will put on the market a civilian cousin, which it hopes will completely automate such industries as oil refining, chemicals, metals, drugs, paper, soap and beer. Price of the computer: $50,000.

Ideas into Gold. R-W's type of success can be found again and again in the industry. Among the new successes: P:Varian Associates was founded in 1948 in Palo Alto, Calif, by Physicist Russell and Engineer Sigurd Varian as a company that had "nothing to offer but advanced technology and ideas." Today, as the biggest producer of the klystron tube, which guides Air Force missiles and irradiates Army food, Varian has grown from seven employees to 1,230, did an annual business of $11 million in 1956. Estimated 1957 sales: up another 27% to $14 million.

P: Litton Industries was started in 1953 by Charles B. ("Tex") Thornton, a onetime Hughes Aircraft Co. executive who left with Ramo and Wooldridge. Backed by Lehman Bros, and other investment bankers, he bought going companies for their products and talent. Today, with 16 small firms in its fold, Litton makes radar tubes, printed circuits, high-quality transformers (780 models), typewriter-sized computers selling for $12,000, dozens of other electronic gizmos. Sales in 1954: $3,000,000. In 1956: $15 million, with $25 million estimated for 1957. Litton's stock, which sold for $10.50 two years ago, now trades on the American Stock Exchange at $38 a share.

P:Hycon-Eastern was started two years ago in Boston by M.I.T. Professors J. R. Zacharias and J. B. Wiesner as a consultant firm in long-range microwave communications. Now Hycon-Eastern is a contractor as well, has a $14 million contract to build a complete radio, telephone and TV communications network for Libya, is surveying a similar job in Thailand, dickering for contracts in Iran and the French Cameroons. The company has a crystal lattice filter for radios that will handle much higher frequencies at one-thousandth the cost of previous crystal lattice filters, has also developed an electronic time standard that varies but one second in 30 years. With first-year sales of $3,000,000, it expects to top $10 million by 1959.

P: Magnetics Inc. was started in a Butler, (Pa.) garage in 1949 by Engineer Arthur O. Black, who had an idea for magnetic nickel-iron amplifiers to take over some vacuum-tube functions. The first year Black had seven customers, sales of $15,000. This year, with more than 800 customers clamoring for "magamps" for radar, sonar and computer systems, Magnetics Inc. employs 320 people, will see its sales soar to $5,000,000. Says Black: "It never crossed my mind that we'd fail, but I never expected this."

P: Consolidated Electrodynamics started out in 1937 to make instruments for oil exploration, never even reached $ 1,000,000 annually until it got into West Coast electronics. Now, under President Hugh F. Colvin, it makes electronic spectrometers to analyze gases in petrochemical plants, recording oscillographs to measure strain in auto-and steelmaking processes, a complete line of "Datatape'' magnetic recording systems to preserve missile and aircraft flight-test data. Result: sales jumped from $924,000 in 1946 to $25 million in 1956, will hit $35 million this year. The company's stock, which sold for $4 a share in 1945, now sells for $43 a share.

Dangers Ahead. Despite all the profit and promise, the U.S. electronics industry of 1957 is studded with dangers. Booming military markets have made it possible for anyone with brains and ideas to start a business. Only the most starry-eyed expect it to last. The Pentagon is a notoriously fickle customer; a canceled program, a shift in weapons emphasis could wreck many small companies whose main business is making a single component or a single piece of equipment.

Like RW, every company is trying to copper its bets by developing civilian products for peacetime markets. But many of them, with no sales or marketing organizations, will find the going too hard. The biggest winners will probably be the big companies with years of production and selling experience.

RCA, which already sells $725 million worth of electronic products annually and leads in color TV, is planning to market a noiseless electronic air conditioner, has a pilot model now in operation. A.T.&T., whose entire telephone network is one gigantic computer, is working hard on a visual phone system it calls "Picture-phone," is experimenting with pushbutton dialing and voice dialing. Raytheon is already producing electronic range units for near-instant cooking, hopes to get the price to consumers down to $500 (from $1,200) soon. Westinghouse, which already has computer-controlled electronic elevators in operation, will soon market an electronic air purifier that removes 90% of all bacteria and pollen from room air. And Sylvania, one of the fastest-moving companies of all, is perfecting the electronic "light sandwiches" for the home of tomorrow. Two new advances: Bendix last week unveiled an automated machine tool with an electronic brain that "reads" coded information on punched tape, automatically guides a 50-ton milling machine turning out precision aircraft and missile parts; National Cash Register this week marketed a "Post-Tronic" banking machine that electronically posts depositors' checks, virtually eliminates the possibility of a clerical error. In another few months one Midwest state will even field-test an electronic control system to steer and otherwise operate cars in a stretch of superhighway.

Faced with such competition, many small companies may find commercial electronics even more hazardous than working for the U.S. Government. Radio and TV producers are already learning the lesson. In 1950 there were 140 manufacturers of TV sets, 108 radiomakers; by last year the totals were down to 51 and 59 respectively. To compete and survive, small companies must tailor their products to a civilian-market demand, learn to produce at low cost as well as in high quality--and learn to market what they make.

Merger, Merger, Merger. Discoveries in electronics are coming so fast that obsolescence is already a major problem for big companies as well as small. To stay out ahead, more and more money must be spent on research, not only applied research aimed at specific products, but basic research to uncover electronic secrets that will lead to quantum jumps in the art. To date, most small companies plow between 6% and 10% of their profits back into research, yet their efforts are puny compared to General Electric's $246 million research budget for 1956, Westinghouse's $150 million, Bell Telephone Laboratories' $120 million. One way for small producers to solve their problems is by merging with bigger companies. Some small electronics makers have as many as 50 merger offers in their files. General Tire & Rubber, American Hard Rubber Co., Baldwin-Lima-Hamilton, even moviemaker Paramount--all have bought into electronics by taking over smaller companies.

The giants frequently pay far more than the electronics firm's stock (often selling at 40 to 50 times earnings) is worth by Wall Street's usual valuation. But to start out from scratch might cost twice as much, take time that no one in the fast-changing industry can afford to lose.

The Key. No one doubts that the electronics industry will solve its problems and push on toward tomorrow. When will tomorrow arrive? As society becomes increasingly complex, with more people to feed, clothe, house and entertain, companies like R-W are betting that it will be soon. "Everything is getting too big too fast," says Ramo. "Industry is getting too complicated, and anytime you have a situation in which the pace is beyond human capacity to keep up, you're heading for chaos." The solution in the eyes of men like Simon Ramo and Dean Wooldridge is to construct ever newer and more wondrous electronic gadgets to bring order out of chaos. To all industrial needs--and most human physical needs--the electronics magicians are sure they have the key.

* Technically, that branch of physics dealing with the motion of electrons--small, negatively charged particles that help make up the atom and are one of the basic elements of electricity In strictest terms, modern electronics is the application of radio techniques to noncommunication jobs, i.e., making vacuum tubes and their substitutes do other things besides broadcasting. But today, the popular definition of electronics has come to encompass all electricity -from light bulbs to giant computers.

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