A $90,000 Gesture

When should a corporate chief think about foregoing his $90,000-a-year salary? One occasion might be when he has to 1) face a meeting of shareholders whose onetime glamour stock has skipped six dividends in a row, 2) announce that sales have fallen from $81 million in the previous year to $33 million, and 3) report a $5,400,000 loss.

All of those sorry circumstances have befallen Asher J. Cole, 58, co-founder (in 1948) and chief executive of National Video Corp. The company is the Chicago TV tubemaker whose stock had been one of the darlings of the American Stock Exchange, rising from a low of $10.75 in 1964 to a peak of $120 a share in 1966. Now it is down to about $13. After reeling off a series of sad statistics to his stockholders, Cole announced that he would yield his presidency to a younger executive, move into the chairmanship--and give up his yearly salary "as a gesture and an attempt to do everything within my power to turn this company around."

Fade Out. The largest independent U.S.. tube manufacturer, National Video suffered the classic one-product-company disaster. Seizing on glowing industry predictions of a surge in color TV sales, Cole decided to phase out production of black-and-white tubes, on which he was losing money, and switch to color. In 1965, he floated a $12,095,000 stock issue to bankroll expansion. Orders for color tubes from Motorola, Admiral and other set makers poured in, rocketing 1966 sales to $89 million. Profits reached $7,300,000 compared with the previous year's $427,558.

Then-- fadeout. Last year sales leveled off in defiance of predictions that a majority of black-and-white owners would switch to more expensive color sets. This year color TV sales are running 30% below expectations. Beyond that, many of Cole's old customers are now supplying more of their own color tube needs.

Selling Off. Cole now plans to cut costs drastically to reduce future losses like last quarter's $1,200,000 deficit. He hopes to retain as many of his 1,700 highly skilled production workers as possible, while selling off a small Long Island subsidiary and sizable chunks of Chicago real estate once earmarked for expansion space. Preferring to press on in living color even if it is red, Cole still does not plan to diversify, or even return to black-and-white, which has recently been enjoying a modest boom.

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