CORPORATIONS: The Problems of Westinghouse

(2 of 3)

Appliance dealers complain that Westinghouse is not keeping pace with the competition. In a high-income highly competitive market, appliances have become increasingly faddist and highly styled, and the company that hesitates to change is lost. Many dealers feel that Westinghouse has moved too slowly. For example, most of Westinghouse's competitors brought out a "hot leader," a $199 refrigerator. By the time Westinghouse finally got around to a $199 refrigerator of its own, dealers said that it was too late. The field was flooded.

Dealers also complain that Westinghouse TV sets are selling poorly because their styling is "a little backward, sort of corny." There is grumbling because so much of the Westinghouse advertising budget is spent on national advertising and on TV, so little for the local tie-in campaigns that nail down sales. Some of the ill feeling even brushes off on topnotch TV Saleswoman Betty Furness. Snapped a Seattle dealer: "She condescends to women, talks down to them. Maybe her kind of chitter-chatter goes good on Park Avenue but not in Seattle, Washington."

Rival Unions. Westinghouse has also been losing out on sales of heavy industrial equipment, occasionally failing to meet its delivery schedules. Its power-plant department, said a public-utility man, needs to revise its basic designs ("they lack venturesomeness").

Then there are labor troubles. In the first nine months of this year while industry as a whole enjoyed unusual labor peace, Westinghouse had 94 work stoppages costing 5,000,000 production man hours. Sometimes they were not Westinghouse's fault: Westinghouse was the battleground for two rival unions competing for its employees. But Westinghouse pulled some boners. Last August, on the eve of wage negotiations, Westinghouse got into a dispute over a time study at the huge East Pittsburgh plant and the men walked out. Twenty-eight other plants went out in sympathy but went back when it was agreed to negotiate the dispute along with the other issues However, this week negotiations bogged down and 46,000 CIO-IUE workers walked out.

Too Much Cash? Wall Street's financial experts criticize the tendency of Westinghouse President Gwilym A. Price a onetime banker, to hang onto the company cash instead of putting it to work to earn more cash. Westinghouse has a larger cash reserve ($344 million) than G.E ($307 million), which does twice as much business. While loaded with cash, Westinghouse has been borrowing for expansion, now has a debt of $325 million, G.E. has none.

For all of this, there are many bright spots. Westinghouse is moving fast in the growing field of industrial atomics. It turned out the atomic-propulsion unit for the submarine Nautilus and is building reactors for an aircraft carrier and for fleet-type submarines. Westinghouse is also constructing the reactor and parts for Shippingport, the first U.S. central atomic-power station.