Electronics from Germany

Twelve years ago Max Grundig was just another drummed-out German quartermaster private, with a headful of ideas and a handful of tools. But he had neither money nor shop with which to put them to work. Today Grundig is Germany's No. 1 radio-set maker, claims to be Europe's biggest. At 48 he is owner and ram-rodding boss of a 13,000-worker, six-plant electronics business that last year grossed some $50 million on sales of 900,000 radios, TV sets, phonographs and recorders. Almost half were exported, including big shipments to the U.S., where Grundig sets are marketed by Majestic International Corp. and DeJur-Amsco Corp.

Last week Grundig started to move his middle-cost and high-quality production talents beyond the electronics field. He took over more than 50% interest in Germany's famed Triumph-Werke, which does a $17 million yearly business manufacturing typewriters, office equipment, bicycles. As with all his other investments, every pfennig he paid was Grundig's own.

Do It Yourself. Grundig, who quit school at 14 to be an electrician's apprentice, was mustered out of the German army in 1944 to operate a small plant making radio transformers and coils. At war's end he went back to his home town of Fuerth and set up shop in a few flea-ridden rented rooms. He hoped to make radios, which were scarce and rationed. But the Allies forbade production of radio equipment. However, they did permit the manufacture of toys, so Grundig turned out a "toy": a knocked-down "Do-It-Yourself" radio kit. He took advance orders and deposits from retailers to finance the deal, sold 75,000 as fast as he could make them, even though buyers had to scrounge the tubes on the black market. To expand, he leased a city-owned grazing meadow and put up four small frame sheds. Says Grundig: "It was a great chance to start from scratch. We inherited no inefficient plant layouts, no tradition that had to be respected."

Do It for Less. When the ban on radiomaking was lifted, Grundig expanded fast by marrying German craftsmanship to U.S. production-line methods. He was greatly helped by Germany's low wage scales, pruned the bill further by employing women in 60% of the jobs.

Every year he had a new sales hit. In 1950 he mass-produced Germany's first ultra-high-frequency radios, in 1951 its first pushbutton tuning. In 1953 he startled West Germany by selling a TV set for less than 1,000 marks ($238). In 1954 he brought out the first tape recorders priced under 500 marks, sold 100,000 of them in two years. Then Grundig introduced his small, low-priced "Stenorette" tape dictating machine ($169.50 in the U.S.), sold 100,000 in 18 months.

For his success Grundig offers a simple explanation: "I guess I just have the right nose," i.e., he knows what kind of goods will open pocketbooks from Fuerth to Fort Worth.

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