Friday, Aug. 17, 1962
Growing with the Mushrooms
The U.S. offer at Geneva to soften its demand for on-site nuclear inspection stations (see THE NATION), is based in part on the careful reckonings of a little-known Boston electronics company. Since its incorporation 15 years ago, Edgerton, Germeshausen & Grier, Inc., has timed or measured every U.S. nuclear blast.
On islands from Eniwetok to Christmas, and in the Atomic Energy Commission's Nevada-based Vela tests to detect far-off nuclear blasts, E.G. & G. has honed its ability to estimate worldwide explosions (by clocking the momentary fluorescence given off). Along the way the company has mushroomed from a fledgling enterprise employing a dozen people to a flourishing corporation with 2,000 employees (70% of them carrying top-level Government Q clearance), laboratories in Boston, Las Vegas and Santa Barbara, and a panoply of scientific equipment and knowledge that this year will gross $40 million.
Scientific Nonchalance. E.G. & G.'s forte is mastery of "pulse techniques," by which it records the sight and shocks of a nuclear explosion in time-paring millimicro-seconds. In the recent Christmas and Johnston Island tests, 200 E.G. & G. technicians armed with $3,500,000 worth of equipment took 50,000 photographs of each of 26 explosions, shot some film at speeds of a billionth of a second. They, measured such phenomena as fireball temperatures, alpha, beta and gamma rays, eye-burn potential, and the blasts' effect on radio communication. Currently under a $25 million AEC contract, E.G. & G. is reckoning results, comparing them with earlier tests dating back to 1948, programming findings for AEC computers. Because it can handle such assignments, E.G. & G. is the AEC's highest paid instrumentation subcontractor.
Edgerton, Germeshausen and Grier first got together in 1934, when Chairman Harold E. Edgerton, now 59, was an M.I.T. professor of electrical engineering and President Kenneth J. Germeshausen, 55, and Executive Vice President Herbert E. Grier, 50, were his research assistants. The three developed a powerful strobe light for high-speed photography, but before they could market it, they were scooped up into World War II research on the atom bomb and sensitive aerial photography. At war's end, they incorporated at the AEC's request. As a small company, the new E.G. & G. let the big AEC worry about finances. Periodically the three gathered up bills and forwarded them to the Government. Recalls Germeshausen: "After all, they had the auditors and lawyers."
Until 1952 the AEC was E.G. & G.'s only customer. Then, aware that bomb testing might have a limited future, the three partners decided to spread out. They hired their own auditors and lawyers, as well as buyers and salesmen, marketed commercial equipment based on 64 patents held among the three partners. Ebullient "Doc" Edgerton, who still teaches at M.I.T., developed an underwater light and camera that functions at depths as great as seven miles, tested it on seven cruises with famed French Marine Explorer Jacques Cousteau (TIME cover, March 28, 1960). And E.G. & G. even found a foreign buyer for its nuclear-testing equipment. Contacted by the French government, it sold measuring devices that speeded De Gaulle's atomic program by several years.
As the company has grown, its business approach has remained scientifically nonchalant. Chairman Edgerton continues to hold business conferences at lunch in the M.I.T. cafeteria, and avoids board meetings whenever he can. Weekends, he uses his own underwater sonic pinger for a scientist's hobby: probing Boston's Charles River for an 800-year-old Viking ship that he believes may lie on the bottom.
"A Long, Long Time." In 1960 E.G. & G. went public, sold 100,000 shares of stock that were grabbed up at $14.50, and now, after a two-for-one split, stand at $16 bid. E.G. & G. refuses to pay dividends, plows all profits ($524,000 during this year's first half) into research and development.
Despite its drive to diversify, E.G. & G. still makes 85% of its sales to the Government. Along with AEC nuclear tests, the company is timing and measuring NASA's nuclear space engine, Project Rover. This week, NASA will also launch a geodetic survey satellite whose blinking light-made by E.G. & G.-will be visible from outer space for ground observers to track. The capriciousness of Government contracting can be costly for a small company; in 1958, after the U.S. declared a moratorium on nuclear tests, E.G. & G.'s contract with the AEC was slashed overnight from $5,000,000 to $1,250,000. Today, with tests resumed, E.G. & G. is booming. Says Vice President Grier: "People like us are going to be in style a long, long time. The country is committed now to being prepared."
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