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Squeezing the Service Technician
August 1949 Radio-Electronics

August 1949 Radio-Electronics

August 1949 Radio-Electronics Cover - RF Cafe[Table of Contents]

Wax nostalgic about and learn from the history of early electronics. See articles from Radio-Electronics, published 1930-1988. All copyrights hereby acknowledged.

The byline of this article from a 1949 issue of Radio-Electronics magazine says, "The Editors," which included of course Hugo Gernsback, Fred Shunaman, M. Harvey Gernsback (brother of Hugo), and a few others listed on the Table of Contents page. The situation for electronics service technicians and shop owners had evidently gotten pretty bad regarding the financial burden placed on them because of low-cost comprehensive service warranties being issued by sales establishments. As licensed manufacturer service providers, shops were required to honor the warranties that included not only service on faulty equipment, but also initial installation that often included antenna mounting and lead-in wire. Salesmen and retailers were having a profit windfall while the service industry was going bankrupt. The state of New York - always quick to institute new laws and taxes - was in the process of requiring service providers to carry expensive insurance assuring that they were financially capable of supporting the warranties.

... New legislation threatens the television service contractors ...

By The Editors

The radio service technician's bed has never been strewn with roses; and of late the situation has been worsening to such an extent that it threatens to get entirely out of hand.

Latest development comes from New York State, where the Attorney General's office may take action which could strike a mortal blow to the independent television installation and maintenance man. The proposition is to declare that television service contracts come under the existing insurance laws, and that all organizations handling service should therefore be licensed under the State insurance law. This means that firms taking television service contracts would have to prove they were financially stable, and would have to put a required sum of money into a trust fund to insure that television set owners would get the service they are entitled to under their contracts.

The real cause, of course, is that television maintenance contracts have been set at a price which has made it impossible for the service contractor to carry them out. His costs have been so much higher than the contract fees that he has been forced into bankruptcy, in many cases watching the savings of a lifetime disappear with the funds he received for his television contracts.

Tragic as this has been for the service technician who has been forced to close up his business, the customer has been hurt as well. He has paid his money for a year's service. Three months after the contract is signed, his receiver may develop a fault. He finds that the company with which he signed the contract is no longer in existence. The dealer who sold him the television set and contracted for its installation through an intermediary service firm is not interested in his plight. Neither is the manufacturer of the set, in spite of the fact that one of his models may have been the cause of the customer's dilemma and the contractor's bankruptcy.

As we go to press no final decision has been taken by New York State on this proposal, and it is hoped that no unfavorable decision will be made. New York State is by far the country's biggest television market, and if such an adverse action were taken in that state, many other states would certainly follow the example.

The New York State Insurance Department contacted many of the larger television manufacturers in an endeavor to have the makers themselves guarantee the service contracts. With the exception of several large television set makers who have their own service setups, the manufacturers declined to have anything to do with the proposition. They insisted that maintenance was the dealers' and distributors' job, and felt that if the manufacturers were made responsible they might become involved in lawsuits and other difficulties.

What then is wrong with the entire setup? How can the trouble be cured? The main difficulty is obviously that the rates paid for television installation and maintenance are so low as to drive the service concerns out of business. The cure is obviously to remove this trouble, not to make the present difficulty an excuse to channel television servicing, installation, and maintenance into the hands of large concerns who - given a near-monopoly on the business - can then raise the contract rate to a figure that will assure them a profit under the most unfavorable circumstances. This will react into higher cost to the customer, and eventually the manufacturer and dealer will pay for it in the form of fewer television set sales.

Why are present service contract rates so low? There are three main reasons. First, it is in the dealer's interest to make the price for installation and service as low as possible, since he does not intend to do this work himself. But because of the novelty of the business, would-be contractors had no means of knowing what their costs would be, and in many cases were sold these "suicide" contracts.

Probably the greatest single cause of loss-producing contracts is the "sour" television model. We have had these models since the beginning of broadcast radio. Every manufacturer makes such a set occasionally, and the complications of television render the chances of putting on the market a model with latent defects that much greater. Such a model may call for twice as many service calls as the average televiser, and the maintenance technician who has contracts for a large number of them is slated for certain economic destruction.

The nature of the contract itself it partly to blame. Only a term of service, with no restriction on the number of calls, is usually specified. The customer therefore feels it good business to call up the service technician any time if something out of the ordinary appears on the screen. Many maintenance men report that half their calls are of the "nuisance" variety, in which nothing is actually wrong with .the set, and the customer requires only an explanation of what he has seen.

How can we remove these causes?

Obviously The Unlimited Maintenance Contract" Must Go! The manufacturer must be responsible for calls due to defects in his receiver. All calls - after the manufacturers' guarantee period - should be paid for by the customer. An ideal installation and maintenance contract would call for a fixed fee for installation and a specified number of calls during the "work-in" period of the receiver. All calls thereafter would be paid for at a stated rate per call. This system would prevent the maintenance technician from going bankrupt.

For - make no mistake about it - the small two- or three-man shop is the most efficient service organization ever devised. We went through this same children's disease in the infancy of broadcast radio in the early '20's. More than one manufacturer wished to assure good repairs by "factory service" and sets were shipped back to the factory when they broke down. But it was soon found that factory repair departments could not break even without charging from three to five times as much as would the local repairman for an equivalent job.

The final answer-for manufacturer, dealer, service technician and set owner - is not a system that will add to the expense of television maintenance by sqeezing the smaller service technicians and installation firms out of business, but common sense that will take the "gimmicks" out of the present setup and thereby make it possible for them to stay on the job.

Far-seeing television manufacturers cannot fail to be impressed with this situation. We are faced with a shrinking economy in this country and the public cannot be placed in a position where it hesitates to buy television receivers, for fear of having to pay twice for television servicing. Neither can the manufacturer profit from a system that would result in fewer and fewer technicians being left in the field to service the growing number of sets. It is up to them to help the service technicians stay in business if they do not want to lose money in the end.



Posted October 1, 2021

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