[net.audio] Heathkit Changes - some poop

gordonl@microsoft.UUCP (Gordon Letwin) (01/14/85)

Recent articles in this group have noticied that Heath/Heathkit seems
to be getting out of the high end of the HiFi field, and in general
bemoaned the decrease excitement of the Heath product
line.  I worked at Heath as an engineer for a couple of years, helping
to create and introduce their computer line, and might be able to shed
some light on the situation.

Basically, whats hurting Heath is the great success, from a manufacturering
standpoint, of the consumer electronics field.  At one time electronic
equipment was assembled by hand.  Handwork and large components (and heat)
meant that the equipment was relatively large, as well.  In those days
one could save money by buying a kit and doing the work oneself.

With the advent of semiconductors, printed circuts, and especially
integrated circuts, things changed.  Now, manufacturing and testing is
highly automated... when you buy a video casette recorder, for example,
a relatively small part of its price tag is labor cost.  Further, integrated
circuts and low power have meant miniaturized equipment... something that
a manufacturing robot can handle but a ham-handed amature with a pair of
needle-nose pliers can't.  For example, I recently built a Heath logic
probe, for old times sake.  The thing is very large... it had to be
to mount the switch, descrete transistors, an 8 pin DIP IC, etc.  A week
later I saw one in an electronics store... it does more, its 1/4 the
size, and cost $10 less.  It was manufactured by machine and cheap labor
in taiwan and used surface mounted chips to save space.

Another thing that hurts Heath is testing and allignment.  Once something
is built it has to be made to work.  A commercial manufacturer can build
his circuits using standard tolerance components.  As each unit rolls
off the line its tested by $50000 worth of specialized dedicated
test equipment.  Those that are out of spec or fail to operate are
shunted to one side where a technician quickly fixes them, once again using
a battery of specialized gear.  Heath, on the other hand, has to make
sure that the unit comes up alive in some guys basement, and the only
test equipment they can count on is a voltmeter.  This means tighter
parts tollerances, simpler circuits, perhaps built in test
circuits, and nearly no allignments or adjustments.  As electronics
becomes more and more sophisticated this becomes more and more difficult
to achieve.  Digital gear is a whole new problem:  if the stuff doesn't
work there's no way to debug it with a voltmeter.  Since an item returned
for repair means a net loss of money and an unhappy customer Heath is forced
to pre-assemble and test most of their larger digital circuit boards.

And finally, the third thing that hurt them was the growing disparity between
the skills of their designers and the skills needed to create state-of-the-art
designs for consumer electronics.  Partially this is not their fault:
its hard to pay the salarys of the very best audio designers, the very
best video designers, the very best ham designers, etc., etc., while
being a small "niche" producer in each of those fields.  Part of it
IS their fault, though, in that Heath management was stuffy and ingrown
and refused to recognize or pursue quality.  Their attitude was, and
I'm practically quoting, "if we can hire an engineer for $N then no engineer
is worth more."  Time and time again I saw the very best engineers there
prove their skill with a great project, be refused the responsibility and
the money that they now deserve, and go somewhere else that would recognize
and pay them.  For example, a good friend of mine did some great design
work in microprocessor/analog home appliance kinds of things... and 
quickly left when some other company recognized his talent and offered him
reasonable money for a top-flight engineer, as opposed to the "average
joe" Heath payscale.

Even if one didn't worry about money, engineering management made being
sharp a liability, rather than an asset.  For example, the guy who
was the computer product line "product manager" decided that the followup
to the heath 8080 machine should be an 8085, rather than an 8086.  His
reasoning (and I quote): "If we use an 8086 it will be so much better than
the H8 (8080) that no one will want to buy the H8 anymore.  If we use the
8085 then it won't be much better and the H8 will still sell."  This
line of reasoning is particularly brilliant because, naturally, we had
lots of competitors and THEY certainly wern't going to refuse the 8086
to protect our H8 product!  At my current company such reasoning would
be laughed off the stage.  At heath, however, no one was laughing.  The
management didn't see anything wrong with the argument and the engineers
had no say in the matter.  We were sweating bullets in engineering because
we knew that if we couldn't change this guy's mind that Heath would produce
an 8085-based second generation machine.

Bottom line, Heath was a great company that went downhill.  Their basic
industry changed under them, making it much harder to continue in
exactly the way they did in the past.  Instead of rising to the challenge,
managment did the classic "head in the sand" number that gives managements
a bad name.  All in all, its a shame.  When I went to work there I was
excited about their potential (in computers... this was when MITs was the
biggest name in the field, remember...).  When I left I knew that they
were a total loss in the areas of technical excitement and inovation.  Sure,
no one there wants to just give up, but if they can't break out into something
"complete different" their gear will have less and less appeal and value,
more and more will be relabeled outside equipment, and tougher and tougher
will it be for them to survive.  At any rate, I can't see how the realitys
of modern manufacturing can allow them to return to something close to their
"golden age".

	Gordon letwin
	PAM-8, HDOS, etc.