By Tom Imerito
Although Westinghouse Electric’s lingering and painful demise is lamented by some, the company's engineering technologies live on as though paying undying homage to its founder's enduring spirit. Today in Pittsburgh and elsewhere throughout the world, former Westinghouse managers and employees variously own, operate and manage the corporate descendants and technological offspring of the company that once told us with both confidence and credibility that "You Can Be Sure If It's Westinghouse.”
Starting by Stopping
It began in 1868, when a 23-year-old George Westinghouse came to Pittsburgh in search of steel for his patented railcar replacer and railway frog, devices that made railroading less arduous, not to say effortless. Once here, he went on to patent his renowned Westinghouse Airbrake, which became his springboard to legendary success.
Prior to his invention, engineers controlled steam to propel the train and brakemen rode atop the cars in the open air, scrunching down as they passed through tunnels, jumping from car to car to turn a wheel on each one that tightened a set of chains that applied the mechanical brakes, one car at a time, bumping and grinding their collective way to an operationally precarious and acoustically rackety halt. Although the Westinghouse Airbrake was designed to slow trains down, as a practical matter, it had the opposite effect, because the engineer, confident that he could stop the train with the pull of a lever, was free to apply more steam between stops. The net result was faster travel.
An air compressor attached to the locomotive generated the force for the airbrake. In early iterations, when the engineer opened the valve, compressed air would flow through hoses that ran from car to car, forcing the brakes to contact the wheels and stop the train. The system worked far better than the previous car-hopping, wheel-cranking procedure except when a car decoupled or an air hose broke, which resulted in the failure of all the brakes on all the cars and a consequent set of unpredictable and unfortunate events. In response to that problem, Westinghouse modified the system so that air pressure held the brakes off the wheel until the engineer applied them by releasing the air. Now the brakes would always be on except when the compressed air was holding them off. The new system was pretty much fail-safe. The airbrake led to the establishment in 1881 of the mainstay of George Westinghouse's many corporate entities, The Westinghouse Airbrake Manufacturing Company.
Had George Westinghouse been interested in mere fame and fortune, the airbrake would have done the trick. But his penchant for invention went far beyond self-interest or material gratification. Once he had railway speed under control, he went on to address the next pressing issue for the burgeoning railroads: how to prevent collisions between trains traveling along the same stretch of track, either head-on or engine-to-caboose. He did this by devising an electronic signal system that employed the tracks themselves as an electrical conductor. Known as the railway block signal, the system used a battery to charge a closed-loop section of track. When a railcar’s wheels rolled over the two rails of the charged track, they would cause a temporary shift in the track’s electroconductivity (impedance) which served to actuate a signal change some distance ahead. Combined with an array of track switches – at first operated manually, then by compressed air, then by electric motors – Westinghouse’s inter-train communication system became the universal standard for railway control. Even today when railroads are radio-controlled with integrated circuits from central stations hundreds of miles away, George Westinghouse’s block signal principle provides the basis for on-the-ground detection and signaling between trains, controllers and engineers.
Electrifying the World
Just as pneumatic airbrakes logically led to electric signaling, electric signaling led quite naturally to Westinghouse’s founding in 1886 of the company that would dominate the world of advanced technology for more than a century, the Westinghouse Electric Company.
In 1886, Westinghouse engineer William Stanley developed a key component of long-distance AC transmission – the first practical transformer. The AC transformer stepped the voltage in an electric line either up or down by manipulating the number of turns on a pair of coils wrapped at opposing ends of a common magnetic core. When the inbound (primary) current was run through a coil with, let’s say 100 turns, it would induce a magnetic field in the core. In turn, that magnetic field would produce an electric current in the outbound (secondary) coil, but its voltage would be proportional to its number of turnings: 50 turns would result in half as much voltage, because there would be half as many turns. If the situation were reversed to twice as many turns on the outbound side, as on the inbound, the voltage would be doubled. The AC transformer enabled George Westinghouse to file the Westinghouse Electric Company’s first patent, for a System of Electrical Generation in 1889 and
to illuminate the village of Great Barrington, Mass., with the first commercial AC generating station.
Two years later, another Westinghouse engineer named Oliver Schallenberger invented the first ampere-hour meter, the device that quantified the amount of electricity that passed through a wire. Prior to the invention of the electric meter, electric distribution was limited to entities large enough to pay for all the power produced by a generator, typically a municipality that wanted electric street lights. The electric meter was the key to selling electricity to every building in town.
When a feud between Nikola Tesla and Thomas Edison ended their relationship, Westinghouse brought the legendary master of alternating current to Pittsburgh and acquired his patents. The historic competitive battle between AC and DC ensued. But George Westinghouse was nothing if not certain about AC’s supremacy over DC. In the midst of a corporate liquidity crisis, Westinghouse engaged in a series of high-visibility electrification projects that proved the practicality and efficiency of long distance AC transmission lines, high-power transformers and polyphase electric systems. In 1893, he dazzled the world by illuminating the Chicago World’s Fair with a quarter million electric lights, a feat more notable for Westinghouse’s determination to prove the value of alternating current than for the efficiency of the lamps, many of which required daily replacement.
Arguably of greater practical significance than the electric light, Westinghouse demonstrated the first polyphase AC generation and distribution system in collaboration with Tesla. The polyphase electric system increased the efficiency and horsepower of electric generators and motors by effectively increasing the number of magnetic attraction/repulsion events during a single revolution. It was like having six cylinders instead of two in a car. Used for both electric generation and use, polyphase electricity quickly became the standard for industrial power and remains so to this day.
By 1895, George Westinghouse was ready for the coup de grace of his campaign to conquer the foes of alternating current: the harnessing of Niagara Falls for electric generation by means of three 5,000 horsepower generators. With the transformation of Niagara’s mechanical energy into electrical energy, its transmission to Buffalo 20 miles distant, and its subsequent conversion to mechanical energy and illuminative power, all wagers between direct and alternating current were settled forever. The race to market was on.
By 1900, the Westinghouse Electric and Manufacturing Company employed 50,000 workers. In 1906, it established a formal research and development division. Then, for three years beginning with the Panic of 1907, a series of misfortunes, including a proxy battle that George Westinghouse lost, the appointment of a court receiver, a financial reorganization funded by Westinghouse and his employees, and a six-month leave of absence ordered by the Westinghouse board of directors left the genius who had started it all four decades earlier discouraged and disinterested. In 1910, George Westinghouse formally retired from the Electric Company leaving management of his other companies, including Westinghouse Airbrake and Union Switch and Signal, to others. Although he would retain nominal control of many of his other enterprises, George Westinghouse would never again control the Westinghouse Electric and Manufacturing Company.
Becoming a Giant
Four years after his retirement, on March 12, 1914 George Westinghouse died in a wheelchair. Not surprisingly, close at hand were design drawings for an electric wheelchair he was working on. At the time of his death, George Westinghouse controlled more than 15,000 patents, 314 of which he had invented himself. A 1921 biography puts the total number of Westinghouse-affiliated companies at 104. When he died, he had more than 50,000 workers in his direct employ. He had founded and built the Pittsburgh suburb of Wilmerding. Despite his death, his companies continued to change the world.
In 1920, the company pioneered commercial radio with the live broadcast of the Harding-Cox election on the nation’s first, and Pittsburgh’s own, commercial radio station, KDKA. In 1928, the company introduced the first television camera tube. In the same year, the Westinghouse Elevator Company was founded. In the 15 years between George Westinghouse’s death and the start of the Great Depression in 1929 the Electric Company’s sales grew five-fold, from $43 million in 1914 to $216 million in 1929, the year of Crash.
Then, in 1932, the company’s annual report showed an operating loss of $9 million. The document began with the words, “The business depression of 1931 will go down in history as one of the worst periods the American people have ever endured.” Like many other U.S. companies, Westinghouse remained in the financial doldrums until 1935, when an operating profit of $11 million supplanted the previous four years’ losses of between $3 million and $9 million. Then in 1940, business exploded. Reporting sales of $239 million and profits of $19 million, the annual report declared, "The company experienced during the year 1940 the greatest expansion in business in its 55 years of
existence." It can only be called fortuitous that the Westinghouse SCR-270 aircraft warning radar system is credited with detecting the Japanese attack on Pearl Harbor. With the onset of World War II, Westinghouse embarked on its greatest technological and commercial expansion ever.
Between 1940 and 1944 sales rose from $239 million to $835 million. Profits were so high that the company renegotiated its wartime government
contracts downward in order to return what it considered to be unpatriotically excessive returns on investment. Following the war, no company was more ready for a boom than Westinghouse Electric.
In 1950, Westinghouse sales broke the billion-dollar mark for the first time. By 1954 consumer demand for Westinghouse products was sufficient to warrant the establishment of the Westinghouse Credit Corporation. In 1957, the company designed the world’s first commercial nuclear power plant at nearby Shippingport, Pa. During the 1950s and 1960s, as the company’s breadth of operations spread across the economy from consumer goods to industrial products to military systems and power infrastructure, its financial operations assumed an increasingly important role.
Heading Toward Decline
Then, during the mid-1970s uranium prices spiked, putting the company in the position of losing money on every pound of the nuclear fuel that Westinghouse had agreed to sell under long–term contracts to more than a score of utility companies. The ensuing litigation, combined with the effects of the accident at Three Mile Island, put the nuclear energy business into a 30-year state of hibernation.
The company began to look for new revenue streams. By 1990, the company’s business activities reached into virtually every sector of the economy from space electronics to radar to TV stations, cable systems and broadcast programs, to naval and air defense electronics, to military command and control systems, to office furniture, to soft drink bottling to filing and management systems, to waste management systems to consumer and industrial finance services to nuclear power systems, fuel sales and disposal, to real estate development, to consumer and industrial finance. Westinghouse Electric’s profits were at a record high. Unfortunately, in that same year, the financial services division’s profits went from a modest $164 million profit in 1989 to a loss of $844 million in 1990. In response to lower Wall Street ratings, Westinghouse Electric agreed to guarantee the Credit Division’s liabilities. After a century of success, it started to become clear that the end was near.
Through the 1990s, the company sold divisions and shifted strategies in a noble struggle for survival. By the end of 1992, the company had sold off almost $8 billion in assets and absorbed losses of almost $6 billion. Most of the losses were attributable to $13 billion in bad loans. In the decade between 1985 and 1995 the workforce had shriveled by half to 85,000.
Between 1994 and 1997, the company disposed of eight of its manufacturing and land development divisions for a total of $10 billion. The proceeds of those sales helped pay for the acquisition of a $16 billion media empire that included CBS, Infinity Radio, American Radio Systems and The Nashville Network. In the end, the company was broken up into its component parts many of which were put on the block or otherwise divested. In December of 1995 the company’s name was changed from Westinghouse Electric to CBS. The company’s last CEO, Michael Jordan, began to dispose of the remaining pieces of the industrial division.
The Influence Remains
Despite the company’s long, painful journey into the night, George Westinghouse’s influence on Pittsburgh and environs has endured. Aside from Westinghouse Electric, George Westinghouse’s influence can be found in such commonplace Pittsburgh
enterprises as Duquesne Light, a descendent of his early interests in electrifying the city; Equitable
Resources, corporate scion of The Philadelphia Company, Westinghouse’s natural gas distribution company; Union Switch and Signal, still located in Pittsburgh, is owned by AnsaldoSTS.
The company continues to develop, manufacture and supply transportation control systems and equipment around the world; Wabtec, successor to Westinghouse Airbrake, flourished independently of Westinghouse Electric for more than a century before merging with another railway product company in 1998. Today, Wabtec manufactures a wide range of products for locomotives, railcars and passenger transit vehicles. Located in Wilmerding, Pa., where George Westinghouse originally founded the company, Wabtec posted sales of more than $1 billion in 2006.
On the Westinghouse Electric side of the equation: The Bettis Atomic Power Laboratory, located in West Mifflin was operated by Westinghouse for 50 years prior to 1999 before losing the government contract; Wesco, the Westinghouse electrical parts distribution arm was purchased by its management team in 1994. With its world headquarters located in Station Square, the company employs more than 7,000 people worldwide. Wesco’s 2006 annual sales were approximately $5.3 billion; Emerson Process Management’s Power and Water Solutions division, successor to Westinghouse Process Control, remains in its RIDC Park location where it has been for the past four decades. Although company President, Robert Yeager exudes deep gratitude for his years in the employ of Westinghouse, his sentiments are tempered by a sober view of the division’s fate. “Probably the best thing that ever happened to us was Emerson’s purchase, because Westinghouse didn’t look at controls as a strategic growth business,” Yeager said. “Today, about 40 percent of U.S. generating capacity, both fossil and nuclear, has Emerson controls.”
Now owned by Toshiba, the surviving Westinghouse Electric has recently come full circle with the re-ascendance of nuclear power. The company has designed a modular nuclear power plant called the AP1000. Principal among the AP1000’s advantages is that its modular design obviates the need for new design evaluation by the governmental agencies for every new installation. The plant employs the natural forces of gravity, circulation, convection and gas compression to shut a plant down and keep it cool in the unlikely event of a nuclear accident.
With four confirmed nuclear plant orders from China, 12 applications underway in the United States, and projects under serious consideration in 16 countries around the world, Westinghouse has seen sufficient promise in the future of nuclear power to build a new 775,000-square-foot headquarters in Cranberry with space for 3,000 employees.
Truly a move that will do George Westinghouse proud.