Oak Industries

Oak Industries, Inc. was an American electronics manufacturer whose seven-decade history followed the development of radio, television, cable, printed-circuit technology, telecommunications and optical components. Founded in 1932 as Oak Manufacturing by Edward S. Bessey in Crystal Lake, Illinois, the company initially produced electrical switches, Bakelite products, dial lamps and light-socket assemblies. It soon concentrated on components for the expanding radio market, including tube sockets, and later found one of its strongest early growth opportunities in television tuning dials and rotary switches. The company broadened substantially during the 1950s and 1960s. It acquired competitors, expanded into television components and materials processing, and developed capabilities related to printed-circuit-board production. Oak reincorporated in Delaware in 1960, changed its name to Oak Electro-netics Corporation in 1964 and adopted the Oak Industries name in 1972. Everitt A. Carter, who joined in 1958 and became chairman in 1963, led the company during its most expansive period. Oak was publicly traded from its 1944 initial public offering and obtained a New York Stock Exchange listing in 1967. At its peak in 1980, it employed approximately 11,000 people and remained one of Crystal Lake's largest employers. Oak's business portfolio included switches, television-control components, printed-circuit materials, copper foil, cable-television equipment and related communications technologies. Its 1971 cable converter work helped establish a significant position in the CATV equipment market, particularly through addressable converters that allowed cable operators to communicate with individual subscriber decoders. Oak also entered subscription television. Through a venture initially formed with Chartwell Communications, it helped create National Subscription Television and the ON TV service, which began in Los Angeles in 1977 and later operated in several other American metropolitan areas. ON TV became Oak's most visible consumer-facing business and generated substantial revenue at its peak, but its economics deteriorated as cable television expanded, the economy weakened and disputes affected programming and station relationships. The communications strategy produced severe problems. Oak's TC-56 cable box experienced technical failures and was voluntarily recalled, contributing to a sharp loss of market share. ON TV systems closed in succession from 1983, with the final Los Angeles operation sold in 1985. Oak also pursued satellite-scrambling and direct-broadcast-satellite ambitions, but rising costs and competition limited the outcome. Its media expansion included a co-production role on the 1983 film Psycho II, part of an intended broader agreement that did not develop as planned. The collapse of the media strategy coincided with recessionary pressure, debt, shareholder litigation and regulatory scrutiny. Carter resigned in late 1984, and E. L. McNeely took over as chairman. McNeely sold international subsidiaries and the materials division, using proceeds from the 1986 sale to AlliedSignal to retire most of Oak's outstanding debt and restore positive net worth. The Securities and Exchange Commission cleared Oak in 1987 after investigations concerning reported earnings, while the company paid $33 million to settle a shareholder class action. After the restructuring, Oak pursued smaller and less closely related acquisitions, including quartz-crystal businesses and railroad-maintenance-equipment manufacturers. A 1989 proxy fight led by Roderick M. Hills and supported by MIM Ltd. removed McNeely as chairman. The subsequent management team closed the TeleFinder online-classified service, divested communications activities, sold other units and moved headquarters from Rancho Bernardo, California, to Waltham, Massachusetts. Oak acquired Standard Grigsby in 1991 and reorganized its component operations under the OakGrigsby name. Oak returned to profitability in the early 1990s and continued as a more focused components and industrial-technology company. Corning Inc. acquired Oak in January 2000, primarily to obtain its Lasertron laser division. The acquisition ended Oak Industries as an independent company. Its history illustrates both the opportunities available to diversified electronics manufacturers in the postwar era and the risks of moving from industrial components into rapidly changing media businesses.

Oak Industries began in 1932 as Oak Manufacturing in Crystal Lake, Illinois. Edward S. Bessey established the company during the Great Depression, initially producing switches, Bakelite goods, dial lamps and socket assemblies. The rise of radio created demand for Oak's tube sockets and related components, while the postwar spread of television gave the company a larger opportunity in tuning dials and rotary switches. During the 1950s and 1960s, Oak expanded through acquisitions and new business units. It entered television-component manufacturing, materials processing and printed-circuit-board materials, reincorporated in Delaware in 1960 and adopted successive corporate names before becoming Oak Industries in 1972. The company went public in 1944 and joined the New York Stock Exchange in 1967. Under chairman Everitt A. Carter, Oak reached a high-growth phase and became a major employer in Crystal Lake. Oak also developed an important communications-equipment business. Its cable boxes, including early addressable converters, supported community-antenna television operators. In 1973 it partnered with Chartwell Communications in a venture that became National Subscription Television. The resulting ON TV service used scrambled UHF broadcasts and subscriber descrambler boxes. Beginning in Los Angeles in 1977, it expanded to other metropolitan areas and became Oak's largest revenue source in 1981. Oak moved its headquarters to Rancho Bernardo, California, in 1979 in part to be closer to the entertainment sector. The media strategy failed as cable television expanded and the economy weakened. ON TV systems closed from 1983, and Oak's TC-56 converter suffered technical problems and a voluntary recall. Oak's satellite-scrambling ambitions also faced stronger competitors. The company sold its remaining Los Angeles ON TV operation in 1985 and eventually disposed of related station interests, although the WSNS-TV ownership issue continued until 1995. Oak's media ambitions extended briefly into film production through its participation in Psycho II. Carter resigned in 1984. E. L. McNeely became chairman and pursued a program of downsizing and asset sales. Oak sold international subsidiaries and Adec, then sold its materials division to AlliedSignal in 1986. The proceeds substantially reduced debt and helped avert bankruptcy. Regulatory scrutiny and shareholder lawsuits related to the company's financial reporting and corporate conduct continued until the SEC cleared Oak in 1987 and a $33 million shareholder settlement was paid. McNeely's later acquisitions included quartz-crystal component businesses and railroad-maintenance equipment companies such as Nordco. Investors criticized the diversity and governance of the strategy. In 1989, Roderick M. Hills led a successful proxy fight backed by MIM Ltd. The new leadership closed TeleFinder, ordered the sale of Oak Communications and other units, and moved the headquarters to Waltham, Massachusetts. Oak acquired Standard Grigsby in 1991 and consolidated component operations under OakGrigsby. The company returned to profitability in the early 1990s and continued with a narrower technology portfolio. Corning acquired Oak in January 2000, chiefly for Lasertron, its laser division. Oak consequently ceased to operate as an independent company.

• 2000

  Acquisition by Corning

  [1]Oak Industriesen.wikipedia.org

  Corning acquired Oak primarily for its Lasertron division.

• 1991

  Standard Grigsby acquired

  [1]Oak Industriesen.wikipedia.org

  Oak acquired the Illinois switch manufacturer and reorganized its component business as OakGrigsby.

• 1989

  Proxy fight and management change

  [1]Oak Industriesen.wikipedia.org

  Roderick M. Hills and supporting investors won control of the board, beginning another restructuring.

• 1986

  Materials division divested

  [1]Oak Industriesen.wikipedia.org

  Oak sold its materials division to AlliedSignal and used the proceeds to reduce debt.

• 1985

  ON TV Los Angeles is sold

  [1]Oak Industriesen.wikipedia.org

  Oak sold the last remaining ON TV operation in Los Angeles to SelecTV.

• 1980

  Employment peak

  [1]Oak Industriesen.wikipedia.org

  Oak reached approximately 11,000 employees and was the largest American manufacturer of television tuning dials.

• 1977

  ON TV begins service

  [1]Oak Industriesen.wikipedia.org

  Oak-backed subscription television launched in Los Angeles and later expanded to additional markets.

• 1972

  Name changes to Oak Industries

  [1]Oak Industriesen.wikipedia.org

  The company adopted the Oak Industries name as its operations diversified.

• 1971

  Early cable converter development

  [1]Oak Industriesen.wikipedia.org

  Oak manufactured an early cable-television box and pioneered addressable converter technology.

• 1967

  New York Stock Exchange listing

  [1]Oak Industriesen.wikipedia.org

  Oak's shares began trading on the New York Stock Exchange.

• 1960

  Delaware reincorporation

  [1]Oak Industriesen.wikipedia.org

  The company reincorporated in Delaware.

• 1944

  Initial public offering

  [1]Oak Industriesen.wikipedia.org

  Oak became a publicly traded company.

• 1932

  Oak Manufacturing is founded

  [1]Oak Industriesen.wikipedia.org

  Edward S. Bessey founded the company in Crystal Lake, Illinois, initially manufacturing switches, Bakelite products and lighting-related assemblies.

A diversified American electronics and industrial-technology manufacturer, historically positioned around components, materials processing and communications equipment, with a later focus on specialized electronic and optical technologies.

• Electronic components · 1930

  Radio components

  Oak's early product base included radio tube sockets and related electrical components. These products connected the company to the expanding consumer-radio industry during the 1930s and 1940s and established manufacturing capabilities that later supported its television and communications businesses.

• Television components · 1950

  Television tuning dials

  Oak manufactured rotary switches and tuning dials for television sets. The product line expanded as television ownership became widespread after World War II and eventually made Oak the largest American producer of television tuning dials around 1980.

• Cable-television equipment · 1971

  CATV converters

  Oak Communications produced cable-television converter boxes, including addressable systems that allowed a cable headend to communicate with individual subscriber decoders. The later TC-56 56-channel model encountered technical problems and was voluntarily recalled.

• Subscription television service · 1977

  ON TV

  ON TV was an over-the-air subscription television service using scrambled UHF broadcasts and subscriber descrambler boxes. It reached several U.S. metropolitan areas and was strongest in Los Angeles, but declined as cable television expanded and programming and station disputes intensified.

• Electronic materials · 1976

  Oak-Mitsui copper foil

  Oak-Mitsui manufactured copper sheet and foil for precision instruments and printed-circuit applications. The venture initially supplied Oak's internal materials operations and later became an outside supplier to circuit-board laminators.

• Electronic components · 1986

  Quartz-crystal components

  Oak acquired a quartz-crystal components group comprising businesses that made precision crystals, telecommunications and defense oscillators, and airtight enclosures for quartz components. The portfolio was assembled during Oak's post-1986 restructuring.

• Industrial equipment · 1986

  Railroad-maintenance equipment

  Oak entered railroad-maintenance equipment through acquisitions from Rexnord and the purchase of Nordco in 1987. The move reflected management's attempt to build a portfolio in industries considered relatively resilient to recession.

• Optical and laser components

  Lasertron lasers

  Lasertron was Oak's laser division and the principal reason Corning acquired the company in 2000. The division represented Oak's later specialization in optical technology after the company had exited much of its earlier media and materials portfolio.

• 1991

  OCI Communications sale lawsuit

  Lorain Group sued Oak after acquiring Oak Communications, alleging that Oak misrepresented the business's financial condition and withheld information about a sharp sales decline.

  Source

• 1982

  Earnings-reporting investigation and shareholder litigation

  Oak faced SEC scrutiny over allegations that it overstated earnings in 1982, along with shareholder claims and questions concerning corporate expenditures. The SEC cleared the company in 1987, and Oak paid $33 million to settle a shareholder class action.

  Source

Read more

• 1977ON TV expansion

  Los Angeles · Detroit · Phoenix · Miami–Fort Lauderdale · Cincinnati · Chicago · Dallas–Fort Worth · Portland–Salem

  Oak promoted ON TV as a subscription alternative for households in areas not yet served by cable, using scrambled UHF broadcasts and rented descrambler equipment.

  Outcome. The service achieved substantial early adoption, especially in Los Angeles, but closed market by market as cable expanded and the operating model weakened.

  Source

• 2000

  Corning acquires Oak IndustriesM&A

  Background

  Oak remained a specialized technology company after earlier divestitures, with Lasertron among its notable businesses.

  Action taken

  Corning purchased Oak primarily to obtain the Lasertron laser division.

  Aftermath

  Oak ceased to exist as an independent company.

  Source

• 1989

  Restructure after proxy fightStrategy

  Background

  Investors criticized Oak's acquisitions, governance and cumulative losses after the company struggled following its media expansion.

  Action taken

  The new board closed TeleFinder, began selling Oak Communications and other units, and planned a headquarters move from California to Massachusetts.

  Aftermath

  Oak narrowed its operations, returned to profitability in the early 1990s and continued until Corning's acquisition.

  Source

• 1986

  Sell materials division and retire debtStrategy

  Background

  Oak's failed communications expansion and recession-era losses left it heavily indebted and financially vulnerable.

  Action taken

  Management sold the materials division to AlliedSignal and applied the proceeds principally to debt reduction.

  Aftermath

  The transaction reduced most of Oak's outstanding debt and helped move net worth from negative to positive territory.

  Debt retired. $230 million outstanding debt → $34.5 million remaining, based on the reported $195.5 million repayment (1985–1986)

  Source

1. 1Oak Industriesen.wikipedia.org