'You have just heard the opening bars of the Government Sales Symphony. As usual, the military came through loud and clear, but you may have missed the soft rustle of carbon paper and the crunch of used coffee cups that represent the executive branch of Government. But the non-military government market is significant in itself. All together, the U. S. Government is the world's largest single user of pencils, toilet paper, aspirin and other necessities of modern life.

As you know, the Department has assigned sales responsibility to the three regions. Sales performance will be measured against two separate and independent quotas. One for commercial business, and one for government business. We have established a tentative regional breakdown based on the original 1961 government sales quota. . .

The particular allocations are subject to revision as additional information becomes available. The figures are on an 'all sold' basis, and are for government sales alone in keeping with the separate quota philosophy. Now, let's face some blunt facts. Even with the powerful combination of the GSA contract and the GE 225 we would not meet these quotas without meeting major needs of the past. First, we need. . . and now have. . . active management support for government sales. For example. . . Mr. Strickland and Mr. Lasher will participate in our presentation to the Pacific Air Force on May 31. Second, we need. . . and now have. . . . . . a large and growing country wide sales force. . . . and you are that force. . . to carry the GE story to the multitude of customer locations. . . for example. . . . Dick Nosky is calling on the Air Force at Dayton where we have some excellent contacts through

John Turner of the Defense Field Operations Dept. Wayne Wright and Bob Harris in Washington have been doing a lot with very little support. They're going to get more. Third, we need. . . and now have. . . . . authority to establish an adequate headquarters sales unit with its own application engineers to give competent and timely support to the field force and government customers. We have organized the headquarters sales unit on a customer basis as shown in this chart. In addition to sales people, we have established and are filling positions for three application engineers.

Although many of you know the members of the headquarters unit, I would like each of them to say a few words about his particular assignment, so you may be sure of who they are and what they are doing.

Hank Cadell will lead off with some comments on the Air Force situation. Hank....

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THE GREAT WHITE FATHER

H. J. CADELL

Bill Hayes and I are both handling the Air Force and would like to tell you about the four P's in the Air Force, business potential, our plans to insure that GE gets a decent share of the Air Force business and power politics that influence the Air Force purchases of data processing equipment.

The Air Force has plans to automate the data processing activities at two hundred bases within the next three years. We have had some experience with these requirements since we have, this year, submitted proposals to the Headquarters Command to the Alaskan Air Command, and also to the Strategic Air Command. We presently are working on proposals for the Pacific Air Forces, the Tactical Air Command and the Military Air Transport Service. The procurement at PACAF will automate nine bases with a good possibility that some of these bases will have multi

Now, let me tell you about the way Will and I plan to work with you field people. In February we received a request from the Military Air Transport Service for information on the 225. We immediately contacted Ray Bowers in whose district the Military Air Transport Service headquarters lies. We prepared a presentation, met Ray in St. Louis, and went out and spent the day with the customer; together, we gave him a good pitch on the 225 and also found out a lot of information that will be invaluable when it comes time to submit a proposal. Headquarters MATS will buy the systems, but these systems will be installed at McGuire, Dover and Travis Air Force Bases. In order to do a complete selling job, we contacted Don Hubbard in San Francisco to call on Travis and Gene Agerton in Philadelphia to handle the contacts with McGuire and Dover. Since then we have been passing on information to these district representatives and will continue to do so until we land an order. The specifications are expected shortly, and we plan to offer assistance to the field in the preparation of flow charts and timing estimates requested.

All purchases of computers go through the statistical services branch of the Air Force which is under the comptroller. As the name implies, statistical services is a service organization which handles the reporting activity for the other functional areas of the Air Force. Supply is the largest customer; fifty per cent of stats work is with supply. Material dictates how supply must be handled. Other functional areas such as personnel, accounting and finance, and civil engineering are also working on their own requirements, which will be given to the stat shop to perform. We must cultivate all functional areas as well as the stat shop. In some cases, supply has been able to procure their own computer and have it run by the stat shop in supply. We don't really care who buys the computers, whether it is supply, stat services, or others. All we want is that they buy GE 225's.

It will be interesting to note that there are no formal procedures in the Army for scientific or special computer applications; however, on the business side, procedures and plans have been issued as a directive from the commanding general, United States Army. Here at headquarters, we will keep you posted on the progress of requirements for the Army and NASA and will advise the field as requests for proposals reach the procurement stage.

If you live in or visit the cities, towns or hamlets listed on this slide, a call on the manager of data processing or the Navy management office could lead to an order, as Ted Szatrowski of Seattle saw with his own eyes at Hanford one week ago Monday.

Both the Navy and EAC are hard copy people. The Navy personnel accounting machine installations are based on cards, and cards are actually used as orders in the case of enlisted people. The AEC presently has a requirement that certain records must be kept on cards in lieu of magnetic tapes or rams. Most of their present systems in the Navy and AEC are 650's. The overall change is under way. There are groups in both camps today that want more powerful mag tape machines but they need our help. As soon as some of these basic rules change. . . and they will change. . . we should be in a position to contribute to the mass updating of these equipments. Gentlemen, this indeed is a new frontier. O. K. that's the story today. But how about tomorrow and the next day? The government newsletter which you can readily identify by the salesman running inside the pentagon. . . will keep you posted on country wide activities. The first issue is being distributed here today, and more will follow.

The sales to the federal government do indeed represent a new frontier to the Computer Department, but as we have seen, we now have a product and a means to sell it. We have a plan, and we are getting the necessary manpower and management support.

Our speaker for tonight came from a banking family in Kansas City. I understand he was practically disowned when he decided to study engineering at the University of Missouri. After graduation he came to General Electric as a student engineer and first landed a permanent job in 1937 at Fort Wayne in the motor business. His next move was to the field. . . . selling to the Air Force. From there he became commercial engineer for the Appliance Division in Bridgeport. In 1951 he was appointed Division Manager of the Small Appliance Division. In 1953 he became Vice President and General Manager of the Major Appliance Division. . . the division which pioneered the use of electronic data processing for business use in General Electric and. as a matter of fact, in the world. That job was tough enough to keep him for a while. In 1959 he became a member of the executive office of General Electric as Vice President . . . . . Marketing Services.

It's my pleasure to introduce. . . . . a banker by background. . . an engineer by training. . . and a salesman at heart. . . . . . Vice President. . . . . Marketing Services for the greatest company in the world. . . . . Chuck Reiger. (editor note notice his name is spelled both ways on this page)

Gentlemen, I could give you a long talk. I worked many hours on this thing and I can show you my notes. They're right here. I do want to talk to you tonight if I may about a lot of silly things. And some of you who know me, and some of you do, you know I'll get a little mixed up and wander a little bit. But I do hope I can get a message across to some of you to this extent. And that's this. There's a hell of a lot of things that are wrong with the General Electric Company and ,here's a hell of a lot of things that are right. Just like there's a lot of things that are wrong with your Department, and a lot more things that are right. But even more important, I've got an opportunity, since I'm talking and you all can't leave because some of you got money and you're going to stay here till I get through to see who gets those damn prizes. So therefore, I've got an unlimited opportunity and I would like to talk to you for not too damn long, because I deliberately did not go to the men's room so that I'll have to stop in a reasonably short time.

All you guys in Phoenix shut up for a while. I want to talk to the salesmen. You know as well as I do that the way the world runs is that somebody takes a pyramid, he draws a triangle and he says here's the boss man. We're going to have a triangle like this and what is underneath is three guys reporting to me in a nice symmetrical column and underneath them will be six more. And we'll have regional managers, divisional managers, local managers and secretaries, all in a row. This is what I think happens to be one of the basic faults., of G. E., IBM and others. And Tom Watson and Wiz Miller are very close friends of mine but we like to organize uniformly so the boss can understand it. And I think this is pretty damn stupid. Because I happen to think the way we ought to organize is the way the customer can understand it. When you organize the way the customer wants, you're going to have a hell of a different organization from St. Louis or Little Rock or Timbuktu, or Hell's Half Acre. Why in the hell do we organize to suit our leader, who's in the pool. This is pretty damn rough, and I mean it.

This is something we've all got to grow up on. We're all now over 12 years old. And we're being paid for only one thing, (miserably I admit) to tell what the hell is wrong. And we're not doing it. We're not living up to this thing. I feel like a sail boat sometimes, you know, I have to see which way the wind is blowing so I can run before the wind. And this is pretty damn stupid. So the only thing that I ask of you is. . . There is no such thing as a non egotist in the General Electric Company and management. I mean everybody modestly admits, including me, we're terrific. And I happen to know I'm right. But, since they know that, stop agreeing with them and tell them what's wrong. And you do it in a nice way. You can say: "Look, you're a hell of a nice guy, I love you, but have you considered the fact that you may possibly have made the wrong decision ?" This is what we need more than anything in the world. I hear the applause, I laugh like hell. You got an order, everybody applauds terrific. You see what I mean. You didn't mean that. What the hell you meant was that why in the devil didn't we have that other stuff so I could get my order. I think this is what we need more, I'm not talking to you all cause I happen to have a very soft spot in my heart for this Department that I'm going to talk about a little later. I'll go nutty on the subject. But please tell what you believe because unless you do, how can these bums know what to design, what to make, how to change policies, how to fix up this miserable bonus plan they've got or do some of these other things. I mean it. Don't applaud me on this one because if I had my way and I'll tell you bluntly as hell I'd put you on a straight commission. Because I'm a firm believer in the carrot and the stick. And I happen to think that some of you would get very rich and a third of you would quit. And I think that's good too, and I mean that. Because you see I think either you produce or you don't produce and you ought to get paid on that basis and if we get the whole damn company thinking this way it'll be real good.

Now I can go on forever about what's wrong, so could you. I can tell you about the fact that we've got too damn many people, I can tell you about how we don't control costs, and I'm going to talk about that in about just two minutes, I can talk about the lousy way we're handling the Philadelphia situation. We ought to face up to the fact that this is a dead issue. We ought to face up to the fact that you wait thirty days and everybody forgets this and will take up with somebody else. But I don't want to talk about that tonight. What I'm talking about is this. You know it used to be, in the "Good Old Days" you controlled cost beautifully, when business was down, by cutting production. And when business was down you cut the hell out of costs because you stopped building things, which meant two things. You stopped buying material and you cut off a good hunk of your labor.

But that's no longer true. Today you can stop building things and you cut off material but you don't cut off your labor. Because there's a hell of a lot more of you guys and me than there are of them. And this is the fundamental problem. There is a lot more white collars, I hear, than there are blue collars.

Now how do you control this. Well this is real simple. You have all the salesmen, when business goes down you cut your advertising, you cut your bonuses, you do everything else. This is not the answer. This is something we've got to face up to verry verry fundamentally. And it affects this department, more than any department in the General Electric Company. But this is a fault, we have yet to learn how to control, our cost, and if you guys have an ounce of sense, you'll get into this one and get a

lot of business, I hope, first internally and then let it spread externally and get your orders. Now enough of the complaints.

I'll save the complements for last, being no fool. Let's talk about what I think you ought to do. You know there's nothing greater than an expert away from home. And, there's nothing greater than a guy whose talking on a business he doesn't even understand. If you asked me how a computer works, I couldn't even give you the faintest idea, but, then I will say this much I suspect I'm among the majority in this group if we get down to basic facts. And if you're a good salesman, and I hope you never learn how, because this and ten cents will get you a small cup of coffee. The only thing you want to do is explain to someone what the hell it will do for them. Not how it's doing it. I'm sure that you're all going to be taught that or I hope you have. Let's get back to the GE Company, and some of those faults I was talking about. And why I think this department is important. And I'm not pulling any punches on this one. I happen to think very fundamentally of this.

You see when you get back to the thing I was talking about, about people and the kind of jobs they have. I'm talking about the engineers, the accountants, the planners of manufacturing, the salesmen and the others. You've got what is called a fixed load. And I happen to think in some extents maybe it's a burden to the extent that we got so damn many people helping. The real guys who are doing engineering, the real guys who I'm assuming are sitting in this audience and are doing selling, I'm not talking about ammunition passers, I'm not talking about the guys who are firing rifles. And I think there's too few of them versus all the other people in the world. Now where do you fit into this picture? Well I happen to think we've got one of the world's greatest opportunities and I think that if you fellows will quit knowing what a 225 or a 3000 or a 301 or a 7,000,670 does and go about going after your customers. Remember, I told you I was going to lecture about something I didn't know a hell of a lot about, but since I don't' I can talk freely. I want to talk to you a little bit about this thing. I happen to think we've got a problem internally. Here I'm going to a sales pitch for a gentlemen who talked about internal selling, but you can sell it outside too. And it's this sort of thing.

Things are a mess;' "So what the hell do we need?" "We need a pricing policy." They need a pricing policy like I need a hole in the head. Can you imagine a pricing policy for a utility group which involves everything from a lightening arrester, which is a little tiny thing with three wires, that they've never promoted and they make for $1.49 and ran an ad in Life Magazine at $9.95. They said this will keep you from your washer blowing up when you get lightening on your house that you don't get anyway.

And they sold 50,000 of them. But, some of you Tooly Brothers might get mad. I should live so long at these prices. But, now this is true. What the hell we need is not a pricing policy. We need a merchandising and promotion policy. And this is something I will say to you that thank God I've finally come to a place in the General Electric Company which is not dead on it's ass and which can stand up and have fun with sex and blank ammunition. Truthfully, here's what I'm driving at, and here's where you guys enter this picture. I happen to have a philosophy which I am sure is wrong, but I want to preach it to you cause some damn fool will buty(??). It's this. I think this company we've got a magnificent opportunity of shelf good items. Forget your business entirely. Quit selling your equipment and doing something everybody knows about. Lets go into a customer and lets talk to him about something he needs and he doesn't know he needs. And believe me they need it. The stock market has been operating terribly successfully for a long time and they operate on the very simple basis. Here's a goy who wants to give you two bucks and some other silly jerk that wants $4 so you compromise at $3 and sell it. And it is a neat sale and everybody is happy. And this is called the law of supply and demand, where you compromise at market prices. Now let me drop that one for a minute. And lets go to another view point. Another problem we've got in this company is inventory control. We have the most magnificent policy of building what won't sell and not having in stock what will sell, of any company I've ever seen in my life. Therefore, this creates a problem of pricing. Now let's drop this one for a minute, and let's go on to the next subject.

This is a problem of how do you get from the guy whose really using this stuff to the guy whose really building this stuff and make a successful compromise on what you're building and what you've got in stock and what the hell the price ought to be. And there's only one answer to this. I'm looking at all of them right in this room. That's you guys and I'm dead serious on this thing. There was touched on today this FASO system. I may be stupid as hell but I happen to believe that we've missed the boat. I'm pushing the devil out of it for the very fundamental reason that the basis of this thing which is, "What's in stock" and I can get an immediate reply. If you gentlemen will pick this thing up and do the next step, you may have the perfect gasser. All of these add up together I think to the fact that you are the basis of selling, not only our company, which I hope you do first, but also everybody else on a basic system of what I call free enterprise. Not that it has anything to do with the fact but it's sensational it's like motherhood and sin and everybody will buy it. I think of the days when I used to love to get out in Louisville and say, "We'll build one little 8 foot refrigerator and we'll make everybody buy one, and we'll sell them for $39.95." Well we can't sell them for $39.95. And some of the public doesn't want to buy them. We've got to face up to the fact that if we're going to win this competitive battle, we've got to first do away with one very fundamental thing. That's all thoughts of standardization and all thoughts of price sheet policy. What do I mean by this? Listen to me, disagree with me if you will, but think about it. Let's suppose, just for the hell of it, that on shelf items, and I'll take something as repentitive and which the whole theory has been beautifully developed and which I disagree with completely, a refrigerator. Any damn fool knows, that unlike a turbine you take a refrigerator, you design it, you guess what the customer wants, and you build it. And then you hope it will sell. I'm not so sure that it's so damn necessary. I'm not so sure that under

And therefore, if they have this problem nobody else is going to sell the thing. I think through the type of equipment that you build we can do this. We can unstandardize the hell out of things and we can do one of two things. We can set up a system similar to the one that FASO is setting in. We can do this type of thing. You punch a button today and you can find out that you can get a ticket on the American Airlines from New York to Chicago tomorrow morning at 9:30 if you happen to be in New York tomorrow morning at 9:30 and they'll reserve it. You guys have got this, see, your putting it in for inventory control, but you are eliminating one important thing. At what price was that seat sold at? Now unfortunately, American Airlines because of government regulations, has to have it sold at a constant price. But the market price is not working like that today, Gentlemen, and this is something that you work into your equipment and sell to a customer. You can't live with a price sheet because your price sheet's good for an hour and ten minutes. And then you go five per cent under book, you go ten percent under book, you go what the hell it is. This is the way market is selling. I'm talking about your equipment. What your customer's equipment is selling at. If you'll do this, and guarantee to put in a price transaction along with that, you've got the nearest thing to the New York Stock Exchange.

This model is not selling, I've got 3 thousand in stock at this price. The model below it (and you always have one below it and one above it) is selling. Then why don't you solve the federal government's problem, your problem and the inventory problem at the same time. Why don't you instantly raise the price on the one that is selling and lower the price on the one that's not selling. Because the one that is selling, you sure won't have enough in stock on, and vice versa. . . You guys have got the basis of doing this thing and I don't care whether its screws, hammers, or refrigerators or cardboard boxes, believe me, the fellow who can first set up a system to instantaneously vary prices and control his production of his factory is going to be awfully important. And I'll tell you why, because every competitor sets his prices all for Mr. Big. He's got to have a printed price sheet to do it. The day he can't find that printed price sheet and suddenly the price is rising instantaneously all over the country and he's dead, the guy who can cope with this is going to be the winner. So I suggest toyou strongly, take a look at that one. And I think it could be damned important. Now, I've made sermon on how you guys should run your business. Now I would like to wait for the first product, because there are 83 departments that need it.

The motor business is the most profitable in the General Electric Company. The turbine is not growing at the rate we though it ought to be but it also happens to be making one hell of a lot of money, so is the transformer business so is the industrial control business. I suspect the switch-gear business will be again. This is damn good proof incidentally at how you don't run a business it was milked and it was milked badly. And as a result it made more money for two years and it'll take three or four years to get back into making it. But it will come back again. I happen to be as unimpressed as hell with market position. I'll tell you why. Now I'm taking about company viewpoint. I'll come back to that. I firmly believe that in an industry that is running on the level or is shrinking there is nothing more important than not gaining industry position. This is the most expensive damn foolishness you can do. Because the only way you can get it is take it away from your competitor and if he's got an idle factory too and then, you're just cutting your damn throat. But fundamentally, what we've got to do even in these areas we've got to get into some new businesses, and we've got to get into business with industrial growth in mind. Gentlemen, are the prime factor in most of the industries we are interested in going into and and to gain percent of industry. But it depends on you not as engineers, not as application people, not as product planners, but as salesmen to point out to these boobs what a wonderful chance you've got for them so their industry can grow. Let's take just a few. You're doing a marvelous presentation this morning on the fact that post office automation is coming. Well hell, I think we know this. And I think that you guys are doing something about it. You're doing a lot of talking though about a couple of other areas I don't think that you are really serious about. I talked to you salesmen about it because your factory is not going to do a thing unless you guys get pushing them because only the squea1king wheel gets greased. And only you can squeak it, Gentlemen. You've got the damnest opportunity in the world in my opinion of a little something called medicine. All you've got to do is pick up any book and find out how many pre-med guys are entering school. All you've got to do is figure out how many are going to graduate then look at this explosion of population, then you tell me how long you're going to have to wait in any doctor's office you know. I'd like to know what is going to happen to this country unless medicine is automated. Maybe I'm getting a little bit into process computers but

but let's get a little bit in and then get the hell out of it in a hurry cause it's a dirty word and I know it. At least in this meeting. My good friend Nelson up here at X-ray was doing the most magnificent job of building an x-ray that beats the batter better, as I put it. It takes a bigger picture, deeper. This is the most unnecessary damn thing in the world. What the hell they need, if you've ever had an x-ray taken... is something that takes it a lot quicker and gets you out of it. You go in and get an x-ray taken today and the first thing some gal says is, "Will you please take your shirt off?" And then you put your chin up there, and they push this thing up against there and about 20 minutes later you're out of there. You need a machine. . . . . we need something, something that will simply go click, do all the adjustments, get them out of there. Nelson finally got the picture.

He's building a machine which costs twice as much as anything on the market but buster, we can run fifty times as many patients a day through your office than are being run now. This is what I'm talking about. Now you take your fancy computers with your fancy numbers. What the hell I'm interested in is something that is a storage unit. Pure and simple, which has a simple read-out for everything on athlete foot or syphilis or what have you, but damn it, they've got to have this thing. They haven't got the time to do this and this is going to be a fantastic business. Take your retailing, let me read you some pure and simple facts on the grocery store business, 1 which I think is fantastic. My figures are completely wrong, but I don't think anyone in this room knows so I can talk freely on them. As I remember ten years ago, there were 350,000 grocery stores in this country. Today, I think, and I can't remember, but I will say there are 250,000. No wait, 187,000, I believe. They're going way way down. This I do know, there were 31,000 supermarkets in the 1950. Today there are 28,000 and they do 81% of the total business done in groceries. Now then, we know from talking to the grocery boys that they don't know how the hell to build a supermarket that will do over three million dollars a year in business and make money. Because when they get them that big they go down. They've gone over the point of no return as I call it. They've got to hire too damn many people and it becomes inefficient to stock the shelves and they've got to have too many people to unload the shelves. It sound stupid. Too many customers and too many check-out clerks. Here's were you guys enter the picture. Automatic retailing has got to come. You guys are doing a lot of talking about it but you aren't selling nobody nothing on anything. Who the hell says that you shouldn't have in Campbell's soup something, because bean soup is selling it automatically lowers the prices on bean soup, if it's not selling and raise the price on consume if it is. And re-inventory the thing and reorder. This you guys can do. But your not asking for it. So again I say, I'm running your business. Now, literally, gentlemen, what I'm really adding up to is this. I firmly believe, that without any questions GE is going to run 6, 8, 10 million billion dollars a year. This is no problem.

To hell with this, this is the simplest thing in the world to get to. But the principle problem is to get down and get the profit net after taxes up with it. And it's got to come in gross industries. And by if I ever meant anything I ever said in my life, it's this. The basis of this group has got to come from your department. And you guys have got to nail this thing. This is why I think you, as salesmen, have got a tremendous future. If you've got an ounce of sense you'll only build it and become very expert in it. In addition to that you'll learn your business so well that they're going to be demanding your services internally and externally in positions that are a hell of a lot higher than you've got now. This is fine, but IBM is going to do just as well. Nuts!! 1 should live so long. I'm dead serious. I happen to know because I talked to Paul. Paul explained to you this is the 27th in a race that didn't run. I remember when I use to get scared the hell out of May tag. I'm no longer scared, I'm not in home laundry any longer. Look, they're smart, they're sharp, and I know them well, but there's nothing I think that is more easily overtaken than the guy in first place. Let's look at the people who have attacked us. Fortunately they got happy too so they're falling by the wayside also. But, it's lean and hungry people that make this world go around and I don't see any very fat ones here tonight. 1 Now let me talk to you about IBM and General Electric. And I'm going to tell you a story. I had dinner with the chief representative for Mitsui in the United States. lean 't think of his name but' it's unimportant really. I love this rascal cause here to me was the sole of diplomacy and I titled him "How to screw your neighbor and make him love it". Because I said, "You stinker, you are ruining our radio market and we after all, had it locked up for years." And he says that I was completely wrong. That the transistor radio as is built by the Japs is not hurting the American and particularly General Electric at all. He said, "Mr. Rieger, is it not true that you are the world's biggest producers of radios?" And I said this is right. Absolutely, unquestionably, we're fabulous. He said, "Well, isn't it also true that you are one of the world's richest corporations?" I said this is absolutely right. As a result of this you are a very rich company. He said you make many of these things. You check the customers who bought your radios. You found out exactly what they want and you build according to that. Is that not correct? I said that's exactly right. What percent of the market do you get? I said about 25%, 27%.

He said, we don't ever go near your customers. All we do is survey the 75% that didn't buy your stuff. And we build what they want. Now, he said, you are a very rich company. He said, you happen to know some people happen to want inexpensive radios. They don't care about quality and so forth. You build a 6-transistor radio. You sell it very cheaply. For those who have lots of money and don't care about price, but want quality, you build an 8-transistor radio. We are very poor company because we have to build a 7 -transistor radio that both has quality and low price. We do not effect your customers.

Gentlemen, this is a marketing man. Believe me. And for him I have great admiration. Now let me tell you about another application that I happen to think that you guys are fumbling the ball on. I happen to believe that this company of ours, and I suspect all companies has got the lousiest, the most miserable, commercial intelligence operation I've ever seen in my life. And this is just a simple common, what the hell are our competitors doing. There's nothing more complicated than that. And I believe that you can take a moron who can read the paper and who with one of your fine computers and program by a programmer can put this thing on the very simple paper cards or what have you and feed back with some very simple analysis exactly what the hell is going to happen. When you make a move, what is logically going to be their next move. I've seen this done, gentlemen, I've seen it done in photo lamps and it's being done today. With a very simple computer. One of my guys happens to be forecasting the sales of photo lamps a lot better then either the manager of marketing or the manager of sales, and it's very simple. When they get into analyzing the market, they found out that they are not stupid boobs who are buying photo lamps. And the actual use of these things are just as flat as hell.

Oh sure, they go up a little when people take pictures at Christmas time and the summer time, but basically the retail sales are pretty flat. They analyzed it, and got a very simple solution. There was a guy named Mitchell in with Sylvania who got a nutty idea every spring and fall of having a special price promotion. Everybody bought Sylvania photo flash lights and didn't buy anything else and when inventory was gone then they bought again at the next best buy. Well, they analyzed this, they checked this out and counted the promotions, and now I'm proud to say that Mr. Mitchell is no longer president of the bank and our sales are doing well. But how many of you guys have gone into a customer and said we'd like to analyze your business with our fine equipment. It mayor may not be necessary. Sell them your equipment as a means of getting them to sell you their problems. Because this will do the job I think. I think we have not pushed this -- maybe I'm out of order -- - maybe you guys have been doing this --- I just got here last night, so I can talk freely. But look at this thing. Industries will al so need your equipment for quickly analyzing sales of their products. And I'm wondering how many of you guys have approached any trade industries. There's a possibility I think you are still trying to sell a product, you're not trying to sell a service which a customer wouldn't have to have. Would you please think about that. Now look, to hell with all this, me telling you what ought to be done. Your a lot smarter than I am. I want to talk to you for just a new minutes and then I'll shut up and let you have your prizes. I happen to have grown up in a Apparatus business which I thought was stuffy as hell. As a result I sneaked out and got into the appliance business which just fascinated me to death because it was fun. I mean it was one of those kind of things that you got in trouble every day and it was fun getting into and out of trouble deeper. You didn't know what you were doing but you knew damn well if you did something different it would upset somebody and this is good. I mean this is the greatest, most exciting thing in the world. The General Electric Company needs you guys, not for all the crap I've been feeding you to use up time, but because You're in it something like the appliance business. I mean it as a compliment. What I'm talking about is this. You've got a new field. You've got to groan and grin. And more important than any damn thing else I am so delighted you're not set in your ways and you don't say, we don't do it that way. Do me a favor will you. With this kind of a sales meeting. With this kind of a promotion. With this kind of screwball thinking. I mean that as a compliment. You guys can do more to set this company on fire than any thing in the whole world, because gentlemen, we've gone to sleep and we need problem children, and we need guys who are dissatisfied as hell, and we need guys who can get up and say you're a dumb jerk and I can prove it, and we need guys who can say I'm going to take this gal out and I'm going to get what I'm after. And we need guys who can break every damn rule in the Company, barring Anti-Trust. This is what I'm talking about. You have seen here this week, something that I haven't seen for a long time. This is good, don't get old!'.!! I mean if you get old, get up and go with IBM and stay there.

Most personnel of these groups have been actual computer users and understand thoroughly the user's requirements, and are therefore able to approach new problems with the proper insight to come to good solutions. They know a lot about good and poor software, and, like doctors, they can tell the healthy from the ill. They know the proper measurements .. I mean specifications, which make the software look better and work better than anybody else's software. Our staff is more than adequate and is being increased to extend our competence still further.

Finally, TABSOL suits the needs of the guy who is new in the computing business, and cannot express his problems in a concise mathematical form. Generally speaking, he can put all of his parameters, constraints and conditions in a table, and the cute TABSOL program takes it from here. The Tabular approach to problem solution is a new concept and has fascinated many users. Again, we are the first ones to incorporate this concept extensively in our software package. No other compiler contains TABSOL this is a G. E. first.

We have written a program called SEARCH for the GE 225 that allows you to retrieve information by searching abstracts, making it possible to select according to complicated logical patterns and rules. This program was written for the Western Reserve University. It is running now. There is an interpretive program for the 304, serving the same searching requirements, that has been running successfully since October last year. The GE 225 version of the SEARCH Program is extremely fast and turns out to be faster than equipment specifically engineered for the searching process. It requires only two tapes and an 8000 word memory, which makes it economical for small libraries that have a need to search abstracts. General Electric is first to come out with such a program.

One of our better looking software models is luring a number of you to stay at this motel for several additional day s to get to know her, that is, 'it' better. This is the CPM package. I am sure that you are anxious to know what the fruits of your effort will be.

We are writing a package for the utility industry, incorporating the problems of utility engineering, load flow and short circuit programs, and also a package for utility billing. This will be completed this year for the GE 225.

I am happy to announce a new compiler for the GE 225. This new compiler, called GEWIZ Compiles, in one pass, formula statements and branch commands, allows indexing and many other features of algebraic compilers. It will be a considerable boost to our recently announced stripped GE 225 version.

Well, we have got it. You can show your customers hardware and software in action in your nearest information processing center. You may come any time to the I.P. C. and have the equipment demons demonstrated for your potential customers. Your customers can tryout their own programs and be furnished their forty hours free time. And, finally, the Centers give a guarantee for backup. should the customers machine get in trouble. The I.P.C's must be run on a profitable basis and they should be only in places where the market warrants it. Therefore we cannot promise every customer his private I.P. C. After all a single I.P. C. represents a million dollar investment for the company. However, I can assure you there will be enough centers in a year from now to serve each area. Remember the more machines you sell in an area the less you worry about back up. If you come across some bachelor who cannot afford his own machine have him come to the I.P. C. to get a taste of good hardware and software in action. Some day he will order a full machine from you. I.P. C. 's will be focus points for many customers and will provide leads for you to sell hardware.

We also have a study on services provided by computer manufacturers which was done by the John Diebold Organization and I quote from this. . . 'The overwhelming majority of current and potential computer users are definitely influenced by the service extras provided by the manufacturer. This is a competitive fact of life'. (unquote)

Before we get into the details of the current Application Engineering organization, let me point out that there are differences in the way the Computer Department and competitors are organized to provide software and services as well as in the status of the groups involved. These differences, I believe, are highly significant. The manager of the Applications section reports directly to the general manager, as does the engineering manager, pointing up the duality of software and hardware. In Marketing, Application Engineering and Product Service are on the same reporting level as Sales.

The second slide shows the organization of a typical unit, in this case, the Industrial Applications Group. On March first, of this year we confirmed the unofficial decentralization of the Major Support Groups. Eastern regional managers were appointed for Industrial and for Financial applications. The central and western regional application organizations will be set up when the volume of activity requires it.

The fourth slide shows the current geographical distribution of Application Engineering personnel. We have people today in twenty-nine cities in the United States. It must be kept in mind that we have several customers in some cities and that customers in other cities are covered from the location shown. As of April 30, we had thirty-five professional people in the eastern region, twenty- one in the central region, nine in the western region, and twenty- seven at headquarters in Phoenix. I might add that we have one man on temporary duty in Milan, Italy and before long expect to have a significant number of foreign assignments. Let's talk about Application Engineering as a sales tool.

In some areas of the Department, I believe there is a tendency to view Application Engineering as a necessary evil, an overhead function that must be tolerated. On the contrary, Application Engineering should be exploited as an important sales tool.

There are certain recent developments which I think will be of interest to you. In March I was authorized by Mr. Goostree to get a reasonable personnel lead on the orders received rate, as well as to provide an increased training period on new hires. We also plan to provide more support to scientific users and to beef up our publications effort. In general, I believe I can assure you of better service all around from Application Engineering.

The boys in Application Engineering thought that if we turned back the pages of history and dramatized certain events you would get a better idea of what we mean by how sales can help Application Engineering. So without further adieu, let's put the spotlight on sales.

Next Section (Part 6)