The COVID-19 is not the first crisis that century-old companies like Tungsram have had to master. Let’s take a quick look at how Tungsram mastered the great crises of the past.
Tungsram is a survivor. It survived the end of the WWI, the endless scarcities of manpower, food, vehicles, coal, and fuel. It survived the terrible Spanish flu (1918-1920), one of the deadliest pandemics of human history, which wrought high mortality rates due to malnourishment, overcrowded hospitals and public transport vehicles, and – in some districts – poor hygiene in Budapest as well, all leading to similar quarantine and lock-down measures such as confront us today. It survived the takeover of management by the workers’ local council during the Hungarian Soviet Republic from March 21 to August 1, 1919 and the loss of machines and material the Romanian troops brought with them later that year. Moreover, Tungsram survived the collapse of the Austro-Hungarian empire and the Trianon treaty, which drastically reduced the size of the home market, and found solutions to less advantageous terms of capital import, growing protectionism in world trade, and political tensions within the Danube region which impaired economic relations.
Despite all these dire circumstances, Tungsram would soar in the interwar years. During the war, the profit had been used to invest in production mechanization and to build a vertical production chain for incandescent lamps. In 1917, Tungsram took over an important lamp producer in Austria and bought equity in the only remaining major competitor in the Austrian and Hungarian lamp market. The strikes in 1917 and 1918 taught lessons: Tungsram paid workers a cost-of-living allowance during work-time reductions (due to coal shortages in 1919), since training new people cost more than keeping the trained ones. The company’s new CEO, Lipót Aschner focused resources on the products in which Tungsram had the highest value added. Besides incandescent lamps, radio valves became the other main product group; at Tungsram, initial experiences with this new technology resulted from military production.
During the Great Depression, Tungsram maintained financial stability and was one of the most important Hungarian export companies, earning considerable amounts of convertible currencies. As a middle-sized member of the international lamp cartel, Tungsram profited from this organization’s measures to circumvent trade restrictions, maintain prices, standardize products and reduce marketing costs. Tungsram continued setting up production units in the main export markets to maintain access to these. Furthermore, radio valves and radio equipment became important consumer goods, as to some extent radio replaced theatre, cinema, and other, more costly, middle class entertainment. Some innovation processes ripened during the crisis, as well, such as the tungsten filament fashioned of large crystals, thus making the filament more resistant and increasing the efficiency of light output. Other innovation processes started immediately before and during the Great Depression, too, like using krypton as a filling gas, developing gas discharge lamps or fluorescent lamps. Continuous investment into the development of radio valves was also necessary in order to match the competition from Philips, Telefunken, and the US-American producers. Continuing the work of Professor Ignác Pfeifer – the first director of Tungsram Research Laboratory – from 1936 Professor Zoltán Bay directed the Tungsram research team’s efforts that would lead into new fields even during WWII.
The third great crisis occurred at the end of WWII when the invading Soviet Army completely dismantled the central Tungsram factory in Újpest. A shortage of food occurred, not to mention scarcities in fuel, building material – everything. However, with some machines that had been hidden, machines and tools that engineers redesigned from memory – and even with tools workers brought from home – production started within a few weeks(!) after the factory’s dismantlement. As quickly as trade restrictions made it possible, export started as well. Using the miniaturization achievements attained during the war, the research team Ernő Winter directed constructed a series of highly energy-efficient miniature radio valves in 1946. These valves became one of the best-selling Hungarian export products well into the late 1950s. The nationalization of the company – including the loss of its right to export and import autonomously – and the reorganization of research in the country, as well as the Cold War, spawned great difficulties, but the way of extensive growth stood open.
By 1989, Tungsram operated with low profitability and had accumulated a high amount of debt. Due to the distortions of the planned economy, the large enterprise did not work efficiently; its production profile, production technology, and processes had not adjusted quickly enough to the development of the lighting and electronics industry and to market demand. GE’s takeover of the company enabled Tungsram to go through the unavoidable organizational change the market economy required as part of this multinational company. Tungsram survived Central Eastern Europe’s systemic transformation; it regained financial stability and reinforced its innovation capability. Since 2018, the autonomous Tungsram Group surged into a new transformation while maintaining its lighting core and developing smart solutions in new areas. The UV-light disinfection equipment for COVID-19 is just an example for a quick response to market demand, and at the same time, it is a sure sign of Tungsram’s innovation capacity, the key to master all crises.
Tungsram UV Box https://www.youtube.com/watch?v=5zdWXRBmRec
