NOW HEAR THIS... In the quiet town of Point of Rocks, Applied Electro Mechanics Inc. makes some of the world's most powerful public address systems

THE BALTIMORE SUN

Vietnamese Communists have heard them, sailors on tall ships have been welcomed by them and ousted Panamanian dictator Manuel Noriega has been serenaded by them.

What all these people have in common is firsthand experience with the products of Applied Electro Mechanics Inc. -- the maker of super-loud speakers and amplifiers used in emergency operations, crowd control and propaganda efforts.

These are not ordinary public address systems. These systems, built for combat, can project a spoken message for miles. It's the type of equipment you would use "if you want to talk and stay away from the mortars and the small arms fire and still say something to your enemy," said Edward R. Hallett, director of marketing for Applied Electro.

Such systems, called "loud hailers" by the Navy and "sky shouts" by the British, are made in the quiet little town of Point of Rocks, near Frederick. The factory is an inconspicuous one-story, cinder block building where about 20 workers assemble square horns and their amplifiers. These horns, also called bells, can be put together in ever-larger arrays, producing bigger and louder systems.

The company's largest system, a 7,200-watt model, can be heard for six miles if mounted in an aircraft -- that's about twice the distance from the Inner Harbor to Memorial Stadium.

While the company is little known, its equipment has been at center stage in military conflicts since the Korean War and has played a role in some movies.

In the 1950s, the company provided banks of speakers that were mounted along the South Korean border of the Demilitarized Zone so allied troops could shout propaganda to the North Koreans. They are still there and still working.

In 1976, Baltimore police used the equipment mounted in helicopters to welcome foreign tall ships -- in their native language -- into Baltimore as part of Operation Sail.

In December 1989, when General Noriega was holed up in the Vatican diplomatic mission in Panama City, soldiers used Applied Electro equipment to blare rock music at the fallen dictator to harass him and foil eavesdropping journalists.

And when helicopters in the movie "Apocalypse Now" were swooping down on the Viet Cong, Applied Electro speakers were used to blast out Wagner's "Ride of the Valkyries."

Despite its high-profile products, which can fetch as much as $150,000, Applied Electro has struggled in recent years to maintain sales levels and profitability.

At the height of the company's business during the Vietnam War, about 40 people worked in the plant. Since then, the work force has fluctuated as large contracts have come and gone. The plant had about 35 workers from roughly 1985 to 1987 as it worked on major contracts for Iraq, El Salvador and the U.S. Navy, Mr. Hallett said. With those contracts, sales hit $1.3 million in 1986 and $1.8 million in 1987.

But since then, annual sales have remained at about $800,000 and the company had small losses in 1988, 1989 and 1990, the result of slow sales and write-offs of obsolete inventory.

At the end of 1990, the company missed a chance at another important deal. Competitor Video Masters Inc. of Kansas City, Mo., received a $2 million contract to make sound systems for Operation Desert Storm. The sole-source contract was not put out for public bidding, Mr. Hallett said.

Despite losing out on that contract, Applied Electro made a small profit last year, said Geneva L. James, the company's executive secretary. The company has a strong financial position with no long-term debt and good cash flow, she said.

Still, it has been slow to modernize manufacturing equipment.

Applied Electro's factory is one large open area with several rows of wooden workbenches, littered with electronic components. In the back of the room is the machining area, where manual machine tools 20 to 30 years old are used to fashion some of the equipment.

The company has considered going to computerized machine tools, but it has not had enough business to justify the expense, Mr. Hallett said.

Charles R. Banks, 85, still presides over the company that he founded in 1951.

Mr. Banks was bitten by the electronics bug as a farm boy in New Jersey when his uncle returned from World War I, where he was an aircraft radioman.

Mr. Banks' enthusiasm for electronics resulted in a lifelong injury to his ankles when he fell off a roof while installing an antenna at the age of 17. But the injury didn't bother him much until after he was about 75, when he developed a slight limp.

He went on to work for the electronic companies of RCA, DeForest and Radiotron, eventually landing a job in 1937 at American Airlines, where he helped the airline switch from lower frequency radio communication to what is known as very high frequency (VHF) waves. This provided cleaner, crisper communications, Mr. Banks said.

At the outbreak of World War II, he was offered a commission in the Navy as a lieutenant commander to help with the Navy's communications system. He left the Navy as a commander in 1946 but was called back a few years later to help develop rockets.

Mr. Banks recalls that the government was having trouble figuring out what was wrong with its rockets, which were crashing routinely. His suggestion: Put a parachute on the rocket so that technicians could determine the problem once they fell to Earth.

Today Mr. Banks, Applied Electro's president, owns 85 percent of the stock; the rest is owned by Harry Brown, the vice president and chief engineer.

Applied Electro has no formal plan of succession. The heir to Mr. Banks' portion of the business is his daughter, Marcia Banks, who does not work there.

Applied Electro, which once was heavily dependent on government contracts, now has a brisk overseas business. It sells 80 percent of its systems to customers in Canada, England, Greece, Italy, Spain, Taiwan and even Japan, where there is no apparent competitor, Mr. Hallett said. About 60 percent of the foreign sales are made to military organizations, and the rest are made to police and rescue operations.

Other steady customers: the Los Angeles Police Department, the Pennsylvania State Highway Patrol and various airplane and helicopter manufacturers.

Prices for the equipment range from $6,000 for a 250-watt system to as high as $150,000 for a 7,200-watt system installed in a van. Five such vans were sold to Iraq before the gulf war, but apparently none was used in the conflict, Mr. Hallett said.

Besides Video Masters in Kansas City, other major competitors for Applied Electro are Northern Airborne Technology Ltd. of Kelowna in British Columbia and Whelen Engineering Co. in Chester, Conn.

Walter Shawlee, president of Northern Airborne, said Applied Electro is pretty much alone in the high-power speaker market above 400 watts. However, in the market for lower-powered systems for aircraft, in which Northern Airborne competes, he says Applied Electro has not kept up with the industry.

"I know we are not losing any sleep over them," he said.

But executives at Applied Electro say the company is becoming more aggressive.

Applied Electro's latest effort is a lighter 450-watt amplifier that will weigh 6 pounds, compared with 10 pounds for the current model. The extra pounds make a great difference when the equipment is in a helicopter, where much of the equipment is installed, Mr. Hallett said.

Along with the lighter equipment, the company has lightened its prices -- a 30 percent reduction went into effect about two months ago. With more competitive prices, Applied Electro plans to aggressively pursue police and medical services agencies.

But don't expect Applied Electro to stray too far from the loud hailers that have been its bread and butter for years.

In the late 1960s, the company diversified into home security systems, but retreated after its high-end systems were not popular in the market.

"I don't think we are going to branch out," Mr. Hallett said. "There's still money to be made in what we are doing."

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