Small company shouts with super-loud speakers NOW HEAR THIS


Vietnamese Communists have heard them, sailors on tall sailing ships have been welcomed by them, and ousted Panamanian dictator Manuel Antonio 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 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 a one-story, cinder block building where about 20 workers assemble square horns and their amplifiers. These horns 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 -- from the Inner Harbor to Northern Parkway.

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 in helicopters to welcome foreign tall ships -- in their native language -- into Baltimore for Operation Sail.

More recently, when General Noreiga was holed up in the Vatican Embassy in Panama in December 1989, 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 operatic movement, "The 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 with the contracts. 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. Sales hit $1.3 million in 1986 and $1.8 million in 1987.

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

At the end of 1990 the company did not win a $2 million contract to make sound systems for Operation Desert Storm to a competitor, Video Masters Inc. of Kansas City, Mo., which received a sole-source contract that was not put out for public bidding, Mr. Hallett said.

Still, Applied Electro made a small profit last year, said Geneva LJames, 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 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 radio operator on airplanes.

Mr. Banks' enthusiasm for electronics resulted in a lifelong injurto his ankles when he fell off a roof while installing an antenna at the age of 17. 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.

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. 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, once 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, Mr. Hallett said. About 60 percent of the foreign sales are made to military organizations. The rest are made to police and rescue operations.

Prices 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 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.

But executives at Applied Electro say it is becoming more aggressive.

Applied Electro's latest effort is a lighter 450-watt amplifier that will weigh six pounds compared to 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.

The company recently cut prices by 30 percent. With more competitive prices, it plans to aggressively pursue police and medical services agencies.

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