The Post-War Boom

Despite the horrible reality of the war, it gave Beckman’s business an important boost.  Not only did it force NTL and its allied companies to boost production, it also introduced Beckman to a much wider potential market, in science, engineering, business, and the military, for his expanded line of instruments.  His business grew exponentially in the 1940s, augmented by the postwar business and science boom and by NTL’s first foray into direct advertising.  The size and energy of NTL caused the board of directors concern, however, because many of them were not nearly as adventurous as Beckman himself.  Beckman controlled a minority share in the company, a unique position for a man whose technical expertise was the reason for the company’s existence. 

In order to remedy this situation, Beckman struck a deal with John J. Murdock, the man who had originally asked him to consult on non-clogging inks for National Postage Meter.  Murdock was a major shareholder in NTL, and he agreed to sell Beckman his shares upon his death.  But by 1947 other, more conservative shareholders had begun to gang up on Beckman.  In a characteristically bold move, Beckman entered into merger negotiations with Minneapolis-Honeywell Regulator Company, an electronics corporation that had its roots in the thermostat industry.  This would have given him control of his own enterprise as well as a significant role in the larger corporation.  In 1948 Murdock died, however, and Beckman was able to purchase his shares and thus gained control of his own company.  He immediately broke off negotiations with Minneapolis-Honeywell, because his goal had always been control of his own ideas rather than big business.

Change came quickly once Beckman controlled the board.  In 1950, the name of the corporation was changed to Beckman Instruments in order to reflect the name that had become associated with high-quality, precision instruments.  Beckman Instruments was introduced as a publicly-traded company in 1952, giving it a much-needed injection of capital.  Beckman Instruments had been capitalizing new ventures out of the previous years’ retained earnings, which although sufficient stifled much of the company’s exuberant innovation.  The new money would allow Beckman to pursue avenues of research that had previously been too expensive.  It also allowed the company to buy potentially advantageous technology.  Indeed, Beckman Instruments purchased Berkeley Scientific that same year.

Even with the astronomical growth of the early 1950s, Beckman worked hard to ensure that the close-knit, loyal, familial feel of his company was not lost.  He continued his early habit of hand-delivering each employee’s paycheck long past the point of feasibility; he only stopped when there were so many employees that the task would have taken more than a day.  Beckman valued loyalty, and expected the commitment to go both ways.  His first two directors of research and development, Howard Cary and Roland Hawes, both left to start their own firms, decisions that left much bad feeling on both sides.  Even though there was eventually a reconciliation, these splits were indicative of a major trend in American industry in the later twentieth century.  Especially in technology companies, the old model of corporate loyalty was sacrificed to the entrepreneurialism that kept the industry vital.  Beckman’s company was a true pioneer of this new model of business.

During this exciting period in the history of Beckman Instruments, the children of the Beckman family were growing up.  Mabel worked hard to maintain their house in Altadena as a haven for the family, and she insisted that Arnold take some time out of his busy schedule for their children.  The family remained very closely knit for this reason, spending every Sunday and every vacation together.  Camping remained a Beckman favorite, but it was increasingly supplemented with sailing trips aboard the Lady Pat, a 37-foot sloop that the Beckmans co-owned with their friend Gray Phelps. Later, the Beckmans owned their own boat, the Aries.  Beckman’s roots in the Midwest and in the Great Depression kept the family from luxurious excess, and their modest life in their old home in Altadena belied Beckman Instrument’s remarkable success.

Beckman Instruments pursued a number of growth strategies in the 1950s.  First, they worked to increase the sensitivity and precision of the instruments they had.  The company constantly pushed for the cutting edge thanks to its founder’s unique drive.  Secondly, they worked to make cheaper and simpler instruments.  Recognizing that not every user needed the sensitivity or could afford their top-of-the-line instruments, Beckman developed a line of lower-cost, easier-to-use instruments that sold particularly well to industry.  The third strategy, which often helped serve the second one, was that of acquisition.  Now that it was a widely-respected and publicly-traded company, Beckman Instruments could afford to purchase technologies that they did not have the time or inclination to develop in-house.  Beckman followed a somewhat untraditional route to acquisitions, however.  He preferred to buy entire companies rather than merely purchasing patents, which would have been cheaper and easier.  This habit underlines his belief that the most important thing in a technology company is the talent behind the product. 

The fourth strategy followed by Beckman Instruments was suggested by their experience with MIT’s Radiation Laboratory and the Helipots.  They pursued a policy of aggressive development of their component business, first within the Helipot Corporation, and then within the Helipot Division of Beckman Instruments.  Military use of Beckman’s devices helped to spur their development, especially that of high-performance ceramic/metal blend materials.  The division also moved beyond potentiometers to the productions of other electronic components.  In 1958, Beckman Instruments opened a Helipot factory in Scotland, signaling its global ambition.

Beckman pursued a number of government contracts in the same years.  Government contracts were not profitable in themselves, due to the small run and strict specifications, but they helped Beckman’s staff retain their position on the technological cutting edge.  A prime example was their agreement to build a series of mass spectrometers for the Atomic Energy Commission (AEC) in 1953.  Even though Beckman Instruments had decided not to enter the mass spectrometer market, due to the already-established preeminence of several other firms, they built other instruments that incorporated the technology they developed for the AEC, including a super-sensitive leak detector and a portable gas analyzer.  The industrial purpose of both of these instruments reflects the expanding horizons of Beckman’s market.

Despite Beckman’s busy business schedule, he still found time to be involved in the Los Angeles Chamber of Commerce.  Southern California was growing exponentially at this time, and in 1943 smog entered the regional consciousness as a problem.  Since Beckman was a member of the scientific advisory group, he quickly attacked the problem.  He motivated the research that identified the probable cause of smog, ozone, and chaired the Special Committee on Air Pollution that released its findings in the “Beckman Bible” in 1953.  This study set Los Angeles and statewide pollution control measures for years to come.  In November 1953 Beckman was also active in founding the Air Pollution Foundation, a not-for-profit founded to support research into the smog problem.  Beckman’s leadership on the smog issue won him an invitation to join the board of directors of the Chamber of Commerce in 1954.   He was named vice president in 1955 and president in 1956.  Beckman became a strong spokesman for his adopted Los Angeles, and emphasized two issues during his tenure: fighting smog and fostering the scientific-technical-industrial-educational nexus that was growing in the area.  His concern for smog won him a place on the Federal Air Quality Board in 1970.  He received a further opportunity to address these concerns when he assumed the leadership of the California Chamber of Commerce in 1967.

As president of the Los Angeles Chamber of Commerce, Beckman became the region’s representative to the world.  The American economy was undergoing much change that could be classified under the heading of “globalization” in the 1950s, and the technology-fueled Los Angeles area was no exception.  This new international focus in Beckman’s civic life was reflected in his professional life, as well.  He opened his first overseas factory in Munich, Germany, in 1953.  Even though a majority of his international orders originated in Great Britain, he was reluctant to open a facility there due to its long tradition of strong unions.  The management of Beckman Instruments had always believed in non-union factories, and treated their employees well as a matter of principle.  The German subsidiary was a success, leading to similar arrangements in Scotland, France, Austria, the Netherlands, Sweden, South Africa, Mexico, and Puerto Rico.  Beckman established sales and service networks in many more countries, excepting only Soviet allies. 

All of this new activity in the 1950s seriously taxed Beckman Instruments’ available space facilities.  The company was spread out through two factories and countless smaller spaces in South Pasadena, and Beckman wanted to unify his operations under one roof.  Real estate in South Pasadena had become prohibitively expensive, and so in 1953 the company broke ground on a massive complex in Fullerton, California.  It was designed as a marvel of flexibility and expandability, and it continues to house Beckman Coulter, the descendent of Beckman’s operations, to this day.

Beckman made one move towards the technological cutting edge that would have great ramifications for the entire world even though it was essentially a failure for Beckman Instruments.  William Shockley, a scientist at Bell Labs, had invented the semiconductor in 1947, and it promised to revolutionize the world of electronics as a far superior replacement to the vacuum tube.  He was interested in commercializing his invention, and Beckman convinced him to come on board at Beckman Instruments.  From the beginning Shockley was a creative prima donna, but Beckman followed his usual policy of indulging technological talent for the sake of innovation.  The Shockley Transistor subsidiary was located in Palo Alto, California, at Shockley’s request.  It quickly became clear that the division was not following its mandate, which was the efficient mass production of silicon semiconductors, and that Shockley was in fact abusing his position to follow his personal interests in creating a four-layered diode, an exceptionally complex transistor.  Beckman was faced with a mutiny in the ranks of Shockley’s research team, and eventually eight scientists left to form their own company.  Beckman Instruments eventually marketed the four-layered diode, but Shockley’s managerial problems turned out to be more trouble than they were worth, and Beckman sold the subsidiary to Clevite Transistor Company in 1960, ending his involvement with semiconductor manufacture.  Fairchild Semiconductor, the company founded by the splinter group of researchers, went on to develop integrated circuits, the basis for all modern information processing technology.  Fairchild spawned Intel and many other important companies.  Beckman Instruments was thus present at the very birth of Silicon Valley, and was perhaps the earliest victim of the legendary entrepreneurial inclination of its technological innovators.

Beckman made an early venture into the exciting realm of information processing with his purchase of Berkeley Systems in 1952.  After that, his company became increasingly involved in processing the information that its instruments produced.  The expanding scale of science and industry, as well as the increasing ease of making measurements, combined to make automated data processing essential.  Beckman Instruments had formed a Systems Division by 1957 to develop appropriate devices, and Beckman built a $1.25 million addition to his Fullerton facility to support the work.  Although his data collection systems were originally designed for oil refineries, they were popular with the military and aerospace industry, and their construction made Beckman Instruments a major military contractor.  Each system was custom-built, like an organ: they were all made of the same basic parts, but each application required a unique assembly.  They worked, but they were ahead of their time.  Beckman’s salesmen were selling products that most people could not even imagine existed.  The Systems Divisions was busy and successful, but never profitable.

In 1955, Beckman Instruments acquired Spinco, short for Specialized Instruments Company, a Bay Area producer of ultracentrifuges.  Until the rise of Beckman’s medical and clinical instruments business in the 1960s and 1970s, Spinco was the most profitable division of Beckman Instruments.  The company also manufactured Moore-Stein amino acid analyzers and ion-exchange chromatography instruments, and it counted several firsts, such as commercial peptide sequencing and synthesizing, Tiselius electrophoresis, and paper and capillary electrophoresis.  Spinco remained Beckman Instrument’s storehouse of technical know-how in the life sciences, especially molecular genetics and biology.  As such, it laid the groundwork for much of Beckman Instruments’ future preeminence in clinical instrumentation, the central mission of the company today.

In 1956 Beckman Instruments acquired the Watts Manufacturing Company of Ronceverte, West Virginia, which had been one of the first firms to produce gas chromatographs, especially for industrial customers.  Later that same year, Beckman Instruments came out with its first gas chromatograph, the GC-1.  It was an inexpensive yet high-performance instrument targeted at an industrial market.  Like Spinco, Beckman Instrument’s gas chromatograph division was highly successful and developed a long line of instruments.  Commercial competition was extreme in the field of gas chromatographs, however, and Beckman was faced with the same decision he needed to make over the infrared spectrophotometer.  His company would only enter into the market if they could be at the top.  Since true leadership in gas chromatography eluded Beckman Instruments, the decision was made to withdraw.

Beginning in 1955, Beckman positioned his company at a prime spot of opportunity, namely, the technologies that would underpin the growth of biotechnology in the 1970s.  The developments that began with Spinco put Beckman Instruments in a unique position to be true leaders in the field.  Luckily for the company, another significant trend followed the growth of biotechnology: the field of hospital diagnostic tests and clinical care.  In a sense, the hospital market was to biomedical research what industry was to chemical research.  In both cases, Beckman Instruments was able to fulfill the needs of both constituencies and thus expand their markets.

Beckman Instruments’ rapid expansion began to take its toll in the late 1950s.  In 1958, the company posted its first and only loss.  The problems lay with Arga, a hastily-acquired company that manufactured high-precision rotating equipment.  Its founders had taken on more than they could handle, and they lost over $1.7 million in 1958.  Shockley’s transistor group and the Systems division were also drains on profitability.  The problems with the company ran deeper, however.  Beckman had continuing difficulty managing his company that had grown so rapidly.  His personal style of management, which relied to a great extent on loyalty given and received and his own personal instincts for innovation, was no longer suited to the corporate reality of Beckman Instruments.  Arnold Beckman was still Professor Beckman, leading graduate students, rather than President Beckman, leading employees.  Luckily he was wise enough to recognize this fact, and a series of reorganizations and reforms quickly returned the company to profitability.

In 1963, Beckman instruments made a radical change in their distribution and sales scheme.  They had relied on instrument dealers ever since the 1930s when Arthur H. Thomas Company of Philadelphia had agreed to sell Beckman’s pH meter.  These catalog merchants had no reason to push Beckman’s instruments over those of any other manufacturer.  Furthermore, Beckman had relied on these distributors to service his equipment, but its increasing sophistication often exceeded their ability.  Thus in 1963 Beckman Instruments announced the establishment of their own network of sales and service representatives.  It cost the company some $2 million, but it paid off handsomely in the end: it only took the new system nine months to exceed the record sales total of the old system.  There was a personal cost as well, however.  Ed Patterson, Beckman’s loyal ally at Arthur H. Thomas who had originally pushed for the national marketing of the pH meter, never spoke to Beckman again.

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