1. Tennelec History

    By Larry Darken

    Ed Fairstein started Tennelec in 1960 to design and produce high quality nuclear instruments for signal processing.  Ed was sole proprietor and the first products were assembled in his home .He had been a senior engineer at the Oak Ridge National Laboratory for fifteen years and had significant experience in this field. Initial success ($40K sales in the first year) prompted incorporation with the first stock issued in 1961. Sales increased to $127K in 1964, but subsequently increased dramatically with the introduction of theTC200 (see below), the highest performing linear amplifier for nuclear spectroscopy at the time. Tennelec products remained at the technological forefront  of a competitive nuclear instrumentation business  through the introduction of solid state electronics and the adoption by the user community of the NIM standards. Sales increased to $986K in 1967, the year that Tennelec moved into their new building at 601, Oak Ridge Turnpike. At that time, Ed served as Board Chairman, President, and Chief Design engineer.

    The Tennelec TC-200, The laboratory standard in linear amplifiers during the 1960s.
    The Tennelec TC-200, The laboratory standard in linear amplifiers during the 1960s.

    While Tennelec continued to do well in the NIM market (Sales of $1,220K in 1971), the limitations of the overall nuclear market became apparent.   In 1972, Tennelec started the Consumer Products Division to apply their electronic expertise to larger markets. Tennelec became a major innovator in the the rapidly expanding CB radio market when they introduced the first programmable CB radio scanner, the MS-1, in 1974. Tennelec sales reached $4,237K in 1975 and peaked 50% higher in 1976 when the MCP-1, which allowed keypad frequency entry, was released.  At this point, Ed Fairstein was still chairman and contributing to nuclear instrument design, but Stan Doebler, who had joined the company in 1971, had become president and was managing the business expansion.  Tennelec had 150 employees in Oak Ridge and over 200 employees at a new manufacturing plant in Orangeburg, South Carolina.

    Tennelec’s initial technically driven market success against larger and more established competitors did not last long. By the end of 1976 incipient cracks in the company’s position had become fissures: CB products in the rush to market were of unreliable quality, spawning high return rates which triggered cancellation of large orders from retailers including Radio Shack. Falling revenues in a company whose payroll and inventory were structured for rapid growth led to a grim situation. A petition for a Chapter XI bankruptcy was filed on October 14, 1977. With Tennelec’s image marred and competitors having eroded their ephemeral technological edge, Tennelec abandoned the CB market, but continued their nuclear business which had remained largely unscathed. The abandoned CB business echoed for at least 15 years as telephone receptionists dealt with distraught users who wanted theirTennelec scanners repaired.  At the nadir of the bankruptcy the company was reduced to a handful of employees. The company was purchased during the bankruptcy period by David Coffey, an Oak Ridge entrepreneur. David had founded a couple of technical businesses in Oak Ridge including the Nucleus, which specialized in nuclear spectroscopy instruments for the educational market.

    Tennelec survived the tenuous times and in 1979 was released from bankruptcy. By that time David had hired Jim Moughianis from ORTEC as president of Tennelec. Jim was highly energetic, strongly driven, and described himself as a leader more than a manager. You did not complain to Jim because he would get more involved with your problem than you wanted. Jim thought that Tennelec’s growth opportunities were in systems rather than components for the nuclear market.  That year, Tennelec  also returned to profitability and introduced its first low background alpha/beta counting system, the LB 5100. This system was well received by the market and Tennelec remained a market leader in low background systems for the health physics and environmental monitoring markets for many years. In 1982 overall Tennelec sales had reached $3.25M  with a 17% pretax profit.

    The market for nuclear spectroscopy had been shifting away from nuclear physicists who were adept at using modular components to build up the instrumentation needed for their particular experiment to more commercial customers. These customers frequently had the same specific applications and were less interested in and less capable of constructing systems to meet their needs. Many of these opportunities involved gamma ray spectroscopy for which Tennelec had the signal processing technology, but not the detector technology. Gamma ray detectors for spectroscopy were made from large high-purity germanium crystals and operated in a vacuum at high voltages.

    abricating contacts and operating these detectors at low leakage current was a difficult enough technology to master by itself, but growing suitable crystals was even more challenging as well as more expensive in material and equipment. It was Tennelec’s strong conviction that they could not securely enter this systems business without acquiring high-purity Germanium detector and crystal growth technology.

    In 1983 Tennelec made two significant acquisitions: Waltec, a small Oak Ridge silicon detector company founded by John Walter, a former ORTEC manager, and the high-purity Germanium crystal growth group from General Electric. The crystal growth group was located in King of Prussia, PA, but was moved that same year to Oak Ridge. These two parts comprised the new Semiconductor Division. Larry Darken was hired to lead the high-purity crystal growth group and John Walter, later joined by Pat Sansingkeow led a program to make high-purity germanium detectors. The crystal growing group largely maintained its customer base in the transition but did not obtain profitability until the 86/87 fiscal year. It returned 44% profit on sales of $1.6M in fiscal 87/88.  Yield problems due to poor charge collection occurred in 1989 and again in 1991, but the operation subsequently remained highly profitable. In 1995 Tennelec reached a high-purity germanium crystal supply agreement with Canberra which provided welcome stability.  The high purity germanium detector group sold its first detector in May 1986 and sales peaked at $1.3M in 1989, but this business element never became profitable.

    In the meantime Tennelec was legally merged into the Nucleus in 1987, and the combined company, still run by David Coffey and Jim Moughianis, was sold to UEI, a British company, in November 1988. Six months later UEI was acquired by Carlton, another British company. Carlton sold Tennelec/Nucleus to Oxford Instruments in September 1989, and Tennelec/Nucleus became the Oxford Nuclear Measurement Group (NMG). “Bookings” became “sales” and “sales” became “turnover.” The name Tennelec was retained as a brand name for the low background system. All these changes were compounded by the death of Jim Moughianis in November 1989. Jim’s successor George Epthiumu(sp?) was let go in January 1990  after only nine months of service, and the next president, Frank Brown, did not arrive until October, 1990. To say it was a time of anarchy would only be a slight exaggeration. Oxford had purchased a company with nine somewhat disparate business elements, $13M in sales, and minimal profit by the end of 1990. New product development was not focused and two product marketing managers had left to start competing companies. Consultants were brought in. Among other things, the pathway of high-purity germanium crystals to high purity germanium detectors to detector based systems was approved, but had been achieved only through internal Oak Ridge profits.

    In the 1990s, NMG tried Expanding overseas sales of low background systems. Multiple alliances or marketing arrangements with other companies were implemented. An alpha spectroscopy system was introduced. Despite these initiatives, this was a period of static to declining sales and an often unsuccessful  struggle for profitability. There were five different presidents in that decade.  In the last year of Oxford ownership sales had declined to $11.6M yielding a profit of 1.6%. Financial difficulties at Oxford Instruments PLC, the parent company, precipitated the sale of NMG (Tennelec) to Canberra, completed on 4/1/1999.