Customer Reviews

My Years With Xerox: the Billions Nobody Wanted

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This is the fascinating story about the physics engineer & patent lawyer Chester F. Carlson, who on October, 22, 1938 invented the xerography. But despite he was turned down by companies like GE, IBM and RCA, he believed his invention would make a difference - even it should take years before it became widely used and worldwide known.

The following six years Chester F. Carlson tried with no luck to attract both research institutions and companies to get them to use his invention. Finally in 1944 somebody saw an opportunity and got interested. It was the Battelle Memorial Institute, and for a limited amount they supported Chester F. Carlson the next years.

In 1946 Battelle found a company, the Haloid Company, who believed in turning the xerography invention into a commercial business. The only problem was that the company was closed to bankruptcy. However Joseph C. Wilson, Haloid's president, managed to overcome the problems, and as visionary as he was, he decided that xerography should be the company's future main product. On October, 22, 1948 - exactly ten years after Chester F. Carlson made the invention - Battele and Haloid announced the commercial developing of xerography, and in 1949 the first product, Model A, saw its daylight.

Already in the early 1950'ties Joseph C. Wilson decided, that Xerox should move abroad. In 1953 a Canadian subsidiary was founded, and in 1956 - through an American employee - the J. Arthur Rank Organisation Ltd. became interested in marketing xerography in Europe, Latin America, Africa, Asia and Oceania. The Chief Executive of John Davis signed a joint venture agreement with Haloid, making Rank Xerox Ltd. the international arm of Xerox.

In 1958 the Haloid changed its name to Haloid-Xerox, Inc., and a year later, in 1959, Haloid-Xerox bought all Battelle's worldwide patents and at the same time introduced the first real plain-paper officer copier, Xerox 914, which should become the big break-through for Haloid-Xerox.

Halloid-Xerox skiped in 1962 Halloid and is just named Xerox Corp., and entered the Fortune 500 with a rank of 423. The same year Rank Xerox made an agreement with the Chairman of Fuji Photo Film Co. K.K. of Japan, Mr. Setsutaro Kobayashi, regarding the establishing of a joint venture, Fuji Xerox Co. K.K. - covering the Far East.

Xerox and Rank Organisation agrees in 1964, that Xerox should take over the marketing in Central and South America, which in geography meant, that Xerox handles Americas, Rank Xerox handles Europe, Africa, the Middle East, Singapore and Malaysia, Australia and New Zealand, and Fuji Xerox handles the rest of the Far Eastern countries. Now xerography covered the whole World - through joint ventures. And it seemed that endless success of developing, manufacturing and marketing copiers had no end.

Later - in 1969 - Xerox acquires the majority interest - 51% - in the joint venture Rank Xerox, while Rank Organisation retains the remaining 49%.

Also in 1969 Xerox decides to enter the computer industry by acquiring Scientific Data Systems, Inc. from Max Palevsky. The company changes its name to Xerox Data Systems, Inc., and at Xerox-management the expectations and hopes are as high as ever.

The interesting story covering the years 1906-1971 is told by John H. Dessauer, who joined Haloid Company back in 1935 - and who later became its Chief Research & Development Officer (before retiring in 1970) and its Vice Chairman.

The story ends at the same time as Joseph C. Wilson dies at age 61, Xerox has a turnover on nearly $ 2 billion, a net income on $ 213 million, nearly 70.000 employees, holds the rang of no. 52 on Fortune 500, and is now a global company - ready to enter the computer industry.

The good thing about this book is, that it is written like a modern fairytale. At the time the story ends in 1971, the author was in his good right to praise his company as he does, and I believe he has written this story without glamorizing it at all. It was actually the American dream about how a innovator and investors believed in the promising future of electro-technology.

Had he written the story five years later - in 1976 - it would have included: Xerox Data Systems' destiny, which ends fours years later, when Honeywell takes over the company and Xerox decides to withdraw from the entire computer industry. Several antitrust cases - and among these two brought by SCM Corp. and Van Dyk Research Corp. The 12 IBM-Xerox patent rights lawsuits against each other, which ends with, that the two companies share their patents. And ending in September 30, 1976, with the notice about, that the last Xerox 914 plan-paper office copier, which made the Xerox-brand world famous, had been produced - nearly 17 years after the first Xerox 914 was made!

Even Xerox still in these years makes fine results, it would have vanished the fairytale about Chester F. Carlson and Haloid.

So in many aspects a new era starts when Peter McColough takes over after Joseph C. Wilson as Xerox' new Chairman. Xerox is now a grown-up company - and is soon to discover how it is to be a larger middle-age American corporation - where discontinued operations and lawsuits are part of daily business management.

In all aspects this is the most impressive history of establishing cross-global joint ventures, when you want to market your products in the whole world, and at the same time do not want to lose your financial power - making too expensive material investments abroad.

EPILOGUE:

Much later the joint venture constellation was restructed.

First in 1990 - Rank Xerox sells it activities in Australia, Malaysia, New Zealand and Singapore to Fuji Xerox.

Later in 2000 this followed-up when Xerox sells Xerox completes sale of Xerox (China) Ltd. and Xerox (Hong Kong) Ltd. Whereafter Xerox controls North and South America, Europe, Africa, Middle East and the old Soviet republics, while Fuji Xerox controls rest of Asia as well as the Oceania.

In connection with this Rank Organisation sells 13,3% of its 33,3% shareholding in Rank Xerox in 1995 to Xerox Corp., which then holds 80% of Rank Xerox, and in 1997 Rank Organisation sells the rest - 20% - of its shares in Rank Xerox to Xerox and Rank Xerox is at the same renamed to Xerox Europe.

In 2001 Xerox ran into financial statements trouble ( much like Enron and Worldcom ) as well as regulary financial difficulties, and Xerox was therefore forced to sell half of its 50% shareholding in Fuji Xerox to Fuji Photo Film, making this company the majority shareholder with 75% ownership of Fuji Xerox.

This also meant the end of the absolute greatest joint venture constellation (read: multi strategic alliance) ever made in global business history.