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Walter Cherry

Overview

Cherry Electrical Products Corporation was founded in 1953 by Walter Lorain Cherry (1917–1996). Cherry’s own details about their founder have contained a number of errors, including implying a birth surname of Kirsch (German for “Cherry”), giving his ancestry as German, and spelling his middle name as “Lorraine”. Günter Murmann and his son Peter (the company president and later chairman) have corrected these errors. Walter Cherry was born in Iowa to a family of English ancestry. Walter Cherry was originally Walter Lorain Cherry Jr; Peter had a brother Walter Lorain Cherry III. The name “Walter L. Cherry, Jr.” appears on his early patents. Walter L. Cherry III would become Walter L. Cherry Jr. at some point in his teenage years, and his father dropped the “Jr.”

Walter’s son Peter Cherry—whose sole employer was Cherry—became the company president, and later took over as company chairman when his father retired around 1994.

The unlikely chairman Cherry

The following article from Doug Weatherwax was posted in the Waukegan News-Sun (now the Lake County News-Sun) in January 1984. Peter Cherry preserved a scanned copy, that is transcribed below with his assistance. The article provides a fascinating insight into the company’s founder, and the organisation itself.

Long before Apple, there was Cherry.

It was 1953, three years before the birth of Steven Jobs, that a 36-year-old former Zenith electronics engineer named Walter Cherry took $7,500 in personal savings and set up shop in 1,800 square feet of a Highland Park basement.

This week, accompanied by a Hollywood opening-like gush of media attention, chairman Jobs, 28, trotted out seven-year-old Apple Computer Inc.’s new Macintosh personal computer. Apple promptly issued the ominous warning that if its little Mac does not catch the public’s fancy within 100 days, it is doomed to a life as an also-ran in the zip-zappy personal computer market.

This week, chairman and chief executive officer Cherry picked up a phone in his office and called a fellow “member of the company” (he dislikes the word “employee”) somewhere in the bowels of Cherry Electrical Products Corp. complex in Waukegan. Then, Cherry scratched around for a sheet of lined, white paper, set his reading glasses on his nose and punched up some numbers on his pocket calculator. He jotted down a couple of lines and handed the sheet to a reporter.

“Oh, I left off the zeros. That’s millions, of course,” Cherry said.

It certainly was.

What the numbers showed is why Walter Cherry is perfectly happy to remain in the electronic and electrical component business, feeding a broad array of bits and pieces to the makers of glitzy consumer items like personal computers, autos, telephones and cameras — and leaving folks like Steven Jobs with the multi-million dollar marketing migraines.

Cherry’s numbers predict total sales for his company will climb 33 percent, from $105 million (at the close of the company’s fiscal year, Feb. 28) — to $140 million by Feb. 28, 1985.

Even more dazzlingly encouraging for the area economy, Cherry figures sales from the company’s home base plants in Waukegan will leap 45 percent — from $64 million to $93 million over the same period.

In addition to good news for Cherry Electrical, that could be good news, indeed, for Lake Countians looking for jobs. Walter Cherry figures a 45 percent gain in sales might result in an employment gain about half as large, which could boost the number of Waukegan employees from a record 1,600 to nearly 2,000.

The big gains at Cherry, unlike the gains of the finished product manufacturers it supplies, have not come as the result of clever advertising campaigns and strategic assaults on the media. Instead, they cap off a bold, $45 million capital equipment spending plan launched in 1980, coupled with beefed-up expenditures in research and development.

At Cherry Electrical, they are not concerned about which personal computer makers survive, so long as the industry as a whole, which buys Cherry’s keyboards and semiconductors, continues to thrive.

And Walter Cherry’s abiding concern is not with making products user-friendly. It’s with making a company employee-friendly.

Cherry, who turns 67 Monday, stood in his office this week and talked about business and enterprise, about work and competition. In shirt sleeves and ritual bow tie, sporting a plastic company I.D. badge bearing the name “WALT” in bold, black letters, he did not exactly present the omnipotent image expected of most $100 million-corporation chairman.

As he spoke, Cherry paced like a professor behind a lectern, head down and hands clasped behind his back, pausing now and again to carefully integrate his words into circuits.

What works mostly in business, he said, is work.

Cherry described his recent visit to a computer plant where it quickly became apparent to him why the company was experiencing difficulty.

“There was a bad work ethic,” he said, “both at the managerial and — I hate to use the word — worker level.”

That’s a shame, Cherry added, because “most people like to work and put in a full day’s work.”

Like a fellow native Iowan, Robert Noyce (the unofficial “mayor of Silicon Valley”) Cherry seems to possess those same characteristics which writer Tom Wolfe discovered in a whole flock of Midwest-born electronics entrepreneurs. Writing for Esquire magazine, Wolfe found that almost to a man the Midwesterners 1) respected working hard more than anything, except perhaps, working harder; and 2) vehemently disdained the palatial offices and imperial perks of their New York City counterparts.

“I grew up with a soldering iron my hand,” said Cherry. “I just love it. I feel sorry for anybody who doesn’t.”

At Cherry Electrical Products, there are no reserved parking spots snuggled next to the lobby for Walter Cherry and his son, Peter, who is company president and chief operating officer. “We park as far away from the building as we can,” said chairman Cherry.

“We have a strong philosophy here of individual dignity.”

When Cherry’s business outgrew its previous Highland Park plant in 1970 (it escaped the basement in 1955), he asked his 300 employees where they would like to move. They picked Waukegan, where most of them already lived.

At Cherry Electrical, salary ranges are posted, so there is no mystery about compensation.

Workers at Cherry may participate in the company’s stock ownership plan, and a new plan going into effect will provide about $100 worth of free stock each year to each employee. “All they have to do is work here,” Cherry said.

Pay for off-the-street assembly workers starts at just under $7 an hour, but under the company’s pay incentive program, it can rise to $11 an hour or higher, depending upon an employee’s speed and skill.

“There are people here who regularly earn 14 hours pay for 8 hours work,” said Cherry. The average worker in the plant earns a 30 percent bonus. “Which is pretty neat,” he added.

“Incentive is terrific because it starts over every morning, so that each associate is an entrepreneur. If someone is more highly skilled or more highly motivated, he can earn more.”

Management incentives, however, are more difficult to provide, indicated Cherry. “At that point, you have to depend on profit-sharing.”

He steadfastly refuses to provide year-end bonuses for management personnel because “you don’t know where to stop them. If the department manager gets a bonus and the manager gets a bonus, where do you stop?”

Cherry is well aware that his no-perks, no-bonus philosophy may put him at a competitive disadvantage with some of the latest generation of hot-tubbing Silicon Valley companies.

“It’s tough,” he admitted. “There’s a nationwide and very serious shortage of good technical help.

“But there are people who like it here. We have a warm, friendly environment. … We try to have fun here and we try to work hard.”

Despite his company’s lead, Cherry is doubtful that Lake County could ever develop into a high tech. er, electronics hotbed like the Silicon Valley. (“Frankly, I think the public and all of us have gotten bored with the term ‘high tech.’ ”)

The nucleus of the Valley and other electronic coveys is usually the semiconductor business. “The infrastructure is not quite right here,” he said. “Semiconductor engineers like to talk to other semiconductor engineers.”

This is not to say, however, that Cherry thinks it is now more difficult to start up an electronics firm here than it was when he started out in 1953. Quite the opposite.

“I think it can be done a lot easier,” he said, “simply because the breadth of technology is so much greater that there are many more areas to get into.”

He also does not see any shortage of area venture capital companies to launch new technology firms — only a shortage of area entrepreneurs.

“A great deal of the money on the West Coast comes from Chicago,” Cherry pointed out. “The whole milieu is different out there. The entrepreneurs beget the venture firms, beget the entrepreneurs — the whole thing begins to build on itself.”

The continued success of his own company, Cherry in large part attributes to the diversity of its products.

In its electrical line, Cherry Electrical provides chiefly snap-action switches for home appliances and other electrical equipment and automotive switches for windshield wipers, power windows, etc. The electronic segment largely produces keyboards and keyswitches for computers and other data entry devices. Its Rhode Island semiconductor subsidiary, purchased in 1977, provides integrated circuits for cameras, communications devices, and computer peripherals.

The electrical line still accounts for over half the company’s sales, and Cherry concedes the gravitation into more electronic, and fewer electrical, sales has been “perhaps a little slower” than he had hoped for. Still, he pointed out, 60 percent of the products his firm makes — whether electronic or electrical — go into the electronics industry.

“Electronics are growing and electrical has substantially matured,” Cherry said. “So, if we want to get ahead, the growth is definitely in electronics.”

The near future for Cherry Electrical, he said, lies in computers, both in the office and the home.

From its humble basement beginnings, Cherry Electrical Products has grown into an international company, with plants in Germany, England, Brazil and Japan (a 50 percent partnership), in addition to Cherry Semiconductor Corp. in Rhode Island.

Cherry permits very little to be imported from his overseas plants and is proud of the fact that 10 percent of the company’s overall shipments are sent to the Far East, where so much of America’s electronics competition comes from. (“Kind of neat, isn’t it?” he said.)

Calls by U.S. business leaders for import restrictions to combat competition from the Far East and elsewhere trouble him greatly.

“I worry about this a lot,” Cherry said. “American managment still thinks we’re a neat little island over here that can claim what we want, pay ourselves what we want and call our own tunes. But we can’t any more. We’re just part of a huge market.

“All the protective imports aren’t going to back it. We’re going to have to compete with the 3rd World on a toe-to-toe basis.”