Ze'ev Drori takes another sip of tea and recalls one night in 1979 when he wanted to drive around San Francisco.
He was walking toward his Porsche Turbo, an expensive sports car that ostensibly was protected by a $900 auto-alarm system. As he approached the car, two would-be thieves bolted out the doors and fled. Drori found the car's stereo ripped halfway out of the dashboard.
Worse yet, he said, his alarm, "which was supposed to protect my car, was the first to go. And it was on the pavement, resting in peace."
So he bought another alarm, this one from a tiny Sun Valley firm called Clifford Electronics. And, as Victor Kiam of Remington Products would say, he liked it so much he bought the company.
Drori won't say what Clifford cost, but it is unlikely that the sum proved much trouble for him. Now 48, he is a multimillionaire from having founded Monolithic Memories, a successful Silicon Valley maker of semiconductors, in 1970. He was Monolithic's chairman until it was sold last August to rival chip maker Advanced Micro Devices for $422 million in AMD stock.
An Israeli immigrant who didn't speak English when he moved to the United States at age 22, Drori said he first invested "several hundred thousand" dollars in Clifford in 1981, became its sole owner and president in 1985 and moved the private company to Chatsworth 18 months ago.
Auto Thefts Increasing
Clifford is a major player in auto security, a market with annual sales of about $450 million and rising. Auto theft jumped 11% nationally in 1986 after rising 6.8% in 1985, according to the National Auto Theft Bureau, a research group based in Palos Hills, Ill. Nationwide, 3.9 million cars, trucks and other vehicles--or one out of every 46 registered in the United States--was stolen or had its contents rifled in 1986. Such auto-related crimes cost Americans and their insurance companies $6 billion a year, the bureau estimates.
Of course, a security system does not ensure that the car will not be stolen or burglarized, and Clifford doesn't provide a money-back guarantee if a crook breaks through its alarm to gain entry. "Anything can be stolen if you want it enough," said Sgt. Clarence Henderson of the vehicle-theft division of the Los Angeles County Sheriff's Department. "But an auto alarm is a good deterrent."
Drori will not disclose Clifford's sales. But he said Clifford sells about 10,000 systems a month, and he did not quarrel with estimates that Clifford takes in an average of nearly $250 per unit. Using some simple math, that would put Clifford's annual sales at roughly $30 million.
One of Clifford's main competitors, Code-Alarm Inc. of Madison Heights, Mich., doesn't believe it. "They're about the same size as us. We think they're slightly smaller," said Rand Mueller, president of the publicly held Code-Alarm, whose sales were $8 million in 1986 and $6.2 million in the first half of 1987.
Unlike Code-Alarm, most of the industry's players are privately held, so there are no precise statistics on each competitor's rank. But, industry executives said, Clifford and Code-Alarm are among the largest, along with Crimestopper Security of Simi Valley and MaxiGuard of Elk Grove Village, Ill.
Clifford, originally formed in 1976, now has 1,500 dealers nationwide, sells 13 various security systems or convenience products for autos, such as remote-control engine starters, and has 100 employees. The systems' retail prices, installed, range from $150 to $900.
The market for electronic auto-security systems began flourishing in the mid-1970s, although many early systems were unreliable because of what Drori called "extremely crude" components. One familiar result: shrieking car alarms going off in parking lots for no apparent reason.
Drori and a few others have tried to change that by packing the alarms with more sophisticated electronics, namely the "intelligent" microprocessor chips that Monolithic helped pioneer. Clifford's products, "from a technical standpoint . . . are very well-perceived in the industry," said Joe Palenchar, editor of Autosound & Communications, a trade journal.
Typically, auto alarms still appeal mostly to owners of cars costing at least $20,000. But Drori wants to expand the market, making security systems as affordable to owners of Chevys as to owners of Porsches (Drori owns one), Rolls-Royces (he owns two), Mercedes-Benzes and BMWs (he owns one of each).
The challenge of reducing crime statistics and increasing profits at the same time is what excites Drori. "I don't like to be involved in frivolous things," he said. "The biggest kick I'm getting today is the creation of jobs."
Israeli Army Veteran