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Sidney Harman Is Still a Loud Speaker in Stereo Industry

Valley and Ventura County

Entrepreneurs: The man funding Jane Harman's political career has been a force in the electronics business for 50 years.

May 26, 1998|BARRY STAVRO | TIMES STAFF WRITER

NORTHRIDGE — One of the last major furniture factories on the West Coast sits on Balboa Boulevard, turning out cabinetry for the JBL stereo loudspeakers that come off the assembly line at Harman International Industries.

It's part of the business empire controlled by Sidney Harman, whose fortune of about $200 million comes from half a century of selling stereo loudspeakers and consumer electronics. Harman, 79, is the well of deep money behind his wife Jane Harman's gubernatorial run.

Harman International's sales are expected to hit $1.6 billion this year. Although headquartered in Washington, D.C., with units in four states and six foreign countries, Harman's biggest operation is in Northridge, where 1,550 employees work in administration or designing and engineering loudspeakers.

Along the way, Harman acquired several other local loudspeaker companies, including Van Nuys-based JBL in 1969 and Chatsworth-based Infinity in 1983. He later consolidated those operations into a campus-like Northridge business park.

Few executives in America can claim, as Sid Harman does, that "I was one of the founders" of an industry, and remain active in it almost 50 years later.

In 1953, when Eisenhower was in the White House and Sid Harman's future wife was still in elementary school, he and Bernard Kardon began selling receivers on Long Island for the embryonic high-fidelity sound business. A few years later his partner quit, but Harman kept building up Harman Kardon's name, riding a profitable shift from mono to stereo.

John Atkinson, editor of Stereophile magazine, pegs three seminal figures in the loudspeaker industry: Paul Klipsch, Amar Bose and Sidney Harman.

In the late '40s, Klipsch pioneered the use of bass horns in loudspeakers, which gave genuine oomph to the muted sounds produced by the radios and phonographs of the day. In the late '60s, Bose came up with a hallmark design in which some speakers fired away from the listener, bouncing sounds off walls to fill a room.

Klipsch and Bose are engineers; Harman is "basically a marketer," Atkinson said. "He's very good at thinking and understanding what people will want to buy in five years."

Harman, who has a doctorate in social psychology, had also run other businesses, among them a mirror factory in Bolivar, Tenn., that drew national attention for an innovative program offering "earned idle time" so factory workers could go home after meeting their daily production quotas.

Vice President-elect Walter Mondale read about this labor experiment, and at his urging, Harman joined the new Carter administration as undersecretary of commerce. He sold off his audio company to Beatrice Foods in 1977 for $100 million, pocketing about half of it.

During his two years in government he met Jane Lakes Frank, then a deputy in the White House, who is 27 years younger than he is.

"I was mildly surprised but not shocked," recalled Shirley Hufstedler, Carter's secretary of education. "Sidney has a captivating air about him. When he wants to make a sale, he's an extremely good salesman. And Jane found him an intriguing being, because he is."

In a phone interview, Sid Harman recalled, "My friends said, 'Are you out of your mind? Do you not have a sense of mortality?' I said I had a profound sense of mortality, 'and if Janie can't make it, she won't make it.' "

They married in 1980 and have two teenage children.

Harman returned to the audio business that year by repurchasing most of his company from Beatrice for $55 million, when it was generating about $70 million in annual sales. Capping nearly two decades of rapid growth, Harman International's sales reached a record $1.5 billion and turned a record profit of $54.8 million in 1997.

Harman built a billion-dollar company in part by aggressively pushing loudspeaker sales to car makers; Chrysler and Mercedes are now his biggest customers, accounting for 16% of his total sales last year. He also repurchased his original Harman Kardon division from a Japanese firm in 1985.

"He has constantly kept his product line fresh and changing, and reads the trends in the marketplace," said Mark Hassenberg, an analyst with Donaldson, Lufkin & Jenrette Securities in New York.

Harman International sells professional audio components--including speaker systems for concerts used by the Rolling Stones, Pink Floyd and Wynton Marsalis--and provides speakers to Dolby and THX for movie theater sound systems.

It also sells audio products through mass merchandisers, such as Circuit City, and specialty retailers. In addition to loudspeakers, Harman sells amplifiers, CD players and multiroom home theater systems. Its brands include Infinity, JBL, Harman Kardon, Citation, Proceed, Revel, Audioaccess and Mark Levinson--and their prices range from $50 to $50,000.

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