The 113-year-old Smith Corona Corp. filed for bankruptcy protection Wednesday, offering an advance look at the epitaph for the typewriter.
Smith Corona, a once-dominant typewriter-maker that has fallen victim to the spectacular rise of the personal computer and tough Japanese competition, said it needed protection from creditors while it scrambles to come up with new financing.
The next 30 or 40 days are "crucial" in determining whether Smith Corona can avoid liquidation, a company lawyer said at a hearing before the U.S. Bankruptcy Court in Wilmington, Del. Smith Corona won court approval of an interim financing agreement with Chemical Bank and Bank of America.
But symbolically, the standard-bearer of a fading technology has already expired: Few follow its fortunes on Wall Street any more; it dropped out of the office-equipment industry trade association a few years ago; and its claim to be the sole remaining U.S. maker of portable typewriters rings hollow.
Blaming unfair competition from Japan and the high costs of U.S. manufacturing, the company left its Cortland, N.Y., factory in 1993 and moved production to Mexico. It now supplies the world from Mexico and Singapore.
Meanwhile, its toughest competition--Brother Industries Ltd. of Japan--is assembling typewriters in Tennessee and, according to critics, doing a better job of it than Smith Corona.
"They're not even an American company if you look inside their machines," said a Southern California office-equipment dealer who quit carrying Smith Corona's machines years ago because, he complained, they were no good.
The filing under Chapter 11 of the bankruptcy code came four days after the company hired a turnaround firm and changed top management. In May, citing tumbling revenue, it announced a $22-million restructuring charge related to the layoffs of 750 employees, or 26% of its work force.
Smith Corona stock did not trade Wednesday. It closed Monday at $1.50 on the New York Stock Exchange, compared to $21 in 1989.
Patented in 1868, the sturdy mechanical typewriter for years advanced at about the same leisurely pace as other machines of its time, though Thomas Edison invented an electric one as early as 1872. The portable came along in 1909. For newspaper people and other users, the typewriter acquired a romantic quality, at least in retrospect.
But Smith Corona and other venerable typewriter brand names, such as Royal, Remington and Underwood, faded for obvious reasons: the ascension of the affordable personal computer. A powerful generic PC can be bought for $799--barely above the industry average price for the standard office electronic typewriter.
Smith Corona's main products are portable electronic typewriters--smaller than the heavy-duty office machines still made under the IBM name--and word processors, which are sophisticated typewriters with disc drives that enable them to "talk" with computers.
Analysts say the remaining demand for such equipment (not even Smith Corona makes manual typewriters anymore) is limited to the computer-phobic and to those who need to fill in the occasional form in triplicate or type addresses on the odd envelope.
That is by definition a shrinking market. Still, there is a market--shipments of all sizes of electronic typewriters totaled 960,000 last year, versus a peak of 1.37 million in 1987--and such competitors as Brother and other Japanese firms have grabbed it.
Smith Corona blamed its tumbling market share on unfair competition, and--following the lead of manufacturers of other U.S. products--accused Brother in 1991 of "dumping" typewriters in this country. The charge was upheld by the U.S. government.
But the case didn't exactly resonate with the public. Not only had Smith Corona been partially acquired by Hanson PLC, a British firm, but Brother could rightly claim to be a U.S. producer--and filed a counterclaim accusing Smith Corona of dumping its Singapore-built machines in this country.
Lawsuits on both sides were dropped by mutual agreement last year, by which time Smith Corona was already in dire straits. Analysts said the company, based in New Canaan, Conn., might have better spent its time keeping its eye on the market, starting in the late 1970s when the personal computer first appeared.
"They chose to focus on their main strengths at the time. Perhaps if they had shown more foresight about where the market was going, they might have done better," said Robert Corpuz, who follows technology markets for Dataquest, a market research firm.
Meanwhile, Corpuz said: "We still need typewriters. We have them here. I use ours for putting addresses on mailing labels."