Plugging Zenith back in the black

In a ceremony this month at a cable TV convention in Anaheim,Calif., executives of Glenview-based Zenith Electronics Corp.presented their first digital set-top box to Americast, the TVentertainment consortium.

One down, 2,999,999 to go.

The presentation Dec. 10 was a symbolic victory forlong-suffering Zenith, which has not had a profitable year since1988, and for William G. Luehrs, president of Zenith Network Systems.One major analyst had expressed skepticism when the deal wasannounced that Zenith would ever deliver the boxes.Luehrs, 52, is Zenith's billion-dollar man. He brought home the$1 billion deal to make 3 million digital set-top boxes during thenext five years for Americast, which is owned by Ameritech Corp. andother regional phone companies and the Walt Disney Co.The Milwaukee native, who has degrees in electrical engineeringand business, came to Zenith two years ago to carry out a digitalstrategy for Zenith. Previously, he was with Scientific-AtlantaInc., where he was in charge of developing analog and digital set-topdevices and cable modems.He spent 17 years with General Electric, where he was involvedin general management and strategic planning.Addressing the cynics, Luehrs said Zenith's deal with Americastis "a real contract. This is not digi-hype. It's a serious contractwith serious consequences on both sides."Peter S. Willmott, Zenith's chief executive officer, said: "Billis a driving force behind Zenith's digital strategy. He was broughtinto Zenith to revitalize our core Network Systems business and hasdone a terrific job in building a strong team, creating strategicalliances and implementing a breakthrough strategy for digitalset-top boxes."Luehrs said the future is in high-speed digital data - be itentertainment or Internet connections - into the home via set-topboxes and cable modems.He said digital set-top boxes will make it possible for homeviewers to receive 500 channels of TV and to have "near video ondemand." Viewers will be able to watch programs when they wantbecause cable companies will use the new capacity afforded by digitalunits to show the same movie on multiple channels at staggered times.Luehrs said the digital set-top boxes also will enhancereception of audio on TV to the quality of compact discs."There is no degradation of the signal," he said.Zenith will send a few more digital units to Americast fortesting during the next few weeks, but the production ramp-up for thenew boxes won't take place until mid-1997.Luehrs said the digital set-top boxes are designed by Zenith tobe very flexible to meet the needs of a variety of networks,including "wireless cable," direct broadcast satellite, traditionalcable and fiber-optic transmission."Americast is the first home entertainment company currentlyrequiring multiple delivery media from essentially the same boxdesign," Luehrs said."It brings a unique vision of the digital future, making this avery significant venture for Zenith and for the entire industry," hesaid.The different types of units will be made on the same assemblyline in Chihuahua, Mexico.Luehrs said Zenith's digital strategy will give the company aboost. "Zenith understands TV and has a strong retail presence," hesaid. "It foresaw the digital era coming and now is in the positionto exploit it."