THE CTS STORY: Highlights of a Successful, Long-Lived Organization

The Early Years...

The Beginnings of a Telephone Manufacturing Business

In 1896, the enterprising father and son team of A.J. and George A. Briggs partnered with S.A. Buffington, a Chicago Lawyer, to establish Chicago Telephone Supply Company (later to become CTS).  Working out of a small building near downtown Chicago, their telephones were sold through local supply houses, jobbers and mail order. Within a year, the Briggs family bought out Buffington’s interest and took over all operations of the company. In less than 6 years, this small company had grown to encompass a workforce of 250 employees.

In 1902, in need of more, yet less expensive manufacturing space, the company found suitable facilities in Elkhart, Indiana, about 100 miles east of Chicago. Chicago Telephone Supply Company was lured to this northern Indiana city by the incentives of a new building on a railroad spur, in exchange for a multi-year wage pay-out to stimulate the local economy.

The rapid growth of Chicago Telephone Supply can be attributed to its focus on a market niche that had been largely ignored by other telephone manufacturers—the rural telephone market. Period company catalogs show a wide variety of telephones and components produced during this time. One of the company’s earliest product line expansions included the production of telephone switchboards. By 1910, the company was producing a wide variety of telephone models, as well as 20 different types of switchboards ranging from apartment building size units up to express switchboards that could accommodate up to 300 telephone connections.

With their economic telephone and switchboard systems designed to “have a higher degree of efficiency than will ever be demanded in service,” (a company promotional phrase), Chicago Telephone Supply quickly became a leading producer of telephones and systems for rural areas.  The company marketed their products by the statement, “Chicago Telephone’s Satisfy,” indicating the high level of quality that the company designed into their products. The last commercial telephone produced by the company was manufactured in 1940.

Radio - A Whole New Communications Market

Communication on a telephone had become commonplace by the early part of the 20th century. People had grown accustomed to the accomplishments achieved through the infant electronics industry, which was creating new product possibilities. By the 1920s, radio broadcasting had triggered a “boom” for consumer radio receivers. Chicago Telephone Supply Company immediately acted on this opportunity and began re-inventing some of their well-known telephone products, such as jacks, plugs and headphones for use in the emerging radio market.

By 1922, more than half of company sales came from the radio components business. During the Great Depression, demand for less expensive tabletop radios grew. Chicago Telephone Supply Company responded with the development of more cost effective and stable carbon composition variable resistors that helped lower the cost of radio components. During this time, the company evolved from a manufacturer of finished products (telephones and switchboards) to a major supplier of radio receiver components. Along with its standard line of products, developing and producing customized components for its customers was becoming a cornerstone of the company that continues today.

 

Growing With Consumer Electronics...

Television - The New Opportunity

The late 1940s ushered in the next boom in consumer electronics —television. Several aspects of radio and television technology are fundamentally similar; therefore, early leaders in the television industry also had been the same companies that led the “Golden Age of Radio” —Zenith, Magnavox, RCA and others.  All were established customers of Chicago Telephone Supply Company.

When television fever hit America, Chicago Telephone Supply Company, already a leading supplier of radio components, applied the technology of variable resistors and switches to the new television market. Illustrating the rapid growth of this new market, U.S. manufacturers produced 6,000 television receivers in 1946, and by 1950 that figure soared to 7,500,000. Where a radio receiver may have used one, two or three Chicago Telephone Supply components, a television receiver required between 6 and 10 variable resistor components. This increased component count drove company production and profits to new heights.

By the beginning of the 1960s, Chicago Telephone Supply Company had diversified into a manufacturer of many types of switches, variable resistors and a variety of other electronic components. Yet, the company had not produced a commercial telephone for over 20 years. After decades of expanding into new markets with new technologies and product innovations, it became clear that the original name no longer fit the company.

In 1960, Chicago Telephone Supply Company officially changed its name to CTS Corporation to more accurately reflect its diverse product line offerings. Today, CTS Corporation is a name known worldwide for quality and value-added components and services for a wide variety of technology markets.

Going Public

June 4, 1962, marked a watershed moment for CTS Corporation. It was the day that CTS listed its common stock on the “Big Board” at the New York Stock Exchange. The day marked a turning point in the evolution of CTS as a company, for the listing on the New York Stock Exchange helped give the company greater visibility as an international business. Since that day, the “CTS” symbol on the NYSE has stood for innovation, leadership, and profitability.

 

Expanding Beyond Consumer Electronics...

While still enjoying growth driven by the consumer television industry, CTS once again looked to another new, emerging market for opportunities. The data processing or computer market fit the bill and CTS answered with new, innovative products. In 1958, after 4 years of intensive research, CTS engineers introduced Cermet™, a new type of stable resistance element.  The stability of Cermet fulfilled the demand of miniaturized applications for the computer, as well as military industries, securing CTS’ participation in modern electronic markets.

During the same time period, CTS, through acquisitions and internal development, expanded its product portfolio to include crystal filters, quartz oscillators, selector switches and loudspeakers, along with its expanding variable resistor business. As demand in the electronics industry called for the miniaturization of electronic products, CTS responded by manufacturing hybrid microcircuits, designing more functionality into smaller packages, for applications as varied as heart pacers to missile guidance systems.

As CTS transitioned into the 1970s, concerns over environmental pollution led to U.S. Government mandated automotive emissions control requirements. The need for throttle position sensing and exhaust gas recirculation controls immersed CTS into custom under-the-hood and chassis position sensor business, opening new market opportunities for the company.

For several decades now, CTS has served the automotive market with position sensors for applications such as throttle control, exhaust gas recirculation systems (EGR), intake valving and more recently, turbocharger position sensors. The company also produces rotary actuators for tuned manifolds and other engine systems controls, and a broad line of electronic accelerator pedal modules for light-duty and commercial vehicle manufacturers around the globe.

Recently, CTS’ Automotive Products achieved a strategic growth milestone by expanding into the commercial vehicle, off-road and heavy equipment markets. CTS developed and introduced a robust “Smart Actuator” that is designed for such applications as fuel delivery management, control of variable vane turbochargers and is suitable for a variety of other large diesel engine management functions. Additionally, CTS Automotive Products supplies position sensors to the small engine market (motorcycles, ATVs, outboard engines, etc.). 
 

Building A Global Organization...

The evolution of consumer electronic manufacturing drove many U.S.-based electronic manufacturers to open operations in Asia—particularly China, Hong Kong, Singapore, and Taiwan. With some of its customer base relocating to these regions, CTS found it was also necessary to establish operations in these countries. In the late 1960s and into the 1970s, CTS opened facilities in Kaohsiung, Taiwan, The Republic of Singapore and Matamoros, Mexico—for the production of switches, potentiometers, frequency control devices and other electronic components. More recent facility expansions in Tianjin and Zhongshan, China, as well as the Czech Republic, have further strengthened CTS’ world-wide manufacturing capabilities.

As the company grew internally, it also looked for acquisitions that would both enhance its market share and introduce new technologies or services for the company’s ever expanding customer base. One of the first acquisitions was the 1953 purchase of a successful manufacturing business in Streetsville, Ontario, Canada. 

In the early 1980s CTS acquired a successful connector and backplane manufacturer with operations in North America and Scotland. Today, CTS Electronic Manufacturing Solutions (EMS) traces its operational roots through this important acquisition. Additionally, this Scottish connection opened many new European market opportunities for CTS position sensor products. A late 1990s merger with Dynamics Corporation of America (DCA) bolstered CTS’ position as a leading producer of electronic components.

Another significant late 1990s acquisition was the purchase of the Component Products Division (CPD) of Motorola, Inc. This strategic acquisition placed CTS in the forefront of the emerging cell phone handset and base station market through the manufacturing of ceramic filters, duplexers and other telecommunication components. More recently, the acquisitions of SMTEK International, Inc. and Orion Manufacturing, Inc. has enhanced CTS’ role as a major supplier in the electronic manufacturing services business sector.  These acquisitions have opened new opportunities for penetration into the communications infrastructure, medical, defense and aerospace and industrial markets, while further expanding CTS' manufacturing base in U.S., China, and Thailand.

The 2008 acquisition of Tusonix, Inc. of Tucson, Arizona, with manufacturing operations in Nogales, Mexico, added electromagnetic and radio frequency interference (EMI/RFI) filter components to the CTS product family. These, and other strategic mergers, acquisitions, and facility expansions have fortified CTS’ position as a world leader in electronic components, vehicle sensors and actuators and electronic manufacturing services.