1962: Fears of Foreign Yo-Yos

         Storm clouds were appearing on the horizon. In November 1962, the Duncan headquarters in Evanston, Illinois, announced the start of a new employee newsletter. The first issue said there had to be cost cutting “in order to operate this business successfully and to provide secure jobs for our employees.”

         The cover message by President Donald F. Duncan Jr. emphasized that the company was facing increased competition from foreign companies and needed to control costs. “If we cannot hold down our costs and prices the American buyer will turn to foreign toys even more than he is doing now,” Duncan Jr. wrote.

          In what might have seemed an ominous warning to employees, the newsletter introduced a former Air Force lieutenant colonel, Clifton Prager, as the new manager of cost control. Prager had been comptroller of Appleton Electric Company.

          The newsletter cited the U.S. Department of Commerce figures that toy imports had increase 600 percent from 1950 to 1961 and were then totaling $108 million a year. For the first quarter of 1962, toy imports had increased 23.7 percent over the same period in 1961, with Japan leading the way.

         Driving the point home to the Luck plant employees, the newsletter said the Japanese toys “bear very attractive prices” because of low labor costs. It cited a report that Japanese manufacturing workers averaged only $46.84 a month. “All this adds up to more problems for the American toy manufacturers... problems which probably will get worse before they get better.”

          The newsletter concluded: “Heavy television promotion may be the one way in which we can meet this new challenge. U.S. Toy manufacturers spent $12 million on television promotions last year. … We tried a heavy TV promotion campaign last year. But television time is very costly. And there is a real financial risk involved when you have to put hundreds of thousands of dollars into TV promotion. No one can guarantee good results.

            “We continue taking this gamble in the hope that TV will produce enough sales to offset these large expenditures,” the newsletter said.

            Duncan Jr. didn't sugarcoat the problem. His Greetings mentioned that the newsletter was introducing two new products. The Duncan “Bang-a-Ball,” was “returned in modern dress” – a paddle with a rubber ball attached to a rubber band. The toy was in plastic and sold for $1. There was also the Package of Four – “a unique 'Collector's Chest' patterned after the legendary pirate's strong box. It contains four of the finest four of the finest dollar Yo-Yo return stops, with extra replacement strings, and a giant full-color instruction book.”

            Duncan Jr. said the new products “were introduced to take up the slack in Yo-Yo return top sales this year. So far, however, the results have not been too encouraging.”