Put to the Test

Consumer Reports cuts back

Since 1936 testers for Consumer Reports magazine have been pinching, poking and probing just about everything Americans buy. Each month the magazine issues tersely worded critiques of toasters, breakfast cereals, cars and other products. But now the publication is undergoing public testing of its own. Financial losses are growing and employee morale is shrinking at the magazine's headquarters in Mount Vernon, N.Y. Making matters even worse, Consumer Reports has just lost its first libel case in more than 40 years of product testing.

These setbacks come as policy feuds within the organization have boiled into the open. In December more than 80% of 160 Newspaper Guild members signed a petition demanding the ouster of Rhoda H. Karpatkin as executive director of Consumers Union, the nonprofit publisher of the magazine. The protesters were incensed over what they considered Karpatkin's shaky financial judgment. Their demand, however, was firmly rebuffed.

The guild petition reflected the division that has bedeviled Consumers Union for about a decade. On one side are the so-called toaster testers, who want the organization to stick to evaluating products. On the other are the activists, who have pushed Consumers Union into new directions that include opening three public advocacy offices and launching Penny Power, a magazine aimed at elementary school children. The testers blame the expansions for much of the organization's $5.7 million deficit.

Karpatkin, executive director since 1974, insists that the new ventures are vital to Consumers Union. She attributes the financial plight to the state of the economy and a postal rate increase that will cost the magazine an additional $2 million per year. Says she: "The Reagan recession hit us, and our promotion results softened in the first part of the fiscal year. The second thing was a massive postal increase."

Another heavy blow to Consumer Reports was the libel case. The verdict, which the organization is appealing, casts doubt on the magazine's credibility. In the ruling, a federal court in Boston found that the periodical had "published a false statement of material fact with the knowledge that it was false or with reckless disregard of its truth or falsity."

The case involved the Bose 901 loudspeaker produced by Massachusetts-based Bose Corp. In a 1970 article, the magazine labeled the speaker inferior, saying that the sound of "individual instruments heard through the Bose system seemed to grow to gigantic proportions and tended to wander about the room." Bose challenged the article and won $115,296 plus interest in damages.

To halt its financial losses, Consumers Union dismissed 10% of its 250 employees; trimmed Consumer Reports ten pages from its average of 60 pages; switched to cheaper paper and decreased the number of products sampled. It also told its advocacy offices to raise their own funds or close their doors.

Consumer Reports, though, is in no immediate danger of folding. It boasts a paid monthly circulation of 3 million, its highest level ever and an increase of nearly 11% over last year. The magazine, which has never accepted advertising, plans to stick to its basic format of reviewing six major types of products and reporting on an automotive test in every issue.

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