Unfortunately, National's line of instruments was not well diversified and, as demand for the expensive and hard-to-manufacture tri-cone guitars began to slip, the company realized that it would need to produce instruments with a lower production cost to remain competitive. Dissatisfaction with what John Dopyera felt was mismanagement led him to resign from National in January 1929. He subsequently formed the Dobro Manufacturing Corporation, later called Dobro Corporation, Ltd, and began to manufacture his own line of resonator-equipped instruments (dobros). Patent infringement disagreements between National and Dobro led to a lawsuit in 1929, with Dobro suing National for $2 million in damages. Problems within National's management, as well as pressure from the deepening Great Depression, led to a production slowdown at National. This ultimately resulted in part of the company's fractured management structure organizing support for George Beauchamp's newest project: development of a fully electric guitar.
Unfortunately, National's line of instruments was not well diversified and, as demand for the expensive and hard-to-manufacture tri-cone guitars began to slip, the company realized that it would need to produce instruments with a lower production cost to remain competitive. Dissatisfaction with ,what John Dopyera felt was mismanagement led him to resign from National in January 1929. He subsequently formed the Dobro Manufacturing Corporation, later called Dobro Corporation Ltd, and began to manufacture his own line of resonator-equipped instruments (dobros). Patent infringement disagreements between National and Dobro led to a lawsuit in 1929, with Dobro suing National for $2 million in damages. Problems within National's management, as well as pressure from the deepening Great Depression, led to a production slowdown at National. This ultimately resulted in part of the company's fractured management structure organizing support for George Beauchamp's newest project: development of a fully electric guitar.