He joined with Ralph Matthews and Karl Hassel, the three of them incorporating the Zenith Corporation (formerly Chicago Radio Labs) in 1923. From the call letters of their amateur station, 9ZN, they developed the trade name of ZN-th. The company survived the Great Depression and was soon the leader of radio manufacturers. At the same time McDonald launched a career as an explorer and adventurer that publicized the Zenith products and sent sales to new records.
He formed and was the first president of the National Association of Broadcasters and pioneered the development of the short-wave radio. When Donald B. MacMillan made his Arctic trip he was equipped with transmitters and receivers supplied by the Zenith Corporation. "He expanded the radio medium into international communications, ship-to-shore, radar, and VHF and UHF television." The company slogan was: "The quality goes in before the name goes on."
The Zenith Corporation was a great company and a good example to others. During the Great Depression, Zenith employees took less pay and worked longer hours to keep the company alive. As the economy improved, Comdr. McDonald rewarded them with additional shares in the company and a larger portion of its profits.
He became interested in the radio business in 1920 upon learning that there was money to be made in it. However, it was necessary to hold a manufacturing license from Edwin Armstrong - and issuance of these had been suspended indefinitely. However, in 1921 he entered into a partnership with the founders of the Chicago Radio Laboratory, Karl Hassel, and Ralph Matthews. Under the tradename "Z-nith", this company held a valuable Armstrong license but lacked funds for expansion to meet the demands of their order book.
McDonald was appointed general manager and the partnership was formally incorporated in 1923 as the Zenith Radio Corporation. By 1927, the company was large enough to secure its own RCA manufacturing license. McDonald was well known for his charismatic leadership style, and his unexpected death in 1958 reportedly "left a void of talent at the top" of the company.
Eugene McDonald, besides being a hard-driving and demanding CEO, was also a yachtsman. His yacht the Mizpah (AKA USS Mizpah (PY-29) was one of the largest in the Great Lakes region. Toward the end of 1939 the interest in the war in Europe increased. McDonald had poor reception of any regional broadcast aboard the Mizpah and suggested that a portable radio be produced that could receive not only standard broadcast (AM radio) but higher-frequency shortwave broadcast to receive international broadcasts that use radio frequencies that could bounce off the Earth's ionosphere (upper atmosphere) and travel great distances.
One of the big obstacles to such a radio was that vacuum tubes in the 1930s and 1940s had trouble operating at higher frequencies using battery power supplies which were lower voltage than AC-operated designs. In late 1941 after many rejects by McDonald (who personally did the testing on his yacht). Zenith Radio engineers Gustaffson, Passow, Striker and Emde came up with the model 7G605 "Clipper", that was met with approval by McDonald after stringent testing. Zenith advertised this new product extensively, including loaning or giving one to a celebrity or well-known individual to try and evaluate. Zenith made electronics and radio history by producing the first totally portable multiband radio designed for standard and shortwave broadcast listening. Zenith went into production in 1942, but the US entry into World War II put a production halt to the "Clipper". Although no new consumer Trans-Oceanics were made, Zenith provided them for the war effort and continued to advertise and promote the Trans-Oceanic during World War II. Very few were produced (35,000), and not very many are in service presently, which makes this a very rare item.
In December 1957, Eugene McDonald and Zenith engineers put Zenith Radio back into the news with the world's first portable transistorized multiband radio, the Royal 1000 Trans-Oceanic. McDonald was personally involved with its conception and manufacture, as he was in the development of the 7G605 "Clipper" The Royal 1000 like the "Clipper" was designed for standard and shortwave broadcast reception. The quality construction and engineering design efforts, a Zenith trademark were mechanically and electronically demonstrated in this model. This was McDonald's last major involvement with Zenith as he died the following year.
The Trans-Oceanic is considered by many the best-designed mass-produced portable radio made. Zenith for the most part, until the end of the model line, used the latest cost-effective technology advances and materials in Trans-Oceanics. The Trans-Oceanic model line ran from 1942 to 1982. For years it was the top selling "high-end" portable multiband radio until it was finally eclipsed by Sony with their digital tuning ICF-2001 and ICF2010 in the 1980s, which put the Trans-Oceanic out of business.
RCA's promoting radio manufacturers to build televisions with its no royalty policy got Zenith Radio into the TV business during the end of the 1940s. McDonald, whose aversion to commercials was well-known, wanted Zenith to produce and sell a remote control.
In 1950 Zenith came up with a remote control called the "Lazy Bones" which was connected with wires to the TV set. The next development was the "Flashmatic" (1955), designed by Eugene Polley, a wireless remote control that used a light beam to signal the TV (with a photosensitive pickup device) to change stations. One problem was that during the daytime the sensitivity degraded. In 1956 Zenith began producing a remote control named after McDonald's nickname "The Commander" and calling it the "Space Command". This new technology worked by sending an ultrasonic tone to the TV set, where it was picked up with a miniature microphone sensitive to only that tone. At the cost of $259.95, it was truly a luxury item.