The Black & Decker Corporation

The Black & Decker Corporation

701 East Joppa Road
Towson, Maryland 21204
U.S.A.
(301) 583-3900
Fax: (301) 583-3318

Public Company
Incorporated: 1910 as The Black & Decker Manufacturing Company
Employees: 38,600
Sales: $3.19 billion
Stock Exchanges: New York Pacific London Frankfurt Zürich Basel

The Black & Decker Corporation principally sells industrial and consumer portable electric tools. More than any other firm, Black & Decker (B&D) created the post-World War II consumer market for power tools. During the 1960s Black & Decker branched into several new endeavors, including garden and lawn equipment, yet it remained a fairly small company with just over $1 billion in sales at the end of the 1970s. At that time it dominated the world market in power tools, but foreign and domestic competitors threatened its position. During the 1980s, however, Black & Decker rationalized its operations and diversified its markets through two major acquisitions. As a result, The Black & Decker Corporation is a producer of a wide line of do-it-yourself and professional hardware and housewares.

Alonzo G. Decker and S. Duncan Black, two industrial tool designers and engineers, formed The Black & Decker Manufacturing Company in September 1910. With $600 from the sale of Black’s second-hand car and a loan of $1,200, they set up a machine shop in a rented warehouse in Baltimore, Maryland. Black was the president of the company. In their first years the partners contracted to manufacture industrial products invented and sold by others.

In 1916 Black and Decker began to design and manufacture their own electric-powered tools. The German-made electric tools then available were heavy and difficult to operate, and, as a result, had not been commercially successful. Black and Decker designed a universal motor—the first for electric-tool use—which used either alternating or direct current, and trigger switch modeled after the mechanism in the Colt revolver. The first tool incorporating these innovative elements was a 1/2-inch portable drill with the innovative “pistol grip and trigger switch” that have remained standard for electric drills ever since. The drill was comparatively light at 21/2 pounds, and it was considered inexpensive at $230.

B&D grew consistently during the 1920s, as businesses bought labor-saving devices to deal with rising labor costs. In 1917 the company was awarded patents for its pistol grip and trigger switch and constructed a factory on the outskirts of Towson, Maryland. By 1918 sales surpassed $1 million. Immediately after World War I, more portable electric tools were introduced including a 3/8-inch drill, a grinder, and a screwdriver. To accommodate demand the Towson plant was expanded three times by 1927. A Towson headquarters building was also constructed in 1924.

Black & Decker used aggressive salesmanship and product services to build its client base. The company’s first service centers were opened in Boston and New York in 1918. B&D also organized clinics to teach distributors how to use and sell the tools; demonstrators toured the country in two buses. At the end of the 1920s the company even outfitted a monoplane to showcase its tools. In addition, the firm began its first mass-media campaign in the Saturday Evening Post in 1921.

With its initial success The Black & Decker Manufacturing Company expanded outside the United States, marking the beginning of its development into a global business. During the last year of World War I, burgeoning overseas sales led the company to establish representatives in Canada, Great Britain, the Soviet Union, Australia, and Japan. Canada was the site of B&D’s first foreign subsidiary, started in 1921. Four years later a London sales and service subsidiary was formed. In 1928 the British company began manufacturing operations at a leased facility in Slough, outside London. The British company eventually built its own plant at Harmondsworth, Middlesex, in 1939. In 1929 an Australian subsidiary was established in Sydney. Until the 1950s the British subsidiary remained Black & Decker’s only foreign manufacturing operation. It was the most important of B&D’s many foreign operations after World War II.

In the latter half of the 1920s Black & Decker expanded its U.S. operations by several acquisitions. In 1926 the Marschke Manufacturing Company of Indianapolis, Indiana, a maker of grinders, was purchased. Two years later the Van Dorn Electric Tool Company of Cleveland, Ohio, was acquired. In 1929 B&D purchased the Fleming Machine Company of Worcester, Massachusetts, and the Domestic Electric Company of Cleveland. Fleming Machine made wire brushes, saws, and grinding stones, and Domestic Electric was a major producer of electric motors. In addition Black & Decker acquired the Loadometer Company, from which it previously had bought the rights to a portable truckweighing scale.

Like other businesses, The Black & Decker Manufacturing Company experienced great difficulties during the Depression. Despite huge layoffs, including Alonzo Decker’s son, the company nearly went bankrupt. Employee loyalty—some workers continued to work although the company could not pay them—and a large influx of capital from outside investors kept Black & Decker afloat. The Marschke Manufacturing Company acquisition did not prove successful, and that company was sold in 1932. Black & Decker continued to develop new products. In 1930 and 1931 the firm marketed a portable circular saw, an adjustable-clutch electric screwdriver, and a new, streamlined housing for its drills. A line of power tools using the new induction motors, the High Cycle line, was introduced in 1935. As the decade ended there was a cascade of new B&D products, including an electric hammer, an industrial vacuum cleaner, a portable metal cutter, a portable trim saw, and the Shorty series of drills.

When the United States entered World War II Black & Decker switched to the production of fuses, shells, and other products to contribute to the war effort. Alonzo Decker and S. Duncan Black were determined to avoid the problems which had followed World War I. They believed that the key would be postwar consumers. Although the company had developed an inexpensive 1/2-inch drill in 1923, and introduced the Cinderella washing machine in 1930, its forays into the consumer market had not been successful. In 1942 the Black & Decker Post-War Planning Committee was established. This group developed plans for Black & Decker to manufacture power tools for do-it-yourselfers and homeowners. The committee believed B&D could provide cheaper tools using new, less-expensive plastic housings to tap this unexplored market.

In 1946 The Black & Decker Manufacturing Company introduced the world’s first power tools for the consumer market, the inexpensive Home Utility line of 1/4-inch and 1/2-inch drills and accessories. In the first five years, one million 1/4-inch drills were produced. This success led to the addition of other products to the Home Utility line. A set of circular saws was introduced in 1949, and a finishing sander and jigsaw in 1953. Black & Decker also continued to market new tools for professional users, including an impact socket wrench introduced in 1949 and two heavy-duty routers introduced in 1957. As a result of great demand, the company began construction of a large new plant in Hampstead, Maryland, in 1951; by 1955 this facility had been expanded to more than four times its original size. The old Towson plant ceased production in 1965, although the site remained Black & Decker’s headquarters.

In the 1950s and 1960s B&D resumed the overseas expansion begun in the 1920s. Manufacturing operations were organized in Australia in 1956. During the 1960s production facilities were built or acquired in West Germany, France, Italy, Spain, Canada, and Mexico. In addition, sales and service subsidiaries were established in many other countries. The U.K. subsidiary successfully expanded into other European markets, and, as a result, a new plant was built at Maidenhead in 1962. Three years later this factory was expanded, and another plant was opened in Spennymoor, Durham. By 1969 43% of B&D’s sales and earnings came from its foreign operations.

Despite personnel changes, The Black & Decker Manufacturing Company remained under the leadership of the Black and Decker families during the 1950s and 1960s. In 1951 president and co-founder S. Duncan Black died at age 67. Black was succeeded as president by his partner, Alonzo G. Decker, who also took on the new post of chairman in 1954. The following year, however, Decker died. Robert D. Black, S. Duncan Black’s brother, succeeded Decker. In 1960 Decker’s son, Alonzo G. Decker Jr., was named president. The 54-year-old Alonzo Decker Jr. had started B&D as a floor sweeper in the early 1920s. In 1964 he replaced Black as chief executive officer.

Although Black & Decker enjoyed healthy profits, by the late 1950s the company was not increasing beyond its 20% share of the U.S. market. To generate growth the company branched out into other types of labor-saving machinery. The Master Pneumatic Tool Company of Bedford, Ohio, maker of portable pneumatic tools, was acquired in 1959. Production of portable air tools was begun at a new facility in Solon, Ohio, in 1960. The Value line was introduced in 1967 to offer standardized, less-expensive models. The pneumatic tools business remained a minor part of B&D’s operations, until that sector was sold in 1986.

In 1960 Black & Decker purchased De Walt of Lancaster, Pennsylvania, makers of radial arm saws and other woodworking equipment. An improved line of radial arm saws was introduced in 1966. To expand the woodworking operations Black & Decker bought the Carbide Router Company of Moonachie, New Jersey, in 1970 and the Wisconsin Knife Works of Beloit, Wisconsin, the following year.

Black & Decker also entered the garden- and lawn-care field in the late 1950s. It introduced electric lawn edgers and hedge trimmers in 1957. The first electric lawn mowers were unveiled in 1966, and a cordless model went into production three years later. In 1973 the business was expanded by the purchase of McCulloch Corporation, a manufacturer of gasoline engines and chain saws. During the mid-1970s production of certain outdoor-tool models was scaled back because of the unpredictable nature of their sales. Sales of outdoor tools depended upon weather conditions and seasonal buying patterns. McCulloch performed very well during the energy crisis of the early 1970s, which spurred the use of woodburning stoves, thus popularizing chain saws, but in the early 1980s the subsidiary began losing money. In 1983 the chainsaw business was sold.

Black & Decker power tools continued to enjoy success during the 1960s and early 1970s, as prices were cut and products improved. The cost of B&D’s 1/4-inch drill was reduced in increments from $15.98 in 1963 to $7.99 in 1970. A research-and-development task force brought out dozens of new tools each year, maintaining Black & Decker’s status as an industry innovator. The Workmate portable worktable and accessories were first marketed in England in 1973, and soon proved very successful around the world. Beginning in 1964 Black & Decker also made extensive use of television advertising. Sales surpassed $100 million in 1964, $200 million in 1969, and $500 million in 1974. To accommodate the new demand the company built two plants in North Carolina, at Fayetteville and Tarboro, in 1966 and 1970, respectively. In 1974 a plant also was constructed in Easton, Maryland.

In 1975 Decker retired as chief executive officer, to be replaced by Francis P. Lucier who had been named president in 1970. Although Decker remained chairman, this marked the end of the founding families’ executive control of the company. In 1975 B&D also experienced its first break in postwar growth, and many employees were laid off. The firm’s future looked dim in the face of growing competition from Japanese and German toolmakers. Offering lower-priced, high-quality tools, the Japanese firm Makita Electric Works steadily gained on Black & Decker. By the early 1980s Makita had nearly equaled Black & Decker’s 20% share of the world market in professional tools. High turnover among the top executives also contributed to Black & Decker’s woes.

Promoting a program of globalization, 48-year-old Laurence Farley was promoted to president and chief executive officer in 1983. The new head of B&D was determined to develop a world market for standardized consumer goods, including housewares. He implemented a sweeping reorganization scheme, closing five plants in England, Ireland, and the United States. Two years later more plants were closed in the United States, Brazil, Mexico, and Canada. Farley also integrated the global operations of Black & Decker, in the process firing 25 European managers and closing the European headquarters in Brussels. In 1985, to help bring home the reorganization, The Black & Decker Manufacturing Company revamped its hexagonal trademark and changed its name to The Black & Decker Corporation. The name change was meant to give greater emphasis to the marketing and sales side of the company.

Black & Decker’s new path under Farley grew out of the firm’s earlier development of cordless technology. In 1961 Black & Decker had introduced the world’s first self-contained cordless electric drill. This tool and others that soon followed were powered by nickel-cadmium batteries, that failed to deliver the necessary performance. Nevertheless, the firm developed a cordless minimum-torque-recreation tool and a lunar surface drill, both of which were used by NASA on several space missions.

Using this earlier experience, Black & Decker introduced the Dustbuster cordless vacuum cleaner in 1979. This product was an immediate success, establishing B&D as the leader in the hitherto untapped small-appliance niche market, the Dust-buster was followed by the Spotliter rechargeable light and other cordless appliances. To put Black & Decker squarely in this new business, Farley paid $300 million in 1984 for the small-appliance operations of General Electric (GE). By purchasing the largest U.S. producer of irons, toaster ovens, portable mixers, coffee makers, and hairdryers, Black & Decker was able to gain a large chunk of the market immediately, without risking the loss of Black & Decker hardware shelf space to its housewares. Farley also believed production costs would be lowered by integrating the research and production of power tools and housewares.

During the two years following the 1984 purchase, Black & Decker undertook a $100 million brand-transition program. Meanwhile, the company also developed its own upscale light appliances, such as the Spacemaker series. Black & Decker also introduced more cordless appliances, including a mixer and an electric knife. Farley began marketing the company’s small-appliance line overseas. In Britain, where B&D has long enjoyed considerable name recognition, the first Black & Decker appliances were introduced in 1985. Other markets soon followed. In addition, GE’s expertise in manufacturing electric motors enabled Black & Decker to design more efficient power tools using a smaller and more powerful 47-millimeter motor.

Yet Black & Decker’s sales performance remained unspectacular, and fears that Laurence Farley was not sufficiently committed to product development, contributed to his replacement as president by Nolan D. Archibald. A year later Archibald also was named chief executive officer and chairman of the board of Black & Decker. Archibald came to The Black & Decker Corporation from Beatrice Company, where he headed the consumer durables group. Bringing in his own management team, the new B&D chief cut 3,000 jobs by 1987 and spurred product development. The company’s worldwide operations were restructured into product groups. In 1986 the household-products group introduced a number of successful products, including the Cup-at-A-Time coffeemaker. Greater efficiency at Black & Decker led to record sales of $1.9 million and improved profits in 1987.

Once he had returned Black & Decker to efficiency and profitability, Archibald set out to expand the company’s operations through acquisition. In January 1988 he attempted to purchase American Standard to obtain its line of plumbing fixtures, but American Standard escaped through a leveraged buyout. Archibald acquired Emhart Corporation in early 1989 for $2.8 billion. With its True Temper lawn and garden tools, Kwikset locks, Garden America sprinkler systems, Price Pfister faucets, and various fastening systems. Emhart’s product line complemented Black & Decker’s own products. Archibald combined the two companies’ distribution and sales networks.

As a result of the acquisition, Black & Decker assumed a $4 billion debt. In order to reduce debt, Black & Decker planned to sell Emhart’s non-complementary operations and cut staff.

The Black & Decker Corporation has regained its world dominance in manufacturing inexpensive, quality hardware goods and power tools. B&D’s purchases of Emhart Corporation and the General Electric small-appliance division appear to have been successful. The wider range of doit-yourself products and an attractive line of upscale small appliances add to Black & Decker’s potential for future growth. Black & Decker has succeeded because of attention to consumer needs, high production standards, and savvy marketing.

Principal Subsidiaries

Advanced Technology Inc. of Delaware; Black & Decker (U.K.); Black & Decker Canada Inc.; Black & Decker Eletrodomesticos Ltda. (Brazil); Black & Decker G.m.b.H. (Germany); Black & Decker Housewares Ltd. (Singapore); Black & Decker Inc.; Black & Decker (U.S.Pte.) Inc.; Black & Decker Italia S.p.A. (Italy); Black & Decker (Australasia) Pty. Ltd. (Australia); Black & Decker (Belgium) S.A.; Black & Decker, S.A. de C.V. (Mexico); Black & Decker (France) S.A.R.L.; Emhart Corporation; Emhart Deutschland G.m.b.H. (Germany); Emhart Industries, Inc.; Emhart International Ltd. (U.K.); Emhart Scandia AB (Sweden); Planning Research Corporation; PRC Business Information Systems, Inc.

Further Reading

“A.G. Decker of Black & Decker,” Nation’s Business, December 1969; Highlights of Progress, Towson, Maryland, The Black & Decker Corporation, 1987.

—Neal R. McCrillis