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Ball Corporation

Ball Corporation

10 Longs Peak Drive
Broomfield,, Colorado 80021
U.S.A.
Telephone: (303) 469-3131
Fax: (303) 460-2127
Web site: http://www.ball.com

Public Company
Incorporated:
1922
Employees: 13,500
Sales: $5.75 billion (2005)
Stock Exchanges: New York
Ticker Symbol: BLL
NAIC: 326160 Plastics Bottle Manufacturing; 332431 Metal Can Manufacturing; 332116 Metal Stamping; 334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing; 336419 Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Once identified with its glass home canning jars, Ball Corporation has traded its glass packaging activities for plastic and metal, while maintaining a thriving aerospace business since the 1950s. After spinning off its home canning line and other consumer-oriented business in Alltrista in 1993, the company quickly became a global leader in advanced plastic and metal food and beverage containers, with strong positions in China, Europe and the United States. The company has also acquired aerosol can operations in the United States and Argentina. Altogether, Ball has operations in a dozen countries, and has about 30 joint ventures or licensee plants.

19TH CENTURY ORIGINS

The Ball Corporation began in 1880 when the Ball brothers (Edmund, Frank, George, Lucius, and William) went into the business of making tin-jacketed glass containers for kerosene lamps. From this type of operation it was an easy shift to the manufacture of canning jars and lids. Moreover, it was wise business strategy: Thomas Edison's recent invention of the incandescent light bulb had antiquated the kerosene lamp. The glass jar, on the other hand, had a great future. (After moving the business to Muncie, Indiana, in 1887, the brothers also launched what would become Ball State University.)

Until the end of World War II, Ball was primarily a jar and bottle manufacturer with few other interests. In the late 1940s, however, a problem had to be confrontednearly 70 percent of the company's glass production facilities were in need of modernization. Ball had either to diversify and grow in order to underwrite necessary modernization costs or liquidate the company. The family decided to diversify the company because a 1947 antitrust ruling prohibited Ball from purchasing more glass subsidiaries. Under president Edmund F. Ball, they made a number of key acquisitions outside the glass container field. Before the company ventured too far afield, Ball hired a New York management consulting team to help establish a long-range program. In the words of Edmund Ball's successor, John Fisher, "We wanted to plan for growth, not just hope for it."

SPACE AGE OPPORTUNITIES

The significant changes at Ball, those which have molded the company's future, took place in the late 1950s and early 1960s. The launching of Sputnik by the Soviets in 1958 ushered in the Space Age and created many new opportunities in the field of aerospace. Ball had already decided to take advantage of the situation, establishing Ball Brothers Research Corporation in 1956. "We got into the space field because it was the beginning of the biggest scientific effort in our nation's history," said Fisher, adding "We knew it could be profitable for us, and that we could get commercial "fall-out' from it."

The Ball management proved itself correct on both counts. A substantial portion of the company's business would come from the sale of computer components, pointing controls for NASA satellites, electronic data display devices, and many related items such as Sound-Guard, a preservative for phonograph records that was a derivative of a lubricant developed for spacecraft. The company also built the cameras for the Viking I and II spacecraft that were used to determine the landing site on Mars; the Space Shuttle tether system, which allows small payloads to trail up to 65 miles away from the parent ship; and the telescope on the Infrared Astronomical Satellite launched in 1983 that helped scientists to determine more precisely the size of the Milky Way galaxy. Ball procured $180 million in defense contracts alone by 1987. Chief Executive Officer Richard Ringoen hoped the company's "strong position in infrared and ultraviolet instrumentation [would] continue to allow it to compete favorably with larger aerospace firms like General Dynamics."

Ironically, Ball had entered the high-tech market almost by mistake. In the 1950s, the company hired a small engineering firm in Boulder, Colorado, to develop a device that would more accurately weigh glass batch materials. The original device was never developed, but Ball was impressed enough by the technical skill of the small operation to purchase it. From this small start Ball invested heavily in research and development and made this sector a vital part of the company's overall business.

POSTWAR CONTAINER BOOM

The 1960s were years of unparalleled growth in the container industry, especially in the consumer beverage area. Americans began drinking more beer and soft drinks than ever before, and innovations such as the pop-top can and the non-returnable bottle helped container companies make large profits. While not being a large-volume can manufacturer on the order of American Can or Continental, Ball was nonetheless extremely successful in this competitive market. Cans soon made up two-thirds of the company's packaging sales, supplanting jars and bottles as the company's primary container product.

Ball's success in this area can be traced back to 1968 when the firm made an early switch to two-piece cans. The two-piece can, which was lighter, less expensive, and faster to make, was by the early 1990s used to package 70 percent of all soft drinks and 94 percent of all beer. Since Ball was already in the container industry, it was able to win manufacturing contracts from such important customers as PepsiCo, Inc., The Coca-Cola Co., and Anheuser-Busch Co. In fact, Anheuser-Busch and Ball constructed a $32 million plant in New England to manufacture two-piece aluminum cans for the brewer on an exclusive basis. While Ball controlled less than one percent of the total can market in the 1980s, it had 7 to 8 percent of the two-piece can market.

GREATER DIVERSIFICATION: 19701990

Ball's diversification efforts during the 1950s and 1960s were bold in concept but fairly modest in scope. The man responsible for creating the widely diversified company that the Ball Corporation would become, John W. Fisher, was chosen president and chief executive officer in 1971. Fisher directed Ball into such fields as petroleum engineering equipment, photo-engraving, and plastics, and established the company as a leading manufacturer of computer components and high-tech hardware for defense and space.

COMPANY PERSPECTIVES

The company's mission is to be the premier provider to beverage, food and aerospace and technologies customers of the products and services that we offer as we aggressively manage our business, and to explore and pursue acquisitions, divestitures, strategic alliances and other changes that would benefit Ball's shareholders.

Fisher, the last company president to be a member of the Ball family (his wife was the daughter of one of the five founding Ball brothers), resisted the traditionalists within his firm and pushed Ball into new markets all over the world. In 1972, Fisher acquired a Singapore-based petroleum equipment company that built and sold production gear and provided engineering expertise to oil firms in the Pacific. This purchase gave Ball subsidiary operations in Singapore, Malaysia, Indonesia, Panama, and Japan. The following year the Ball-Bartoe Aircraft Corporation was established in Boulder, Colorado. It was involved in the development of an experimental STOL (short take-off and landing) military jet in the 1980s.

The company then acquired agricultural systems and prefabricated housing. Fisher established a Ball Corporation division in Boulder devoted solely to the production and sale of "turnkey" irrigation packages for agricultural development in arid but arable areas of Libya and other nations in the Middle East. Ball also designed a modular home that could be erected on-site in a little more than six hours. In desert nations where building materials are scarce and therefore expensive, Ball has succeeded in selling a large number of these "kit" houses. Then, in 1974, Fisher acquired a small California computer company. This concern was expanded into Ball Computer Products Division based in Sunnyvale, California, in the heart of Silicon Valley.

Following Ball's success in the foreign petroleum engineering equipment business, Fisher established similar operations in the United States. However, stiff competition, higher technological standards, and prohibitive start-up costs thwarted this venture from the start. Fisher wasted no time in selling it in 1976 for 40 cents per share. In the mid 1970s, Ball also developed and introduced Freshware food containers. Made of plastic with tight-fitting lids, these were designed to compete with Tupperware. The product was never actually marketed and Ball had to write it off as a loss, phasing out the project in a matter of months. But these were relatively small setbacks. Fisher's management strategy was long-term and he was willing to bear the burden of brief, small-scale problems. The two large obstacles he never surmounted, however, were the company's image and the stock market's ambivalent opinion of it. Despite its interesting acquisitions, the American public still associated Ball almost exclusively with its glass jars.

Ball Corporation became a public company on July 13, 1972. There were two reasons for going public. The company management wanted to establish accurately the market value of the Ball family holdings, and they intended to raise equity money to finance the company's diversification efforts. But despite its impressive history, Ball's stock price did not significantly increase. Fisher's efforts to give Ball a more technological image, his trips across the United States to speak with investors, and his dedication to growth did not change the minds of many people. The executive could not understand why a profitable company would not be an attractive stock purchase. He remarked, "We live in a world where products must be packaged, in good times or bad. This is all a bit mystifying to me." Originally traded over the counter, shares were admitted to the New York Stock Exchange on December 17, 1973.

KEY DATES

1880:
Ball brothers form the Wooden Jacket Can Company in Buffalo, New York.
1884:
The renamed Ball Brothers Glass Manufacturing Company begins making home canning jars.
1887:
Business moved to Muncie, Indiana to benefit from abundant natural gas.
1947:
Company begins diversification push.
1956:
Ball Brothers Research Corporation (later Ball Aerospace) formed.
1969:
Ball Brothers Corporation renamed Ball Corporation, buys Denver's Jeffco Manufacturing Company.
1972:
Ball Corporation goes public.
1973:
Ball-Bartoe Aircraft Corporation established in Boulder, Colorado.
1974:
Ball acquires small California computer company.
1986:
Packaging joint venture established in China.
1992:
Kerr Group's commercial glass assets acquired.
1993:
Ball exits home canning with spinoff of Alltrista; Heekin Can acquired in stock swap.
1994:
Ball launches plastic container business.
1995:
Ball Aerospace joint venture, Ball-Foster Glass Container, is formed.
1996:
Ball sells its interest in Ball-Foster to Group Saint Gobain, exiting glass business.
1997:
Purchase of M.C. Packaging makes Ball China's largest supplier of cans.
1998:
Ball buys Reynolds Metals' metal beverage container business, relocates headquarters to Colorado.
2002:
Germany's Schmalbach-Lubeca AG acquired; Ball Packaging Europe formed.
2006:
Ball acquires U.S. and Argentina operations of aerosol can leader U.S. Can Corporation.

When Fisher retired in 1981 he was replaced by Richard Ringoen. Ringoen concentrated on two areas, technology and packaging. Many of the other sectors, while being neither divested nor disregarded, had been left to operate on their own. From 1988 to 1992, Ball's annual sales increased dramatically, from $86 million to $2.177 billion, on the force of acquisitions. Net income only increased slightly, however, from $50.5 million to $69.1 million during the same period.

In the late 1980s, Ball began to focus on international packaging markets where growth far outpaced that of the United States. In 1986, Ball entered into a joint venture with Guangzhou M. C. Packaging in China. By 1993, that business ranked as one of that country's most successful foreign joint ventures, and Ball had established five beverage can manufacturing plants in China, one in Taiwan, and one in Hong Kong.

CONSOLIDATION: 19902000

Ringoen served Ball for a decade, and was succeeded by Delmont A. Davis in 1991. Davis led Ball's early 1990s consolidation and rationalization. In 1992, the company acquired Kerr Group Inc.'s commercial glass assets for $68.4 million, which helped boost Ball's share of that market. Heekin Can, Inc., one of the Midwest's largest food can manufacturers, was purchased in 1993 through a tax-free exchange of stock. The integration of Heekin and Ball's existing Canadian can operations made Ball the third largest supplier to the combined U.S.-Canadian food can market. At the same time, Ball spun off its Alltrista Corporation subsidiary, which was comprised of Ball's consumer products, zinc products, metal decorating and services, industrial systems, and plastics businesses, to shareholders.

Ball's aerospace business also faced challenges in the late 1980s and early 1990s, as the end of the Cold War and the shifting governmental priorities that resulted helped reduce the federal defense budget and intensify competition for contracts. Still, in 1993, Ball was proud to have played a major role in the well-publicized repair of the Hubble Space Telescope. The Ball-built COSTAR optics system helped correct the telescope's notoriously blurry vision.

The net result of these reorganizational activities was that Ball's sales more than doubled from $1.12 billion in 1990 to $2.44 billion in 1993, while the corporation's staff was reduced by over ten percent. Ball was compelled to take a $95 million pre-tax restructuring provision, half of which was used for plant shutdowns and consolidations. Although CEO Davis rightly called Ball's $65.1 million loss for the year "simply not acceptable," he also expressed confidence that the company's "unparalleled restructuring" would bring new opportunities for profitability in the last half of the decade.

Ball had shed its home canning line with the Alltrista spinoff, and would soon leave the glass business altogether. The company launched its first plastic container development in 1994, originally basing this operation in Smyrna, Georgia. A PET plant was soon opened in California.

In September 1995, the Ball-Foster Glass Container joint venture was formed by combining Ball's last remaining glass operations with Compagnie de Saint-Gobain's recently acquired Foster-Forbes. Saint-Gobain bought out Ball's 42 percent interest the next year. These changes were overseen by George Sissel, a longtime company veteran who had become CEO in 1994 after Davis left. Also in 1995, Ball grouped its aerospace business into the subsidiary Ball Aerospace & Technologies Corporation.

The 1997 purchase of M.C. Packaging Ltd. made Ball China's largest supplier of cans. Ball bought Reynolds Metals' metal beverage container business for $746 million in 1998. This made Ball the North American market leader (it also brought its total debt up to $1.6 billion). Ball was among manufacturers developing new contours for the ubiquitous aluminum can. It was taking advantages of new printing processes to offer customers cans with photo quality graphics. The company was also working on metal beverage cans with plastic liners.

Another major change in 1998 was the relocation of the headquarters to Broomfield, Colorado, from Muncie, Indiana, which had been its home for more than 100 years. By this time, noted Knight Ridder, divestments had reduced the company's employment in Indiana from 1,300 to just 180 administrative staff within a few years. Though Colorado housed Ball Aerospace and 3,000 workers, most of the company's 13,000 employees were at other sites around the world.

MORE ACQUISITIONS IN 2000 AND BEYOND

Ball's total sales were $3.7 billion by the end of the decade. In 2000, Ball joined ConAgra in a metal food container joint venture, Ball Western Can Company LLC, which was based in Oakdale, California. Ball would buy out ConAgra's interest in the plant in March 2004. Ball got a new CEO, David Hoover, in early 2001. Hoover had been with the company for 30 years. By this time, divestments had reduced the global work force to about 10,000 employees.

Germany's Schmalbach-Lubeca AG, a $1 billion metal beverage canning company, was acquired in 2002 in a deal worth about $855 million (EUR 900 million). Ball Packaging Europe was created around this acquisition. In 2004, the company began building an $80 million aluminum can plant near Belgrade to serve the Eastern European market.

The company's packaging technology development operations were consolidated at a site in Westminster, Colorado in 2004. Ball also had an R&D Center in Bonn, Germany. Sales reached $5.75 billion in 2005. The largest segment was North American Packaging, with revenues of $3.7 billion. International Packaging accounted for $1.4 billion, while Aerospace and Technologies reported record sales of about $695 million. The unit was enjoying the success of America's Mars rovers, for which it supplied electronics and antennas. It was also participating in the Deep Impact comet exploration project.

Ball began 2006 by announcing two major acquisitions. First was that of the U.S. and Argentinean operations of U.S. Can Corporation, the leading producer of aerosol cans in the United States. Second, Ball acquired the North American plastic bottle container assets of Alcan, providing Ball with new manufacturing facilities, greater technologies, and a broader range of customers.

        Updated, April Dougal Gasbarre, Frederick C. Ingram

PRINCIPAL SUBSIDIARIES

Ball Aerospace & Technologies Corporation; Ball North America Corporation; Ball Packaging Corporation.: Ball Aerospace & Technologies Corporation; Ball Packaging Europe GmbH (Germany).

PRINCIPAL COMPETITORS

Alcan Inc.; Alcoa Inc.; Crown Holdings Inc.; Rexam plc; U.S. Can Corporation.

FURTHER READING

"Ball Corp. Focuses on Core Business; Ball Jars, Penny Blanks Find New Home in Spin-Off Alltrista," Indianapolis Business Journal, April 12, 1993, p. 1A.

Ball, Edmund F., "From Fruit Jars to Satellites: The Story of Ball Brothers Company, Incorporated," Newcomen Society in North America, 1960.

Birmingham, Frederic Alexander, Ball Corporation: The First Century, Indianapolis: Curtis Publishing Co., 1980.

Blodgett, Richard, Ball Corporation at 125, Old Saybrook, Connecticut: Greenwich Pub. Group, 2005.

"The History of Ball: From Wood-Jacketed Tins to Aerospace," Broomfield, Colorado: Ball Corporation, 2006.

Hudson, Kris, "Packaging Giant Ball Corp. Moves to Broomfield, Colo.," Knight Ridder/Tribune Business News, August 21, 1998.

"In a Native Tongue, Ball Says 'Can' Do with Commitment to Eastern Europe," Packaging Strategies, January 31, 2003, p. 1.

Koenig, Bill, "Ball Corp. of Muncie, Ind., Selling Stake in Ball-Foster Glass," Knight Ridder/Tribune Business News, September 17, 1996.

Marcus, Alfred A., Big Winners and Big Losers: The 4 Secrets of Long-Term Business Success and Failure, Upper Saddle River, NJ: Pearson Education, Inc., 2006.

Sfiligoj, Eric, "The Shape of Cans to Come," Beverage World, June 1996, p. 52.

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Ball Corporation

Ball Corporation

345 South High Street
Muncie, Indiana 47305-0407
U.S.A.
(317) 747-6100
Fax: (317) 747-6850

Public Company
Incorporated: 1922
Employees: 14,400
Sales: $2.18 billion
Stock Exchanges: New York
SICs: 3411 Metal Cans; 3221 Glass Containers; 5099 Durable Goods, Nee; 3085 Plastic Bottles; 3081 Unsupported Plastics Film and Sheet; 3812 Search and Navigation Equipment; 3679 Electronic Components, Nee

Although the Ball Corporation is best known for its distinctive home canning jars, that business was just one segment of the diversified company in the 1990s. Glass packaging constituted only 29 percent of Balls annual sales by that time, while metal packagingincluding aluminum beverage containers, and food and aerosol cansbrought in about 60 percent of yearly revenues. The firm ranks as one of Americas top beverage-can manufacturers. Balls emphasis on quality has helped it compete well in the highly competitive can market: by 1994, the company was the third largest supplier to the combined U.S.Canadian food can market. The remaining eleven percent of the corporations annual income came from aerospace and communications subsidiaries. Ball has secured numerous U.S. Defense Department contracts and participates in the Space Shuttle Program of the National Aeronautics and Space Administration (NASA).

Ever since the five Ball brothers discovered that John Masons patent on canning jars had expired in the late 1800s, the Ball Corporation has been making the preferred canning equipment in America. Five generations of Americans have preserved everything from pickle relish and apricots to cherry jam and tomatoes in the well known jars, whose design has gone virtually unchanged for over 100 years. Though Ball finally went public in 1972, 60 percent of the companys stock is still owned by the family.

The Ball Corporation began in 1880 when the Ball brothers went into the business of making tin-jacketed glass containers for kerosene lamps. From this type of operation it was an easy shift to the manufacture of canning jars and lids. Moreover, it was wise business strategy: Thomas Edisons recent invention of the incandescent light bulb had antiquated the kerosene lamp. The glass jar, on the other hand, had a great future.

Until the end of World War II, Ball was primarily a jar and bottle manufacturer with few other interests. In the late 1940s, however, a problem had to be confrontednearly 70 percent of the companys glass production facilities were in need of modernization. Ball had either to diversify and grow in order to underwrite necessary modernization costs or liquidate the company. The family decided to diversify the company because a 1947 antitrust ruling prohibited Ball from purchasing more glass subsidiaries. Under president Edmund F. Ball, they made a number of key acquisitions outside the glass container field. Before the company ventured too far afield, Ball hired a New York management consulting team to help establish a long-range program. In the words of Edmund Balls successor, John Fisher, We wanted to plan for growth, not just hope for it.

The significant changes at Ball, those which have molded the companys future, took place in the late 1950s and early 1960s. The launching of Sputnik by the Soviets in 1958 ushered in the Space Age and created many new opportunities in the field of aerospace. Ball decided to take advantage of the situation. We got into the space field because it was the beginning of the biggest scientific effort in our nations history, said Fisher. We knew it could be profitable for us, and that we could get commercial fall-out from it.

The Ball management proved itself correct on both counts. A substantial portion of the companys business presently comes from the sale of computer components, pointing controls for NASA satellites, electronic data display devices, and many related items such as Sound-Guard, a preservative for phonograph records that is a derivative of a lubricant developed for spacecraft. The company also built the cameras for the Viking I and II spacecraft that were used to determine the landing site on Mars; the Space Shuttle tether system, which allows small pay-loads to trail up to 65 miles away from the parent ship; and the telescope on the Infrared Astronomical Satellite launched in 1983 that has helped scientists to determine more precisely the size of the Milky Way galaxy. Ball procured $180 million in defense contracts alone by 1987. Chief Executive Officer Richard Ringoen hoped the companys strong position in infrared and ultraviolet instrumentation [would] continue to allow it to compete favorably with larger aerospace firms like General Dynamics.

Ironically, Ball had entered the high-tech market almost by mistake. In the 1950s, the company hired a small engineering firm in Boulder, Colorado, to develop a device that would more accurately weigh glass batch materials. The original device was never developed, but Ball was impressed enough by the technical skill of the small operation to purchase it. From this small start Ball invested heavily in research and development and made this sector a vital part of the companys overall business.

The 1960s were years of unparalleled growth in the container industry, especially in the consumer beverage area. Americans began drinking more beer and soft drinks than ever before, and innovations such as the pop-top can and the non-returnable bottle helped container companies to make large profits. While not being a large-volume can manufacturer on the order of American Can or Continental, Ball has nonetheless been extremely successful in this competitive market. Cans soon made up two-thirds of the companys packaging sales, supplanting jars and bottles as the companys primary container product.

Balls success in this area can be traced back to 1968 when the firm made an early switch to two-piece cans. The two-piece can, which is lighter, less expensive, and faster to make, is now used to package 70 percent of all soft drinks and 94 percent of all beer. Since Ball was already in the container industry, it was able to win manufacturing contracts from such important customers as PepsiCo, Inc., The Coca-Cola Co., and Anheuser-Busch Co. In fact, Anheuser-Busch and Ball constructed a $32 million plant in New England that manufactures two-piece aluminum cans for the brewer on an exclusive basis. While Ball controlled less than one percent of the total can market in the 1980s, it had seven to eight percent of the two-piece can market.

Balls diversification efforts during the 1950s and 1960s were bold in concept but fairly modest in scope. The man responsible for creating the widely diversified company that the Ball Corporation would become, John W. Fisher, was chosen president and chief executive officer in 1971. Fisher directed Ball into such fields as petroleum engineering equipment, photo-engraving, and plastics, and established the company as a leading manufacturer of computer components and high-tech hardware for defense and space.

Fisher, the last company president to be a member of the Ball family (his wife was the daughter of one of the five founding Ball brothers), resisted the traditionalists within his firm and pushed Ball into new markets all over the world. In 1972, Fisher acquired a Singapore-based petroleum equipment company that built and sold production gear and provided engineering expertise to oil firms in the Pacific. This purchase gave Ball subsidiary operations in Singapore, Malaysia, Indonesia, Panama, and Japan. The following year the Ball-Bartoe Aircraft Corporation was established in Boulder, Colorado. It was involved in the development of an experimental STOL (short take-off and landing) military jet in the 1980s.

The company then acquired agricultural systems and prefabricated housing. Fisher established a Ball Corporation division in Boulder devoted solely to the production and sale of turnkey irrigation packages for agricultural development in arid but arable areas of Libya and other nations in the Middle East. Ball also designed a modular home that could be erected on-site in a little more than six hours. In desert nations where building materials are scarce and therefore expensive, Ball has succeeded in selling a large number of these kit houses. Then, in 1974, Fisher acquired a small California computer company. This concern was expanded into Ball Computer Products Division based in Sunnyvale, California, in the heart of Silicon Valley.

Following Balls success in the foreign petroleum engineering equipment business, Fisher established similar operations in the United States. However, stiff competition, higher technological standards, and prohibitive start-up costs thwarted this venture from the start. Fisher wasted no time in selling it in 1976 for 40 cents per share. In the mid 1970s, Ball also developed and introduced Freshware food containers. Made of plastic with tight-fitting lids, these were designed to compete with Tupper-ware. The product was never actually marketed and Ball had to write it off as a loss, phasing out the project in a matter of months. But these were relatively small setbacks. Fishers management strategy was long-term and he was willing to bear the burden of brief, small-scale problems. The two large obstacles he never surmounted, however, were the companys image and the stock markets ambivalent opinion of it. Despite its interesting acquisitions, the American public still associated Ball almost exclusively with its glass jars.

Ball Corporation went public in 1972 for two reasons. The company management wanted to establish accurately the market value of the Ball family holdings, and they intended to raise equity money to finance the companys diversification efforts. But despite its impressive history, Balls stock price did not significantly increase. Fishers efforts to give Ball a more technological image, his trips across the United States to speak with investors, and his dedication to growth did not change the minds of many people. The executive could not understand why a profitable company would not be an attractive stock purchase. He remarked, We live in a world where products must be packaged, in good times or bad. This is all a bit mystifying to me.

When Fisher retired in 1981 he was replaced by Richard Ringoen. Ringoen concentrated on two areas, technology and packaging. Many of the other sectors, while being neither divested not disregarded, had been left to operate on their own. From 1988 to 1992, Balls annual sales increased dramatically, from $86 million to $2.177 billion, on the force of acquisitions. But net income only increased slightly, from $50.5 million to $69.1 million during the same period.

In the late 1980s, Ball began to focus on international packaging markets where growth far outpaced that of the United States. In 1986, Ball entered into a joint venture with Guangzhou M. C. Packaging in China. By 1993, that business ranked as one of that countrys most successful foreign joint ventures, and Ball had established five beverage can manufacturing plants in China, one in Taiwan, and one in Hong Kong.

Ringoen served Ball for a decade, and was succeeded by Delmont A. Davis in 1991. Davis led Balls early 1990s consolidation and rationalization. In 1992, the company acquired Ken-Group Inc.s commercial glass assets for $68.4 million, which helped boost Balls share of that market. Heekin Can, Inc., one of the Midwests largest food can manufacturers, was purchased in 1993 through a tax-free exchange of stock. The integration of Heekin and Balls existing Canadian can operations made Ball the third largest supplier to the combined U.S.-Canadian food can market. At the same time, Ball spun off its Alltrista Corporation subsidiary, which was comprised of Balls consumer products, zinc products, metal decorating and services, industrial systems, and plastics businesses, to shareholders.

Balls aerospace business also faced challenges in the late 1980s and early 1990s, as the end of the Cold War and the shifting governmental priorities that resulted helped reduce the federal defense budget and intensify competition for contracts. Still, in 1993, Ball was proud to have played a major role in the well-publicized repair of the Hubble Space Telescope. The Ball-built COSTAR optics system helped correct the telescopes notoriously blurry vision.

The net result of these reorganizational activities was that Balls sales more than doubled from $1.12 billion in 1990 to $2.44 billion in 1993, while the corporations staff was reduced by over ten percent. Ball was compelled to take a $95 million pretax restructuring provision, half of which was used for plant shutdowns and consolidations. Although CEO Davis rightly called Balls $65.1 million loss for the year simply not acceptable, he also expressed confidence that the companys unparalleled restructuring would bring new opportunities for profitability in the last half of the decade.

Principal Subsidiaries:

Ball Brothers AG (Germany); Ball-Canada Holdings Inc.; Ball Efratom Elektronik GmbH (Germany); Ball Efratom Corporation Ltd.; Ball Foreign Sales Corp.; Ball Holdings Corp.; Ball-Incon Glass Packaging Corp.; Ball Metal Container Corp.; Ball Packaging Products Canada, Inc.; Ball Systems Technology Ltd.; Ball Technology Licensing Corp.; Ball Technology Services Corp.; CCD, Inc.; Heekin Can, Inc.; Madera Glass Co.; Muncie & Western Railroad Co.; Verac, Inc.

Further Reading:

Birmingham, Frederic Alexander, Ball Corporation: The First Century, Indianapolis: Curtis Publishing Co.

updated by April Dougal Gasbarre

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Ball Corporation

Ball Corporation

345 South High Street
Muncie, Indiana 47305
U.S.A.

Public Company
Incorporated:
in 1922
Employees: 9,000
Sales: $1.4 billion
Market Value: $932 million
Stock Index: New York

The Ball Corporation is one of the few large companies that is more widely known in the American Midwest than in New York City. Ever since the five Ball brothers discovered that John Masons patent on canning jars had expired in the mid-1800s, Ball has been making the preferred canning equipment in America. Five generations have preserved everything from pickle relish and apricots to cherry jam and tomatoes in the distinctive jars. The design has virtually gone unchanged for over 100 years.

When the name Ball is mentioned most Americans think of fruit jars. But in fact, home canning equipment makes up less than 10% of Balls total sales. The bulk of revenues come from such diverse sectors as solar sensors, plastic soft drink bottles, satellite instrument systems and aluminum beer cans. Ball has secured numerous U.S. Defense Department contracts and participates in the Space Shuttle Program of the National Aeronautics and Space Administration (NASA).

The Ball Corporation began in 1880 when the five Ball brothers went into the business of making tin-jacketed glass containers for kerosene lamps. From this type of operation it was an easy shift to the manufacture of canning jars and lids. Moreover, it was wise business strategy. Thomas Edison had just invented the incandescent light-bulb and turned the kerosene lamp into an antique. The glass jar, on the other hand, had a great future.

The Ball Corporation is based in Muncie, Indiana and the present chief executive officer Richard M. Ringoen is only the fifth president in the companys 107-year history, and the first who was not a member of the Ball family. Though Ball finally went public in 1972, 60% of the companys stock is still owned by the family.

Until the end of World War II Ball was primarily a jar and bottle manufacturer with few other interests. In the late 1940s, however, a problem had to be confronted nearly 70% of the companys glass production facilities were in need of modernization. Ball had either to diversify and grow in order to underwrite necessary modernization costs or liquidate the company. The family decided to diversify the company, and under president Edmund F. Ball, they made a number of key acquisitions, but none in the glass container field. A 1947 antitrust ruling prohibited Ball from purchasing more glass subsidiaries. Before the company ventured too far afield, Ball hired a New York management consulting team to help establish a long-range program. In the words of Edmund Balls successor, John Fisher, We wanted to plan for growth, not just hope for it.

The significant changes at Ball, those which have molded the company into what it is today, took place in the late 1950s and early 1960s. The launching of Sputnik by the Soviets in 1958 ushered in the Space Age and created many new opportunities in the field of aerospace; Ball raising eyebrows in corporate America, decided to take advantage of the situation. We got into the space field because it was the beginning of the biggest scientific effort in our nations history, said Fisher. We knew it could be profitable for us, and that we could get commercial fall-out from it.

The Ball management proved itself correct on both counts. Fully one-fourth of the companys business presently comes from the sale of computer components, pointing controls for NASA satellites, electronic data display devices, and many related items such as Sound-Guard, a preservative for phonograph records that is a derivative of a lubricant developed for spacecraft. The company also built the cameras for the Viking I and II spacecraft that were used to determine the landing site on Mars; the Space Shuttle tether system, which allows small payloads to trail up to 65 miles away from the parent ship; and the telescope on the Infrared Astronomical Satellite launched in 1983 that has helped scientists to determine more precisely the size of the Milky Way galaxy. Ball Corporation procured $180 million in defense contracts alone by 1987. Chief Executive Officer Richard Ringoen hopes the companys strong position in infrared and ultraviolet instrumentation will continue to allow it to compete favorably with larger aerospace firms like General Dynamics.

Ironically enough, Ball had entered the high-tech market almost by mistake. In the 1950s the company hired a small engineering firm in Boulder, Colarado to develop a device that would more accurately weigh glass batch materials. The original device was never developed, but Ball was impressed enough by the technical skill of the small operation to purchase it. From this small start Ball invested heavily in research and development and made this sector a vital part of the companys overall business.

The 1960s were years of unparalleled growth in the container industry, especially in the consumer beverage area. Americans began drinking more beer and soft drinks than ever before, and innovations such as the pop-top can and the non-returnable bottle allowed container companies to make large profits. While not being a large-volume can manufacturer on the order of American Can or Continental, Ball has nonetheless been extremely successful in this competitive market. Cans now make up two-thirds of the companys packaging sales, supplanting jars and bottles as the companys primary container product.

Balls present success in this area can be traced back to 1968 when the firm made an early switch to two-piece cans. The two-piece can, which is lighter, less expensive, and faster to make, is now used to package 70% of all soft drinks and 94% of all beer. Since Ball was already in the container industry, it was able to win manufacturing contracts from such important customers as Pepsi, Coca-Cola, Dr. Pepper, Strohs Beer and Budweiser. In fact, Anheuser-Busch and Ball constructed a $32 million plant in New England that manufactures two-piece alumium cans for the brewer on an exclusive basis. While Ball controls less than 1% of the total can market, it has 7% to 8% of the two-piece can market.

Balls diversification efforts during the 1950s and 1960s were bold in concept but still fairly modest in scope; the company was still very much a family operation. The man responsible for creating the widely diversified company that the Ball Corporation is today is John W. Fisher, who became president and chief executive officer in 1971. It was Fisher who directed the company into such fields as petroleum engineering equipment, photo-engraving, and plastics, and established the company as a leading manufacturer of computer components and high-tech hardware for defense and space.

Fisher, the last company president to be a member of the Ball family (his wife is the daughter of one of the five founding Ball brothers), resisted the traditionalists within his firm and pushed Ball into new markets all over the world. In 1972 Fisher acquired a Singapore-based petroleum equipment company that built and sold production gear and provided engineering expertise to oil firms in the Pacific. This purchase gave Ball subsidiary operations in Singapore, Malaysia, Indonesia, Panama and Japan. The following year the Ball-Bartoe Aircraft Corporation was established in Boulder, Colorado. It is presently involved in the development of an experimental STOL (short takeoff and landing) military jet.

Next came agricultural systems and prefabricated housing. Fisher established a Ball Corporation division in Boulder devoted solely to the production and sale of turnkey irrigation packages for agricultural development in arid but arable areas of Libya and other nations in the Middle East. Ball also designed a modular home that could be erected on-site in a little more than six hours. In desert nations where building materials are scarce and therefore expensive, Ball has succeeded in selling a large number of these kit houses.

Then, in 1974, Fisher acquired a small California computer company. This concern was expanded into todays Ball Computer Products Division based in Sunnyvale, California, in the heart of Silicon Valley.

Following Balls success in the foreign petroleum engineering equipment business, Fisher established similar operations in the United States. However, stiff competition, higher technological standards and prohibitive startup costs thwarted this venture from the start. Fisher wasted no time in selling it in 1976 for a mere 40 cents per share. In the mid-1970s Ball also developed and introduced Freshware food containers. Made of plastic with tight-fitting lids, these were presented as a challenge to Tupperware. The product was never actually marketed and Ball had to write it off as a loss, phasing out the project in a matter of months.

These were relatively small setbacks. Fishers management strategy was long-term and he was willing to bear the burden of brief and small-scale problems. The two large obstacles he never surmounted, however, were the companys image and the stock markets ambivalent reaction to it. Despite its interesting acquisitions, the American public still associated Ball almost exclusively with its glass jars.

Ball Corporation went public in 1972 for two reasons. The company management wanted to establish accurately the market value of the Ball family holdings, and they intended to raise equity money to finance the companys diversification efforts. But despite its impressive history, Balls stock price did not significantly increase.

Fishers efforts to give Ball a more technological image, his trips across the United States to speak with investors, and his dedication to growth have not changed the minds of many people. Fisher could not understand why a profitable company would not be an attractive stock purchase. He remarked, We live in a world where products must be packaged, in good times or bad. This is all a bit mystifying to me.

When Fisher retired in 1981 he was replaced by Richard Ringoen. Ringoen in recent years has primarily concentrated in two areastechnology and packaging. Many of the other sectors, while being neither divested not disregarded, have been left to operate on their own. In particular, Ball Corporation under Ringoen is attempting to develop and market the plastic-can. Plastic soda-pop bottles of the two-liter, half-liter and 12-ounce varieties have already proved popular with consumers. Beer in such containers, Ringoen contends, could be next. The technology is there for plastic cans that will hold their shape at the high temperatures you need for pasteurization. Ball has spent millions of dollars in the past five years on plastics and is now poised for an entry into the market if it should come.

Principal Subsidiaries

Ball Agricultural Sales Corp.; Ball Packaging Products, Inc.; Ball International Sales Corp.; Pantek Corp.; Muncie & Western Railroad Co. The company also lists subsidiaries in the following countries: Bermuda, France, Switzerland, United Kingdom, and West Germany.

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