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Rayovac Corporation

Rayovac Corporation

601 Rayovac Drive
Madison, Wisconsin 53711-2497
U.S.A.
Telephone: (608) 275-3340
Fax: (608) 275-4577
Web site: http://www.rayovac.com

Public Company
Incorporated:
1906 as the French Battery Company
Employees: 3,380
Sales: $703.9 million (2000)
Stock Exchanges: New York
Ticker Symbol: ROV
NAIC: 335911 Storage Battery Manufacturing

Rayovac Corporation is the third leading U.S. manufacturer of alkaline storage batteries and the market leader in other battery categories such as hearing aid, computer backup, heavy duty, lantern, and keyless entry. It also manufactures flashlights and other miscellaneous items. The company has played a leadership role in the U.S. battery industry since the early 1900s. After lagging behind Gillettes Duraceli and Energizer Holdings, Rayovac enjoyed a rebirth in 1996 when the Thomas H. Lee Group purchased the company and changed management. The company has been publicly traded since 1997.

Company Origins

Rayovacs roots reach back to 1906, when entrepreneurs James B. Ramsay, P.W. Strong, and Alfred Landau joined forces to create the French Battery Company. Ramsay, the leader of the operation, was 35 years old at the time and had already established himself as a successful businessman. His gumption, in fact, was evident early; he convinced the University of Wisconsin to admit him when he was a junior in high school, and subsequently became the only person to graduate from the institution who did not have a high school diploma. After college, Ramsay moved to Medford, Wisconsin, where he started a lumber company and later was elected mayor of the town. He sold the thriving business when he was 35 years old and returned to Madison in search of a new challenge.

After Ramsay returned to Madison, Strong, an old friend, approached him about a business opportunity. The dry cell battery had been invented in the 1800s in France and demand for the technology was beginning to grow in the United States by the early 1900s. Strong was aware of a man in Chicago named Alfred Landau who was manufacturing batteries in his attic and selling them locally. Cursory research convinced Ramsay that it was a good investment. So, in 1906 the three men initiated the French Battery Company. They started with $30,000 working out of Landaus Chicago attic. The company just happened, Ramsay noted in company annals, as did the history of the fellow who grabbed such a hold of the bulls tail that he couldnt let go.

Landaus crude manufacturing operation soon outgrew his attic so the men moved the company to a small building in Madison in March 1906. But orders continued to pour in, many of them unsolicited, and the entrepreneurs were overwhelmed with new accounts. Just three months after they had started the company, sales had far surpassed even their most ambitious projections. In the summer, they moved the operation into a two-story brick building with the help of 12 more investors who supplied about $60,000 in new capital. By that time the company was employing 24 workers. During its first year, the French Battery Company churned out 37,000 battery cells, most of which sold for about 13 cents apiece. To boost revenues, Ramsay hired L.H. Dodge as the companys first salesman in January 1907. He added three more salesmen in the summer of that year.

Ramsay and his cohorts were operating a bare bones operation: They owned one roll-top desk, a typewriter, and about $314 worth of lab equipment going into 1907. But they had invested heavily in inventory in anticipation of growing demand. Unfortunately, some of the materials were found to be unreliable after many batteries had been shipped. Disappointed buyers demanded refunds and the struggling upstart began losing money. Infuriated investors demanded that Landau, who was serving as the official head of the company, resign. Landau returned to France, and Ramsay kept the operation going, although another investor was appointed president. By the end of 1907, the companys books showed a total deficit of $50,000 for the two years of operation. Nevertheless, Ramsay remained committed to the companys success.

To replace Landaus technical expertise, Ramsay called on Dr. Charles F. Burgess, the founder of the chemical engineering department at Ramsays alma mater. Burgess was intelligent and a perfectionist. He was immediately intrigued by Ramsays enthusiasm about the operation, despite his belief that the French Battery Company was producing the worst battery on the market. Burgess invested in the company and helped it to upgrade its products. Within a year he believed that the company was offering the best dry cell available in the United States. The company struggled for a few more years, narrowly escaping bankruptcy, before posting its first profit in 1910. Enthusiasm about the surplus was negated, however, by a fire that wiped out Frenchs factory. Significantly, though, French began selling a pivotal new flashlight battery that eventually would bring big profits.

French recovered from the fire and achieved steady profits between 1913 and 1920, despite another fire that virtually leveled the companys new factory in 1915. Burgess became increasingly involved in, and vital to, the company during those years and was elected vice-president in 1915. After the 1915 fire, however, relations between Burgess and the company deteriorated. Burgess departed in 1916 to start his own enterprise, although he allowed French to continue manufacturing products under his patents. Burgess was succeeded by his top assistant, Otto E. Ruhoff. Despite management turbulence, French recorded record profits in 1916 of $62,410 from sales of $889,880. That year, moreover, marked the last one in which the company would generate less than one million in sales. Ramsay was elected president of the company in 1918.

Company Survival Through Two World Wars and the Great Depression

Battery sales boomed during World War I because of huge orders from the United States and allied governments. By 1919, the company had established sales branches throughout much of the nation and as far west as Kansas City. An economic downturn in 1920 stalled growth, and wary executives shuttered the companys recently constructed New Jersey manufacturing plant. But the downturn was short-lived. Spurred by new applications for batteries, particularly the radio, demand spiraled during the 1920s and French prospered. Frenchs line of successful batteries was expanded to include Ray-O-Vac (radio batteries), Ray-O-Lite (flashlight cells), and Ray-O-Spark (ignition batteries). Sales topped $3 million in 1923 and production facilities were expanded to meet demand for Frenchs patented batteries. At the peak of activity in the 1920s, when unsolicited orders poured in from around the globe, the company was employing 1,300.

Explosive demand growth during the mid-1920s was driven primarily by the radio, the use of which necessitated batteries. Battery manufacturers were stunned, therefore, when Dr. Samuel Rubin invented technology that made the plug-in electric radio possible. The discovery capped Frenchs growth spurt and even pummeled sales and profits during the late 1920s and early 1930s. Revenues plunged from $4.1 million in 1928 to just $2.1 million in 1933. The industry shakeout left only a dozen beleaguered battery manufacturers intact, one of which was French. Ramsay resigned in 1929, deciding to make way for a younger man. He remained on the companys board until his death in 1952 at 83 years of age. Ramsay was succeeded by Bill Cargill, an aggressive, flamboyant general manager described by others as larger than life.

In part as a result of Cargills sheer energy and charisma, the French Battery Company survived the Great Depression relatively unscathed. Because of the name recognition of its Ray-O-Vac battery, the company officially adopted that name in the early 1930s. Ray-O-Vacs fortunes began to turn in the middle and late 1930s, in part as a result of new innovations that boosted sales. Interestingly, in 1933, Ray-O-Vacs research team, led by the talented Art Wengel, developed the first portable radio with high fidelity reception. The radio was so small that it could be carried around in a suitcase-style box. In 1937, moreover, Ray-O-Vac patented the first wearable vacuum tube hearing aid. Despite global economic malaise, Ray-O-Vacs sales steadily surged to an impressive $5 million annually by 1936 and continued to grow to more than $8 million by 1941.

Company Perspectives:

Rayovac has a mission to create and maintain a working environment that is safe for our employees, the communities in which we work, and the earth on which we live. The individual parts we play in our neighborhoods and on our jobs are critical to preserving these resources for our future and that of our children. It is the responsibility of every employee to incorporate the practices of informed stewardship in daily life. Waste, whether produced in the manufacturing plant, office, or home, represents environmental and economic inefficiency. Accordingly, we should reduce our consumption of resources to levels reasonably needed, and we should reuse those assets where practicable. Finally, we should dispose of resources intelligently, recycling those that can be utilized economically in a different form. We must recognize, however, that recycling is not costless, and that some recycling processes consume more resources than they save. We all deserve to have clean air, safe water, and adequate resources. As environmental stewards, we support this mission.

In 1939, Ray-O-Vacs Herman R.C. Anthony invented the leak-proof sealed in steel dry cell battery, which played an important role during World War II, as Allied troops used the batteries to power flashlights, radios, walkie-talkies, mine detectors, signal lights, bazookas, and other gear. The companys workforce soared from about 1,500 to more than 14,000, including many women and elderly men. Ray-O-Vacs manufacturing facilities, considered war plants, were patrolled by armed military guards. In some of its plants, battery making was discontinued in favor of production of parts for military gear and weaponry. The government purchased an astounding 23 million units of just one type of leak-proof battery during the war, and Ray-O-Vac operated the largest battery plant in the worldthe ten-building Signal Battery complex in Milwaukee.

Batteries were rationed to the public during the war, so the loss of government orders following the war was partially replaced by increased consumer demand. After a brief period of reorganization, the company began growing in the wake of the postwar population and economic boom. In an effort to bring some order to the sprawling organization, Cargill realigned Ray-O-Vac in 1946 into six divisions: Lighting Division; Manufacturers Battery Company, which produced radio batteries and related items; Canadian Division; Specialty Battery Division; Export Division; and Research and Development Division. Although sales and profits swelled throughout the late 1940s and into the 1950s, the reorganization eventually proved inefficient. Nevertheless, Ray-O-Vac continued to innovate and set new records. It sold more than 100 million leak-proof batteries in 1946, for example, and in 1949 Ray-O-Vacs Dr. W. Stanley Herbert introduced the breakthrough crown cell alkaline battery for hearing aids. Also in 1949, the company introduced its hugely popular Sportsman flashlight.

International Expansion and Diversification: 1950s70s

Ray-O-Vac shipped its billionth leak-proof battery in 1950. Two years later, Cargill, in ill health, retired and was replaced by Don Tyrrell. Just a few days after the transfer of power, the companys founder, Ramsay, died. Ray-O-Vac was already operating on several continents going into the 1950s. But Tyrrell stepped up international efforts. Notably, he helped to engineer an agreement with a Japanese company to import and distribute Ray-O-Vac products. Ray-O-Vac soon was producing and distributing batteries throughout the Orient. Sales in that region augmented increased efforts in Europe and South America, among other regions. At the same time, Tyrrell spearheaded a diversification effort. Ray-O-Vacs first purchase was Wilson, a safety products company that it bought in 1955. Other acquisitions followed.

The battery industry was transformed during the late 1950s and 1960s by the introduction of the transistor in 1956. The transistor replaced energy-consuming vacuum tubes, thereby making devices smaller and more energy-efficient. The invention created a plethora of new market opportunities for companies that were willing to take risks. Elmer Ott succeeded Tyrrell as president in 1957. He continued to diversify the company and to prepare for growth in the popularity of the transistor. Also in 1957, Ray-O-Vac merged with the Electric Storage Battery Co. (ESB), a leading manufacturer of industrial and automotive wet batteries. At the time, ESBs sales were $102 million annuallyroughly two and a half times as great as Ray-O-Vacs. Ray-O-Vac effectively became a division of ESB. ESB was particularly interested in tapping into Ray-O-Vacs international network, which by the late 1950s spanned 100 different nations and accounted for nearly 25 percent of profits. The Ray-O-Vac name became so well known overseas, in fact, that it was often exploited (illegally) by foreign companiesa humorous example was Ray-O-Vac Leak Proof Fish Sauce in China.

In an attempt to adapt to a world increasingly dominated by transistors, Ray-O-Vac introduced a number of low-voltage, miniature battery products during the 1960s, including penlight batteries and super small button batteries. In addition, Ray-O-Vac became a leader in battery-powered lighting systems and devices, including fluorescent camping lanterns, miniature disposable flashlights, and long-lasting boat lamps. Meanwhile, international expansion continued with the development of manufacturing facilities in Iran, for example, and expanded operations in Latin America. Ray-O-Vac was generating annual revenues of about $55 million by 1965, for the first time surpassing World War II sales figures. The company also made national headlines in 1965 because of one of its employees, Doc Swenson. Doc turned 100 in 1965. He had worked for Ray-O-Vac since 1916 and continued to work 40-hour weeks until the age of 90, after which he cut back to 20 hours weekly. Doc, who missed only one-and-one-half days of work during his career, died shortly after his 100th birthday.

After 44 years of service to Ray-O-Vac, Ott passed the torch in 1967 to Owen Slauson. Under Slausons direction, Ray-O-Vac aggressively automated its manufacturing operations and continued to pursue global diversity with new factories in the Dominican Republic, Mexico, Africa, Peru, Korea, and other places. In the United States, Ray-O-Vac built a $2 million Engineering and Development Center in Madison, Wisconsin. Innovations stemming from research in the facility included the first heavy-duty all zinc-chloride battery, which was introduced in 1972 and doubled the life of existing general purpose batteries. The company also continued to diversify by acquiring, among other ventures, fishing tackle companies, plastic and rubber manufacturers, and mining operations. Unfortunately, most of the acquisitions languished and became a drag on Ray-O-Vacs bottom line. In 1979, ESB, which was purchased by INCO Ltd. in 1974, reunited Ray-O-Vacs domestic and international operations and selected Benno A. Bernt as president of the group.

Key Dates:

1906:
French Battery Company incorporated in Wisconsin.
1930:
Company changes name to Rayovac.
1939:
Company introduces leak-proof dry cell battery.
1949:
Company introduces stainless steel Sportsman flashlight.
1982:
Thomas and Judith Pyle purchase company.
1996:
Thomas H. Lee Group acquires company.
1997:
Rayovac makes initial public offering of stock.

New Leadership in the 1980s and 1990s

By the early 1980s, Ray-O-Vac was generating about $175 million in annual sales. Ray-O-Vacs attempts at geographic diversity and product innovation, however, belied serious structural problems that plagued the company during the 1970s and early 1980s. Indeed, Ray-O-Vac was the undisputed leader of the U.S. battery industry during the 1950s. During the 1960s and 1970s, though, it lost its edge and gradually succumbed to the challenge of competitors like Everready Battery Co. and Duracell Inc. Ray-O-Vacs share of the battery market plunged during the period from 35 percent to a measly six percent. Some critics blamed Ray-O-Vacs parent companies for the slide. Others pointed to internal problems that resulted in outdated packaging and stale product offerings in comparison with other battery producers. Most important, Ray-O-Vac executives failed to aggressively pursue the emerging market for alkaline batteries, which quickly became the industry standard. Going into the 1980s, sales were falling, Ray-O-Vac was laying off workers, and major long-term customers were dropping the Ray-O-Vac line.

Enter Thomas and Judith Pyle, a husband-and-wife team with experience selling toiletries, sewing patterns, makeup, and wigs to personal care and consumer products companies. The Pyles, with two other investors, purchased Ray-O-Vac (they changed the name to Rayovac Corporation) from INCO in 1982. The 44-year-old Pyle and his wife became chairman and co-chairwoman and Pyle named himself president and chief executive. They eventually bought out the other two investors and virtually owned the company. The Pyles combined their consumer marketing savvy with Rayovacs untapped manufacturing potential and were able to bring the company back from the edge of disaster. Under their direction, Rayovac introduced a steady stream of innovative products and marketing initiatives. In 1984, for example, the company unveiled its successful WORKHORSE premium flashlight with its ultrabright bulb and lifetime warranty. Likewise, they started selling Smart Packs of six to eight batteries instead of the usual two.

The Pylesstrategy was based on experience gleaned from their previous work with consumer products. Judith Pyle called their tactics nichemanship, meaning that every product, particularly new ones, had to incorporate features, designs, and prices focused tightly on a specifically targeted group of customers. Second, new products had to be truly innovative, as opposed to me-too entries into the crowded marketplace. To that end, Rayovac introduced products like the successful Luma 2, the first flashlight with its own emergency backup system; if the batteries failed, a separate lithium-powered system could be activated. Similarly, the Loud n Clear hearing aid, unveiled in 1987, represented a breakthrough in hearing-aid zinc battery technology. In the late 1980s, moreover, Rayovac began using the Checkout Pack Merchandising System. That system featured shrink-wrapped battery packages that could be stacked rather than hung on conventional pegboard displays and a new gravity-fed display rack designed for use at checkout counters.

In addition to introducing new products, the Pyles also updated Rayovacs packaging and aggressively sought to recover customers who had dropped their lines. They barraged lost customers in Wisconsin, for example, with letters asking them to start selling Rayovac products again. The effort boosted market penetration in the state from 20 percent to 70 percent within a few years. Meanwhile, Rayovac shuttered some non-performing operations and expanded through acquisition. During the 1980s, the companys acquisitions included, in 1983, certain Timex battery operations in the United Kingdom; in 1988, Raystone Corp., a manufacturer of battery cells; in 1989, Crompton Vidor, a U.K. producer of consumer batteries and flashlights; and the Tekna line of high-tech flashlights. The Pyles also initiated an aggressive quality improvement program designed to improve operations at every organizational level.

The net result of the Pyles efforts was that Rayovacs sales rose to $270 million in 1987, reflecting growth of nearly 15 percent in 1985 and 1986. Furthermore, the companys share of the U.S. retail battery market reached 12 percent. Between 1987 and the early 1990s, Rayovacs revenues topped $450 million. Innovations in the early 1990s included: a new alkaline computer clock battery; a line of ultra-tough flashlights; a WORKHORSE fluorescent lantern; and the Renewal battery, the first reusable, long-life alkaline battery that could be used 25 times or more and was environmentally safe. Nevertheless, Rayovac realized only sluggish growth in the early 1990s, growing at a rate of only one to two percent. Rayovac signed sports megastar Michael Jordan to support the rechargeable product in a long-term endorsement contract in April 1995, a move that the company hoped would have a major impact on its market share.

Even Jordans charisma, however, could not reverse the companys fortunes overnight. For too many years the companys competitors, Duracell and Energizer, had been more aggressive in advertising and marketing their products on a global scale. In September 1996 a Boston-based buyout firm, Thomas H. Lee Group, purchased 80 percent of Rayovac with the intent of taking the company public. Brought in to run the business and serve as chairman and chief executive was David A. Jones, who had significant management experience with Electrolux Corporation, The Regina Company, and Thermoscan, Inc.

Joness goal was to revitalize the Rayovac brand by updating the companys marketing, advertising, and distribution strategies, as well as expanding product lines and growing through strategie acquisitions. The first major order of business, however, was to take the company public. In November 1997 Rayovac sold 6.7 million common shares of stock at $14 each, raising nearly $94 million, the net proceeds of which were earmarked to repay debt. Also in 1997 Jones introduced the first major product launch under his watch: the Maximum alkaline line of batteries. Aklaline accounted for $2.5 billion of a $4.6 billion U.S. battery market. Jones opted to position Maximum as a value-based alternative to the premium-priced Duracell and Energizer batteries, standing out from the competition by selling at ten to 15 percent less while offering the same performance. Other new products launched under Jones included keyless entry batteries and medical batteries for the home health care market. At the same time, Rayovac increased it efforts to improve its U.S. distribution. When Jones took control, Rayovac batteries were found in 36,000 stores. Within 18 months 50 major chains were added, boosting distribution by 40 percent. An additional 100,000 stores that did not carry Rayovac were identified and targeted. Jones also hired a new advertising agency, fattened the advertising budget, and launched a national campaign that utilized Michael Jordan for the entire company, not just the rechargeable line. The results would be immediate, as alkaline sales jumped dramatically.

Late in 1997 Rayovac added to its overseas presence when it acquired BRISCO GMBH in Germany and BRISCO B.V. in Holland, assemblers and distributors of hearing aid batteries in Europe. Rayovac would take an additional step to increase its world market share with the acquisition of ROV Limited, a move that allowed penetration into Mexico, Latin America, and much of South America. In 1998 Rayovac bolstered its position in the rechargeable battery market by acquiring Direct Power Plus, a New York company that offered a full line of rechargeable batteries and accessories for cellular phone and video camcorders. Early in 2001 Rayovac reinforced its image as a leading innovator in the industry when it announced a major new product launch: the first one-hour Nickel Metal Hydride battery charger for the batteries used by such high-drain devices as digital cameras.

All of the changes that Jones instituted, including ongoing cost-cutting measures, would result in 16 consecutive quarters of record sales. Sales for 2000 were $703.9 million, an increase of 25 percent over 1999s record $564.3 million; net income of $38.4 million was up 59 percent compared with $24.1 million in 1999. As the company neared its centennial, Rayovac was poised to realize an even more successful future.

Principal Subsidiaries

ROV Holding Inc.; Rayovac Europe B.V.; Rayovac (U.K.) Limited; Rayovac Latin America Ltd; Rayovac Canada Inc.

Principal Competitors

Energizer Holdings Inc.; Duraceli; Ultralife Batteries Inc.

Further Reading

Gribble, Roger A., Workers Essential to Rayovac Quality, Wisconsin State Journal, February 14, 1993, Bus. Sec.

Kueny, Barbara, Flashlights of Innovation Illuminate Rayovacs Bottom Line, Business Journal-Milwaukee, May 27, 1991, p. 13S.

McDonald, Martha, CEO David Jones Steering Rayovac into New Century, Twice, June 29, 1998, p. 38.

Millard, Pete, Look at the Source: Wisconsin Companies Are Developing Technologies to Solve Environmental Problems, Corporate Report Wisconsin, March 1994, p. 23.

Phillips, Sharon, Market Leading TechnologyUnique Niche Strategy, Wall Street Corporate Reporter, June 22-28, 1998.

Reviving Primary Cells, Machine Design, March 9, 1995, p. 131.

Ruble, Kenneth D., The Rayovac Story, Madison, Wise: North Central Publishing Company, 1981.

Tracewell, Nancy, Enterprising Companies Build for Future During Recessions, Business Journal-Milwaukee, December 28, 1987, p. B4.

Weiner, Steve, Electrifying, Forbes, November 30, 1987, p. 196.

Dave Mote
update: Ed Dinger

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Rayovac Corporation

Rayovac Corporation

601 Rayovac Drive
Madison, Wisconsin 53711-2497
U.S.A.(608) 275-3340
Fax: (608) 275-4577

Private Company
Founded: 1906 as the French Battery Company
Employees: 2,800
Sales: $450 million
SICs: 3648 Lighting Equipment, Not Elsewhere Classified; 3691 Storage Batteries

Rayovac Corporation was the third leading U.S. manufacturer of storage batteries and the leading supplier of hearing aid and computer backup batteries in 1994. It also manufactured flashlights and other miscellaneous items. The company has played a leadership role in the U.S. battery industry throughout the 20th century. After faltering in the late 1970s and early 1980s, Rayovac rebounded and was the fastest growing contender in the industry in the early 1990s. Going into the mid-1990s, the company operated ten plants in the United States and two plants in the United Kingdom, and had international sales and distribution operations in Europe and Asia.

Rayovacs roots reach back to 1906, when entrepreneurs James B. Ramsay, P.W. Strong, and Alfred Landau joined forces to create the French Battery Company. Ramsay, the leader of the operation, was 35 years old at the time and had already established himself as a successful businessman. His gumption, in fact, was evident early; he convinced the University of Wisconsin to admit him when he was a junior in high school, and subsequently became the only person to graduate from the institution who didnt have a high school diploma. After college, Ramsay moved to Medford, Wisconsin, where he started a lumber company and was later elected mayor of the town. He sold the thriving business when he was 35 years old and returned to Madison in search of a new challenge.

After Ramsay returned to Madison, Strong, an old friend, approached him about a business opportunity. The dry cell battery had been invented in the 1800s in France and demand for the technology was beginning to grow in the United States by the early 1900s. Strong was aware of a man in Chicago named Alfred Landau who was manufacturing batteries in his attic and selling them locally. Cursory research convinced Ramsay that it was a good investment. So, in 1906, the three men initiated the French Battery Company. They started with $30,000 working out of Landaus Chicago attic. The company just happened, Ramsay noted in company annals, as did the history of the fellow who grabbed such a hold of the bulls tail that he couldnt let go.

Landaus crude manufacturing operation soon outgrew his attic so the men moved the company to a small building in Madison in March of 1906. But orders continued to pour in, many of them unsolicited, and the entrepreneurs were overwhelmed with new accounts. Just three months after they had started the company, sales had far surpassed even their most ambitious projections. In the summer, they moved the operation into a two-story brick building with the help of 12 more investors who supplied about $60,000 in new capital. By that time the company was employing 24 workers. During its first year, the French Battery Company churned out 37,000 battery cells, most of which sold for about 13 cents apiece. To boost revenues, Ramsay hired L.H. Dodge as the companys first salesman in January of 1907. He added three more salesman in the summer of that year.

Ramsay and his cohorts were operating a bare bones operation: They owned one roll-top desk, a typewriter, and about $314 worth of lab equipment going into 1907. But they had invested heavily in inventory in anticipation of growing demand. Unfortunately, some of the materials were found to be unreliable after many batteries had been shipped. Disappointed buyers demanded refunds and the struggling upstart began losing money. Infuriated investors demanded that Landau, who was serving as the official head of the company, resign. Landau returned to France, and Ramsay kept the operation going, although another investor was appointed president. By the end of 1907, the companys books showed a total deficit of $50,000 for the two years of operation. Nevertheless, Ramsay remained committed to the companys success.

To replace Landaus technical expertise, Ramsay called on Dr. Charles F. Burgess, the founder of the chemical engineering department at Ramsays alma mater. Burgess was intelligent and a perfectionist. He was immediately intrigued by Ramsays enthusiasm about the operation, despite his belief that the French Battery Company was producing the worst battery on the market. Burgess invested in the company and helped it to upgrade its products. Within a year he believed that the company was offering the best dry cell available in the United States. The company struggled for a few more years, narrowly escaping bankruptcy, before posting its first profit in 1910. Enthusiasm about the surplus was negated, however, by a fire that wiped out Frenchs factory. Importantly, though, French began selling a pivotal new flashlight battery that would eventually bring big profits.

French recovered from the fire and achieved steady profits between 1913 and 1920, despite another fire that virtually leveled the companys new factory in 1915. Burgess became increasingly involved in, and vital to, the company during those years and was elected vice president in 1915. After the 1915 fire, however, relations between Burgess and the company deteriorated. Burgess departed in 1916 to start his own enterprise, although he allowed French to continue manufacturing products under his patents. Burgess was succeeded by his top assistant, Otto E. Ruhoff. Despite management turbulence, French recorded record profits in 1916 of $62,410 from sales of $889,880. That year, moreover, marked the last one in which the company would generate less than one million in sales. Ramsay was elected president of the company in 1918.

Battery sales boomed during World War II because of huge orders from the United States and allied governments. By 1919, the company had established sales branches throughout much of the nation and as far west as Kansas City. An economic downturn in 1920 stalled growth, and wary executives shuttered the companys recently constructed New Jersey manufacturing plant. But the downturn was short-lived. Spurred by new applications for batteries, particularly the radio, demand spiraled during the 1920s and French prospered. Frenchs line of successful batteries was expanded to include Ray-O-Vac (radio batteries), Ray-O-Lite (flashlight cells), and Ray-O-Spark (ignition batteries). Sales topped $3 million in 1923 and production facilities were expanded to meet demand for Frenchs patented batteries. At the peak of activity in the 1920s, when unsolicited orders poured in from around the globe, the company was employing 1,300.

Explosive demand growth during the mid-1920s was driven primarily by the radio, the use of which necessitated batteries. Battery manufacturers were stunned, therefore, when Dr. Samuel Rubin invented technology that made the plug-in electric radio possible. The discovery capped Frenchs growth spurt and even pummeled sales and profits during the late 1920s and early 1930s. Revenues plunged from $4.1 million in 1928 to just $2.1 million in 1933. The industry shakeout left only a dozen beleaguered battery manufacturers intact, one of which was French. Ramsay resigned in 1929, deciding to make way for a younger man. He remained on the companys board until his death in 1952 at 83 years of age. Ramsay was succeeded by Bill Cargill, an aggressive, flamboyant general manager described by others as larger than life.

Partly as a result of Cargills sheer energy and charisma, The French Battery Company survived the Great Depression relatively unscathed. Because of the name recognition of its Ray-O-Vac battery, the company officially adopted that name in the early 1930s. Ray-O-Vacs fortunes began to turn in the mid-and late 1930s, partly as a result of new innovations that boosted sales. Interestingly, in 1933, Ray-O-Vacs research team, led by the talented Art Wengel, developed the first portable radio with high fidelity reception. The radio was so small that it could be carried around in a suitcase-style box. In 1937, moreover, Ray-O-Vac patented the first wearable vacuum tube hearing aid. Despite global economic malaise, Ray-O-Vacs sales steadily surged to an impressive $5 million annually by 1936 and continued to grow to more than $8 million by 1941.

In 1939, Ray-O-Vacs Herman R.C. Anthony invented the leak-proof sealed in steel dry cell battery, which closely resembled the metal-encased batteries sold throughout much of the mid-1900s. That product played an important role during World War II, as Allied troops used the batteries to power flashlights, radios, walkie-talkies, mine detectors, signal lights, bazookas, and other gear. The companys work force soared from about 1,500 to more than 14,000, including many women and elderly men. Ray-O-Vacs manufacturing facilities, considered war plants, were patrolled by armed military guards. In some of its plants, battery making was discontinued in favor of production of parts for military gear and weaponry. The government purchased an astounding 23 million units of just one type of leak-proof battery during the War, and Ray-O-Vac operated the largest battery plant in the worldthe 10-building Signal Battery complex in Milwaukee.

Batteries were rationed to the public during the War, so the loss of government orders following the War was partially replaced by increased consumer demand. After a brief period of reorganization, the company began growing in the wake of the postwar population and economic boom. In an effort to bring some order to the sprawling organization, Cargill realigned Ray-O-Vac in 1946 into six divisions: Lighting Division; Manufacturers Battery Company, which produced radio batteries and related items; Canadian Division; Specialty Battery Division; Export Division; and Research and Development Division. Although sales and profits swelled throughout the late 1940s and into the 1950s, the reorganization eventually proved inefficient. Nevertheless, Ray-O-Vac continued to innovate and set new records. It sold more than 100 million leak proof batteries in 1946, for example, and in 1949 Ray-O-Vacs Dr. W. Stanley Herbert introduced the breakthrough crown cell alkaline battery for hearing aids. Also in 1949, the company introduced its hugely popular Sportsman flashlight.

Ray-O-Vac shipped its billionth leak proof battery in 1950. Two years later, Cargill, in ill health, retired and was replaced by Don Tyrrell. Just a few days after the transfer of power, the companys founder, Ramsay, died. Ray-O-Vac was already operating on several continents going into the 1950s. But Tyrrell stepped up international efforts. Notably, he helped to engineer an agreement with a Japanese company to import and distribute Ray-O-Vac products. Ray-O-Vac was soon producing and distributing batteries throughout the Orient. Sales in that region augmented increased efforts in Europe and South America, among other regions. At the same time, Tyrrell spearheaded a diversification effort. Ray-O-Vacs first purchase was Wilson, a safety products company that it bought in 1955. Other acquisitions followed.

The battery industry was transformed during the late 1950s and 1960s by the introduction of the transistor in 1956. The transistor replaced energy-consuming vacuum tubes, thereby making devices smaller and more energy efficient. The invention created a plethora of new market opportunities for companies that were willing to take risks. Elmer Ott succeeded Tyrrell as president in 1957. He continued to diversify the company and to prepare for growth in the popularity of the transistor. Also in 1957, Ray-O-Vac merged with the Electric Storage Battery Co. (ESB), a leading manufacturer of industrial and automotive wet batteries. At the time, ESBs sales were $102 million annuallyroughly two and a half times as great as Ray-O-Vacs. Ray-O-Vac effectively became a division of ESB. ESB was particularly interested in tapping into Ray-O-Vacs international network, which by the late 1950s spanned 100 different nations and accounted for nearly 25 percent of profits. The Ray-O-Vac name became so well known overseas, in fact, that it was often exploited (illegally) by foreign companiesa humorous example wasRay-O-Vac Leak Proof Fish Sauce in China.

In an attempt to adapt to a world increasingly dominated by transistors, Ray-O-Vac introduced a number of low-voltage, miniature battery products during the 1960s, including penlight batteries and super small button batteries. In addition, Ray-O-Vac became a leader in battery-powered lighting systems and devices, including fluorescent camping lanterns, miniature disposable flashlights, and long-lasting boat lamps. Meanwhile, international expansion continued with the development of manufacturing facilities in Iran, for example, and expanded operations in Latin America. Ray-O-Vac was generating annual revenues of about $55 million by 1965, for the first time surpassing World War II sales figures. The company also made national headlines in 1965 because of one of its employees, Doc Swenson. Doc turned 100 in 1965. He had worked for Ray-O-Vac since 1916 and continued to work 40-hour weeks until the age of 90, after which he cut back to 20 hours weekly. Doc, who missed only one-and-one-half days of work during his career, died shortly after his hundredth birthday.

After 44 years of service to Ray-O-Vac, Ott passed the torch in 1967 to Owen Slauson. Under Slausons direction, Ray-O-Vac aggressively automated its manufacturing operations and continued to pursue global diversity with new factories in the Dominican Republic, Mexico, Africa, Peru, Korea, and other places. In the United States, Ray-O-Vac built a $2 million Engineering and Development Center in Madison, Wisconsin. Innovations stemming from research in the facility included the first heavy-duty all zinc-chloride battery, which was introduced in 1972 and doubled the life of existing general-purpose batteries. The company also continued to diversify by acquiring, among other ventures, fishing tackle companies, plastic and rubber manufacturers, and mining operations. Unfortunately, most of the acquisitions languished and became a drag on Ray-O-Vacs bottom line. In 1979, ESB, which was purchased by INCO Ltd. in 1974, reunited Ray-O-Vacs domestic and international operations and selected Benno A. Bernt as president of the group.

By the early 1980s, Ray-O-Vac was generating about $175 million in annual sales. However, Ray-O-Vacs attempts at geographic diversity and product innovation belied serious structural problems that plagued the company during the 1970s and early 1980s. Indeed, Ray-O-Vac was the undisputed leader of the U.S. battery industry during the 1950s. During the 1960s and 1970s, though, it lost its edge and gradually succumbed to the challenge of competitors like Everready Battery Co and Duracell Inc. Ray-O-Vacs share of the battery market plunged during the period from 35 percent to a measly six percent. Some critics blamed Ray-O-Vacs parent companies for the slide. Others pointed to internal problems that resulted in outdated packaging and stale product offerings in comparison to other battery producers. Most importantly, Ray-O-Vac executives failed to aggressively pursue the emerging market for alkaline batteries, which quickly became the industry standard. Going into the 1980s, sales were falling, Ray-O-Vac was laying off workers, and major long-term customers were dropping the Ray-O-Vac line.

Enter Thomas and Judith Pyle, a husband and wife team with experience selling toiletries, sewing patterns, makeup, and wigs to personal care and consumer products companies. The Pyles, with two other investors, purchased Ray-O-Vac (they changed the name to Rayovac Corporation) from INCO in 1982. The 44-year-old Pyle and his wife became chairman and co-chairwoman and Pyle named himself president and chief executive. They eventually bought out the other two investors and virtually owned the company. The Pyles combined their consumer marketing savvy with Rayovacs untapped manufacturing potential and were able to bring the company back from the edge of disaster. Under their direction, Rayovac introduced a steady stream of innovative products and marketing initiatives. In 1984, for example, the company unveiled its successful WORKHORSE premium flashlight with its ultrabright bulb and lifetime warranty. Likewise, they started selling Smart Packs of six to eight batteries instead of the usual two.

The Pyles strategy was based on experience gleaned from their previous work with consumer products. Judith Pyle called their tactics nichemanship, meaning that every product, particularly new ones, had to incorporate features, designs, and prices focused tightly on a specifically targeted group of customers. Secondly, new products had to be truly innovative, as opposed to me-too entries into the crowded marketplace. To that end, Rayovac, introduced products like the successful Luma 2, the first flashlight with its own emergency backup system; if the batteries failed, a separate lithium-powered system could be activated. Similarly, the Loud n Clear hearing aid, unveiled in 1987, represented a breakthrough in hearing-aid zinc battery technology. In the late 1980s, moreover, Rayovac began using the Checkout Pack Merchandising System. That system featured shrink-wrapped battery packages that could be stacked rather than hung on conventional pegboard displays and a new gravity-fed display rack designed for use at check-out counters.

In addition to introducing new products, the Pyles also updated Rayovacs packaging and aggressively sought to recover customers who had dropped their lines. They barraged lost customers in Wisconsin, for example, with letters asking them to start selling Rayovac products again. The effort boosted market penetration in the state from 20 percent to 70 percent within a few years. Meanwhile, Rayovac shuttered some nonperforming operations and expanded through acquisition. During the 1980s, the companys acquisitions included, in 1983, certain Timex battery operations in the United Kingdom; in 1988, Ray stone Corp., a manufacturer of battery cells; in 1989, Crompton Vidor, a United Kingdom producer of consumer batteries and flashlights; and the Tekna line of high-tech flashlights. The Pyles also initiated an aggressive quality improvement program designed to improve operations at every organizational level.

The net result of the Pyles efforts was that Rayovacs sales shot up to $270 million in 1987, reflecting growth of nearly 15 percent in 1985 and 1986. Furthermore, the companys share of the U.S. retail battery market vaulted to 12 percent. Between 1987 and the early 1990s, moreover, Rayovacs market share continued to surge as reported revenues bolted past $450 million. Innovations in the early 1990s included: a new alkaline computer clock battery; a line of ultra-tough flashlights; a WORKHORSE fluorescent lantern; and the Renewal battery, the first reusable, long-life alkaline battery which could be used 25 times or more and was environmentally safe. Importantly, Rayovac signed sports megastar Michael Jordan in a long-term endorsement contract in April of 1995. That major coup had the potential to send Rayovacs market share soaring.

Principal Subsidiaries

Ray stone Corp.; Crompton Vidor (U.K.).

Further Reading

Daggett, John, Rayovac Introduces Reusable Alkaline Battery System, PR Newswire, June 15, 1993.

Gribble, Roger A., Workers Essential to Rayovac Quality, Wisconsin State Journal, February 14, 1993, Section Bus.

Jordan Joins the Rayovac Team, PR Newswire, April 11, 1995.

Kueny, Barbara, Flashlights of Innovation Illuminate Rayovacs Bottom Line, The Business Journal-Milwaukee, May 27, 1991, p. 13S.

Millard, Pete, Look at the Source: Wisconsin Companies are Developing Technologies to Solve Environmental Problems, Corporate Report Wisconsin, March 1994, p. 23.

Reviving Primary Cells, Machine Design, March 9, 1995, p. 131.

Ruble, Kenneth D., The Rayovac Story, Madison, Wise.: North Central Publishing Company, 1981.

Tracewell, Nancy, Enterprising Companies Build for Future During Recessions, Business Journal-Milwaukee, December 28, 1987, p. B4.

Weiner, Steve, Electrifying, Forbes, November 30, 1987, p. 196.

Dave Mote

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