Facom S.A.

views updated

Facom S.A.

6, rue Gustave Eiffel
91423 Morangis (Essonne)
Telephone: (33)
Fax: (33)
Web site: http://www.facom.fr

Public Subsidiary of Fimalac S.A.
1918 as Franco-Américaine de Construction dOutillage Mécanique
Employees: 4,300
Sales: FFr 5.2 billion (US$860 million) (1998)
Stock Exchanges: Paris
NAIC: 332212 Hand and Edge Tool Manufacturing; 336399 All Other Motor Vehicle Parts Manufacturing

Facom S.A. is one of the worlds leading manufacturers of hand tools, equipment, and parts for the garage market and automotive aftermarket. Based near Paris, Facom boasts one of the most extensive ranges of hand tools in the world, with more than 8,000 catalog references covering specialized tools for the automotive, aerospace, electrical engineering, electronics, offshore, and heavy duty industry markets, as well as tools for the maintenance, general applications, and consumer markets. Facom operates 13 production facilities in Europe and the United States, while sales and support services are provided through 15 centers located in Europe, the United States, and Asia, which provide distribution to more than 100 countries through a network of 5,500 distributors. The company also operates a fleet of some 100 demonstration trucks, which allow in-field technical and product demonstrations for more than 3,500 Facom products. Each year Facoms field demonstrators log more than 100,000 visits. In the late 1990s, Facom was building its garage equipment activity, principally through its German Beissbarth subsidiary. The company also branched out into the automotive aftermarket business, with the cash purchase of Autodistribution S.A. in May 1999. Formerly known as Strafor-Facom, the company shed its furniture operations (including its joint ownership position of the Steelcase Strafor furniture group), as well as its traditional steel foundry operations. In May 1999, Facom was acquired by the French holding company Fimalac, which bought out more than 96 percent of Facoms stock. Under new CEO Alain Gomez, appointed in June of that same year, Facom announced its intention to become one of the worlds top three hand tool manufacturers, ahead of Snap On, Stanley Works, Danaher, and SPX Corp.

Foundry Founding in 1918

World War I had devastated much of northern France, but had also pointed the way to a new emphasis on machinery and precision engineering. Rebuilding the countrys industrial and manufacturing infrastructure gave rise to new opportunities. Among those seeking his fortune was young engineering graduate Louis Moses. With funding from his family, Moses opened a small forge and workshop near Pariss Gare de Lyon in 1918. Calling his company Franco-Américaine de Construction dOutillage Mécanique, from which the acronym FACOM was later drawn, Moses and a staff of ten workers began crafting precision tools for the booming mechanical and manufacturing markets. The Américaine in the companys name was a shrewd marketing ploy, conjuring up the technical sophistication and diversity of the U.S. military equipment brought over during the war.

Facoms original products were based on Moses own designs; Moses also acted as the companys salesman. Initial production centered on a single product, which remained the companys only product during its first year of business. Later known as Madame 101, this product was an adjustable wrench, one of the first of its kind, with a distinctive round head and curved cast-iron handle. The product, which remained in the companys catolog into the 1960s, was quickly adopted by the French railroad industry, which was rebuilding after the war.

The strength of Facoms sales and a growing range of wrench designs led the company to expand its facilities. Building on Moses family land in Gentilly, a suburb of Paris, Facom opened a 16,000-square-foot workshop containing machining, hardening, grinding, honing, and fitting setups, as well as its own power source. Facom also began adding sales staff. The first of Facoms sales force was one Gustave Schoettlé, who went on to found Etablissments Schoettlé, a prominent Alsace region distributor of automotive parts and industrial tools and supplies, and lead the way toward the building of Facoms worldwide distribution network.

During the 1920s, Facoms market focus expanded from the national railroad industry to the booming automotive market. The company began designing tools for Frances automakers, starting with a monkey wrench for Renault and soon followed by a wood-handled screw wrench for Peugeot. By 1924, Facom was ready to publish its first sales pamphlet, which started with just a few pages for only some 60 product references, but later grew to nearly 600 pages, referencing more than 8,000 products, with over 800,000 copies distributed worldwide. Among the products featured in the 1924 catalog was the Autobloc self-adjusting wrench.

This was followed by another strong success. In the mid-1920s, Facom introduced the Stillson-type pipe wrench to the French market. The success of this and the companys other products led to rapid growth. By the end of the decade the company employed more than 100 workers, and its sales staff had grown to six people.

The 1930s offered the company a new market for growth. The rising strength of the airplane industrywhich had grown from a craftsman-based cottage industry to full-scale industrial productionbrought Facom a new range of customers. Quickly adapting its production to the aircraft industry, Facom became a principal supplier of hand tools and equipment to the new national airline, Air France, which was inaugurated in 1933. The companys involvement in the growth of the aircraft industry encouraged Facom to adopt a new symbol, that of a winged bolt, which remained a company hallmark throughout the century.

By then, Facoms catalog had grown to some 500 products, including a variety of wrench designssuch as the Bulldog, a cycling favoriteadapted to the specialized needs of the various industries. Facom was also building a reputation for high quality, as well as innovative designs. In the late 1930s, the company also began positioning itself as a leader in the high-end tool market, offering products such as interchangeable sockets for its socket wrenches and chromedas opposed to the standard burnishedsteel tools.

Meanwhile, the company diversified beyond tools per se, turning its forge and machining shops to such products as meat mincers and other kitchen tools. Despite a decade of social unrest, as French industry was rocked by a long series of strikes, Facom remained relatively stable, enjoying good employee relations. The company also managed to get through World War II in good shape, maintaining control of its assets and even protecting most of its workforce from labor draft by the German occupiers. Facom, then, was poised for new growth as the war drew to an end.

Postwar Boom

Leadership of Facom was given to Louis Moses son Andre in 1945. A graduate of the prestigious engineering school Ecole Céntrale, Andre Moses remained at Facoms head until 1974, along the way elevating the company as one of Frances largest manufacturers, while also turning its focus to the international market. With an extensive catalog of tool designs and a commitment to technological advancements, the company was well placed to take advantage of the economic boom in postwar Europe. The rebuilding effortand Facoms commitment to making the capital investment needed to increase production capacity and expand its product rangebrought a new era of company prosperity. Over the next 30 years, Facom registered an average annual sales increase of some 13 percent. With production quickly quadrupled, Facom also began innovating with its sales activities.

The companys sales literature was formalized into the Facom Catalog, which, published every four years, quickly became a reference for the French and international tool markets. Facom was also shifting its sales force from direct sales to a distributorship model, eventually building a network of more than 5,500 distributors. At the same time, Facom borrowed a technique from its U.S. rivals, taking to the road with a fleet of demonstration vehicles. The trucks, fitted with much of Facoms growing range of tools, paid visits to the companys distributors and customers, offering demonstrations of new products, as well as noting customer reactions and suggestions, which were then incorporated into the companys future products.

By the beginning of the 1950s, Facoms production levels had grown to some 50,000 products per month. The company launched a large number of new products, including pullers, ratchet wrenches, and torque wrenches, while expanding its automotive range with products including wheel balancers. Facom continued to bring U.S.-inspired marketing techniques to the European marketplace, including a lifetime guarantee on all of its products, which was introduced in 1952. By the end of the decade, the companys sales had expanded across the European continent, and Facom had made strong inroads into the South American, African, and Asian markets as well.

Company Perspectives:

The Facom Group is focusing development on several major growth avenues: Proximity to end-users and close cooperation with distributors; greater innovation in all fields, particularly for the improvement of product ranges and service offered to end-users; constant improvement in products and processes in the Groups Centres of Competence; strengthening of Group brands; continued development of Garage Equipment in cooperation with hand-tool brands for the automotive aftermarket; internationalisation.

With the start of the 1960s, Facom had taken its position as the European leader in hand tools sales. The company also began diversifying at this time, adding to its core foundry and hand tools operations product lines such as office furniture and baking machinery. The companys office furniture line eventually took on a substantial position in the company, leading to a name change of Strafor Facom. In the early 1970s, Facom placed its Strafor subsidiary operations into a joint venture with Steelcase, of the United States, to form the Steelcase Strafor office furniture manufacturer. Facom continued to build its furniture activities, adding the office partition maker Clestra, and moving into the high-end furniture market with the Italian Cassina.

Facom was also building its capital infrastructure. After opening a new forge at Villeneuve-le-Roi in the mid-1950s, the company began opening other industrial facilities, including production sites at Ezy-sur-Eure in 1967 and Nevers in 1974. The companys headquarters moved to Morangis in 1970. That year the company went public, placing its stock on the Paris exchange.

The new capital generated by its stock listing enabled Facom to make stronger moves on the international front. The company began opening full-fledged subsidiary operations in many of its international markets, including Belgium and Germany in 1970, followed by Italy in 1971. By the time of Andre Mosess death in 1974, Facom had built up a catalog of some 4,000 product references, with print runs of more than 300,000 copies and translations into multiple languages.

If André Mosés had been responsible for turning Facom into one of Frances major manufacturers, his successors, Roger Desvignes, from 1974 to 1988, and Henri Lachman, who guided the company into the late 1990s, were credited with building Facom into a truly international company. By the beginning of the 1980s, the company had extended its subsidiary operations to the Netherlands, the United Kingdom, the United States, and Switzerland. The company added a Spanish subsidiary in 1988. Facom also continued to build up its peripheral activities, including garage equipment and service industry equipment.

By the end of the decade, Facom had grown to take not only the leadership of the European hand tools market, with some nine percent market share, but had also become one of the worlds top three hand tools manufacturers. International sales had grown to such an extent that more than one-third of Facoms sales were made outside of France. Facom began boosting its market position with a series of strategic acquisitions, adding new product lines and markets, including Piolé, a sheet metal manufacturer; pliers from Bost; screwdrivers with Garnache; pipe working tools from Virax; the measuring tools maker Déla; the automotive tool maker Britool, based in the United Kingdom; Italys largest hand tools producer, USAG; and U.S. hand tools manufacturer SK Hand Tool Corporation. These acquisitions not only helped consolidate Facoms market status, they also strengthened its international foothold, adding a string of production facilities in the United States, the United Kingdom, and Italy.

Retooling for the 21st Century

While the company continued its international expansion, adding locations in new markets including Poland, Singapore, Russia, and Denmark, an extended economic crisis forced Facom to reevaluate its diversified status. By the late 1990s, Facom made the decision to regroup around its core business of hand tools, while boosting its garage equipment activities and entering the automotive aftermarkettwo relatively un-consolidated markets offering strong growth prospects. By late 1998 and early 1999, Facom had begun to pare down its operations, selling off its foundry and baking machinery operations, while exiting the Steelcase Strafor joint-venture partnership. After purchasing the automotive aftermarket specialist Autodistribution for some FFr 3.4 billion in May 1999, the company exited the furniture market completely, simplifying its name once again to Facom.

By then, the company had come under new ownership as well. In March 1999, the holding company Fimalac, led by Marc Ladreit de Lachamière, launched a hostile takeover of Facom. After an attempt to resist the takeover, Facom finally agreed to the purchase in May 1999, giving Fimalac more than 96 percent control of Facoms stock. The change in ownership put an end to the short-lived leadership of CEO Paul-Marie Chavanne, who had replaced Henri Lachmann in 1998. In his place, Alain Gomez was named CEO. In late 1999, Facom moved to boost its garage equipment operations with the acquisitions of three companies: Fog, in France; Zippo, in Germany; and Tecalemit, in the United Kingdom.

Principal Subsidiaries

Facom (Singapore); Facom (Netherlands); Facom (Germany); Facom (Switzerland); Facom (Spain); Facom (Belgium); Facom (Denmark); Facom (U.K.); Britool (U.K.); Sykes Pickavant (U.K.); Auto Tools (U.K.); Vitrex (U.K.); USAG (Italy); Pastorino (Italy); Coficom; Vidmar; BGI; Dela; Virax; Facom Tools (U.S.A.); Facom USA; SK Hand Tool (U.S.A.); Facom Automotive Group GmbH (Germany); Facom Automotive Group Italia; Beissbarth (Germany); Sicam (Italy).

Principal Competitors

The Stanley Works; Snap On, Incorporated; SMED International.

Key Dates:

Company is founded by Louis Moses.
Andrés Mosés is named president of company.
Facom is listed on the Paris stock exchange.
Company pursues a number of acquisitions, including Bost, Garnache, Virax, Déla, Britool, SK Hand Tools, Sykes Pickavant, and Beissbarth.
Company begins major restructuring.
Facom sells its baking machinery and office furniture subsidiaries.
Company purchases Autodistribution S.A.

Further Reading

Debontride, Xavier, Facom acquiert trois sociétés européenes specialises dans léqipment de garage, Les Echos, October 14, 1999, p. 12.

Deep in the Heart of the 20th Century Industrial Evolution, Morangis: Facom S.A., 1993.

Laforce, Margueritte, Facom vise le podium mondial, Les Echos, June 30, 1999, p. 13.

Strafor Facom se separe de son pole ameublement, Le Figaro, February 4, 1999.

Strafor Takeover Battle Heats Up, Financial Times, April 12, 1999.

M. L. Cohen