ROHN Industries, Inc.

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ROHN Industries, Inc.

6718 West Plank Road
Box 2000
Peoría, Illinois 61656
(309) 697-4400
Fax: (309) 697-5612

Public Company
Incorporated: 1918 as UNR Industries, Inc.
Employees: 700
Sales: $154 million (1996)
Stock Exchanges: NASDAQ
SICs: 3441 Tower Sections; 1623 Transmitting Towers

ROHN Industries, Inc. is one of the leading manufacturers of towers, poles, mounts, and other items for the telecommunications and wireless communications industries, including support structures for antennae, private microwave, cellular telephone, personal communications systems, commercial and amateur broadcasting, and home television. The company is also one of the leading suppliers of shelters and cabinets to house sensitive electronic telecommunications equipment. ROHN Industries has undergone a complete transformation during the 1980s and 1990s, having declared bankruptcy in 1982, sold off its core businesses in steel manufacturing and materials handling during the mid-1990s, and finally changing its name from UNR Industries to ROHN Industries to reflect the reorientation of its operations toward the telecommunications and wireless communications industries. The dramatic changes seem to have helpedafter a lengthy period of time the company is once again profitable, and has started an expansion strategy that management hopes will propel it into the next century.

Early History

The history of ROHN Industries, Inc. can be traced through UNR Industries, Inc., which opened for business in 1918. Incorporated during the same year, UNR Industries was created in order to take advantage of the burgeoning demand for high-quality mechanical and structural steel tubing. With its headquarters located in Chicago, Illinois, the company provided its products to plumbing firms, construction companies, building contractors, and a host of other customers in the Midwest. UNR Industries was fortunate to have started its operations in Chicago, since the city was growing rapidly and construction was occurring every other block within the metropolis. Hence, the demand for steel tubing appeared to be unlimited, and throughout the remainder of the 1920s UNR Industries grew as steadily as the city of Chicago.

After the stock market crash of 1929, and the advent of the Great Depression which swept across the American landscape and affected every business great or small, UNR Industries reduced its workforce, but nonetheless managed to remain solvent and conduct business. During this decade, the company continued providing high-quality mechanical and structural steel tubing, but at lower costs and decreasing volumes. Although there were almost no construction projects underwritten by independent contractors the United States Federal government, under the Public Works Administration (PWA) and the Works Progress Administration (WPA), provided funding for public improvement projects. Working closely with the federal government and its PWA and WPA programs, the city of Chicago was able to hire contractors for specific public improvement projects. The contractors, in turn, signed agreements with UNR Industries for the manufacture and delivery of different kinds of steel tubing.

After the Japanese bombed the U.S. Naval Base at Pearl Harbor, Hawaii, and the U.S.s Declaration of War on Japan and Germany, heavy industry and manufacturing within the United States improved dramatically. With the U.S. armed forces demanding large volumes of equipment and material, the economy quickly recovered from the devastating effects of the Depression, and companies such as UNR Industries were contracted to provide products for the ever-expanding U.S. war effort. By the end of the war in 1945, UNR Industries was well-positioned to capitalize on the growing economy within the United States, which the global conflict had helped to put in high gear.

The Postwar Period

During the immediate postwar years, UNR Industries continued its emphasis on manufacturing mechanical and structural steel tubing. However, the company also began to expand its manufacturing operations to take advantage of new trends in the marketplace. Consequently, the company focused on products that would provide a steady and reliable profit. Besides the manufacture of steel tubing, management decided to enter into the production of stainless steel and composite sinks. The construction boom during the postwar period saw housing starts at an all-time high, and management at UNR Industries regarded it as a lucrative venture to provide sinks for new homes built across the Midwest.

During the remainder of the 1950s, and throughout the 1960s, UNR Industries cautiously expanded its product line. The two core businesses of the company included the manufacture of steel tubing, and the production of high-quality stainless steel and composite sinks. In addition, however, UNR Industries began to manufacture steel and, later on, plastic shopping carts. As the small-town grocery store and the corner meat market began to disappear with the drastic change in American demographics and lifestyle, people shifted to the nearest supermarket. Supermarkets were large warehouses of food, so to speak, and located on plots of land with large adjacent parking lots. People needed shopping carts in order to load their groceries while in the store, and then take them to the car after all the necessary food was purchased. Producing shopping carts was not only profitable for the company, but was to bring a reliable source of income into the firms coffers for over 20 years.

Expansion and Transition

In the early 1970s, UNR Industries took a major step in acquiring Rohn, Inc. Dwight Rohn, whose family owned Rohn, Inc., manufactured his first tower for home television reception in 1948. Rohn and the management team at the company, which primarily consisted of family members, correctly predicted the future growth of the communications industry. Soon the company was making not only towers, but poles, masts, and mounts used by companies to support antennae. Although Rohn, Inc. began to design and produce a wide variety of towers and poles for the communications industry, during the late 1940s and early 1950s demand for such support structures remained relatively small. The annual sales figures for Rohn, Inc. averaged approximately $2 million throughout the entire decade of the 1950s.

It was not until the 1960s and 1970s that demand for Rohn, Inc.s products in this market began to skyrocket. Self-supporting towers, fiberglass equipment shelters, concrete equipment shelters, cabinets to house electronic communications equipment, steel poles, antenna masts and tubing, and satellite antenna mounts were manufactured by the company and provided to firms working in the telecommunications and wireless communications industries. As Rohns profile began to increase, as well as its sales figures, the company soon became an attractive acquisition candidate for those firms looking to diversify their product line. UNR Industries, aware of the growth of the telecommunications and wireless communications industries, bought family-owned Rohn, Inc. at a bargain price, and quickly incorporated the new acquisitions product line into its own. Along with the acquisition of Rohn came support structure manufacturing facilities located in Alabama, Indiana, and Illinois.

At about the same time of the Rohn purchase, UNR Industries began to manufacture a line of livestock handling products, which was marketed to farmers, ranchers, fairs, expositions, and equestrian facilities, and also such items as privacy fencing materials to the military, and custom fabrication and hot-dip galvanizing services. By the end of the 1970s, management at the company decided to form a holding company, called UNR Industries, Inc., in order to organize and coordinate the manufacturing operations of its wide-ranging product line.

The decade of the 1970s seemed to indicate that the companys prospects were bright and limitless. Unfortunately, this was not the case. During the 1980s, UNR Industries employed environmentally hazardous materials in its manufacturing process and operations, including oils and solvents. Similarly, the company also used asbestos at some of its manufacturing sites, and in the housings for electric equipment used in the operation of various communications sites. By 1982, management at UNR Industries was overwhelmed with the number of state, federal and personal lawsuits filed against the company as a responsible party for using hazardous materials detrimental to the health of individuals. As a consequence, the company was compelled to file for reorganization under Chapter 11 of the United States Bankruptcy Code. For the remainder of the decade, UNR Industries battled for its survival under the constraints of bankruptcy law.

The 1990s and Beyond

It was not until the early 1990s that UNR Industries began to recover from its almost decade-long struggle to survive. The shining light of the companys operations throughout the 1970s and 1980s had been subsidiary Rohn, Inc., and now management decided to focus on Rohns product line and implement a radical reorganization strategy to bring UNR Industries back to profitability. Through a concerted capital expenditure campaign to upgrade and improve Rohns manufacturing facilities in Alabama, Indiana, and Illinois, management at UNR began to concentrate on meeting the markets demands for support structure products, such as guyed towers, self-supporting towers, fiberglass equipment shelters, concrete equipment shelters, cabinets, steel poles, fiberglass poles, concrete poles, satellite antenna mounts, antenna masts and tubing, receiver mounts, and television tripods. As a result of this reorganization strategy, UNR Industries sales jumped from $73 million in 1993, to $107 million in 1994, over a 25 percent increase. In 1995, sales dramatically increased by 33 percent, to $142 million.

With such an impressive increase in sales due to managements strategy of concentrating on the manufacture of products for the telecommunications and wireless communications industries, the next step for the company was a natural one. In 1995, the board of directors at UNR Industries decided to sell off the majority of the companys operating divisions and subsidiaries that did not manufacture products for major telecommunications markets. UNR Industries Leavitt Division, which represented the companys core business of manufacturing structural and mechanical steel tubing since its inception in 1918, was sold in August 1996. Unarco Commercial Products Division, a manufacturer of steel and plastic shopping carts purchased in 1992 to augment the companys product line in this market, was also sold during the summer of 1996. UNR Home Products Division, a manufacturer of stainless steel and composite sinks, was sold in September 1996. And the assets of Real Time Solutions, Inc., a growing subsidiary that provided computerized warehouse management and control systems, was sold in December of the same year. Although the company still sold livestock handling products to farmers and ranchers, and provided custom fabrication and hot-dip galvanizing services to a small list of clients, in just one year UNR Industries had reduced its non-telecommunications product line to less than 10 percent of its total sales volume.

Having successfully completed its reorganization strategy, UNR Industries began to focus on building the infrastructure for the telecommunications systems of the future, and providing high-quality products for major markets, including personal communications systems, enhanced specialized mobile radio systems, paging services, radio television broadcast, wireless cable, private microwave, and direct broadcast satellite systems. The growth of the cellular telephone market in the United States alone, from five million subscribers in 1990 to over 40 million in 1996, exemplified the increasing demand for the companys products. Cellular telephones require cell sites located across the United States in order to operate. With only 6,000 cell cites in 1990, the number had grown to over 20,000 by the end of 1996, and each cell site required a tower and shelter valued at approximately $100,000 for its telecommunications equipment. UNR Industries took advantage of this explosive growth and became an industry leader in the manufacture of towers, poles, and shelters for the cellular phone market.

By the beginning of 1997, as the companys expertise and market share grew, UNR Industries was manufacturing every possible configuration of tower for the telecommunications industry, from its self-support tower of 900 feet to small antenna mounts. In fact, the firms towers had become so popular that they were used in all the telecommunications markets, including television broadcast, AM/FM radio broadcast, microwave, cellular telephone, personal communications systems, radar, surveillance camera mounts, solar power stations, and weather stations. Because of the increasing demands for the companys towers, UNR Industries expanded its presence overseas and, by the summer of 1997, was marketing and selling its towers in more than 55 countries, including almost all the European nations, and many developing countries around the world.

In January 1997, the company significantly increased its manufacturing capacity with the completion of a new 180,000-square-foot facility located in Frankfort, Indiana. This facility was designed for the exclusive production of tower components, masts, and mounts. In March 1997, UNR Industries moved its corporate headquarters from Chicago to Peoria, Illinois, and in May 1997, the company formally changed its name from UNR Industries, Inc. to ROHN Industries, Inc. in order to reflect the companys reorientation from a holding company to a highly specialized firm.

With sales amounting to $154 million for fiscal 1996, and gross profits recorded at $47 million, ROHN Industries has successfully carved out a niche market for itself. As the telecommunications industry continues to expand, with such developments as the introduction of high definition television which will require new antenna support systems, ROHN appears to be well-positioned to take advantage of growing market demands.

Further Reading

Bellis, Matt, Vector Signal Analysis Aids Test of DSP-Based Wireless Designs, Electronic Design, February 17, 1997, pp. 116-20.

Pact Reached to Sell Assets of Home Products Unit, Wall Street Journal, August 28, 1996, p. B4(W).

Reina, Laura, Helping Hands, Supermarket News, May 26, 1997, pp. 9-12.

UNR Industries, Wall Street Journal, September 6, 1996, p. C22(W).

UNR Industries, Wall Street Journal, December 20, 1996, p. B5(W).

UNR Industries, Wall Street Journal, March 18, 1997, p. B17(W).

Thomas Derdak