S.C. Johnson & Son, Inc.

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S.C. Johnson & Son, Inc.

1525 Howe Street
Racine, Wisconsin 53403
U.S.A.
(414) 631-2000
Fax: (414) 631-2133

Private Company
Incorporated: 1932
Employees: 13,000
Sales: $2.50 billion

S.C. Johnson & Son is one of the largest family-owned companies in the United States and a leading manufacturer of home, personal-care, and insect-control products. Known internationally as S.C. Johnson Wax, its well-known products include Raid bug spray, Agree shampoo, Pledge furniture polish, and Edge shaving gel. Johnson was founded in 1886 as a parquet flooring company and became one of the first U.S. corporations to expand worldwide, entering Great Britain in 1914. It has operations in 47 countries. Still in family hands after more than a century, Johnson’s strength is its ability to develop and market new products.

In 1882 Samuel Curtis Johnson began selling parquet flooring made by the Racine Hardware Company in Racine, Wisconsin. Four years later, Johnson purchased the flooring business from the hardware company. The new organization had four employees and showed a first-year profit of less than $300.

Johnson’s parquet customers often asked him about caring for their new floors. At that time shellac had been used for that purpose, but it tended to build up and peel off. Johnson created a product called Johnson’s Prepared Wax to sell along with his flooring. The concept was borrowed from the European use of wax to care for old wooden floors. It was very successful, and Johnson began selling it even to people who had not bought his flooring. It was nationally advertised by 1888.

Samuel’s son, Herbert F. Johnson Sr., joined the firm in 1892, beginning a century-long tradition of family involvement in the business. By the following year the company was already experimenting with products such as wood dye, crack filler, and car wax. When the car wax proved to be popular, Johnson made a radiator cleaner. He was forced to buy back 900 Model T Ford radiators that were dissolved by the insufficiently tested product. This setback provided a valuable experience. Johnson Wax has given priority to top-rate research teams and chemists ever since.

As simple maple and oak flooring replaced the intricate parquet floors in the late 1800s, the company’s diversification paid off. In 1898 sales of the floor wax and other wood-care products exceeded Johnson’s flooring sales. Floor wax became Johnson’s major product.

The company changed its formal name to S.C. Johnson & Son in 1906, when Herbert F. Johnson Sr. became a partner. While continuing to add to their product line—Floor Renewer, Under-Lac, and Flat Color Finish—the company expanded overseas in 1914, when the British Johnson company was established. The company opened in Australia in 1917. Johnson discontinued the manufacture of parquet flooring, and the last shipment of it was made in 1917. Johnson concentrated on wax products and preservation products for cars, such as Hastee Patch and Self-Vulcanizer. S.C. Johnson died in 1919, and his son succeeded him as president. The three keys to Johnson Wax’s continued success had been already established: international operations, chemical technology, and the use of advertising.

During this time, the company’s innovations as an employer were also notable: it was one of the first U.S. companies to give paid vacations, a policy begun in 1900. With its 200 employees in 1917, S.C. Johnson Wax began one of the first profit-sharing programs in the country; the program in 1990 was the fifth oldest. It started offering group life insurance for employees also in 1917. In 1920 the Canadian Johnson company was formed. Throughout this decade, product offerings expanded, including enamel paints, carbon remover, weighted brushes for painters, and Kleen Floor and Restorer. Herbert F. Johnson Jr. became president after his father’s death in 1928. At that time, the company had 500 employees.

The French Johnson company opened in 1931, the same year in which sales began of one of Johnson Wax’s longest-selling products, Glo-Coat Floor Finish. The product involved a colloid technology developed at Johnson Wax that freed it of the need for resins that caused yellowing. Glo-Coat became one of the most successful floor-care products of all time. In 1932 S.C. Johnson & Son was incorporated. The company’s pension plan was initiated two years later, and product innovations continued. The most notable event of the decade, however, was the 1939 unveiling of the company’s new office building, designed by Frank Lloyd Wright. An accomplishment in any era, it was particularly stirring at the close of the Great Depression, which Johnson weathered without laying off any employees. The Racine building continues to be headquarters for the company. In 1989 the company was still giving 5% of its pretax profits to charity, a tradition begun with the founder, who gave 10% of his annual income to civic improvements.

By 1942 the company was concentrating its output on products for the war effort, while many employees were called upon to serve. Its contribution during World War II was marked by army and navy production awards. A Research & Development Tower was opened in 1950. The Lighthouse Resort for employees and retirees was unveiled in northern Wisconsin the following year.

The West German Johnson company was established in 1953. Samuel C. Johnson, great-grandson of the founder, joined the company in 1954. He headed the new-products department that was created the following year. Not long after, he produced his first new product within that division, an aerosol insecticide. His father, Herbert F. Johnson Jr., sent him back to the lab, claiming the insecticide was no different from others on the market. In 1956 Johnson came forward with Raid House & Garden Bug Killer; water-based, it was the first product that could be used on plants and in the home without killing the plants. Raid would become one of Johnson Wax’s most profitable lines. Along with this breakthrough came Glade Air Fresheners, introduced the same year; they featured advanced technology in aerosol manufacturing. Insecticide products continued with Off!, an insect repellent first sold in 1957. Another very successful product, Pledge, came out in 1958. Herbert F. Johnson Jr. became company chairman in 1958, and the presidency was assumed by the first non-family member, H. M. Packard.

In 1959 S.C. Johnson Wax established a presence in Italy, and this marked the start of a decade of international expansion: Chile, Switzerland, Sweden, and South Africa in 1961; Belgium, Japan, and the Netherlands in 1962; Norway, Austria, Spain, and Ghana in 1964; and Denmark, east Africa, Greece, Hong Kong, Singapore, and Thailand by 1968. Establishing an international base allowed Johnson Wax to manufacture its products from local materials for local markets; exporting the products would not have been profitable. In 1966 Packard became chairman and S.C. Johnson was named president.

Johnson Wax entered the personal-care-product market in 1970, with the introduction of Edge, a shaving gel, which also went on to become a company mainstay. Entering into eight more countries by 1972, Johnson Wax’s innovations slowed as it dealt with its own growth. Johnson Diversified, Inc. (JDI), a wholly owned subsidiary was formed in 1970. JDI began acquiring highly diversified companies, many of them recreational-equipment manufacturers. In the early 1970s 15 companies—ranging from Eureka Tent & Awning Company to Under Sea Industries—were acquired. William K. Eastham was elected president of S.C. Johnson & Son in 1972.

Gas prices and related mid-1970s economic circumstances made the company’s diversification into recreational equipment costly. Five of the weaker companies were sold. During this time, there was a notable slowdown in the introduction of new products while Johnson Wax adjusted to its size and variety. JDI changed its name to Johnson Wax Associates (JWA) in 1977. After H.F. Johnson Jr. died in 1978, S.C. Johnson took a sabbatical from his post as chairman and CEO in order to settle his father’s estate; Eastham served as CEO in the interim. The company entered Egypt, Taiwan, and the Dominican Republic in 1979, but the decade was closing with lost momentum. Johnson Wax had introduced Agree conditioner and shampoo in 1977 and 1978. During that time, sales increased while profits declined. All consumer packaged goods saw slowed profits during this time, and Johnson Wax had acquisitions and overseas expansions sapping profits in addition. While foreign markets accounted for 60% of the company’s sales for a period during the late 1970s, the recession-affected U.S. dollar undercut this portion of earnings, and the company was faced with a call to change in the early 1980s.

Raymond F. Farley became president in 1980, the same year S.C. Johnson resumed the CEO seat and began instituting needed reforms. In 1982 Johnson imposed a one-year wage freeze. It was the first time in 20 years that a wage freeze had been instituted without governmental exigency. He reduced the company’s U.S. work force by 3% with early retirement programs, then increased the research and marketing staffs. The company was restructured into four enterprise units: personal care, insecticides, home care, and commercial products. Units were organized to speed up the time between product idea and introduction, and new products were pouring forth by the mid-1980s. The advertising budget was nearly 70% higher in 1984 than in 1979, the research-and-development budget increased by 40%, and product price increases were reduced.

One week before the October 1987 stock market plunge, JWA went public. Johnson called this move “going public to stay private,” as the move created liquid assets needed for potential estate taxes, thus protecting the company’s assets and its private status. Family owns 90% of Johnson Wax, with employees holding the other 10%. JWA was selling $250 million annually in the late 1980s, mostly fishing and other recreational gear, as well as ink-stamping equipment. JWA was the nation’s largest producer of electric fishing-boat motors and a major seller of reels and lures.

In late 1988, Farley became the second non-family member in Johnson’s history to become chief executive. S.C. Johnson remained chairman. All four of his children were then involved with the company, with his eldest son, S. Curtis Johnson III, heading a venture-capital unit he induced his father to bankroll in 1983.

In January 1990 Farley retired and was succeeded by Richard M. Carpenter, president and CEO. Johnson Wax started the 1990s with its strength reinforced—a very strong research-and-development emphasis, with labs around the world. Careful planning had insured that the company will stay private, if the great-great-grandchildren of the founder so choose.