TRINOVA Corporation

views updated

TRINOVA Corporation

3000 Strayer
Maumee, Ohio 43537
(419) 867-2200
Fax: (419) 867-2390

Public Company
1916 as Libbey-Owens Sheet Glass Company
Employees: 21,597
Sales: $1.94 billion
Stock Exchanges: New York Midwest Pacific London Frankfurt

Until 1986 TRINOVA Corporation was known as Libbey-Owens-Ford, a firm with deep roots in the history of U.S. glassmaking and for many years the sole supplier to General Motors of windshields and other glass products. In 1986, however, Libbey-Owens-Ford completed its metamorphosis from glassmaker to diversified component manufacturer by selling off its glass facilities and adopting a name suggested by the tripartite structure of its remaining operating subsidiaries: Aeroquip Corporation, Vickers Incorporated, and Sterling Engineered Products. These have since been reduced to two, Vickers and Aeroquip which between them fabricate a wide variety of power- and motion-control components for military, aerospace, and general industrial uses. Aeroquip has made a big business out of fluid-conveying-system parts; it manufactures such things as flexible hose, V-band couplings, refrigeration components, and fittings and assemblies. Vickers supplies a wide range of pumps, motors and cylinders, valves, and diagnostic monitoring devices. The power- and motion-control business produces about 80% of TRINOVAs sales. The remainder is generated by a plastics divisionformerly Sterling Engineered Productsunder the direction of Aeroquip. Plastics sales are mostly to the auto industry. The absence of glass manufacturing in TRINOVAs profile is remarkablefew companies have so successfully managed to shift out of the industry in which they were founded and into a unrelated field while continuing to grow and prosper.

TRINOVAs history is the story of three separate entities: Libbey-Owens-Ford, Aeroquip, and Vickers. The oldest of this trio is Libbey-Owens-Ford, which was itself created by the 1930 merger of two much older firms, Libbey-Owens Sheet Glass and the Edward Ford Plate Glass Company. Libbey-Owens was built by two men who shared a fascination with the manufacture of glass.

Edward D. Libbey was born in 1854 to a family already involved in a glass business, the New England Glass Company. When Libbey was 20 he joined the family firm, gradually taking on increasing responsibilities until he assumed control of the company in 1883. In order to find more economical sources of raw material, and perhaps out of a desire to set up his own shop, in 1888 Libbey moved west and founded the Libbey Glass Company in Toledo, Ohio. Libbey Glass soon made its mark in the manufacture of expensive cut-glass tableware, which achieved a certain cachet in the early 1890s.

Fashionable glassware did not prove especially profitable, however, and by 1893 Libbey Glass was in financial trouble. In that year Edward Libbey took advantage of the Chicago Worlds Fair. In a desperate effort to attract a wider market, he mounted an enormously expensive exhibit at the fair; the advertising worked. The exhibit impressed enough buyers to rejuvenate sales and pull Libbey out of its crisis, solidifying the companys reputation as a maker of elegant tableware.

In the meantime, Edward Libbey had hired a young plant manager who soon demonstrated a remarkable knack for invention. Michael J. Owens learned glassmaking from the ground upat age ten he was already working in a glass plant in Wheeling, West Virginia, and was still a young man when he began work for Libbey in 1888. Owens was a man of great mechanical aptitude, and before long Libbey had assigned him a number of projects designed to automate the glassmaking process. Two of these became particularly importanta machine that automatically formed glass tumblers, and another that shaped glass bottles with equal speed and precision. In an age of widespread bottle usage, the latter invention had a great impact on manufacturing standards in the glass industry.

Aided by these production breakthroughs, Libbey Glass prospered through the early years of the 20th century. It was not until 1912, however, that Libbey and Owens latched onto the technique that launched the companys rapid growth. In that year the two men began working with Irwin Colburn on that mans design for a method to produce window glass in a single, continuous sheet. Colburn had already spent years developing his process, and Libbey and Owens struggled for an additional four years before the technique was ready for use. By 1916, however, the three men had succeeded in drawing a continuous, flat sheet of uniform glass from a vat of molten materials. The sheet could later be polished and cut to fit any window frame. To capitalize on their unique achievement Libbey formed a new company, this time called Libbey-Owens Sheet Glass. A new plant for sheet glass production was built in Charleston, West Virginia, and Libbey salesmen were soon trumpeting the breakthrough to their customers. Owens went on to help found Owens Illinois Corporation.

Libbey-Owens enjoyed unusually vigorous expansion during the following decade, its competitive advantage combining with a robust U.S. economy to push sales far beyond expectations. The 1929 stock market crash brought all such rosy reports to an immediate end, however, and was perhaps responsible for Libbey-Owenss decision to join forces in 1930 with another important glass manufacturer, the Edward Ford Plate Glass Company of nearby Rossford, Ohio.

The Ford family already had a place in American glass-industry history. Edward Fords father, John B. Ford, organized the first plate-glass manufacturing company in the United States in 1867. Their New Albany, Indiana plant was soon joined by others in Louisville, Kentucky and Jeffersonville, Indiana, but the competition of more experienced European glassmakers proved to be too much for Ford, which eventually went bankrupt. Edward Ford and his sons moved to Creighton, Pennsylvania, where in 1880 they founded a second glass company, the forerunner of PPG Industries (Pittsburgh Plate Glass Company). After managing that company for ten years, Ford moved to Ohio. In 1898 Ford bought 173 acres of land along the Maumee River outside Toledo, Ohio and built the largest single-structure plate glass plant in the country. Like many other early industrialists, Ford added a town to his factory, naming it Rossford after his wife and himself.

When the Great Depression hit, Ford and Libbey-Owens managers felt that a merger would help the companies survive, and in 1930 the companies combined. Libbey-Owens-Ford Glass Company (LOF) soon took its place as one of the top manufacturers of flat glass in the country, but of greater long-term significance was the companys growing intimacy with General Motors (GM) and the automotive business.

With headquarters only 100 miles from Detroit, LOF was attracted by the enormous glass requirements of the big automakers, and had soon landed its first orders with GM. GM made LOF its sole supplier of windshields and incidental glass accessories, a relationship which was maintained for the next 30 years. During that time, LOF went from being a diversified maker of glass products sold across the country to a specialized supplier to one vast customer.

Through this relationship LOF grew to be a giant itself. Indeed, with the automaker supplying about half of total sales, LOF expanded right along with GM during the boom decade of the 1950s, when the automobile became ubiquitous throughout the United States. By 1959 sales had topped $300 million and, barring a calamity at GM, the future appeared secure. Glassmaking had become a mature industry, however, with profit margins pared to the bone and an increasing number of effective competitors. Many of LOFs competitors were Japanese, and they exerted a strong downward pressure on industry price levels. In addition, in 1961 GM finally decided that having a single glass supplier was not wise and began to farm out a small but growing portion of its orders to LOFs rival, Pittsburgh Plate Glass.

The combination of these factors made the 1960s difficult for LOF. From 1959s peak of $307 million, sales had dropped to $222 million by 1961 and remained well below expectations until 1967. The slump awoke LOF management to the danger inherent in the companys relationship with GM, and they decided to begin a serious diversification program. In 1965 LOF made its first purchase outside the glass field, buying Modern Patterns and Plastics, a maker of precision tools and jigs. The companys first substantial acquisition was the 1968 purchase of Aeroquip Corporation of nearby Jackson, Michigan. At the time of its sale, Aeroquip boasted 25 plants and some 4,480 employees, sales of $123 million, and a reputation as a leader in its field fluid conveying components.

Aeroquip was founded in 1940 by Peter F. Hurst, a Bavarian mechanical engineer. Hurst had been forced to leave his home in Berlin during World War II, and he immigrated to the United States. There he founded Aeroquip in April 1940 with the help of a group of Jackson investors led by Don T. McKone Sr. Aeroquips products at first numbered only twothe reusable hose-fitting and the self-sealing coupler Hurst had developed in Germany for Focke Wulf, a large aircraft manufacturer. Relying primarily on aeronautic sales, the new company already had 100 employees by the time the United States entered the war in 1941.

Hurst was barred by the U.S. government from entering his own plant for much of the war because of his German citizenship: Aeroquip hose fittings had become the standard on U.S. military aircraft. With McKone running the company and military orders increasing daily, Aeroquip sprouted up almost overnight, and sales reached a peak of $6.2 million in 1944. Peter Hurst was allowed to return to the company in 1944, but the end of the war brought a calamitous drop in business for the rest of the decade. Aeroquip retrenched and began to build a more reliable customer base, mixing commercial business with its military orders and, after surviving a prolonged and violent strike in 1948, the company resumed its steady growth.

In 1948 Aeroquip also made its first acquisition, the California-based Aero-Coupling Corporation, which was followed by a series of similar purchases in the related fields of power fluid conveying components. The company opened its first European subsidiaries in 1959, building a pair of plants in West Germany. Sales reached $52.3 million in 1960, split about 60% to 40% between the industrial and military sectors. Sales increased rapidly following the 1963 purchase of Republic Rubber of Youngstown, Ohio. Republic gave Aeroquip the ability to fabricate its own rubber hose as well as couplings, strengthening the parent company by extending its product line and making it less dependent on outside sources of raw materials.

In 1967 Aeroquip began looking for a wealthier partner to supply the capital it needed for further expansion. After negotiations with Westinghouse Electric broke down, Aeroquip agreed to join Libbey-Owens-Ford in 1968, boosting LOFs total sales to $420 million and furthering its progress toward independence from GM. In addition to acquisitions like Aeroquip and the 1970 purchases of Woodall Industriesa Detroit plastics makerand Dominion Ornamental, a Virginia plastics maker, LOF had tried to counter the mid-1960s slump in glass profits by streamlining its operating methods. Chief among these improvements was the licensing of a revolutionary float glass production process from Great Britains Pilkington Brothers. This techniquewhich permanently altered the nature of flat glass manufacturingallows the production of a continuous, uniform sheet of glass that does not need grinding or polishing; the technique is so efficient that it tripled glass production per man-hour, but LOF had to spend many years and about $100 million revamping its ten plants to accommodate the new technique.

With Aeroquip and a growing stable of plastics companies under its control, LOF was able to reduce its dependence on GM substantially, but the automaker remained critical to both sales and profitability: LOF was still supplying 73% of GMs glass requirements. Thus, when an oil crisis cut GM sales severely in 1974, LOF sales followed suit, dropping 5% to $655 million; but as GM picked up steam in 1975, LOF sales again pushed close to the $700 million mark. Aeroquip continued to rack up growth and high earnings, which accounted for nearly 40% of corporate profit in 1975. In 1975 LOF consolidated all of its plastics operations into a new subsidiary, LOF Plastics.

When LOFs glass operations slipped into the red in 1980, Chairman Don T. McKone Jr. actively began to seek a further acquisition that could match Aeroquips highly profitable $455 million in sales. He found it in 1984 with the purchase of Vickers from Sperry Corporation for $265 million. Vickers was founded by Harry F. Vickers, who founded the company in 1921 in Los Angeles, moved it to Detroit in 1929 to better serve the auto industry, and sold it to Sperry in 1937. By that time Vickers had become a diversified maker of hydraulic pumps, transmissions, valves, and controls. In 1954 Vickers had become president of Sperry, and when Sperry merged with Remington Rand in 1955, Vickers served as CEO of the new Sperry Rand Corporation until 1967 and chairman from 1965 to 1967. Sperry Rand had shortened its name to Sperry Corporation in 1979. Vickers was an international power in hydraulic components. When the recession of the early 1980s led Sperry to put the company up for sale, LOF jumped at the chance to add an established name to its non-glass division.

In 1985 LOF Plastics purchased Sterling Plastics for $26.5 million. Sterling was a major custom injector molder, with headquarters in Sterling Heights, Michigan.

Darryl F. Allen, Aeroquips former chief financial officer, was named president and CEO of the parent company in 1984. Allen completed LOFs liberation from GM. In 1986 he sold all of LOFs glassmaking facilities, its name, and even its logo to Great Britains glass giant, Pilkington Brothers, receiving in exchange a 30% block of LOFs own stock that Pilkington had bought up a few years earlier. That 30% block had been purchased in 1982 from Gulf + Western Industries, which had bought the shares on the open market. LOF gave up $690 million in annual sales and a 100-year tradition in glassmaking, and changed its name to TRINOVA Corporation. In August 1986, the day after LOF became TRINOVA, LOF Plastics adopted a new name: Sterling Engineered Products. The renamed TRINOVA did not miss a beat, with both sales and profits from its three remaining divisionsVickers, Aeroquip, and Sterling Engineered Productsremaining on a constant upward trend. On January 1, 1989, Sterling Engineered Products was merged into Aeroquip Corporation, under whose control Sterling now operates.

Allen has set TRINOVAs goals very higha 16% annual return on equity and sales of $10 billion by 2000. If nothing else, TRINOVA has the satisfaction of knowing that its performance in hydraulic parts and plastics will depend on no one but itself; the years of easy living in the GM empire are gone for good.

Principal Subsidiaries

Aeroquip Corporation; Aeroquip International Inc.; Sterer Engineering & Mfg. Co.; Vickers Incorporated; Vickers International Inc.; Aeroquip A.G. (Switzerland); Aeroquip (Canada) Inc.; Aeroquip GmbH (Germany); Aeroquip Iberica S.A. (Spain); Aeroquip Limited (U.K.); Aeroquip Vickers do Brasil, S/A (Brazil, 99.5%); Double A Hydraulics Limited (U.K.); Polymotor S.p.a. (Italy); EL.GE S.r.l. (Italy); Sterling Engineered Products Inc.; Sterling GmbH (Germany); TRINOVA Export Trading Company (Virgin Islands); TRINOVA Holdings Limited (U.K.); TRINOVA S.A. (France); TRINOVA S.p.a. (Italy); Vickers Systems Inc. (Canada); Vickers Systems GmbH (Germany); Vickers Systems Limited (U.K.); Vickers Systems Limited (Hong Kong); Vickers Systems Pty. Ltd. (Australia); Vickers Systems S.A. (Spain); Vickers Systems OY (Finland).

Further Reading

Our Industrial Heritage, Maumee, Ohio, Vickers, 1988; The Flying A: 50th Anniversary Issue, Maumee, Ohio, Aeroquip Corporation, 1990.

Jonathan Martin

About this article

TRINOVA Corporation

Updated About content Print Article