The Gorman-Rupp Company

views updated May 23 2018

The Gorman-Rupp Company

305 Bowman Street
P.O. Box 1217
Mansfield, Ohio 44901-1217
U.S.A.
Telephone: (419) 755-1011
Fax: (419) 755-1233
Web site: http://www.gormanrupp.com

Public Company
Incorporated:
1934
Employees: 1,033
Sales: $194.1 million (2002)
Stock Exchanges: American
Ticker Symbol: GRC
NAIC: 333911 Pump and Pumping Equipment Manufacturing

The Gorman-Rupp Company is one of the largest pump manufacturers in the United States, producing more than 4,000 models of pumps. The companys product line ranges from small pumps for soft drink dispensers and medical devices to massive machines capable of moving up to 500,000 gallons of fluid per minute. The larger pumps are used in such applications as boosting water pressure in municipal water systems and pumping petroleum products, as in the ground refueling of aircraft. Over the companys several decades of operation, and through both organic and acquisitive growth, the product line has expanded to include an increasingly diverse array of pumps and related equipment, including products for municipal water and sewerage systems, the construction industry, fire protection systems, a variety of industrial applications, original equipment manufacturers, government agencies such as the U.S. military, and petroleum applications. Gorman-Rupp maintains more than one million square feet of manufacturing and warehousing facilities, the bulk of which is located in the companys headquarters city of Mansfield, Ohio; other facilities are situated in Bellville, Ohio; Sand Springs, Oklahoma; Toccoa and Chamblee, Georgia; Royersford, Pennsylvania; St. Thomas, Ontario; and County Westmeath, Ireland. The plants in Canada and Ireland support the companys efforts to penetrate international markets, and in 2002, 14 percent of sales were generated outside the United States from customers located in 75 countries. Gorman-Rupps fairly conservative long-term strategy is codified in the corporate credo: It is our practice to enter a field of pumping service only when able to provide a superior product with better performance.

Companys Founding During the Great Depression

Gorman-Rupps roots stretch back well over half a century to 1933 when two engineers, J.C. Gorman and Herbert E. Rupp, pooled $1,500 and started a pump manufacturing business in a barn outside the small town of Mansfield, Ohio. By that time, pumps had long been integral to many businesses. In fact, pumps remained the second most common machine used in industry into the 1990s. Perceiving an opportunity to carve out a profitable niche in this highly fragmented industry, Gorman and Rupp worked diligently to design pumps with particular features for specific tasks.

They established a longstanding corporate reputation for product development early on, launching the first simplified self-priming centrifugal pump with no valves or orifices in 1933. In keeping with its name, a centrifugal pump generates drawing pressure by moving liquids (and in some applications gases) in a circular pattern. The self-priming part of the name meant that the machine did not need a consistent flow of fluids in order to maintain its pumping capacity. These relatively quiet, rugged, and inexpensive devices are most often used to remove water (known in industry parlance as dewatering) at intermittently wet construction sites, sewers, and quarries. Self-priming centrifugal pumps formed the core of Gorman-Rupps product line.

World War II and the Postwar Era

Within six years of its creation, the company was generating about $345,000 in annual sales. In the 1940s, Gorman-Rupp developed a solids handling trash pump that featured a removable endplate for easy maintenance. The company would later call it a bellwether product, one often imitated by competitors. Fueled in part by wartime contracts with the U.S. Army and Navy, for which the company was awarded an E for excellence, Gorman-Rupp sales multiplied to more than $2 million by 1949. Manufacturing capacity grew correspondingly, and the company moved from its rural barn to a factory in town during this decade.

Sales continued to mount rapidly in the postwar era, when Gorman-Rupps close attention to the dewatering needs of the construction industry paid off. In 1952, the company reengineered a diaphragm pump for this market. Diaphragm pumps incorporate a flexible, but impenetrable membrane that prevents the material being pumped from coming in contact with the inner workings of the pump and vice versa. They are designed to pump abrasive or uncontaminated substances, and can also tolerate extended dry runs. Gorman-Rupp improved on the basic diaphragm pump design by decreasing the pumps weight and increasing its capacity. The pump manufacturer benefited indirectly from the residential housing boom of the 1950s. Its revenues tripled over the course of the decade, from $2.25 million in 1949 to $7 million by 1959.

Progressive Diversification: 1950s70s

Yet company executives realized that they could not rely on a single marketespecially one as cyclical as the construction industryfor consistent sales and earnings growth. The seeds of the diversification process were sown in the early 1950s, when the firm established its Gorman-Rupp Industries Division in nearby Bellville, Ohio. Created to meet the needs of original equipment manufacturers (OEMs), Gorman-Rupp Industries made small, specialized pumps used in larger machines such as photocopiers, coffee machines, kidney dialysis machines, and photo-processing equipment. This divisions emphasis on research and development helped make it the parent companys highest-margin segment by the mid-1990s.

In 1960 the company went international with the construction of a plant in Ontario, Canada. Gorman-Rupp of Canada Limited mirrored the parent companys main plant in Ohio, and its product line grew accordingly.

Gorman-Rupp also began to diversify within the pump category in earnest in the 1960s. It launched new lines of submersible pumps for mining, centrifugal pumps and fiberglass pumping stations for municipal sewage systems, specialty pumps for moving home heating oil and aircraft fuel quickly and safely, as well as pumps for the consumer market (i.e., the handy pump) and a backpack pump for firefighters. These technological developments and the new markets they opened helped triple Gorman-Rupps sales for the second consecutive decade, from $7 million in 1959 to $21 million by 1969.

The company continued to penetrate new niches of the pump industry in the 1970s, launching a magnetic drive pump that could be used to move liquid metals. A key development of this decade was the creation of the Gorman-Rupp International Division, which marketed the entire line of pumps via overseas distributors. This segments contribution to sales rose from 7 percent in 1980 to about 11 percent in 1995. Gorman-Rupp hoped to further increase its share of global pump sales by emphasizing the petrochemical, municipal, and industrial markets. Driven by these developments, total corporate sales doubled over the course of the 1970s, exceeding $50 million in 1978 and reaching more than $58 million by 1979. Having gone public in 1968, Gorman-Rupp common stock was listed on the American Stock Exchange in the 1970s.

Acquisitions Distinguishing the Late 1970s and Continuing in the 1980s

A fairly modest industry contraction saw manufacturers of pumps and pumping equipment shrink from 613 in 1977 to 528 in 1987. Gorman-Rupp played a role in this trend, executing three acquisitions during this period. In 1977 the company acquired Ramparts, Inc. (becoming Gorman-Rupps Ramparts Division), which manufactured air-driven diaphragm pumps and replacement parts for the chemical industry. These specialized machines were most often used to move highly corrosive and/or viscous liquids like sulfuric acid and hydrochloric acid. Although the Ramparts Division was still only generating 1 percent of Gorman-Rupps annual sales 20 years after its acquisition, the parent company considered its high profit margins an important contributor to long-term growth.

Like many manufacturers, U.S. pump makers faced heavy competition from foreign producers in the 1980s. To combat this problem, Gorman-Rupp acquired the IPT Pumps Division, a manufacturer of economically priced, portable, and durable pumps for the construction market, in 1986. Although this division also only contributed 1 percent of annual revenues and scant profits, it helped Gorman-Rupp maintain a presence in this competitive industry segment.

Gorman-Rupp made its largest acquisition to date in 1988, when it paid Banner Industries about $14.8 million for control of the Patterson Pump Company. Based in Toccoa, Georgia, Patterson manufactured a comprehensive line of large-volume centrifugal pumps used for flood control and irrigation as well as fire pumps for automatic sprinkler systems and fire hydrants. Patterson complemented Gorman-Rupps existing water, sewer, and fire-fighting lines, enabling the company to offer custom-designed, large-scale fluid transport systems to these key markets.

Company Perspectives

Seventy years ago, The Gorman-Rupp Company was established upon a philosophy of, and a commitment to, product quality and technological leadership in the pump industry. Gorman-Rupps philosophy of growth and service is reflected in the mission statement made by co-founders J.C. Gorman and H.E. Rupp, which reads: To provide a quality product competitively priced, delivered on time, backed by reliable service, at a profit that provides an equitable return to our share holders, as well as providing our employees with competitive wages and benefits.

The fulfillment of this commitment has provided the foundation for The Gorman-Rupp Company to become a world pump leader.

Although Patterson added $24 million to Gorman-Rupps sales tally, its returns were less than stellar. Treating its newest affiliate as a turnaround situation, Gorman-Rupp pumped an additional $20 million into plant and office renovations over the ensuing eight years.

The 1990s and Beyond

Several key factors contributed to Gorman-Rupps seven-decade record of growth. The company long emphasized innovation and product quality. So confident were Gorman and Rupp in the capabilities of their products that they empowered their distributors to put a Gorman-Rupp contractors pump on any pumping job, anytime, anywhere, beside any competitors pump of comparable size. The company guaranteed that its products would move more volume more efficiently and for a longer time. In addition, if it wasnt the best all-around pump, our distributors would accept the return and pay the user any installation expense incurred.

Gorman-Rupps reputation for excellent customer service was predicated on its network of knowledgeable distributors and its thorough inventory of new and replacement products. Gorman-Rupp supported its nearly 1,000 distributors in North America with in-depth product and process training. Sales representatives, distributors, engineers, and customers alike could attend corporate educational programs at one of two permanent training centers. The company also outfitted three recreational vehicles as mobile exhibitions for on-the-spot training and demonstrations. Although many industries and companies made the transition to just-in-time inventory in order to cut costs, Gorman-Rupp perceived its reserve as a key element of customer service. As James C. Gorman, CEO and son of the founder, told Barrons magazine in 1982, Some 20 percent to 30 percent of our business is crisis business. They dont buy anything from us until they are up to their noses in water. A prime example of the wisdom of this strategy came in 1989, when Gorman-Rupp was able to provide an estimated 90 percent of the pumps used to clean up after the Exxon Valdez oil spill. In a brief article for Fortune magazine in 1990, CEO Gorman crowed, Our Alaskan distributor called us on Saturday, and at six Sunday evening we had the first DC-8 load of pumps in Anchorage. In addition to its ready supply of new pumps, Gorman-Rupp estimated its trade in replacement parts was at 20 percent to 25 percent of total revenues. This segment was doubtless another vital factor in the companys customer service equation.

Although Gorman-Rupp operated as a nonunion manufacturer, it cultivated such a good working environment that one industry observer characterized the company as paternalistic. It launched hospitalization and profit-sharing programs in the mid-1930s and carefully avoided layoffs in the recessions of the 1970s and 1980s, a policy that possibly reflected its Depression-era origins. In return for its fair treatment of employees, Gorman-Rupp enjoyed low turnover and a strike-free history. Healthy labor-management relations also helped give Gorman-Rupp one of the industrys highest productivity rates. In 1996 the companys volume of sales per employee stood at $153,800, having risen from $120,000 in 1991.

Also in 1996, 72-year-old James C. Gorman drew the lines of corporate succession, ceding the chief executive office to President John A. Walter, 61. It was expected that Gormans son, Jeffrey S., 44, who was named executive vice-president at that time, would eventually follow in his fathers (and grandfathers) footsteps. Two years later he did just that, being named president and CEO in April 1998. Gorman remained chairman, and Walter retired but remained on the board of directors.

The period of the late 1990s and early 2000s was particularly noteworthy for the firms aggressive pursuit of overseas revenues. In 1996 the company set up an office in Greece as a way to improve its distribution to the Middle East and Europe. Through a majority-owned subsidiary called Patterson Pump Ireland Limited, Patterson Pump Company began manufacturing pumps in Ireland in 1998 for sale in Europe. (In March 2002 Patterson purchased the minority holding in the subsidiary, making it wholly owned.) In 1999 the Mansfield Division opened a warehouse in Grindstead, Denmark, and another distribution center was opened in Singapore in 2001 to serve markets in Asia. The warehouse in Denmark was closed in 2001, however, and was replaced by one near Amsterdam. By the early 2000s, between 14 and 19 percent of overall revenues was generated outside the United States.

In 2002 Gorman-Rupp completed two significant acquisitions, the first in 14 years. In February, American Machine and Tool Co., Inc. (AMT) was purchased for $12.6 million. Based in Royersford, Pennsylvania, AMT was a producer of small centrifugal and diaphragm pumps for industrial, construction, agricultural, marine, and household use. The firm provided pumps under its own name as well as private-brand products for national distributors. In March 2002 Patterson Pump acquired Atlanta-based Flo-Pak, -Inc. for about $6.5 million. Flo-Pak specialized in prepackaged pumping systems for the municipal, fire protection, industrial, plumbing, and heating, ventilating, and air conditioning (HVAC) markets.

Key Dates

1933:
J.C. Gorman and Herbert E. Rupp start a pump manufacturing business in a barn outside Mansfield, Ohio.
1934:
The business is incorporated as The Gorman-Rupp Company.
1940s:
The company develops a solids handling trash pump with a removable endplate.
Early 1950s:
Gorman-Rupp Industries Division is formed to meet the needs of original equipment manufacturers.
1960:
International expansion begins with the construction of a plant in Ontario, Canada, and the formation of the subsidiary Gorman-Rupp of Canada Limited.
1968:
The company goes public.
1977:
Ramparts, Inc., maker of diaphragm pumps for the chemical industry, is acquired.
1988:
Gorman-Rupp acquires Patterson Pump Company, producer of large-volume centrifugal pumps used for flood control and irrigation as well as fire pumps.
1998:
Patterson begins manufacturing pumps in Ireland.
2002:
The company completes two acquisitions: American Machine and Tool Co., Inc. and Flo-Pak, Inc.

The stellar history of Gorman-Rupp was reflected in the companys achievement of 15 consecutive years of increased revenue and earnings through the year 2001. That year, revenues surpassed the $200 million mark for the first time, hitting $202.9 million. The difficult economic climate of the early 2000s finally brought an end to this streak in 2002, however, as revenues fell 4.4 percent and earnings were down 38.7 percent. Gorman-Rupp products nevertheless continued to prove good at pumping profits for shareholders. The firm that year increased its dividend for the 30th consecutive year.

Principal Subsidiaries

American Machine and Tool Co., Inc.; Gorman-Rupp of Canada Limited; The Gorman-Rupp International Company; Patterson Pump Company; Patterson Pump Ireland Limited.

Principal Divisions

Mansfield Division; Gorman-Rupp Industries Division.

Principal Competitors

ITT Industries, Inc.; IDEX Corporation; Colfax Corporation; Roper Industries, Inc.; Haskel International, Inc.

Further Reading

Autry, Ret, Gorman-Rupp, Fortune, June 18, 1990, p. 93.

Brammer, Rhonda, Gorman-Rupp Gets No Respect, Barrons, November 22, 1999, p. 26.

Gleisser, Marcus, Pumping Up Profits in Mansfield, Cleveland Plain Dealer, June 28, 1998, p. 2H.

The Gorman-Rupp Company, Wall Street Transcript (CEO Supplement), March 1999.

Rosenbaum, Michael, Pumping Profits: Gorman-Rupp Builds Revenues in a Harsh Climate, Barrons, January 4, 1982, pp. 4445.

Sabath, Donald, Gorman-Rupp Succession in Place, Cleveland Plain Dealer, May 29, 1996, p. CI.

Talbott, Stephen, Gorman-Rupp Seeks OK on Egyptian Plant, Cleveland Plain Dealer, March 13, 1988, p. C6.

Winter, Ralph E., Gorman-Rupp Hopes to Maintain Growth Streak, Wall Street Journal, August 28, 2001.

_____, Gorman-Rupps Second Half to Be Slower, Wall Street Journal, August 31, 1998.

April Dougal Gasbarre

update: David E. Salamie

The Gorman-Rupp Company

views updated May 17 2018

The Gorman-Rupp Company

305 Bowman St.
P.O. Box 1217
Mansfield, Ohio 44901-1217
U.S.A.
(419) 755-1011
Fax: (419) 755-1233
Web site: http://www.gormanrupp.com

Public Company
Incorporated:
April 18, 1934
Employees: 993
Sales: $149.5 million (1995)
Stock Exchanges: American
SICs: 3562 Pumps & Pumping Equipment; 3594 Fluid Power Pumps & Motors

The Gorman-Rupp Company ranks among the ten largest pump manufacturers in the United States. Throughout its more than 60 years in the fluids handling industry, Gorman-Rupp has positioned itself as a niche player, developing a particular emphasis on pumps used in the construction industry. Gorman-Rupps product line ranges from small pumps for soft drink dispensers and medical devices to massive machines capable of moving up to 200,000 gallons of fluid per minute.

Its core operation, the Mansfield Division, generated 58 percent of total corporate revenues via the design, manufacture, and sale of self-priming centrifugal pumps. Acquired in 1988, the Patterson Pump Subsidiary contributed another 31 percent of sales, but this segments large volume centrifugal pumps were cited as a drag on Gorman-Rupps profitability in the mid-1990s. The manufacturers remaining revenues came from three divisions: Gorman-Rupp Industries, IPT, and Ramparts. These business segments produced small specialty pumps, often for original equipment manufacturers. The corporate credo, to enter a field of pumping service only when able to provide superior products with better performance, codifies its fairly conservative long-term strategy.

Founded During the Great Depression

Gorman-Rupps roots stretch back well over half a century to 1933 when two engineers, J. C. Gorman and Herbert E. Rupp, pooled $1,500 and started a pump manufacturing business in a barn outside the small town of Mansfield, Ohio. By that time, pumps had long been integral to many businesses. In fact, pumps remained the second most common machine used in industry into the 1990s. Perceiving an opportunity to carve out a profitable niche in this highly fragmented industry, Gorman and Rupp worked diligently to design pumps with particular features for specific tasks.

They established a long-standing corporate reputation for product development early on, launching the first simplified self-priming centrifugal pump with no valves or orifices in 1933. In keeping with its name, a centrifugal pump generates drawing pressure by moving liquids (and in some applications gases) in a circular pattern. The self-priming part of the name meant that the machine did not need a consistent flow of fluids in order to maintain its pumping capacity. These relatively quiet, rugged, and inexpensive devices are most often used to remove water (known in industry parlance as dewatering) at intermittently wet construction sites, sewers, and quarries. Self-priming centrifugal pumps formed the core of Gorman-Rupps product line.

World War II and Postwar Era

Within six years of its creation, the company was generating about $345,000 in annual sales. In the 1940s, Gorman-Rupp developed a solids handling trash pump that featured a removable endplate for easy maintenance. The company would later call it a bellwether product, one often imitated by competitors. Fueled in part by wartime contracts with the U.S. Army and Navy, for which the company was awarded an E for excellence, Gorman-Rupp sales multiplied to over $2 million by 1949. Manufacturing capacity grew correspondingly, and the company moved from its rural barn to a factory in town during this decade.

Sales continued to mount rapidly in the postwar era, when Gorman-Rupps close attention to the dewatering needs of the constriction industry paid off. In 1952, the company re-engineered a diaphragm pump for this market. Diaphragm pumps incorporate a flexible, but impenetrable membrane that prevents the material being pumped from coming in contact with the inner workings of the pump and vice versa. They are designed to pump abrasive or uncontaminated substances, and can also tolerate extended dry runs. Gorman-Rupp improved on the basic diaphragm pump design by decreasing the pumps weight and increasing its capacity. The pump manufacturer benefited indirectly from the residential housing boom of the 1950s. Its revenues tripled over the course of the decade, from $2.25 million in 1949 to $7 million by 1959.

Diversification Begins in 1950s, Accelerates in 1960s and 1970s

But company executives realized that they could not rely on a single marketespecially one as cyclical as the construction industryfor consistent sales and earnings growth. The seeds of the diversification process were sown in the early 1950s, when the firm established its Gorman-Rupp Industries Division in nearby Bellville, Ohio. Created to meet the needs of original equipment manufacturers (OEMs), Gorman-Rupp Industries made small, specialized pumps used in larger machines like photocopiers, coffee machines, kidney dialysis machines, and photo-processing equipment. This divisions emphasis on research and development helped make it the parent companys highest-margin segment by the mid-1990s.

In 1960, the company went international with the construction of a plant in Ontario, Canada. Gorman-Rupp of Canada Limited mirrored the parent companys main plant in Ohio, and its product line grew accordingly.

Gorman-Rupp also began to diversify within the pump category in earnest in the 1960s. It launched new lines of submersible pumps for mining, centrifugal pumps and fiberglass pumping stations for municipal sewage systems, specialty pumps for moving home heating oil and aircraft fuel quickly and safely, as well as pumps for the consumer market (i.e., the handy pump) and a backpack pump for firefighters. These technological developments and the new markets they opened helped triple Gorman-Rupps sales for the second consecutive decade, from $7 million in 1959 to $21 million by 1969.

The company continued to penetrate new niches of the pump industry in the 1970s, launching a magnetic drive pump that could be used to move liquid metals. A key development of this decade was the creation of the Gorman-Rupp International Division, which marketed the entire line of pumps via overseas distributors. This segments contribution to sales rose from 7 percent in 1980 to about 11 percent in 1995. Gorman-Rupp hoped to further increase its share of global pump sales by emphasizing the petrochemical, municipal, and industrial markets in the late 1990s. Driven by these developments, total corporate sales doubled over the course of the 1970s, exceeding $50 million in 1978 and reaching more than $58 million by 1979. Having gone public during the previous decade, Gorman-Rupp common stock was listed on the American Stock Exchange in the 1970s, where it continued to trade into the 1990s.

Acquisitions Distinguish Late 1970s and Continue in 1980s

A fairly modest industry contraction saw manufacturers of pumps and pumping equipment shrink from 613 in 1977 to 528 in 1987. Gorman-Rupp played a role in this trend, executing three acquisitions during this period. In 1977, the company acquired its Ramparts Division, which manufactured air-driven diaphragm pumps and replacement parts for the chemical industry. These specialized machines were most often used to move highly corrosive and/or viscous liquids like sulfuric acid and hydrochloric acid. Although the Ramparts Division was still only generating one percent of Gorman-Rupps annual sales 20 years after its acquisition, the parent company considered its high profit margins an important contributor to long-term growth.

Like many manufacturers, United States pump makers faced heavy competition from foreign producers in the 1980s. To combat this problem, Gorman-Rupp acquired the IPT Pumps Division, a manufacturer of economically-priced, portable, and durable pumps for the construction market, in 1986. Although this division also only contributed 1 percent of annual revenues and scant profits, it helped Gorman-Rupp maintain a presence in this competitive industry segment.

Gorman-Rupp made its largest acquisition to date in 1988, when it paid Banner Industries $14.5 million for control of the Patterson Pump Company. Based in Toccoa, Georgia, Patterson manufactured a comprehensive line of large volume centrifugal pumps used for flood control and irrigation as well as fire pumps for automatic sprinkler systems and fire hydrants. Patterson complemented Gorman-Rupps existing water, sewer, and fire-fighting lines, enabling the company to offer custom-designed, large-scale fluid transport systems to these key markets.

Although Patterson added $24 million to Gorman-Rupps sales tally, its returns were less than stellar. Treating its newest affiliate as a turnaround situation, Gorman-Rupp pumped an additional $20 million into plant and office renovations over the ensuing eight years. And while Pattersons profitability remained comparatively low into the mid-1990s, Gorman-Rupp was committed to wringing higher margins from this subsidiary.

Company Perspectives:

Holding to a longstanding commitment to innovation, growth, improvement, and product superiority, Gorman-Rupp has seen its position as a leader in the domestic pump market dramatically expand to incorporate the global market as well. Today, this leadership is reflected in the vital role that Gorman-Rupp pumps are playing in municipal, industrial, and petrochemical operations worldwide.

The 1990s and Beyond

Several key factors have contributed to Gorman-Rupps six-decade record of growth. The company has long emphasized innovation and product quality. So confident were Gorman and Rupp in the capabilities of their products that they empowered their distributors to put a Gorman-Rupp contractors pump on. any pumping job, anytime, anywhere, beside any competitors pump of comparable size. The company guaranteed that its products would move more volume more efficiently and for a longer time. And if it wasnt the best all-around pump, our distributors would accept the return and pay the user any installation expense incurred.

Gorman-Rupps reputation for excellent customer service is predicated on its network of knowledgeable distributors and its thorough inventory of new and replacement products. Gorman-Rupp supported its nearly 1,000 distributors in North America with in-depth product and process training. Sales representatives, distributors, engineers, and customers alike could attend corporate educational programs at one of two permanent training centers. The company also outfitted three recreational vehicles as mobile exhibitions for on-the-spot training and demonstrations. And although many industries and companies made the transition to just-in-time inventory in order to cut costs, Gorman-Rupp perceived its reserve as a key element of customer service. As James C. Gorman, CEO and son of the founder, told Barrens magazine in 1982, Some 20 percent to 30 percent of our business is crisis business. They dont buy anything from us until they are up to their noses in water. A prime example of the wisdom of this strategy came in 1989, when Gorman-Rupp was able to provide an estimated 90 percent of the pumps used to clean up after the Exxon Valdez oil spill. In a brief article for Fortune magazine in 1990, CEO Gorman crowed that Our Alaskan distributor called us on Saturday, and at six Sunday evening we had the first DC-8 load of pumps in Anchorage. In addition to its ready supply of new pumps, Gorman-Rupp estimated its trade in replacement parts was at 20 percent to 25 percent of total revenues. This segment was doubtless another vital factor in the companys customer service equation.

Although Gorman-Rupp is a non-union manufacturer, it has cultivated such a good working environment that one industry observer characterized the company as paternalistic. It launched hospitalization and profit-sharing programs in the mid-1930s, and carefully avoided layoffs in the recessions of the 1970s and 1980s, a policy that may reflect its Depressionera origins. In return for its fair treatment of employees, Gorman-Rupp enjoyed low turnover and a strike-free history. Healthy labor-management relations also helped give Gorman-Rupp one of the industrys highest productivity rates. In 1996, the companys volume of sales per employee stood at $153,800, having risen from $120,000 in 1991.

A 1996 analysis of Gorman-Rupp by Robert W. Baird & Co., indicated that the company was ripe for an acquisition. But many of the factors that signaled its readiness to acquirelow debt, good cash flow, and a low stock pricealso made it a prime takeover target. Takeover seemed an unlikely outcome, however, given that family and insiders owned a controlling interest in the company. Furthermore, in 1996, 72-year-old James C. Gorman drew the lines of corporate succession, ceding the chief executive office to President John A. Walter, 61. It was expected that Gormans son, Jeffrey S., 44, who was named executive vice-president at that time, would eventually follow in his fathers (and grandfathers) footsteps.

Aside from all their other attributes, Gorman-Rupp products have also proven good at pumping profits for shareholders. The company not only chalked up record sales and operating profits in 1996, but also continued its more than twenty consecutive years of annual dividend increases.

Principal Subsidiaries

Gorman-Rupp of Canada, Limited; The Gorman-Rupp International Company; Patterson Pump Company.

Principal Divisions

Mansfield Division; Gorman-Rupp Industries Division; Ramparts Division; IPT Pumps Division.

Further Reading

Autry, Ret, Gorman-Rupp, Fortune, June 18, 1990, p. 93.

Hillstrom, Kevin, Encyclopedia of American Industries, Detroit: Gale Research, 1994, pp. 954957.

Robert W. Baird & Co., Incorporated, The Gorman-Rupp Company, The Investext Group, August 26, 1996.

Rosenbaum, Michael, Pumping Profits: Gorman-Rupp Builds Revenues in a Harsh Climate, Barrons, January 4, 1982, pp. 4445.

Sabath, Donald, Gorman-Rupp Succession in Place, The Plain Dealer, May 29, 1996, p. C1.

Talbott, Stephen, Gorman-Rupp Seeks OK on Egyptian Plant, The Plain Dealer, March 13, 1988, p. C6.

April Dougal Gasbarre

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