Corning Incorporated Business Information, Profile, and History
History of Corning Incorporated
Corning Incorporated, Corning Glass Works until 1989, began as a producer of specialty glass. The firm specializes in glass, glass fibers, ceramics, and laboratory services. During the 1980s Corning moved from slow-growing markets to development of products in new technologies, such as fiber optics. The company has joint ventures throughout the United States and the world.
Corning traces its beginnings to 1851 when Amory Houghton purchased an interest in Bay State Glass Company of Cambridge, Massachusetts. Three years later he founded Union Glass Company of Somerville, Massachusetts. After selling Union Glass he and his sons bought the Brooklyn Flint Glass Company of Brooklyn, New York, in 1864. Four years later they moved operations to Corning, New York, renaming the enterprise Corning Flint Glass Company. They chose this western New York location because of its favorable location for transportation as well as for acquisition of coal and wood, then necessary for glassmaking.
Amory Houghton Jr. became president in 1875, the year in which Corning Glass Works was incorporated, and remained in the post until 1911. It was during these years that the firm began to exhibit the technological prowess for which it is known today. The company first called upon scientists at Cornell University in 1877 for help in improving the optical quality of its lenses. In 1880 Thomas Edison asked Corning Glass to make bulbs for his electric lights.
An important milestone during Amory Houghton Jr.'s years as president was the establishment of a research laboratory in 1908. It was the fourth such facility in the United States. The laboratory developed a heat-resistant glass, borosilicate, capable of withstanding sudden changes in temperature. One resulting 1912 product was a shatterproof lantern for railway signalmen. Another important borosilicate product, Pyrex, dated from 1915. It found immediate use as laboratory equipment, but it was some years before the company realized its consumer-market potential.
Corning continued to be managed by members of the Houghton family. Alanson B. Houghton succeeded Amory Houghton Jr., and served until 1919, when he was followed by Arthur A. Houghton, president until 1920.
During World War I, when Corning was able to make glass that others could not produce, the company prospered as a supplier to defense contractors. In the postwar years, demand for Corning products led to the invention of a ribbon machine in 1926 which produced blanks for incandescent lamps at the rate of 2,000 bulbs per minute.
Steuben Glass, a division of Corning, originated in Corning, New York, but did not become part of Corning Glass until 1918. It specializes in fine optical glass as well as fine cut glass. Steuben began producing the crystal for which it became famous in 1933, when Arthur A. Houghton Jr., great-grandson of the founder, became president of the subsidiary. He decided that the company was to sell only quality products of the highest design, and he and a vice president smashed over $1 million worth of lesser glass in the company warehouse.
Two presidents served in the decade of the 1920s. Alexander D. Falck was in office until 1928, and Eugene C. Sullivan until 1930. The years of the Great Depression were an era of great expansion for Corning. Under the leadership of Amory Houghton Sr., president from 1930 to 1941, technological innovations continued. Corning built the 200-inch mirror for the Mount Palomar telescope in 1934. It was the largest piece of cast glass up to that time, and was the second version of the mirror. The first, which was miscast, is on display at the glass museum in Corning, New York. Corning developed such products as silicones in the early 1930s, electrical sealing in 1938, and 96%-silica glass in 1939.
During this period Corning began a policy of joint ventures with other companies. Owens-Corning Fiberglas was organized in 1938, a year after Pittsburgh Corning Corporation began producing glass blocks. Dow Corning was established in 1943 to produce silicones.
The early 1940s brought improvements in optical glassmaking. During World War II cathode-ray tubes were mass produced for radar detection systems beginning in 1942. Corning also manufactured a strengthened form of glass tableware for the U.S. Navy. Later advancements in the decade included improved thermometer tubing; ribbon glass as thin as newsprint and used in electronic components; photosensitive glass; and centrifugal casting used primarily for television tubes, which were first automatically produced in 1947.
Glen W. Cole was president during World War II, and was followed by William C. Decker, who served from 1946 until 1961. Amory Houghton Sr. continued to lead as the first chairman of the board, an office created in 1945.
Corning developed electricity-conducting coated glass in 1950 and fused silica in 1952. Color television tubes were introduced in 1953. The process for producing Pyroceram, or glass ceramics, developed in 1957, led to the marketing of Corning Ware cookware the following year.
Amory Houghton Jr. served as president between 1961 and 1964, and then became chairman of the board until his election to the House of Representatives in 1983. During Houghton's tenure as chairman, the presidency was held by R. Lee Waterman until 1971, followed by Thomas C. MacAvoy up to 1983.
Corning made the ceramic heat-resisting reentry shields and the glass windshields for the 1960s Apollo moon program. Cellular-ceramic structures--thin-walled structures used in gaseous heat exchangers--were introduced in 1961 and became key components of automobile catalytic converters beginning in the 1970s. Other developments in the 1960s included chemically strengthened glass in 1964; photochromic glass, which darkens when exposed to light, and fusion sheet glass in mid-decade; and in the late 1960s, hub machines, for cutting hot glass into various sizes and shapes, and optical fibers.
During the 1960s Corning Glass was the undisputed industry leader in glass technology. Sales of bulbs, globes, and panels, Corning Ware, and television-tube blanks grew especially fast in the early 1960s and led to record earnings of $9.28 per share in 1966. Company stock sold at 48 times earnings.
In 1970 Corning's innovations included machinable glass-ceramics and immobilized enzymes. The latter permanently bonds active catalytic materials, such as enzymes, to inorganic substrates, or carriers, leading to the development of radio-immunoassay products for diagnostic testing in 1974. An all-electric melter in 1972, polychromatic glass in 1978, transparent glass-ceramic cookware in 1981, diesel particulate filters in 1986, and dental restorations in 1987 were other breakthroughs.
Despite these innovations, Corning experienced a decline in earnings in the 1970s. Although over one-third of its products were new, the bulk of its sales came from mature products such as bulbs and television blanks for picture glass, which it sold to other companies. Competition was strong and Corning experienced a decline in market share of these products. Japanese imports of television sets, for example, curtailed the demand for Corning television glass.
Another problem involved Signetics, a semiconductor manufacturer, purchased in 1962. In 1970 Signetics lost $6 million on $35 millionin sales. Corning had never developed an expertise in electronics and in 1975 sold Signetics, absorbing a pretax loss of $9.5 million. In 1972 Hurricane Agnes caused a severe flood which cut corporate headquarters off from the outside world for a time and cost the company $20 million. Earnings collapsed to $1.76 per share in 1975. In response to these difficulties, Corning closed five plants and eliminated production of domestic black-and-white TV tubes, Christmas ornaments, and acid-waste drain lines. Employment was cut in the 1970s from 46,000 worldwide to 29,000, with an increase in productivity from an industry average of 3% per year to 6%. Research and development continued, with expenditures of about 5% of sales, above the U.S. national average of 2%.
Sales volumes fell in 1982 for some consumer products, such as Corning Ware, Pyrex, and Corelle dinnerware. In 1983 Corning halted production of light bulbs. That year leadership changed from president to joint management by group presidents and Chairman of the board, James Houghton.
Corelle products designs had not changed in more than a decade, and Corning had not advertised, until 1985, that its products had always been suitable for the microwave oven. The company did not begin market research until 1984. As a result Corning modernized designs of older products and introduced Visions cookware, combining the transparency of glass with the heat-resistant qualities of ceramics.
Corning's experience with fiber optics illustrates the problems and the benefits of a company based on research and technology. As a result of Corning's work, glass-fibers, or fiber optics, have replaced copper wire in traditional telephone lines. A hair-thin glass fiber can carry as many telephone calls as a four-inch copper wire, using pulses of light to transfer sound. The difficulty is that light may lose its intensity as it moves through the cable. When Corning began working on fiber optics in the middle 1960s, researchers decided that a 99% loss over a kilometer was economically viable because it could be boosted at that point. After four years of work, and numerous failed experiments the research team developed a working product. Physicist Donald Keck recorded the event in his laboratory notebook with the notation "Eureka."
At the time there was no apparent demand for the product. Telephone companies said that they would produce their own fiber when demand made such a step imperative. Although lacking sales, Corning continued improving the product, making the original product obsolete even before it was sold. By 1972 the fiber wire could be extended 20 kilometers without a repeater, five times longer than standard copper wire. Eventually the distance grew to 100 kilometers. These continued improvements resulted in price declines from several dollars to less than 12¢s; a meter in the late 1980s.
Corning reacted to the lack of early demand by entering into several joint ventures with European cable companies, believing that local partners would eventually lead to sales to the state-owned telephone monopolies. At the same time Corning built its own factory in the United States. This move proved successful when deregulation of the telephone industry in the United States led MCI Communications Corporation to order 100,000 kilometers of cable in 1982. Two years later the company spent $87 million on new fiber plant facilities, the largest single Corning investment ever.
By the 1970s, U.S. communication companies were developing and using optical fiber. In July 1976, Corning filed suit against ITT Corporation and its customer, the United States government, charging patent infringements. Five years later, after countersuit by ITT and much legal conflict, ITT settled, agreeing to pay penalties for patent infringement; a short time later, the government settled with payment of $650,000 for having purchased the fiber. During the next few years, Corning filed similar suits against Valtec Industries and Sumitomo Electric Industries in Japan. These suits too were settled in Corning's favor, in 1984 and 1987 respectively.
Corning's work on laboratory glass instruments led it into laboratory-related services, through the acquisition of other firms. MetPath, one of the leading clinical testing services in the United States, was purchased in 1982. Hazelton Laboratories, purchased in 1987, became one of the world's leading independent suppliers of services for biological and chemical research. Enseco, acquired in 1989, specializes in environmental testing.
Corning has entered into more joint ventures--over two-thirds with foreign firms--than most other U.S.-based firms. More than half of its 1987 profits came from joint ventures. Dow Corning, with $1.5 billion in revenues, is as large as all of Corning's other joint ventures. The international alliances covered the globe, and included more than 15 joint ventures with companies in Europe, Asia, and Australia, producing such products as optical fiber, specialty glass, ceramics, and cookware.
Acquisition of joint-venture partners continued in 1989 and 1990. IBM invested in PCO, an optoelectronics company controlled by Corning. Mitsubishi Heavy Industries, Mitsubishi Petrochemical, and Corning became partners in Cormetech, a pollution-control company. In June 1990 Corning joined with a company in India to form Samcor Glass. Corning entered such relationships to provide instant market penetration and to bring new technologies to the company. In 1989, Corning acknowledged the diversification of its products by changing the company name to Corning Incorporated.
Corning may serve as a prototypical "knowledge" firm. While it has always depended on research for new products, it has moved even more actively into new products, quality of production, and training since the 1970s. For example, Corning's Total Quality program cut irregularities on a new coating process in fiber optics from 800 parts-per-million in 1986 to none in 1988. By 1991 the company planned to have workers spend 5% of their time in paid training. While many U.S. firms have floundered due to Asian competition, Corning has transformed itself into one of the world's leading technology companies, while successfully maintaining its strength in manufacturing.
Principal Subsidiaries: Corning Engineering; Corning Enterprises Inc.; Corning Europe Inc. (U.K.); Corning International Corporation; Crown Corning USA Incorporated; Dow Corning Corporation (50%); Hazleton Laboratories Corporation; MetPath, Inc.; PCO, Inc.; Pittsburg Corning Corp. (50%); Siccor Corp. (50%); Steuben Glass; U.S. Precision Lens, Inc.
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