Cooper Industries, Inc. Business Information, Profile, and History
Houston, Texas 77002
We believe size creates opportunities; we believe strong brands are important; we believe global solutions enhance profitability; and we believe people make the difference. These same convictions will guide us as we continue to generate increased earnings and value for our shareholders in the years ahead.
History of Cooper Industries, Inc.
After spending most of the 1990s spinning off businesses and focusing on a few select markets, Cooper Industries, Inc. emerged in the new millennium as a $4.5 billion manufacturer of electrical products, tools, hardware, and metal products with over 100 manufacturing plants across the globe. Its Electrical Products segment--responsible for over 80 percent of company revenues--manufactures thousands of products through seven different divisions involved in the production of support systems for electrical, mechanical, and telecommunications applications; circuit protection products; electrical protection products for the industrial and commercial industry; lighting fixtures; emergency lighting and fire detection systems; equipment and components for the management of electrical power; and wiring devices, switches, and plugs. Cooper's Tools & Hardware segment manufactures electric and pneumatic industrial power tools, and hand tools.
Brothers Charles and Elias Cooper built a foundry in their hometown of Mount Vernon, Ohio, and called it the Mt. Vernon Iron Works. Soon better known as C. & E. Cooper Company, their first products were plows, maple syrup kettles, hog troughs, sorghum grinders, and wagon boxes. Charles Cooper was the stronger leader. Aggressively anti-slavery and a dedicated prohibitionist, he became a respected community leader, even though many of his views differed greatly from those of his neighbors. When Elias Cooper died in 1848, Charles Cooper took a succession of partners, and with each the company name changed accordingly.
Mount Vernon was linked to the rest of the nation by the railroad in 1851 and the following year Cooper was able to ship its first steam-powered compressors for blast furnaces. Cooper's relationship with the railroad had its difficulties, however. When the Sandusky, Mansfield, and Newark Railway was delinquent in paying for woodburning locomotives from the company, Charles Cooper was driven to chain the wheels of a locomotive to the track, padlock it, and stand sentry until he was paid in full.
By the time of the Civil War, Cooper products included wood-burning steam locomotives and steam-powered blowing machines for charcoal blast furnaces. After Charles Gray Cooper, son of Elias, served in the Union army and attended Rensselaer Institute, he became a partner with his uncle.
In 1869, Cooper became the first company in what was then the West to produce the new, highly efficient Corliss engine. Six years later, it offered the Cooper traction engine, America's first farm tractor. Throughout the rest of the century, the Corliss engine was Cooper's principal product.
The company was incorporated as the C. & G. Cooper Company in 1895, and Frank L. Fairchild, a respected salesman of the Cooper-Corliss engine, was named its first president. Fairchild so enjoyed selling that throughout his 17-year presidency he continued to serve as sales manager.
By 1900, gas was being discovered in new fields and shipped more than 100 miles through primitive pipelines. At the same time, the oil industry was also beginning to develop. Not long after Charles Cooper's death in 1901, it became clear that steam turbine engines were destined to replace the Corliss engine. Cooper management recognized the necessity of focusing on a small segment of the market, and in 1908 it wisely chose to make a gradual change to natural-gas internal-combustion engines, which were being used successfully at the compression stage of pipeline transmission.
Fairchild died suddenly in 1912 and Charles Gray (C.G.) Cooper, took his place. One story describes C.G.'s famous bluntness particularly well: C.G. once visited a procrastinating client and without any preliminary niceties asked, "Do you want to buy a steam engine?" The man said he didn't want one just then. "All right, then you can go to hell," C.G. said and stormed out abruptly.
During World War I, Cooper built high-speed steam-hydraulic forging presses for government arsenals, munitions plants, and shipyards, as well as giant gas engines and compressors and triple-expansion marine engines. The company's wartime production demands slowed its transformation from a producer of steam to gas engines, since steam engines were needed for the war effort. But after the war, it became clear that the company had chosen its direction wisely when it set its sights on developing gas internal-combustion engines. The old Corliss was quickly becoming outmoded by competition from steam turbines and gas-powered engines.
In 1919, C.G. Cooper became chairman and Desault B. Kirk, the company's treasurer, became president. Just a year later, Cooper began a long-range program for growth, and the directors elected Beatty B. Williams president. Although he'd married the boss's daughter, few credited Williams's rise to simply marrying into the family. Serving as vice-president and general manager during the war years, Williams was single-minded in his dedication to the company's success and directed Cooper (and subsequently Cooper-Bessemer) with great energy and foresight for 22 years. Always mindful of what he called "an aloofness" that could develop between office and factory workers, Williams held conferences in which factory workers were invited to air their views and offered evening courses in production and management in which any employee could enroll.
Natural gas was gaining growing importance in the manufacture of steel and glass and in the emerging petrochemical industry. Cooper field service engineers were often on hand for months at a time to oversee the installation of huge four-cycle Cooper engines and compressors in compressor stations as new pipelines were routed through West Virginia, Louisiana, Arkansas, Oklahoma, and Texas.
The Bessemer Merger
Within just a few years, Cooper became the country's leading producer of pipeline compression engines. Although Cooper also produced smaller two-cylinder engines used in natural-gas fields to extract gas as it came from the well, the Bessemer Gas Engine Company of Grove City, Pennsylvania, dominated that field.
Founded in 1897, Bessemer had produced oil-pumping engines for most of its existence and had invested heavily in diesel engine development during the 1920s. While Cooper and Bessemer had some product overlap, their major strengths were in different areas.
By 1929, Cooper needed additional production facilities to meet the mounting orders for large natural-gas engine compressor units. Bessemer, after its lengthy period of diesel development, badly needed new capital. Both companies had posted nearly identical average earnings for the previous three years. The companies negotiated a merger for several months, and the Cooper-Bessemer Corporation came into being in April 1929. The merger made the company the largest builder of gas engines and compressors in the United States. Soon afterward it was listed on the American Stock Exchange.
Cooper-Bessemer's business boom was brief. The company continued the Bessemer line of diesel marine engines, and since most ships were built or converted on the East Coast, Cooper-Bessemer soon decided to open a sales office in New York. The office was opened on October 23, 1929, however, at the very beginning of the Great Depression. Two years later, annual sales had dropped more than 90 percent, reflecting the almost total halt of construction on long-distance pipelines and in American shipyards. Half of all sales that year were for repair parts. Along with thousands of other American companies, Cooper-Bessemer was forced to lay off workers.
Cooper-Bessemer slowly revived in the middle and late 1930s by continuing to improve products and by entering new markets. The company was convinced that the diesel would replace steam-powered railroad engines and it developed one for the new market.
Charles B. Jahnke was elected president in 1940 and Williams moved to chairman of the board, but Jahnke died a year later and Williams returned to the presidency for two more years. Only when Cooper-Bessemer embarked on a wartime production schedule in 1941 did its sales figures surpass their predepression level. The company had sold engines to several branches of the military before the war and was thus in a favored position to receive large orders during World War II. It became a major producer of diesel engines for military vessels of all kinds and also increased production of locomotive engines. At the peak of its wartime production, Cooper-Bessemer had 4,337 employees working in round-the-clock shifts.
In 1941, Cooper-Bessemer's net sales jumped to an all-time high, and just two years later they had more than tripled. The company was listed for the first time on the New York Stock Exchange in 1944. Gordon Lefebvre was elected company president in 1943. He had previously served as vice-president and general manager. Formerly the head of General Motors's Pontiac division, he had a background in engineering and was energetic, likeable, and a tough negotiator.
Focus on International Expansion and Product Development
After World War II, Cooper-Bessemer became increasingly interested in selling its products worldwide. It formed an international sales office and announced its first sales-service branch outside the United States, in Caracas, Venezuela, in 1945. Later in the decade, it expanded warehouse facilities in Canada and established a subsidiary sales unit, Cooper-Bessemer of Canada, with three offices, and received its first postwar orders from the Soviet Union.
Cooper-Bessemer had developed its innovative "turbo flow" high-compression gas-diesel engine in 1945, and two years later it introduced the GMW engine, which delivered 2,500 horsepower and could be shipped in one assembled unit. In these postwar years Cooper officials began to discuss diversification, which Lefebvre defined as "finding new markets for old products and new products for old markets, rather than moving into fields with which we are not familiar."
In 1951, Cooper-Bessemer's sales of $52 million surpassed its wartime high by nearly $10 million. Business that year was boosted by the Korean War; company shipments were almost solely to markets supported by the war effort, such as the petroleum, aluminum, chemical, and railroad industries.
In 1954, a combination of internal and external circumstances led to a startling 38 percent decrease in net sales and Cooper-Bessemer's first net loss since 1938. The company's problems included a seven-week strike at the Grove City plant and a nationwide recession, but the main difficulty was the U.S. Supreme Court's decision in the Phillips Petroleum case, which ruled that producers selling gas to interstate pipelines had to submit to the Federal Power Commission's jurisdiction. This decision produced upheaval and uncertainty among pipeline operators, and therefore for Cooper-Bessemer.
While the company was rebuffing a 1955 takeover attempt by a private investor named Robert New, Lefebvre resigned unexpectedly, and Lawrence Williams, Beatty Williams's son, became president. He served beside his father, who was chairman of the board. Lawrence Williams had already served the company in many capacities and had taken early retirement to pursue other interests; he considered his return a temporary one. The takeover attempt had shaken management. In an attempt to bring an infusion of young talent to the company, Williams made a number of top management changes, including elevating Eugene L. Miller to chief operating officer. Due to revitalized demand, sales bounced back in 1956 to a record high of $61.2 million, but it was becoming increasingly clear that Cooper-Bessemer needed to diversify in order to avoid the cyclical pitfalls of energy-related manufacturing.
In 1957, Gene Miller was elected president. At 38, he was the youngest man to hold the position since the company's original founder. Miller had begun at Cooper-Bessemer in 1946. A year after he became president, the company acquired Rotor Tool Company of Cleveland, the makers of pneumatic and high-cycle electric portable tools.
Over the next few years Cooper-Bessemer struggled to develop an engine to meet the challenge of General Electric's new combustion gas turbine engine, which threatened to supplant several of Cooper's engines in the pipeline transmission market. Its efforts resulted in the world's first industrial jet-powered gas turbine, introduced in 1960.
Under Miller's leadership, the distinction between Cooper-Bessemer administrative and operational management grew more pronounced, as was happening in companies throughout the country. Innovations such as computerization, fluctuations in worldwide monetary exchanges, increased government controls, and changing tax structures had made operating a large business increasingly complicated. In recognition of this, Miller moved the corporate offices from the Mount Vernon plant to offices on the city square to "establish a corporate group capable of administering many relatively independent divisions." Meanwhile, Cooper-Bessemer's international division was also growing. By the end of the 1950s Cooper had sales agents in ten countries, licensees in three, and franchises in two. In 1964 it opened an office in Beirut and also formed a wholly owned British subsidiary, Cooper-Bessemer (U.K.), Ltd.
Diversification Through Acquisition
Cooper-Bessemer was no exception to the trend toward large conglomerates during the 1960s, but it did try to limit its acquisitions to those that could be mutually beneficial. In the early 1960s, it acquired Kline Manufacturing, a producer of high-pressure hydraulic pumps; Ajax Iron Works, which built gas engine compressors and a water flood vertical pump for oil and gas production; and the Pennsylvania Pump and Compressor Company. Between 1960 and 1965, the company's sales grew from $68 million to $117 million.
Cooper had grown into a large, diverse company. To better reflect its nature, it changed its name to Cooper Industries, Inc. in December, 1965. Two years later it moved its corporate headquarters to Houston in order to be more in the geographic mainstream of American business.
Cooper acquired Lufkin Rule Company of Saginaw, Michigan, in 1967. It was the first of many acquisitions for what Lufkin president William G. Rector called a "tool basket"--a high-quality hand tools manufacturing group. Subsequent hand tool-related acquisitions included Crescent Niagara Corporation (wrenches) in 1968, Weller Electric Corporation (soldering tools) in 1970, Nicholson File Company (rasps and files) in 1972, Xcelite (small tools for the electronics industry) in 1973, J. Wiss & Sons Company (scissors) in 1976, McDonough Company's Plumb Tool subsidiary (striking tools) in 1980, and Kirsch Company (drapery hardware) in 1981.
Charles Cooper, the last Cooper family member to be associated with the company, retired in 1968. The grandson of Elias, he had served as a vice-president and board member.
The company branched out into aircraft services in 1970 by acquiring Dallas Airmotive, and later acquired Southwest Airmotive Company in 1973 and Standard Aircraft Equipment in 1975. While these acquisitions performed satisfactorily, the company sold its airmotive segment to Aviation Power Supply in 1981 because it did not see much potential for further growth.
The 1973 oil embargo threw many industrialized nations into an uproar. Cooper's Ajax division struggled to keep up with orders from domestic crude-oil producers and Cooper received a large order for its Coberra gas turbines for the Alaskan pipeline.
After having served as president and chief operating officer since 1973, Robert Cizik was named chief executive officer in 1975. Lured to the company from Standard Oil New Jersey (now Exxon) in 1961, Cizik started his career at Cooper as executive assistant for corporate development.
Cizik stepped up the company's acquisition program. After satisfying a Justice Department challenge, Cooper acquired the White Superior engine division, a heavy-duty engine maker, from the White Motor Company in 1976, and in 1979 Cooper realized a dream of acquiring the Dallas-based Gardner-Denver Company, a company roughly the same size as Cooper. Although Forbes described Gardner-Denver as "a company notorious for lack of planning or cost controls," Cooper was confident the company's three energy-related business segments could be successfully merged into its own energy-related manufacturing operations. Forbes reported at the time that the merger was one of the ten largest in U.S. history. That year the company passed the $1 billion sales milestone, only three years after it had reached a half a billion dollars in sales.
At the time, Cooper was criticized for handling acquisitions cold-heartedly. After acquiring Gardner-Denver, it closed the company's corporate headquarters, decentralized it, reduced employment, and cut benefits. But many analysts defended these actions, noting that Gardner-Denver had been full of operational problems and was very poorly managed.
Cooper was also known for its manufacturing efficiency and willingness to make capital investments to improve production or market position. For instance, when the last domestic producer of the very hard steel needed to manufacture files stopped making it, Cooper developed a process for making its own steel that was different from the traditional method but still suitable for making files, at half the cost.
In 1981, Cooper acquired the highly respected Crouse-Hinds Company of Syracuse, New York, makers of electrical products, after a long battle in which Cooper played white knight, rescuing Crouse-Hinds from Inter-North Corporation. Cooper also acquired the Belden Corporation, a wire and cable manufacturer that Crouse-Hinds had been in the process of purchasing. This acquisition expanded Cooper's size by 50 percent. Shortly after the merger, Cizik explained to Business Week that he had entered the electrical components business because "we needed to be in a business that looked beyond the 1980s and even the year 2000 for growth." When demand for gas and oil began to slump in 1981, Cooper's diversification paid off. Sales of the company's energy-related products dropped by 60 percent but its other two divisions were hurt far less.
Cizik continued to look for new acquisitions. Cooper's next bold move was a 1985 merger with McGraw-Edison Company, a manufacturer of electrical energy-related products for industrial, commercial, and utility use. The merger nearly doubled Cooper's size and made the company one of the largest lighting manufacturers in the world. Cooper's 1985 sales passed $3 billion.
After the McGraw-Edison acquisition, most Cooper acquisitions were on a somewhat smaller scale in the 1980s. In 1987 they included the molded rubber products division and the petroleum equipment and products group from Joy Technologies. In 1988, Cooper acquired RTE Corporation, a Wisconsin-based manufacturer of electrical distribution equipment, and Beswick, a manufacturer of fuses and related products in the United Kingdom. But in 1989, Cooper made yet another major acquisition, of the Champion Spark Plug Company, the world's leading manufacturer of spark plugs for combustion engines. Champion, based in Toledo, Ohio, was also a major producer of windshield-wiper blades. And in late November, 1989, Cooper also acquired Cameron Iron Works, a Houston-based company with annual sales of $611 million. Cameron was a maker of oil tools, ball valves, and forged products.
By the early 1990s, Cooper manufactured more than a million products in 145 plants, 41 of them in foreign countries, and its annual revenues exceeded $4 billion. International expansion continued during this time period. In 1991, three Canadian-based businesses were acquired. The following year, Cooper purchased Ferramentas Belzer do Brasil, a Brazilian-based hand tool manufacturer.
A New Focus: Late 1990s and Beyond
Management began to take a different approach to expansion in the mid-1990s as competition became fierce in many of its markets. In 1995, the firm spun off its petroleum and industrial equipment business, signaling the start of its new strategy. H. John Riley, Jr., was named CEO that year, and under his direction, Cooper began strictly focusing on its Electrical Products, Tools and Hardware, and Automotive Products business segments.
Cooper made eight acquisitions in 1997, the largest being that of the Menvier-Swain Group, an emergency lights and alarm manufacturer. It also divested Kirsch, its window treatment business, along with other units considered to be low-margin and unrelated to the firm's new direction. The company secured a 25 percent increase in net income that year along with the highest share earnings in its history--$3.26.
The company continued with its transformation in 1998, significantly changing its holdings with the sale of its automotive businesses. While this segment secured nearly 35 percent of Cooper's revenues, it was responsible for just 25 percent of earnings. The segment was also in dire need of capital investment to improve performance--an investment that did not fit in with Cooper's strategy. In October of that year, Federal-Mogul Corp. bought up the division for $1.9 billion.
The firm also made 11 acquisitions that year, expanding its power tool business by 50 percent. U.S. power tool manufacturer Intool Inc. was purchased, along with three European-based companies. Cooper's reach in the electrical products market also increased in size that year through several key mergers in the Latin American region.
While market conditions weakened throughout the manufacturing industry--the company claimed the industry was facing the worst economic slowdown it had experienced in the last 20 years--Cooper continued to bolster its two key business segments. During 1999, the firm acquired ten firms and significantly expanded its reach in European markets. In fact, international revenues increased by 17 percent to $1.1 billion that year.
After nearly a decade of restructuring and divestiture, Cooper entered the new millennium a leaner, more focused company. The firm made several key acquisitions in 2000, including the B-Line Systems business of Aldrich Corp. and Eagle Electric Manufacturing, which was incorporated into the company's Wiring and Devices division. By now, Coopers main two business segments--Electrical Products and Tools & Hardware--were securing nearly $4.5 billion in sales, up from $2.8 billion in 1995.
In fact, Cooper held leading positions in many of its markets. That, coupled with its positive revenue and earnings results and its track record of success, made it a takeover target. Sure enough, in August 2001 Cooper turned down an unsolicited offer from rival Danaher Corp., claiming that the proposal undervalued the firm--Danaher had made an undisclosed offer in 1999 and had Cooper taken that first offer, Danaher claimed, shareholders would have realized significant earnings.
While Cooper refused the Danaher offer, the company announced in August 2001 that it would consider the likes of a future merger, acquisition, or strategic alliance in order to increase shareholder value. As its future remained uncertain, the firm's long standing history of growth and its ability to weather fluctuating economic conditions would no doubt position the Cooper name among market leaders in the years to come.
Principal Divisions: Cooper B-Line; Cooper Bussman; Cooper Crouse-Hinds; Cooper Lighting; Cooper Menvier; Cooper Power Systems; Cooper Wiring Devices; Cooper Tools.
Principal Operating Units: Electrical Products; Tools & Hardware.
Principal Competitors: ABB Ltd.; The Black & Decker Corp.; General Electric Company; Danaher Corporation.
- Key Dates:
- 1833: Brothers Charles and Elias Cooper build a foundry in Mount Vernon, Ohio.
- 1852: Cooper ships its first steam-powered compressors for blast furnaces by railway.
- 1869: The firm becomes the first Western company to produce the Corliss engine.
- 1908: Coopers begins a gradual shift from Corliss to natural gas internal-combustion engines.
- 1929: The company merges with the Bessemer Gas Engine Company, forming the Cooper-Bessemer Corp.
- 1944: The firm lists on the New York Stock Exchange.
- 1945: Cooper-Bessemer opens its first international sales branch in Caracas, Venezuela.
- 1951: Sales reach a record $52 million.
- 1960: The company introduces the world's first industrial jet-powered gas turbine.
- 1965: The firm changes its name to Cooper Industries.
- 1970: Cooper branches out into aircraft services with the acquisition of Dallas Airmotive.
- 1976: The White Superior Engine division of the White Motor Company is purchased.
- 1979: Cooper acquires the Gardner-Denver Company; sales reach $1 billion.
- 1981: The firm continues expansion efforts and purchases Crouse-Hinds Company, an electrical products manufacturer, and Belden Corporation, a wire and cable manufacturer.
- 1985: Cooper merges with McGraw-Edison Co. in a deal that nearly doubles its size and makes it one of the world's largest lighting manufacturers.
- 1989: The company acquires Champion Spark Plug Co. and Cameron Iron Works.
- 1992: Cooper purchases Ferramentas Belzer do Brasil, a Brazilian-based handtool maker.
- 1995: H. John Riley Jr. is named CEO; the firm spins off its petroleum and industrial equipment business.
- 1997: Cooper completes eight acquisitions throughout the year.
- 1998: The firm sells its automotive business to Federal-Mogul Corp. for $1.9 billion.
- 1999: The company--after years of strategic restructuring--operates with two key business segments: Electrical Products and Tools & Hardware.
- 2000: Cooper acquires Eagle Electric Manufacturing and B-Line Systems.
- 2001: The company rejects an unsolicited acquisition bid by rival Danaher Corp.
- Crane Co. Business Information, Profile, and History
- Clark Equipment Company Business Information, Profile, and History
- Other Free Encyclopedias
This web site and associated pages are not associated with, endorsed by, or sponsored by Cooper Industries, Inc. and has no official or unofficial affiliation with Cooper Industries, Inc..