Arvin Industries, Inc.

views updated

Arvin Industries, Inc.

One Noblitt Plaza
Box 3000
Columbus, Indiana 47202-3000
U.S.A.
(812) 379-3000
Fax: (812) 379-3688

Public Company
Incorporated: 1921 as Indianapolis Pump and Tube Company
Employees: 16,002
Sales: $1.89 billion
Stock Exchanges: New York Midwest
SICs: 3714 Motor Vehicle Parts and Accessories; 3479 Metal Coating and Allied Services; 8734 Testing Laboratories; 3355 Aluminum Rolling and Drawing

Arvin Industries, Inc. is an international manufacturing company supplying automotive parts and related products and services in more than 100 countries. Arvin is the world’s leading independent producer of automotive exhaust systems and catalytic converters as well as a major manufacturer of ride control products. The company also produces tire valves, pressure gauges, and related products.

Arvin traces its roots to an Indiana partnership formed in 1919 to produce tire pumps. After a frustrating experience fixing a flat tire, Quintin G. Noblitt, a mechanical engineer and inventor, told a former business colleague, Frank H. Sparks, that he could make a reliable tire pump if Sparks could sell it. Sparks said he could, and the Indianapolis Air Pump Company—the earliest predecessor of Arvin Industries—was born.

Noblitt recruited a third partner, Albert G. Redmond, to oversee the company’s production of tire pumps, and the three partners each agreed to contribute $1,000 in initial capital. The company then rented an empty grocery storm room for $10 month, supplying a make-shift factory with second-hand machinery. By the end of its first year, the partnership showed a profit of more than $10,000.

The company’s eventual name arose from its brief relationship with Richard Hood Arvin, a former arms and ammunition salesman who had invented a heating device for Ford automobiles. In 1920 Arvin, who had applied for patents for his heater but lacked the capital to manufacture it, offered his product to Indianapolis Air Pump. Arvin granted the young company exclusive marketing rights for his heater, and in return, Indianapolis Air Pump agreed to manufacture it. As a result, the Arvin Heater Company was formed in 1920 with Arvin, Noblitt, Sparks, and Redmond becoming sole stockholders.

In 1921 Indianapolis Air Pump leaped into the national arena when Sparks secured a contract to produce tire pumps for Ford Motor Company. That same year the company began experimenting with a tube manufacturing process that led to a company name change in December of 1921, when the partnership was incorporated as the Indianapolis Pump and Tube Company. Noblitt was named president, and Sparks was appointed secretary of the new corporation, which established headquarters in Indianapolis.

In the spring of 1922 Ford Motor Company informed Sparks that it was planning to manufacture its own tire pumps, and soon afterward Redmond sold his interest in Indianapolis Pump and Tube to his two partners. Arvin sold his stake in Arvin Heater Company to Noblitt and Sparks, and the heater company was consolidated into Indianapolis Pump and Tube. That same year the company secured a contract to provide tire pumps for Chevrolet, and that same year Ford, after a short-lived attempt to manufacture its own tire pumps, returned its business to Indianapolis Pump & Tube. With sales expanding, in 1923 the company constructed its first new factory in Greenwood, Indiana, and closed its manufacturing facilities in Indianapolis. As more gas stations began offering free air during the early 1920s, the company’s tire pump business began to suffer. In response, it began diversification efforts and in 1924 introduced a new foot accelerator pedal for automobiles and a cast-iron heater for Ford, Chevrolet, and Dodge vehicles.

Also that year, Indianapolis Pump and Tube purchased the Dan Patch Novelty Company of Connerville, Indiana, producers of a line of wheeled toys. Noblitt quickly developed a new ball bearing wheel for the Dan Patch coaster wagon, while production of most other toy products was discontinued. In 1925 the company separated its heater business from its tube operations and established a plant in Columbus to produce metal heaters, cast-iron manifold heaters, and a new product, automobile jacks. Tire pumps and tubing production was isolated in Greenwood, while coaster wagon production remained at Connerville until the company purchased a building in Seymour, Indiana, and moved its toy manufacturing operations there.

In 1927 the Indianapolis Pump and Tube’s name was changed to Noblitt-Sparks Industries, Inc. By that time Arvin hot-air heaters were being manufactured for every make of car on the market. In 1928 Noblitt-Sparks installed its first nickel-plating units in its Columbus plant and began producing additional automotive parts, including brake levers, hub caps, and bent steel tubing. With annual sales soaring towards $3 million, in the spring of 1928 the company went public and was listed on the Chicago Stock Exchange.

In 1929 Noblitt-Sparks began manufacturing a muffler for Studebaker and Ford. Other new automotive products that year included a rear-vision mirror and the first Arvin hot-water automobile heater. The company’s line of toys was also expanded to include wheelbarrows and scooters. The stock market crash of October 1929 had little initial effect on the company’s sales, which swelled to nearly $5 million by the end of that year. As the company entered the 1930s, hot-air heater sales were falling, while hot-water automobile heaters were rising in popularity. Capitalizing on its work with heaters, in 1930 the company developed a fan-forced electric room heater and moved into the arena of household products.

By 1931 Noblitt-Sparks began to feel the effects of the Great Depression. In a series of retrenchment moves that year, the company discontinued production of toys, closed its Seymour plant, and moved its corporate headquarters from Indianapolis to Columbus, Indiana. Those cost-cutting steps did little to keep sales from plummeting, though, and in 1931 the company suffered its first deficit, losing $100,000. Losses were trimmed slightly in 1932, the last unprofitable year in the company’s history.

In 1933 Noblitt-Sparks entered the car radio field, and two years later the first Arvin home radio was introduced. In 1934 the company purchased facilities in Franklin, Indiana, and the following year began manufacturing automobile parts there. During the mid-1930s the muffler became the company’s number one automotive product, helping to propel profits to more than $1 million for the first time.

Sparks left the company in 1937 to devote his time to a career in education and public administration. He went on to become president of Wabash College, governor of the New York Stock Exchange, and president of the Council for Financial Aid to Education. By the time of the company’s 1937 introduction of its three-way car heater—with heater, foot warmer, and defroster—Noblitt-Sparks Industries was regarded as the largest manufacturer of trade-name car heaters in the field. The company had also expanded its home radio offerings to include 33 models. With product lines expanding, total annual sales topped the $10 million mark for the first time in 1937.

In 1938 recessionary conditions developed, and Noblitt-Sparks reduced its line of radios to nine popular table models. The following year economic conditions improved, and the company added carburetor silencers to its automotive product line. Before the decade closed, Noblitt-Sparks was listed on the New York Stock Exchange. In 1940 Noblitt-Sparks opened a new factory in Columbus, where it began manufacturing metal outdoor furniture and dinette sets. That same year, the company introduced an under-seat automobile heater and a motor-driven defroster unit. In 1940 the company also began supplying Sears, Roebuck & Co. with home radios.

In 1941 Noblitt-Sparks began producing its first private-brand merchandise. Such production was brought to a quick halt after the United States entered World War II late that year, and by 1942 all production efforts were geared toward the war effort. During the war Noblitt-Sparks produced a wide range of military products, including chemical and incendiary bombs, rocket-launching tubes, steel containers, fire extinguishers, anti-tank mine parts, radio communications equipment, and parts for military vehicles. In 1944 the company purchased a former furniture plant in North Vernon, Indiana, and began producing boxes for the bombs being made at its Columbus plant.

In December of 1945, Quintin Noblitt became the company’s first chairman, and Glenn W. Thompson became president. To facilitate its re-entry into civilian markets, in 1946 Noblitt-Sparks began a three-year factory expansion program. At the same time the company also began focusing on the development of consumer products and electrical appliances. Some of these new products included electric irons and metal ironing tables, record changers, waffle cookers, laundry tubs, AM/FM radios, and electric room heaters. Late in 1949 Noblitt-Sparks began production of its first television set.

In 1950 the company changed its name to Arvin Industries, Inc., in order to take advantage of the “Arvin” name, which by that time was on numerous company products. In 1954 Q. G. Noblitt died, having watched his company grow from a one-room tire pump business into national corporation with better than $50 million in annual sales. Thompson succeeded Noblitt as chairman while remaining president. Arvin introduced a color television set in 1954, but a year later the company bowed out of the television business after deciding there was too little profit margin in the field. In 1955 Arvin established a research and engineering department to foster the development of new products. One year later the company began marketing its patented Arvinyl, a vinyl-to-metal sheet laminate; by 1960 the company was the largest laminator in the country.

During the 1950s Arvin introduced dozens of new non-automotive products, including numerous electrical appliances, a broad range of indoor and outdoor furniture, and a line of home fans and heater products. In 1959 Arvin entered the primary home electric heat field, introducing a line of baseboard, cable, and panel heating units. In a major step to boost automotive sales, in 1959 Arvin also entered the exhaust system replacement market.

In 1960 Eldo H. Stonecipher became president, while Thompson remained chairman. Under the Stonecipher-Thompson reign Arvin began an acquisitions and plant expansion program and in 1961 purchased Lok-Products Company, a leading manufacturer of suspended ceiling systems. That same year the company established its first plant outside of Indiana—an automotive parts factory in Tennessee. During the remainder of the decade Arvin Industries established automotive manufacturing facilities in Tennessee, Alabama, and Kentucky, and electronics plants in Hong Kong and Taipei, Taiwan.

In 1962 Arvin entered the advance electronics field by acquiring Westgate Laboratory, Inc. (renamed Arvin Systems, Inc.), an original design and development corporation specializing in electronics, optics, and communications. In 1963, with built-in heaters becoming standard equipment for most cars, the company ceased production of its Arvin heater. Arvin Industries moved into the international arena in 1963, when it acquired half interests in Waller K.K., a Tokyo corporation producing radio components, and Arvin-Standard Ltd., an auto exhaust system manufacturing plant in Canada.

Laminating operations were expanded in 1966, when Arvin Industries acquired Roll Coater, Inc.; the company gave Arvin the capability of coating materials in coil as well as sheet form. The following year Arvin acquired Federal Tool Engineering Company (renamed Arvin Automation, Inc.), a producer of automated welding equipment and machinery, semiconductor components, and reed switches. Thompson retired at the end of the decade and was succeeded as chairman by Stonecipher, while Eugene I. Anderson became president.

During the first half of the 1970s Arvin continued its drive to internationalize and expand its manufacturing and distribution facilities. In 1970 a national distribution center for automotive replacement parts was constructed in Indianapolis, and between 1972 and 1974 Arvin completed several other new facilities, including automotive parts plants in Arkansas and Missouri, a coil-coating facility in Indiana, and an electric housewares plant in Mississippi. In 1973 the company also sold its Hong Kong production facility and consolidated radio manufacturing operations in Taiwan.

Acquisitions during the early-1970s included the 1971 purchase of Data Magnetics Corporation, a prominent producer of magnetic recording heads and video recording devices. In 1972 Arvin bought General Tubes Limited of Toronto (later renamed Arvin North American Automotive of Canada), a manufacturer of automotive tubing and aftermarket exhaust pipes. During the next few years General Tubes’ operations were converted to produce original exhaust pipe equipment. In 1973 Arvin expanded into South America with the formation of Arvin do Brazil S.A., a joint venture designed to produce exhaust system parts for the South American market. In 1973 Arvin also acquired Diamond Electronics, a leading producer of electronic process control monitoring equipment.

In 1974 Stonecipher resigned as chairman and was succeeded by Anderson, who continued as president. That same year Arvin sold Lok-Products and acquired Echo Science Corporation, a producer of magnetic video tape systems and digital magnetic tape recorders. After 15 years of engineering work in the area of automobile emission controls, Arvin produced its first catalytic converter in 1974.

During the latter half of the 1970s Arvin’s activities were increasingly focused on research and product development. In 1976 Arvin debuted ARVEX, a new process for fabricating fiberglass-reinforced thermoplastic parts on traditional metalworking presses. Two years later Arvin completed an exhaust products testing and development center in Walesboro, Indiana. The company also acquired Calspan Corporation of Buffalo, New York, a well-known research and development company specializing in avionics, acoustics, electronics, thermal research, ground transportation systems, and energy systems. In 1980 Arvin’s Calspan won a three-year, $95.6 million U.S. Air Force contract to manage wind tunnel facilities in Tennessee.

In 1981 James K. Baker became president and chief executive officer of Arvin Industries. That same year Echo Science Corporation was sold. In 1982 Arvin began production of stainless steel tubular manifolds and acquired the nation’s largest manufacturer of evaporative coolers, McGraw Edison Company’s International Metals Products Division (renamed Arvin Air). Arvin’s sales in 1982 exceeded the half-billion dollar mark for the first time.

Between 1983 and 1984 Arvin’s Calspan Corporation was awarded a number of government contracts, including a management contract for the wind tunnel facilities at Ames Research Center in California. In addition, a joint venture between Calspan and Dynalectron Corporation during this period was awarded a service contract for the U.S. Army’s White Sands Missile Range in New Mexico.

During the mid-1980s Baker began guiding the company into global markets through joint ventures and acquisitions designed to enhance Arvin’s international sales of automotive products. In 1984 Arvin and Bosal International of Germany formed the joint venture Bosal Industries, GmbH, to supply catalytic converters and tubular products to the European market. That same year Arvin’s joint venture in Brazil was restructured with a new parts supplier, COFAP, and Arvin also purchased Ap de Mexico, S.A. de C.V., a manufacturer of exhaust systems for the Mexican auto industry.

In 1985 Arvin began consolidating operations and moved all of its automotive aftermarket parts production and distribution activities to a new Kentucky facility. Consumer housewares activities were consolidated that year into ArvinAir’s operations. In 1986 Anderson retired as chairman and was succeeded by Baker, who quickly stepped up Arvin’s international strategy with an increased focus on acquisitions. In 1986 Arvin purchased Maremont Corporation, a leading producer of original and replacement shock absorbers and exhaust systems with nearly $500 million in annual sales. That same year Arvin acquired the Canadian-based Schrader Automotive, the world’s largest producer of tire valves. Looking to capitalize on the growing number of Japanese auto-makers with operations in the United States, Arvin also formed a joint venture with Sango Co., Ltd., to produce exhaust systems for foreign-turned-domestic North American automobile manufacturers.

In 1987 Loren K. Evans was elected president of Arvin. That same year the company acquired Systems Research Laboratories, Inc., a leading applied research and development services company specializing in aero-systems. Sales in 1987 jumped to $1.3 billion as profits climbed to $47.6 million. In March of 1988 Arvin announced plans to restructure its American automotive business and consolidate exhaust system operations into Maremont, which had became a subsidiary.

In 1988 Maremont purchased Amortext, a French manufacturer of shock absorbers, and Arvin acquired Cheswick, Ltd., and Bainbridge Silencers, Ltd., two leading European producers of original and replacement exhaust systems with facilities in the United Kingdom, the Netherlands, and Spain. Arvin’s tire valve product line was also expanded in 1988 when Schrader Automotive and Neotech Industries, Inc. (renamed Sentronics Ltd.) agreed to jointly develop and distribute electronic pressure measurement devices.

Arvin continued to implement the game plan announced in 1987, a key element of which was to establish automotive operations in all major assembly capitals of the world. Furthering that end, in 1989 Arvin acquired a 75 percent stake in AP Amortiguadores, S.A. (APA), a leading European manufacturer of shock absorbers and MacPherson struts, located in Spain. Arvin also continued to restructure its U.S. operations, closing two exhaust plants in 1989 and selling Arvin Electronics. Efforts to make labor costs competitive helped pay dividends for Arvin and by 1989 union employees at all of Arvin’s U.S. original equipment exhaust plants had agreed to wage reductions. In 1989 the company’s sales surpassed the $1.5 billion mark for the first time, having grown nearly four-fold during the course of the decade.

In 1990 Baker was named chairman of the U.S. Chamber of Commerce for 1990-91. Arvin itself entered the 1990s continuing its push to globalize. In 1990 Arvin-Tubemakers Pty. Ltd. was formed to expand production of original equipment exhaust systems in Australia. To strengthen its original equipment auto parts business in Europe, Arvin purchased the French engine-manifold and exhaust-tube production business of Tubauto S.A. (renamed Cheswick France S.A.). A ride control research and development center in Pamplona, Spain, was also completed in 1990.

In 1991 ArvinAir was sold, and after nearly a decade of revamping and expanding its business, Arvin provided only auto-related products. Evans was named vice-chairman that year, and Bryon O. Pond became president. In 1991 Arvin began assembly of catalytic converters in Born, Holland, and completed a new research and development center for exhaust systems in Warton, England. A two-year strike at Arvin’s North Vernon site was resolved in 1991, with employees agreeing to accept wage cuts.

In 1992 Arvin and Schmitz & Brill, a German automotive exhaust systems parts manufacturer, formed a joint venture to serve European automakers. That same year Arvin’s Calspan and Space Industries International, Inc., a Houston-based commercial space research company, reached an agreement, which was completed in July of 1993, to merge their operations into a new company with Arvin holding approximately 70 percent of the new venture.

As Arvin entered 1993, its exhaust systems and ride controls systems business held strong positions in the North American and European markets. Arvin planned to continue establishing operations in major assembly capitals of the world and, as a leading independent producer of catalytic converters, to capitalize on the need for converters to meet new European Community air quality standards and emission regulations. The company also continued research and development activities on electronic muffler systems, electronic ride control products, and on-dash tire pressure gauges.

Principal Subsidiaries

Maremont Corporation; Maremont Exhaust Products, Inc.; Gabriel Ride Control Products, Inc.; AVM, Inc.; Gabriel Europe, Inc.; A.P. Mexico; Roll Coater, Inc.; Schrader Automotive, Inc.; Arvin Finance Corporation; Arvin Automotive of Canada; Arvin Industries Deutschland GmbH; Schmitz & Brill GmbH; Arvin International Holdings Inc.; Arvin International U.K. PLC; Arvin Cheswick International B.V. (Netherlands); A.P.A., S.A. (Spain); Cheswick Spain; Arvin France.