Douglas & Lomason Company

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Douglas & Lomason Company

24600 Hallwood Court
Farmington Hills, Michigan, 48335-1671
U.S.A.
(810) 478-7800
Fax: (810) 478-5189

Public Company
Incorporated: 1902
Employees: 5,900
Sales: $561.18 million (1995)
Stock Exchanges: NASDAQ
SICs: 3465 Automotive Stampings; 3535 Conveyors and Conveying Equipment; 2531 Public Building and Related Furniture; 3713 Truck and Bus Bodies

The Douglas and Lomason Company is a leading worldwide supplier of automotive seating systems. Founded in 1902 as a manufacturer of decorative trim for carriages and sleighs, Douglas and Lomason is one of the oldest continuous suppliers of parts to the moving vehicle industry. Through the company’s Bestop subsidiary and Chartland division, Douglas and Lomason also manufactures soft tops and accessories for sport utility vehicles as well as a variety of material handling equipment for industrial customers.

Company Origins

Douglas and Lomason was founded in Detroit in 1902 as a manufacturer of carriage accessories by Alexander G. Douglas, Harry A. Lomason, and Albert J. Cloutier. Douglas and Lomason were to contribute their knowledge of the carriage hardware trade to the enterprise, while Cloutier, a tailor by profession, was to provide the capital. Douglas was named the company’s first president, and Lomason became company secretary and treasurer. The company’s first products were carriage and sleigh rails, handles, and name plates but by 1909 more luxurious carriage accessories such as footmen’s loops and flower vases were added to the company’s line.

In 1905 came the company’s first recognition that the horseless carriage might be the vehicle of the future and Brass Automobile Rails were introduced to the list of Douglas and Lomason products. Set up in a new factory on Brooklyn Avenue in Detroit that was to remain the company headquarters into the 1970s, Douglas and Lomason became one of the leading manufacturers of plated trim for carriages and automobiles.

World War I brought a brief hiatus to the company’s rapid expansion into the automobile industry as wartime production of machine gun components replaced the more frivolous metal trim in the Brooklyn Avenue factory, but the postwar boom saw a growing demand for Douglas and Lomason products to serve the new American obsession, the automobile.

By the 1920s elaborate horse-drawn carriages and sleighs had become relics of a bygone era, and Douglas and Lomason had fully entered the automobile supply industry. The firm produced metal automobile components of all types including running boards, windshields (then optional), hinges, and locks. However, decorative moldings and trim were to become their stock in trade. The Brooklyn Avenue factory, which had by this time been expanded several times, was now refitted to accommodate new metallurgical techniques and materials. Traditional forging and casting was quickly being replaced by steel stamping and rolling, and Douglas and Lomason not only adopted these new technologies but actually manufactured much of the necessary machinery. By the mid-1920s the American automobile industry was producing about four million cars a year, with Douglas and Lomason supplying parts to all of the major manufacturers. By 1927 annual sales for the company had climbed to $728,000.

Depression and Recovery

Like most American businesses Douglas and Lomason suffered major setbacks during the Great Depression of the 1930s. With sales dropping to only $300,000 in 1932, the company was forced to lay-off scores of workers and to cut back production to only two days a week. The company’s first president, Alexander Douglas, retired amidst this decline, and company founder and treasurer Harry A. Lomason took over the presidency of the troubled firm in 1932.

Harry was the first in a series of Lomason family members who were to manage the company throughout the rest of the century. Although the Douglas name would be retained by the company for the sake of continuity, Douglas sold out all his interest in the auto parts firm at the time of his retirement.

Douglas and Lomason founded its recovery from the Depression in large part on the development of stainless steel trim for the new streamlined automobile designs. Stainless steel provided protection from corrosion for the speed lines and accents that were included in the new designs. The new material also allowed for a corrosion-free seal for the new permanent windshields that were a major part of the streamlined automobile. In fact, Douglas and Lomason were pioneers in the use of stainless for these applications, and costly experimentation with the new material paid off for the company in 1935 when sales once again soared to almost $1.4 million and continued to climb through the decade, topping $4 million by 1940.

World War II and the Postwar Boom

World War II saw Douglas and Lomason once again dropping all civilian production in order to supply defense materials ranging from bombs to military vehicle parts for the U.S. army and navy. When peace returned, the soaring postwar demand for cars created a boom for the entire auto parts industry. Douglas and Lomason took advantage of growing demand to enter a new automotive parts market that would prove to dominate the company’s future, automotive seating. The double product line of ornamentation and seating allowed the company more flexibility to respond to ever-changing trends in automobile design. The postwar boom caused sales to multiply five times over the five-year period from 1945 to 1950, rising from $2.3 million to $15.8 million in 1950.

The 1950s were a time of change and expansion for Douglas and Lomason. When president Harry A. Lomason died in 1950, his son William K. Lomason succeeded him as president and undertook a process of regional expansion and product diversification. As Douglas and Lomason increased production, the Detroit plant (which had undergone numerous expansions and additions since its construction in 1912) became unable to accommodate further growth. In addition, labor unrest had begun to plague Detroit area automobile manufacturers as workers demanded a larger share in the surging profits of the industry. In fact, Douglas and Lomason was the subject of a protracted and bitter strike in the mid-1950s that left the company with a 51 percent decline in sales.

By opening manufacturing plants in other states, the company hoped not only to expand its capacity but also to reduce labor strife and costs. In 1955 Douglas and Lomason opened two new plants in the Georgia towns of Carrollton and Newnan to manufacture stretch bent moldings for use as automotive trim. These openings were followed in 1958 by the founding of a new subsidiary in Carrollton called the Douglas and Lomason Plating Corp. This subsidiary would manufacture anodized aluminum, a new and lightweight alternative to steel that was to be used by Douglas and Lomason to produce automotive moldings and grilles.

Douglas and Lomason’s geographic expansion accelerated in the 1960s and, with sales reaching $30 million, the company opened new plants in Arkansas, Mississippi, Nebraska, Iowa, and Georgia. Lightweight and attractive, anodized aluminum trim became an important new product in the automotive industry, and Douglas and Lomason began to expand their aluminum trim manufacturing facilities in Georgia and Mississippi. New plants in Arkansas and Nebraska concentrated on the manufacture of automotive seat frames, the company’s growing secondary product line.

Most significantly, the 1960s saw Douglas and Lomason entering nonautomotive product lines through the acquisition of other companies. In 1962 Douglas and Lomason purchased Superior Atlanta Manufacturing Inc. along with its subsidiary Cen-Tennial Cotton Gin Co. (later renamed Centennial Industries). Although the production of cotton gin machinery was discontinued by the mid-1960s, under Douglas and Lomason Centennial now also began manufacturing special truck bodies for the beverage industry. The specialized truck body industry, expanded through a series of acquisitions through the 1960s and 1970s, was to remain a significant source of revenues for the company into the 1990s.

Also acquired during this period was the Chantland Company of Humboldt, Iowa, a maker of conveyors and pulleys for the material handling industry which was likewise to become an important part of Douglas and Lomason’s product mix. A much shorter-lived excursion outside of the auto parts industry came in 1968 with the establishment by Douglas and Lomason of Shamrock Air Lines, a custom contract air cargo carrier run out of Willow Run Airport in Ypsilanti, Michigan. Although this new venture would enjoy initial success with offices in Atlanta, Georgia, and San Juan, Puerto Rico, by 1976 the spiralling cost of fuel forced the closure of the small airline.

Company Perspectives

We are committed to the development, manufacturing and marketing of seat systems and components with exceptional value for the worldwide automotive industry.… The Company’s Bestop subsidiary will provide the highest level of customer and associate satisfaction while maximizing long term company value as a supplier of automotive soft tops and accessory products.… Our Chantland division’s mission is to be a global leader in the development of new products for the material handling industry and to manufacture quality products at competitive prices.

Consolidation and Reorganization in the 70s and 80s

The company’s prior rate of expansion was slowed in the 1970s, a decade of consolidation and reorganization for Douglas and Lomason. The Douglas and Lomason Plating Corporation was dissolved and the aluminum anodizing processing works were moved to the Carrollton plant. The production of tools, dies, and jigs for Douglas and Lomason manufacturing machinery was now centralized at the Carrollton location with the establishment of a new company division called the Trojan Tool Division. All material handling equipment manufacture which had previously been spread out at a number of plants was also centralized at the Chantland division in Humboldt, Iowa. Most significantly, in 1976 the Detroit plant that had served as the Douglas and Lomason headquarters for 65 years was closed and new corporate offices were established in suburban Farmington Hills, Michigan. In the same year, W.K. Lomason who had been the company president since 1950, retired from the position and was succeeded by his son Harry A. Lomason II.

The 1980s were a difficult time for the U.S. domestic auto industry as foreign imports began to make serious inroads into the American auto market. Suppliers like Douglas and Lomason were forced to reorganize production and engineering processes in order to succeed in this new and highly competitive environment. The big automakers were demanding more flexibility from their parts suppliers to avoid the backlogs of unpopular cars that had caused huge losses in the late 1970s and early 1980s.

The “Just-in-Time” (JIT) system of delivery that had parts manufactured only as increased demand warranted became the standard industry practice by the mid 1980s. In 1986 Douglas and Lomason opened a new state of the art facility in Richmond, Michigan, to manufacture complete seat assemblies on a JIT basis and began plans for a new facility at Havre de Grace, Maryland which would produce JIT delivery seating for Chrysler beginning in 1988.

Meanwhile, the anodized aluminum trim that had been the mainstay of the company’s decorative trim operations began to fall out of favor with consumers. In addition, aluminum supplies were becoming problematic as it became more and more difficult to obtain the high quality raw material required by the fabrication process and yet keep prices at a level that would satisfy the big automakers. Profit margins for the company’s aluminum trim operations started to dwindle at an alarming rate and Douglas and Lomason began to look towards plastic as the new material for exterior decorative trim.

In 1988, the company opened a facility in La Grange, Georgia, to produce plastic bi-laminate and extruded moldings. Although initially successful, even these efforts would not achieve the kinds of sales that had driven aluminum trim production in the 1960s and 1970s and, by 1996, with the auto industry moving increasingly towards large molded plastic for exterior decorative trim, Douglas and Lomason would discontinue the decorative trim production that had been the company’s stock in trade since 1902.

Trouble and Recovery in the 1980s and 1990s

By the late 1980s the re-tooling and reorganization required by the new demands of the domestic auto industry had begun to take their toll on Douglas and Lomason’s bottom line. In 1988 and 1989, in spite of sales of about $400 million, the company posted a $3 million net loss for two years running. While most of this loss could be attributed to higher than expected start-up costs at the Havre de Grace and La Grange plants, the company also experienced high engineering costs in the design of the new products demanded by the highly competitive parts industry. Increasingly, automakers were relying on parts suppliers to provide the innovative engineering required by new car designs instead of merely placing orders for parts designed by the automakers themselves. This additional burden forced Douglas and Lomason to reorganize and update its entire engineering and design facilities at substantial cost to the company’s net earnings.

In spite of these new efforts to revamp its engineering capabilities, in the early 1990s the company lost an important contract for seating for Chrysler midsize cars to larger rival Johnson Controls forcing the closure of the Havre de Grace plant. Although the company recovered its profitable position from 1990 to 1992, plant closings once again saw Douglas and Lomason posting a net loss of $7 million in 1993 in spite of sales of almost $425 million.

In the early 1990s, Douglas and Lomason began to look to foreign partnerships both in order to serve foreign markets as well as to demonstrate the company’s global capabilities to the large American auto firms. In 1995 the company established a joint venture with Shanghai Traffic Machinery Factory in China called the Shanghai Lomason Automotive Seating Systems Company that would produce seat frames for the Volkswagen Santana. Later that year Douglas and Lomason entered into a joint venture, to be called Euro American Seating, with German firm Kieper Recaro, Europe’s premier seating supplier. These two joint ventures along with a previously established partnership with Namba Press Works of Japan would provide the company with an important global presence as it entered the last years of the century.

After a series of poor years, the reorganization and consolidation of company operations began to pay off, and in 1995 Douglas and Lomason reported a net profit of $4 million on sales of $561 million. The acquisition of Bestop Inc., a maker of soft tops and accessories for sport utility vehicles, contributed to this recovery as did growing sales at the company’s Chantland Division, which had continued to manufacture material handling equipment for a variety of industrial applications. Although the worldwide automobile industry was still undergoing tumultuous changes, it appeared from the vantage of the late 1990s that Douglas and Lomason would be in a position to adapt to these changes and enter its second century of auto parts manufacture.