East Penn Manufacturing Co., Inc.

views updated

East Penn Manufacturing Co., Inc.

Deka Road
Lyon Stations, Pennsylvania 19536
U.S.A.
Telephone: (610) 682-6361
Fax: (610) 682-4781
Web site: http://www.eastpenn-deka.com

Private Company
Incorporated: 1947
Employees: 5,000
Sales: $716 million (2004 est.)
NAIC: 336399 All Other Motor Vehicle Parts Manufacturing; 335912 Primary Battery Manufacturing

East Penn Manufacturing Co., Inc. is one of the world's leading manufacturers of lead-acid, gel-cell, and absorbed glass mat batteries. The private company, based in Lyon Station, Pennsylvania, is best known for its Deka brand of batteries, more than 4,000 different types in all, for cars, trucks, boats, farm equipment, and industrial uses. East Penn also makes specialty batteries for applications such as cell phone transmitters, military ordnance, backup power for solar and other renewable energy generators, golf carts, floor machines, wheel chairs, and alarm systems. The company also manufactures battery accessories, including battery terminals, battery cables, and booster cables, as well as general wire products such as starter cable, welding cable, trailer wire, speaker wire, and audio cable.

FOUNDING THE COMPANY AFTER WORLD WAR II

East Penn was founded by DeLight E. Breidegam, Jr., and his father, DeLight R. Breidegam, Sr. The elder Breidegam had little formal education, having left school after third grade, but he gained a practical education and became something of a jack of all trades, at one time earning his living as a farmer, salesman, painter, upholsterer, brass polisher, grocer, and battery case painter. His goal was to own his own business and, despite failing with a grocery store, he was determined to give entrepreneurship another try. He saved his money while learning the automobile battery business, employed in a variety of management positions at a pair of Berks County, Pennsylvania battery companies: Bowers Battery Company and Price Battery. The younger Breidegam was born in 1926 and he, too, gained knowledge of the battery business by working at Price Battery. When the United States entered World War II in 1941, he was not old enough to serve and began attending Gettysburg College before entering the Air Force as the war was beginning to wind down. While waiting to be discharged in 1946 he began writing to his father about launching a battery manufacturing business when he got home.

On the day he turned 20 years old, DeLight, Jr., returned home and he and his father quickly set to work implementing their plan. At the cost of $10 a month they rented a former creamery in Bowers, Pennsylvania, and their business idea became a reality. Because the military had commandeered so many of the raw materials they needed to make batteries, in the beginning the Breidegams rebuilt used car batteries, for which there was a great demand. The venture was very much a shoestring affair at this stage. DeLight, Sr., kept his job at Bowers and only stopped in at night to provide some help and prepare his son for the next day's work. DeLight, Jr., rebuilt the old batteries, using the scale at a grocery store across the street to weigh the lead, and took business calls from a nearby hotel. Both he and his father made sales calls to area service stations, selling their rebuilt batteries and buying old ones. The accounts were done on the family kitchen table by his mother and sister.

The Breidegams took on a partner in 1947, Karl Gasche, an MIT engineering graduate who worked at Bowers Battery. He became vice-president of the company, which was incorporated as East Penn Manufacturing Company. Raw materials were now becoming available and with Gasche's expertise—he would ultimately hold 21 battery-related patents—the company began to manufacture new automobile batteries. For a brand name they coined "Deka," which was a fusion of "DeLight" and "Karl," initially pronounced with a long "e." The company's original battery line included five automotive batteries, with the best labeled Deka Precision Built. The company also would sell batteries under the Berco and Hillcrest brands, but they did not stand the test of time as Deka did.

The partners needed to smelt lead for the new batteries, and so they built a small smelter on an 11-acre parcel of land located outside of Lyons, Pennsylvania, which they used at night while devoting their days to rebuilding old batteries and manufacturing new ones. It was also the first building of what would one day become two million square feet of operations on nearly 500 acres. By the start of 1948 the business was established enough that DeLight, Sr., was finally able to quit Bowers Battery and devote himself fully to East Penn. Business was steady and in 1950 the company, now employing six people, was able to move out of the creamery and add a 3,000-square-foot manufacturing facility at the Lyons site.

Once more the United States became involved in a war, although labeled a "police action," this time in Korea. Again raw materials, in particular lead, became difficult to obtain. East Penn managed to hang on, opened branch offices in Philadelphia and Ohio, and soon began to expand throughout the mid-Atlantic region. Key markets included Hartford, Baltimore, and Indianapolis, as well as the Pennsylvania cities of Harrisburg, Altoona, and Norristown. East Penn ventured far afield in 1954, establishing a manufacturing operation in Florida called Federal Battery, which initially received unformed batteries from the Pennsylvania facility and filled them with acid and finished them. Later, plates also were sent down for assembly.

COMPANY PERSPECTIVES

East Penn Manufacturing makes thousands of different sizes and types of lead-acid batteries, battery accessories, and wire & cable products for virtually any application. Since 1946, we have developed an enviable reputation for world-class quality products made in our state-of-the-art manufacturing facilities.

ONGOING EXPANSION: 1960–90

East Penn continued its geographic expansion in the 1960s. A warehouse was opened in North Carolina in 1964, and a year later four warehouses were opened in the Washington, D.C., and Baltimore area. Then, in 1966 East Penn opened a new warehouse in New York. That year also saw the retirement of Karl Gasche, but while the company lost a brilliant engineer it did not lose its innovative spirit. During the 1960s East Penn diversified beyond automobile batteries. One of its major customers, Sears, Roebuck & Co., needed more plastic booster cable clamps, but East Penn was reliant on outside vendors to supply all of its plastic parts. When the supplier for the clamps was unable to meet Sears's demands, East Penn established an injection molding department at Federal Battery and began making its own plastic parts. East Penn also began to add to its product lines, first by offering battery cables and booster cables, and then by developing the industry's first lead terminal, a vast improvement over the brass terminals then on the market. East Penn successfully demonstrated the product to Sears and it was introduced to the market in 1967. Around this time Sears was looking to cut down on the number of suppliers it dealt with and asked East Penn to provide all its wire and cable products. As was the case with plastics, East Penn relied on an outside vendor unable to fulfill the contracts, and as a result East Penn set up its own operation to extrude wire. Sears proved to be a key catalyst for East Penn's growth. Not only did the retailer give East Penn an opportunity to diversify, it provided steady business, allowing the company to manufacture larger quantities and begin marketing its product lines to smaller distributors. Another key development for East Penn came in 1968 when it introduced an industrial battery line, used in applications such as lift trucks, personnel movers, diesel locomotives, and aircraft pushout vehicles. Mining batteries were also part of this segment and had already proven to be a major contributor to East Penn's balance sheet, accounting for about one-quarter of all sales in the mid-1960s.

When it celebrated its 25th anniversary in 1971, East Penn employed 350 people. Growth was so strong, however, that this number doubled within the next five years. The company acquired Philadelphia's Pioneer Auto Parts, which was folded into the warehouse operations in the city. East Penn also continued to add to its Lyons site, including a cable facility in 1974 and a wire operation in 1975. Then, in 1976, East Penn launched the Lynx line of automotive battery accessories and wire specialty products such as battery lifters and battery testers, which the company began to market through the automotive departments of mass retailers. Demand was so strong for these products that both the cable and wire facilities had to be expanded in 1977. In the meantime, East Penn produced more than a million batteries in a single year for the first time in 1976. To make deliveries of Deka batteries and Lynx accessories, East Penn added to its truck fleet and in 1974 built a garage in which to keep the vehicles serviced. Other plant expansion projects in the 1970s included the opening of an oxide facility and a new battery plant and laboratory, and the addition of a continuous automatic plate-making system. In the late 1970s East Penn introduced its "Kare-Free" line of calcium maintenance-free batteries; the line had so much potential that the company began making plans to build a second automotive plant for its production. To handle the wastewater created by battery manufacturing, East Penn also opened a treatment plant in 1977, able to process 100,000 gallons of wastewater each day.

East Penn expanded on a number of fronts in the 1980s. Battery design became the province of CAD (computer aided design), making the drafting tables obsolete. Engineers also turned their attention to new battery technology in the 1980s, such as absorbed-mat and gelled-electrolyte, nonspillable batteries, ideal for applications such as telecommunications. To keep pace with the demand for these new batteries and old product lines, East Penn continually expanded its Lyons site. In the early 1980s a new industrial batteries building was opened, a new maintenance building was opened to provide support services to all East Penn units, and later in the decade a new 135,000-square-foot distribution center and adjacent technical center were opened. New corporate offices were opened in 1985. Three years later, with the help of a state loan, East Penn opened a new automotive plant more than 100,000 square feet in size. It soon would be expanded to accommodate the production of the new gel cell batteries.

Manufacturing done by Federal Battery was brought to Pennsylvania in the early 1980s and the Florida location became a devoted warehouse. In addition, East Penn opened warehouses in Rhode Island and Virginia, and in 1984 acquired Batteries Unlimited, located in the Philadelphia suburbs, which became the new Pioneer Auto Parts warehouse. Other acquisitions in the 1980s included the 1986 purchase of Taylor Battery Company, based in Kentucky with a dozen warehouses in the Ohio River Valley, and the 1988 purchase of another Kentucky company, Holderfield Battery Co., which added four more warehouses. East Penn also turned its attention to the north and in 1988 began distributing its products in Canada, quickly carving out a significant share of the market.

KEY DATES

1946:: The company is founded by DeLight Breidegam, Sr., and DeLight Breidegam, Jr.
1947:: Engineer Karl Gasche joins the company.
1954:: Federal Battery is opened in Florida.
1966:: Gasche retires.
1976:: Lynx line battery accessories and cable are launched.
1988:: Canadian distribution begins.
1992:: DeLight, Sr., dies.
1994:: Dan Langdon is named president.
2005:: The automotive battery division of Douglas Battery Manufacturing is acquired.

NEW MARKETS: 1990 AND BEYOND

By the start of the 1990s East Penn was doing about $200 million in annual sales and each day its 2,000 employees produced about 20,000 car batteries and 1,400 industrial cells. By 1992 the company was producing five million batteries a year. East Penn continued to stay in the forefront of battery technology. In 1990 it introduced the Deka Dominator, a highly popular gel battery used in wheelchairs, golf carts, and marine and other applications. Two years later, the company introduced solar batteries, which became the foundation for the stationary battery division. These new batteries, providing emergency standby power, were suited to wind generation units, water pumping systems, and remote monitoring systems. A year later East Penn launched a line of stationary batteries for standby power applications such as telecommunications and UPS. Later in the 1990s stationary batteries were developed for the cable TV market. In 1995 East Penn opened a new 350,000-square-foot specialty battery plant to produce stationary and other batteries.

East Penn completed a pair of acquisitions in the 1990s. It bought independent battery specialist Electro Battery Company, a Midwest operation with four warehouses. In 1994 Power Battery Sales Ltd., an Ontario, Canada company, was acquired, adding nine Canadian warehouse operations.

East Penn saw some changes at the top ranks of management in the 1990s. DeLight, Sr., died in 1992, and in 1994 DeLight, Jr., turned over the presidency to Dan Langdon, who had joined the company in 1986 as controller and later became chief financial officer. De-Light, Jr., stayed on as chairman and remained active in East Penn's affairs. The entire company was challenged by a freak occurrence in January 1996 when a record storm dumped more than three feet of snow on the area and high winds caused drifting. The roof of the company's distribution center collapsed under the excessive weight, severing gas and electric lines, which led to a fire that required several days to extinguish, due in large part to the snow that prevented firefighters from making their way to combat the blaze. The company quickly rented an area warehouse and managed to cobble together orders, helped to some degree by competitors supplying product. In less than two months East Penn was able to resume normal operations.

As the twenty-first century dawned, East Penn continued to add new batteries, especially in the telecommunications field. When that sector struggled, East Penn was forced in early 2002 to lay off more than 100 workers until demand strengthened. The company was known for retaining employees; its workforce was composed of many people with tenures of 20 and 30 years and longer. East Penn was regularly recognized as one of the best places to work in Pennsylvania, and in 2005 Fortune magazine ranked it number 79 on its list of "100 Best Companies to Work For."

East Penn continued to pursue growth in the 2000s. In 2003 it forged a joint venture with Austrian company Banner GmbH, helping the partners to improve customer service in the other's home markets. East Penn acquired the automotive-battery division of Douglas Battery Manufacturing Co. in 2005, adding a North Carolina plant. With solid relationships with its customers and a committed workforce, there was every reason to believe that East Penn would continue to thrive for many years to come.