Jeld-Wen, Inc.

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Jeld-Wen, Inc.

401 Harbor Isles Road
Klamath Falls, Oregon 97601
U.S.A.
Telephone: (541) 882-3451
Fax: (541) 885-7454
Web site: http://www.jeld-wen.com

Private Company
Incorporated: 1960
Employees: 20,000
Sales: $2 billion (2001 est.)
NAIC: 321911 Millwork (Manufacturers); 332321 Metal Window and Door Manufacturing; 321918 Other Millwork (Including Flooring); 321999 All Other Miscellaneous Wood Product Manufacturing

Founded in 1960 with 15 employees, Jeld-Wen, Inc. is a privately held, vertically integrated manufacturer of windows, doors, and millwork products for sale to wholesale distributors, home centers, and the manufactured housing industries. Headquartered in Klamath Falls, Oregon, Jeld-Wen employs more than 20,000 people worldwide and operates more than 150 facilities in Africa, Asia, Australia, North America, Europe, and South America. Jeld-Wen cuts lumber from its own timberlands, which it ships to its cut-stock plants, which prepare the wood for the company’s manufacturing plants and distribution business. Its products include interior and exterior doors, garage doors, door frames, moldings, windows, and patio doors. Jeld-Wen also has interests in specialty wood products, real estate, and marketing communications.

1960s and 1970s: Gaining Respect As a Well-Managed, Family-Owned Company

Jeld-Wen was founded in 1960, its name formed from the first initials of cofounder and current CEO Dick Wendt and his siblings and a shortened version of their surname. Wendt, an Iowa native, had been a manager at Caradco, a window manufacturer in Illinois, when its East Coast parent company sold it. The Wendts and partner Larry Wetter, Jeld-Wen’s original vicechairman, purchased a small millwork plant in Klamath Falls, Oregon, once a bustling timber town five hours’ drive from both Portland and San Francisco.

Having rescued their plant from closure, the Wendts initially milled and sold “cut stock,” the wood lengths that manufacturers craft into windows and doors. Jeld-Wen also began making windows and then pressed-wood six-panel doors—an industry innovation—and quickly gained respect as a well-managed outfit. The company became known for being closely held; there was no sign on its front door, and many of Jeld-Wen’s directors and managers were close friends and family members. Dick Wendt, the company’s chief executive, earned a reputation for his thriftiness and his preference for anonymity, characteristics Forbes considered typical of those in the low-margin millwork business, according to a 2000 article. Mill owners historically could gain the upper hand only by doing a better job of forecasting supply and demand; being close-mouthed about their own business dealings went along with the terrain.

Throughout the 1960s and 1970s, Jeld-Wen focused on expanding its core business, developing a number of related subsidiaries, some in Arizona, Pennsylvania, Mississippi, Iowa, and Washington. Then, beginning in the early 1980s, the company changed strategies and folded many of these subsidiaries into itself. It also purchased a number of other related businesses in the fields of construction and building supplies, among them Frank Paxton Co. of Kansas City, Missouri, a hardwood products distributor.

1980s: Expanding Through Acquisitions

In 1983, Jeld-Wen created Trendwest Development Co. (later renamed Trendwest, Inc.) as a subsidiary, and the company embarked on a buying spree that pushed operations into an array of enterprises: commercial and industrial development, financial services, recreation, and venture capital investments. Trendwest started out building subdivisions, but later branched into everything from title companies to car dealerships. The forces behind the company’s new focus, according to a 1986 Oregon Business article, were Robert Kent, Trendwest’s president, and Ron Wendt, son of Dick Wendt and Jeld-Wen’s corporate counsel. Kent described Trendwest’s objective as that of developing jobs and new industries for its home county in Oregon.

The second half of the 1980s was a time of tremendous expansion for Trendwest, much of it in the areas of real estate and entertainment. In 1985, it bought Windmill Inns and Sandpiper Restaurants in Roseburg and Medford, Oregon; in 1986, the Ashland Hills Inn and Klamath Falls Brick & Tile. Trendwest was also one of three partners behind the development of Eagle Crest resort near Redmond, Oregon. By 1986, the subsidiary had developed its home into the Williamson Business Park in Klamath Falls, built on the site of an old ceiling tile manufacturing plant, and the Olene Geothermal Industrial Park, a 400-acre project in one of the Northwest’s most promising geothermal locations. Trendwest also provided cash and management advice to fledgling companies based in Klamath Falls, such as Apple Attractions, which used a special ripening process to emblazon messages on apples; a mushroom farm; and a furniture maker. It invested in developing upscale condominium communities in Medford, Grants Pass, Bend, and Upper Klamath Lake.

As a result of its many operations, Jeld-Wen experienced considerable growth. Its 1986 sales totaled $100 million while its employees numbered about 2,500 people. The company ranked seventh in 1989 among privately held companies in Oregon with revenues between $350 million and $399 million, according to Oregon Business Magazine.By 1991, its sales had grown to more than $400 million. By 1998, Jeld-Wen was Oregon’s largest privately held company and one of the world’s largest window and door manufacturers, with revenues topping $1 billion. Jeld-Wen employed 11,000 people at more than 150 companies in 40 states and several foreign countries. In Oregon, the company employed 2,500 people, 700 of those at its home base in Klamath Falls.

1990s: Unimpeded Growth

Acquisitions continued into the 1990s, with the 1992 purchases of California-based 3D Industries Inc. and Continental Door, Inc., and Bend Millwork Systems Inc. of Oregon. Based in central Oregon, Bend Millwork had 1,400 employees in three businesses: Bend Millwork Co., which made pine door frames, door jambs, and related products; Bend Door Co., which produced fir stiles and rails; and Pozzi Window Co., which made wood windows and patio doors. With the acquisition of Bend Millwork, Jeld-Wen became one of the top ten wood products employers in Oregon; its workforce increased to more than 6,000 workers in Oregon and other states. In 1996, it again added to its portfolio of subsidiaries with the purchase of Norco Windows of Wisconsin from TJ International. In 1997, in an interesting turn of events, Jeld-Wen purchased Caradco, Inc., a subsidiary of Alcoa, the company for which Dick Wendt had once worked before beginning Jeld-Wen. At about the same time, Jeld-Wen also purchased Grossman’s building supply chain, greatly increasing the magnitude of its holdings.

Jeld-Wen had by then made a name for itself as a classic American success story. Even staunch competitors that had lost business to the company praised its frugal habits, its disciplined reinvestment, and its work ethic. It was seen as a rescuer of failing wood products and building supply manufacturers despite the fact that it often purchased companies at a fraction of their value and that its acquisition style often entailed wage cuts and internal reorganization, with workers having to reapply for their old jobs. However, unlike other consolidators that tried to dominate acquisitions by centralizing management, Jeld-Wen by and large left intact the companies it purchased. Jeld-Wen managers might look at as many as 100 possible acquisitions a year, which could contribute to the company’s goal of vertical integration, often settling on companies that were in bankruptcy or heading toward it.

The company and its owners remained hard to know, however. Jeld-Wen routinely refused to participate in routine surveys compiled by the timber industry’s well-known trade journal. According to an article in Forbes in 2000, Chairman Dick Wendt, who owned 39 percent of Jeld-Wen, could walk the streets of Klamath Falls virtually unnoticed and unrecognized. “He’s been kicked out of mills before because security didn’t know who he was,” one member of Jeld-Wen’s public affairs staff was quoted as saying.

Wendt’s low profile afforded him the freedom to quietly pursue his favored conservative political crusades: furthering the welfare-to-work movement and supporting the effort to privatize social security. Wendt held monthly meetings to direct his philanthropic and political crusades. In 1990, he bankrolled an effort to force welfare recipients into the workforce, gaining national attention for the measure that became known as Jobs Plus, a program that placed unemployed people in government-subsidized jobs. Wendt also opened a store, Transitions Wear, that stocked used career clothing for people looking for work, and directed his think tank, the American Institute for Full Employment, to expand its efforts into social security reform. Wendt, who favored the abolishment of social security, initiated an ad campaign that portrayed the system as on the brink of collapse.

In 1996, Forbes ranked Jeld-Wen 225th among the nation’s top 500 private companies, estimating its annual revenues at $850 million, an increase of almost 13 percent from 1995. A year later, that ranking had moved up to 119th with the company’s estimated revenues at $1.39 billion. Much of this money came from the success of Jeld-Wen’s real estate ventures. Throughout the 1980s, Jeld-Wen and its subsidiaries had built or bought 19 West Coast resorts, ranging from British Columbia to Hawaii. By the early 1990s, Worldmark, the company’s timeshare program, had 40,000 members, mostly baby boomers, who purchased points to split vacation time among any of the resorts.

Company Perspectives:

We believe action speaks louder than words and when our work speaks for itself, we don’t interrupt.

During the second half of the 1990s, Jeld-Wen turned its attention to building resorts in Oregon, Washington, and Idaho. An upscale resort compound on a century-old cattle ranch bordering Upper Klamath Lake, the Running Y was slated to become the region’s second largest city, with 900 homes, 350 condominiums, a 250-room hotel, and a convention center, and Jeld-Wen had plans for a second resort in central Washington. It also intended to revive struggling Silver Mountain ski resort in Idaho, its proving ground for the planned Pelican Butte Winter Sports Site in a national forest near Klamath Falls. In 1997, Trendwest Resorts began trading on the NASDAQ under the symbol TWRI, with Dick Wendt retaining an 80 percent stake in the subsidiary.

The Environmental Protection Agency (EPA) dealt the Pelican Butte plans a serious setback in 1999 when it declared that the environmental impact of the proposed ski resort had not been studied fully. The U.S. Fish and Wildlife Service further stymied plans when it announced that the resort would have a detrimental effect on two species of fish, pushing them possibly to the brink of extinction. President Clinton, finally, delivered the project its death blow when, in his final days in office in 2001, he put through new protections for roadless areas.

Jeld-Wen management looked forward to the Bush administration’s assumption of power as a time of unimpeded real estate development. Regardless, with estimated revenues of $2 billion in 2001 and a new majority interest in Creative Media Development, Portland’s largest multimedia, film, and marketing house, Jeld-Wen would clearly keep on growing.

Principal Subsidiaries

Eagle Crest Partners Ltd.; Jeld-Wen Australia Pty Ltd.; Jeld-Wen Canada; Trendwest Resorts, Inc. (80%); International Wood Products; Wenco; Caradco Corp.; Challenge Door Co.; Paxton Beautiful Woods; Advanced Wood Resources; Amerititle; Bend Millwork Co.

Principal Competitors

Andersen Worldwide; Nortek, Inc.; Pella Corporation.

Key Dates:

1960: The Wendt family founds Jeld-Wen with the purchase of a small millwork plant in Klamath Falls, Oregon.

1983:: Jeld-Wen creates Trendwest as a subsidiary.
1989:: Jeld-Wen acquires Frank Paxton Co.
1992:: The company purchases California-based 3D Industries Inc. and Continental Door, Inc., and Bend Mill-work Systems Inc. of Oregon.
1996:: Jeld-Wen purchases Norco Windows of Wisconsin from TJ International.
1997:: Jeld-Wen purchases Caradco, Inc. and Grossman’s building supply chain; Trendwest Resorts goes public on the NASDAQ, with the Wendt family retaining an 80 percent stake.
1999:: Jeld-Wen purchases a majority interest in Creative Media Development.