Steelcase Inc.

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Steelcase Inc.

P.O. Box 1967
Grand Rapids, Michigan 49501
U.S.A.
(616) 247-2710
Fax: (616) 246-9015

Private Company
Incorporated: 1912 as Metal Office Furniture Company
Employees: 20,000
Sales: $1.9 billion
SICs: 2521 Wood Office Furniture; 2522 Office Furniture Except Wood

Known since 1984 as “The Office Environment Company,” Steelcase Inc. is the world’s leading designer and manufacturer of office furniture. The company, launched in 1912 with a single product and fifteen employees, supplies thousands of products worldwide produced by 19,000 employees working in 20.6 million square feet of manufacturing, shipping, and administrative facilities in 11 countries. A network of 900 independent dealers in 68 countries sells Steelcase metal and wood office furniture, systems furniture, seating, computer support furniture, desks, tables, credenzas, filing cabinets, and office lighting. Steelcase boasts an on-time delivery rate of 98 percent. The company also offers computer-assisted programs for those who plan, provide, and manage offices; officer-worker public opinion surveys; and leasing programs.

According to A Field Guide to the Leading 400 Companies, “This company, more than any other, is responsible for the look of the modern office. Since 1968, they’ve been the industry leader, earning a reputation as the General Motors of the office furniture industry.” Steelcase’s sales figures confirm its leadership. At $2.3 billion in worldwide sales, of which some $1.9 billion is in domestic sales, the company has more than twice the sales volume of its nearest competitor. That translates into 21 percent of total office furniture sales in North America, eight percent in Europe, and four percent in Japan.

Steelcase Inc. was incorporated as the Metal Office Furniture Company on March 16, 1912, in Grand Rapids, Michigan. Although the new company had a novel idea—fabricating furniture from sheet metal, it received little notice in “The Furniture City,” which already had nearly 60 furniture manufacturers.

Peter M. Wege proposed the Metal Office Furniture Company to a group of investors. Wege had been a designer and executive at the Safe Cabinet Company and the General Fireproofing Company, both in Ohio, and had received several patents for all or portions of sheet-metal structures he had designed. He was aware of the benefits of steel furniture. At the turn of the twentieth century, mergers were leading to larger companies, larger office and administrative staffs, larger buildings, and an increased office furniture market. However, while new brick and steel construction techniques were making building exteriors less flammable and skyscrapers a reality, office interiors, cluttered with wooden furniture and other combustibles, were still being heated and lighted by open flame appliances. An added fire risk was the use of smoking materials; ashes dumped into the popular wicker wastebaskets caused many office fires. A fire in one of the higher structures was an inferno firefighters could not effectively battle.

Wege persuaded the investors, some of whom were with the Macey Furniture Company, that steel office furniture’s strength, durability, and fireproof qualities made sense. The Macey Company agreed to purchase and market all of the shelving, tables, files, and fireproof safes manufactured by the new company. Metal Office Furniture Company’s first officers were A. W. Hompe, president (also president of Macey Company); Peter M. Wege, vice-president and general manager; and Walter D. Idema, secretary-treasurer. Two years later, when the agreement with Macey was severed, Hompe stepped down, Wege became president and general manager, Fred W. Tobey became vice-president, and Idema remained secretary-treasurer. David D. Hunting joined Metal Office in 1914 to establish a marketing network. He became secretary in 1920, and the Wege-Idema-Hunting management team was set for the next three decades.

On August 7, 1912, the first filing cases and safes made by Metal Office were delivered to Macey sales outlets. By the end of the year, Metal Office had $13,000 in sales, and by the end of the first full year of operation, it had $76,000 in sales, an amount equal to the initial capitalization.

In 1914 Metal Office hit on an idea that solved the problem of carelessly flicked cigar and cigarette ashes: The Victor, a fireproof steel wastebasket. Touted for its strength and durability, the wastebasket could also be color coordinated with other furniture. Victor became an official trademark in 1918 and eventually became an expanded line of products. Metal Office had two other unusual products that enjoyed short-term popularity. The Liberty Bond Box was used for storing war bonds, while the Servidor was a double-doored product into which hotel guests put room service orders or clothes to be cared for. Service personnel tended to the guests’ needs from the hall side without disturbing them.

The concern over fire safety led to Metal Office’s first government contract and to its becoming a desk manufacturer. While businesses were slow to replace wooden furniture with the more expensive metal furniture, government architects specified it, citing the fire threat. David Hunting heard that metal furniture was to be used in the renovation of the 50-year-old Boston Customs House. Although Metal Office did not make desks, Hunting conferred with Wege and Idema and they agreed Metal Office should submit a bid. The bid was for 192 desks at $44 each, for a total of $8,485.49.

After the lowest bidder’s product was deemed unacceptable, Metal Office, as the next lowest bidder, was asked to send a sample of a desk for examination. Wege and Chris Sonne designed a desk, and a prototype was built to send to Washington the next week. Unlike the low bidder’s desk, which was held together by loose bolts, theirs had welds and crimped metal and did not come apart during shipping. Metal Office got the order and filled it in 90 days.

In 1921 Metal Office hired media consultant Jim Turner to convince the public that wooden office furniture was a thing of the past. Turner coined the name Steelcase to describe the indestructible quality of the furniture. Steelcase was officially registered as a trademark in August 1921. Because office furnishers never entirely gave up their perception that offices, and especially executive offices, should have wooden furniture, the company pursued ways to make metal furniture more attractive. It implemented spray-painting in 1924 to give furniture a smoother, more even coat and in 1928 developed a wood-graining process. Metal Office manufactured fashionable rolltop desks in oak and mahogany wood-grain on metal.

During the 1930s Metal Office produced some attention-getting furniture, including a futuristic, island-based desk displayed at the World’s Fair in Chicago. In 1937 the company collaborated with world-famous architect Frank Lloyd Wright to produce furniture for the “great workroom” for the offices of S. C. Johnson & Sons in Racine, Wisconsin.

Over the years, Metal Office/Steelcase won several more government contracts. During World War II, the brunt of the forced cutback in the use of steel by metal furniture manufacturers was tempered by the U.S. Navy’s order for “Shipboard Furniture.” The company had to recruit plant personnel to meet increased production and the loss of workers to the military. Many of the new employees were the mothers, wives, and sweethearts of soldiers.

A piece of Steelcase naval furniture was used for the historic signing of the surrender documents ending World War II. A mahogany table had been prepared on September 2, 1945, for the signing by Japanese Foreign Minister Mamoru Shigemitsu and the Supreme Commander of the Allies, General Douglas Mac Arthur, but the table was too small for the documents. The ceremony was completed on a Steelcase rectangular folding table from the crew’s mess, spread with a green tablecloth.

Metal Office utilized what it had learned in building furniture with interchangeable parts for ships when it introduced the first standard sizing of desks based on a 15-inch multiple in 1949. The Multiple 15 concept became an industry standard; it also served as the basis for other modular furniture developed by Steelcase.

In 1954 the Metal Office Furniture Company officially changed its name to Steelcase Inc. Walter Idema thought the name change would eliminate confusion with the products of other metal furniture manufacturers. That same year, Steelcase became the first in the industry to offer office furniture in colors, announcing Sunshine Styling colors inspired by the twilight haze over the Arizona mountains: Desert Sage, Autumn Haze, and Blond Tan. The innovation was made possible by acrylic paints that made it easier for workers to change colors. In 1959 the company introduced Convertibles—auxiliary pieces with rigid steel frames and suspended cabinets and pedestals that permitted working arrangements to be individually designed to suit each worker—and Convertiwalls—steel and glass panels attached at slotted posts, which could be wired for telephone or electrical connections.

In the 1960s Steelcase product engineers developed Chromattecs, a method devised to soften the mirror-like finish of traditional chrome. The resulting new line featured “matte-textured acrylics and classic personal fabrics.” In 1965 Steel-case established itself as the industry leader, achieving record sales volume for the United States and Canada. Mobiles, introduced in 1968, was the first product incorporating the concept of systems furniture. The line combined the features of Multiple 15, Sunshine Styling, and Convertibles to create more private workstations, completely furnished with desks, shelving, walls, and broadside dividers.

In 1971 Steelcase offered its first comprehensive systems furniture line, Movable Walls, and, in 1973, introduced the Series 9000 Systems Furniture line. The Designs in Wood line, introduced in 1972, addressed the negative perception of metal furniture. The furniture featured exterior hardwood paneling with drawer and pedestal interiors of steel.

In 1975 Steelcase brought out the Sensor chair, the first office chair to sense and support the body’s movements according to the occupant’s height, weight, and preference.

In 1992, looking to a future relying increasingly on teamwork and wireless technology, Steelcase demonstrated Harbor, a prototype product of the office of the future, and Commons, a concept that uses open space to quickly reconfigure into an ad hoc meeting area. The company also announced a partnership with Motorola, Inc. to develop wireless technology in office furniture.

Steelcase has won numerous design awards, including 26 between 1987 and 1992. The company also won the Distinguished Engineering Award from the Consulting Engineers Council of Michigan for an innovative steam-generating, waste-disposal system and a national award from the President’s Council on Environmental Quality for a process that curbed pollutants in its painting process.

In the early 1990s direct descendants of Metal Office Furniture Company founders held many key executive positions in the successor firm, Steelcase Inc. They included Robert Pew (who married the daughter of investor Henry Idema), chairman; his son, Robert Pew III, president of Steelcase North American operations; Peter Wege, vice-chairman; and William Crawford, president of a design subsidiary. Only two Steelcase chief executives, Frank Merlotti and Jerry Myers, were not descended from the founders.

Frank Merlotti, who came up through the manufacturing ranks, is credited with changing how the company approached the process of product development and production. The World Class Manufacturing (WCM) plan implemented during his tenure has five principles: quality, faster throughput, elimination of waste, product group focus, and employee involvement or empowerment. The plan was put into practice at the $111 million Corporate Development Center opened in 1989. The pyramid-shaped facility has ten laboratories, giving it the most comprehensive research capability in the office furniture industry. It also provides an interdisciplinary creative environment where designers, engineers, marketers, and others work in neighborhoods focused on the development of a particular product.

Steelcase’s status as a privately held company was threatened in 1992, when an estimated one million shares of the rarely traded stock passed to the brokerage firm of Robert W. Baird & Co. from the estate of an heiress of one of the founding families. Baird sold the shares to outsiders, including one buyer who accumulated 30,000 shares and distributed them to allies in an attempt to force Steelcase to go public. The descendants of the founders joined ranks and used a reverse stock split to force the outsiders to sell their Steelcase stock back to the company.

Following a 20-year boom in office furniture sales propelled by an increasing number of office jobs, Steelcase experienced flat sales in the early 1990s because of a recession and widespread corporate downsizing. Although Steelcase had to make cutbacks and short-term layoffs, it was determined to avoid the fate of the automakers. The company embarked on aggressive product development, broadened its overseas base, and continued to keep the needs of its employees and dealers a priority.

Steelcase: The First 75 Years states, “Steelcase was founded because new materials and new needs offered greater business opportunities. And these are the very ideas that have helped the company become an industry leader. In tandem with this quest to meet constantly changing needs is a strong commitment to every single member of the Steelcase family. That commitment is as fresh today as it was on that spring evening in 1912 when Metal Office Furniture Company was born.”

Principal Subsidiaries

Alternative Office Furniture, Inc.; Atelier International, Ltd.; Attwood Corporation; Brayton International, Inc.; DesignTex Fabrics; Details; Hedberg Data Systems, Inc.; Interior Woodworking Corporation; Metropolitan Furniture Corporation; MFR Corporation; Steelcase Japan Ltd.; Stowe Davis; Strafor S.A. (France; owns Pohlschroeder GmbH, Germany; A.F. Sistemas, Spain; Gordon Russell, England; Euroseel, Portugal; Sanash, Morocco); Vecta Contract; Wigand Corporation.