Twin Disc, Inc.

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Twin Disc, Inc.

1328 Racine Street
Racine, Wisconsin 53403
U.S.A.
(414) 638-4000
Fax: (414) 634-1989
Web site: http://www.twindisc.com

Public Company
Incorporated: 1918 as the Twin Disc Clutch Company
Employees: 1,200
Sales: $168 million (1996)
Stock Exchanges: New York
SICs: 3566 Speed Changers, Drives & Gears; 3568 Power Transmission Equipment

Twin Disc, Inc. is a small but important manufacturer of heavy-duty power transmission products that are used in off-highway vehicles, equipment, and machines around the globe. The company’s product line includes the production of hydraulic torque converters; power-shift transmissions; universal joints; gas turbine starting drives; power take-offs; mechanical, hydraulic, and pneumatic clutches; and fluid couplings and control systems. Although Twin Disc is known for its manufacturing expertise in one primary business, the company sells its products to both domestic and foreign customers in the construction equipment, industrial equipment, marine, agricultural, and energy and natural resources industries. The company’s rural location in central Wisconsin belies the fact that it has a multinational network of operations around the world, including sales offices in Wisconsin, Oregon, Washington, Florida, Belgium, Australia, Singapore, South Africa, and Spain; and manufacturing licenses with companies in Japan, Italy, and India.

Early History

The moving force behind what was to become Twin Disc, Inc. was P.H. Batten. During World War I, Batten worked as a manager at the Wallis Tractor Company located in Racine, Wisconsin. During his time at the company, Batten was convinced that a better clutch system was needed for farm tractors, since the old expanding shoe clutch was not durable enough for heavy farm use. A young inventor from Iowa, Tom Fawick, had developed a “twin disc” clutch that he gave to an engineer, Arthur Modine, who, in turn, gave it to Batten for testing at his company. The new twin disc was so successful in its initial testing that the Wallis Tractor Company decided to use the clutch in large quantities for its tractors and needed a company to supply mass quantities of the product.

The Twin Disc Clutch Company was formed as a result of this request. Batten, Modine, and Fawick established a partnership, with Batten assuming the position of company president shortly after the firm opened for business in September of 1918. Wallis Tractor Company was the firm’s first large customer, with Minneapolis Steel and Machinery Company the company’s second big customer. With these two prominent and influential clients behind its product, Twin Disc Clutch Company never looked back. In fact, the flat plate clutch design, introduced by the company at this time, still remains the basic design for all industrial clutches up to the present.

By the early 1920s, Twin Disc Clutch Company had established itself as the sole manufacturer of the twin disc clutch for tractors in the agricultural industry. Batten was not content with standing still, however, so he aggressively pursued other applications for the company’s clutch. With the growing network of paved roads beginning to crisscross the United States, the next appropriate market for the company’s clutch was road machinery and construction industry equipment. Road and construction equipment suffered from much the same problems as farm tractors, namely, the lack of heavy-duty power transmissions. Once Twin Disc began to manufacture its clutch for T.L. Smith & Company, other firms also requested twin disc clutches for their equipment. Orders arrived fast and furious from a host of road and construction equipment firms, such as Acme Road Machinery, Allis-Chalmers, Barber-Greene, Bay City, Buckeye Tractor Ditcher, Buffalo-Springfield, Byers Machines, Chicago Pneumatic Tool, Northwest Engineering, Ohio Power Shovel, and many more. Since the majority of heavy-duty construction and road equipment manufacturers made their own clutches, when Twin Disc Clutch Company arrived on the scene it had no direct competition.

Although many of the companies across the United States suffered extreme financial hardship during the Great Depression of the 1930s, Twin Disc Clutch Company was more fortunate. Tractors still needed twin disc clutches to plow land for agricultural produce, and the road and construction equipment industry still needed the company’s clutches for the building of roads contracted by the government. With its financial situation relatively stable, therefore, Batten began to look for new markets and settled on the development of an efficient marine gear. In work boats, fishing boats, and pleasure craft of the time, engines turned at a slow rpm with a planetary gear design. The gear was inefficient in reverse, however, so Batten decided that his company would address and solve this problem. Twin Disc developed a reliable countershaft reduction gear that enabled a boat to go forward or reverse itself with the same amount of power. Although this line of marine gears was significantly ahead of its time in both design and dependability, Batten had his engineers improve it by developing a duplex clutch with a single two-sided friction plate in each portion. This innovation enabled Twin Disc Clutch Company to claim that it was the only manufacturer at the time that offered 100 percent reverse power with a countershaft design. Built primarily for the heavy-duty demands of work boats and fishing boats, this reliable and rugged gear soon was to make a name for itself during World War II.

Besides its development of the duplex clutch, the company also began manufacturing torque converters. Having traveled to Sweden to obtain a license for the rights to manufacture the Lysholm-Smith type 3-stage hydraulic torque converter, Twin Disc Clutch Company started its own production in 1936. A radical departure from the power transmission devices widely in use at the time, there was an initial reluctance to switch to the new product. The first application of its torque converter was at a West Virginia oil drilling well. Soon afterwards, however, a large order arrived from American Car & Foundry Inc. for use in railcars built for a company in Bogota, Columbia. Pleased with the results of Twin Disc’s torque converter, American Car & Foundry submitted another large order for railcars it was making for the New York Susquehanna Railroad. In addition to the railcar industry, Twin Disc also supplied its torque converters to the logging industry, which was instrumental in making it economically feasible for logging companies to change from steam to diesel power.

Expansion and Growth During World War II and the Postwar Era

Immediately after the surprise attack by the Japanese on the U.S. Naval Base at Pearl Harbor, Hawaii on December 7, 1941 and America’s entry into the war, Twin Disc Clutch Company converted all of its manufacturing operations for the production of essential war materials. The twin disc marine gear became one of the standard items on all U.S. and Allied landing craft during the Second World War, and more than 100,000 of them were made for equipment used in campaigns such as the landing at Iwo Jima in the South Pacific and the invasion of Normandy on the coast of France. The company’s torque converters became standard equipment on the Army’s M-4 and M-6 artillery tractors, and twin disc clutches were manufactured for use in amphibious and airborne tractors as well as for moto-cranes. In September of 1943, Twin Disc Clutch Company was awarded the distinguished Army-Navy “E” award, signifying excellence in both the production and performance of all of its wartime production materials, especially its marine gears.

During the immediate postwar era and into the late 1940s and throughout the 1950s, Twin Disc was one of the first companies to design and manufacture its own power shift transmissions for the construction equipment used to build the modern highways and freeways that have become such an important part of American life. From the experience garnered during World War II, however, management at Twin Disc, under the leadership of the Batten family, changed its role as a one-component manufacturer to an internationally recognized specialist in the production of power transmissions. Designing and manufacturing complete transmission systems rather than focusing on a single product, namely, the twin disc clutch, convinced management it was an appropriate time to change the name of the company to Twin Disc, Inc.

During the 1950s, in addition to manufacturing a complete line of power-shift transmissions for engines ranging from 50 to 900 horsepower, the company made universal joints that compensated for an engine’s movement or misalignment in vehicles or in-plant machinery; developed a set of control systems and associated mechanisms that could be operated electrically, pneumatically, hydraulically, or manually; designed and manufactured fluid couplings that consisted of a centrifugal pump that ran oil at engine speed and a matching turbine, thereby helping a motor to start a heavy load more easily; and also produced power take-offs and reduction gears, in which the former enabled the operator of an engine to either engage or disengage the power source immediately, while the latter reduced the revolutions per minute of an engine and increased its torque or twisting power. Of course, Twin Disc continued to design and manufacture the products that made the company prosperous in the first place, including the twin disc clutch, marine reverse and reduction gears, and torque converters.

By the 1960s, Twin Disc was one of the leading manufacturers of power transmission equipment to the construction industry, and it comprised the company’s single largest market. Twin Disc claimed that nearly every type of machinery or equipment used within the construction industry incorporated one or more of the firm’s products. Twin Disc was also a leading manufacturer of high-quality marine reverse and reduction gears for commercial fishing boats, pleasure craft, high-speed boats, work boats, and ocean-going yachts. Large orders for its marine gears were regularly received from such firms as Allis-Chal-mers, Caterpillar, Cummins, Detroit Diesel, Ford, Lister, Murphy, and Volvo-Penta.

Growth During the 1970s and Retrenchment in the 1980s

Twin Disc continued its success into the 1970s. The company was supplying products to a number of industries, including a complete line of heavy-duty clutches, power transmissions, and universal joints to the oil-drilling industry, power transmission components to farm machinery manufacturers, torque converters and transmissions to leading mining equipment manufacturers, and modulated clutches and universal joints for the production of railway equipment. Along with the expansion of its product line came an expansion of the company’s manufacturing facilities and sales offices. Twin Disc already had established sales offices in Cleveland, Dallas, Newark, Seattle, New Orleans, and Los Angeles, just to name a few. In the 1960s, 1970s, and 1980s, the company gradually expanded its presence in overseas markets as well. British Twin Disc Ltd. was acquired in England, a complete plant was built in Nivelles, Belgium to serve the European market, and additional facilities were opened in Tokyo, Japan, Sao Paulo, Brazil, and Sydney, Australia, not to mention the arrangement of licensing agreements to manufacture Twin Disc products in Italy and India.

Unfortunately, the uninterrupted years of success and growth at Twin Disc came to an abrupt halt during the 1980s. The marine industry experienced a general recession, and demand for Twin Disc products such as marine gears fell precipitously. The sale of fishing boats dropped dramatically, a market where Twin Disc had previously sold high volumes of its marine gears. At the same time, the demand for agricultural equipment also decreased, and farm equipment manufacturers were forced to cancel long-standing contracts with Twin Disc for its power transmissions, clutches, and operating control systems. Compounding these problems were the developments in the international marketplace, where intense foreign competition, the fragmentation of markets, and changing demands of worldwide economies significantly affected the way Twin Disc conducted business and its share of the marketplace.

The 1990s and Beyond

One of the stabilizing factors at Twin Disc throughout its history has been the continuity of its leadership. P.H. Batten, one of the founders of the company and the man who led it through the Great Depression and World War II, gave the reins of management to his son, John Batten, who directed the company through its most prosperous era during the postwar years and into the 1970s. Under John Batten’s tenure, the company reached its greatest growth, from $7 million in sales during the 1950s to more than $220 million in sales during the 1970s. John Batten was also the architect of the company’s international expansion and growth as a leader in the global marketplace.

When John Batten was succeeded by Michael Batten, the world had changed significantly, and Twin Disc was required to find new, more efficient methods of manufacturing and marketing its products. Although the company experienced its lowest ebb during the early 1990s, when annual sales dropped to $136 million in 1991, the company enjoyed a revival of its fortunes during the mid-1990s. By 1996, company sales for the year had rebounded to a healthy $160 million, and manufacturing firms within the marine and agricultural industries appeared to be headed for a period of increasing demand for Twin Disc products. Twin Disc had also received a number of contracts for its hydraulic steering units and power transmissions from the U.S. Department of Defense for use in armored combat vehicles.

Michael Batten remains CEO and chairman of the board of directors, and the Batten family retains a large share of control in Twin Disc through its ownership of the company stock. This continuity of management and family interest in the growth and success of the company should not be underestimated in evaluating the future prospects of Twin Disc, Inc.

Principal Subsidiaries

Twin Disc International S.A.; Twin Disc (Pacific) Pty. Ltd.; Twin Disc (Far East) Ltd.; Twin Disc (South Africa) Pty. Ltd.; Mill-Log Equipment Company, Inc.; Southern Diesel Systems, Inc.; TD Electronics, Inc.; Niigata Converter Company, Ltd.; British Twin Disc, Ltd.; Twin Disc Transmissoes Ltda. (Brazil).