GenCorp Inc.
Address:
175 Ghent Road
Fairlawn, Ohio 44333-3330
U.S.A.
Telephone: (216) 869-4200
Fax: (216) 869-4211
Statistics:
Public Company
Incorporated: 1915 as General Tire & Rubber Company
Employees: 13,500
Sales: $1.94 billion
Stock Exchanges: Boston Cincinnati Midwest New York Philadelphia Pacific
SICs: 3764 Space Propulsion Units & Parts; 3489 Ordnance & Accessories Nec; 3089 Plastics Products Nec; 3714 Motor Vehicle Parts & Accessories; 3764 Space Propulsion Units & Parts; 3949 Sporting & Athletic Goods Nec; 2821 Plastics Materials & Resins; 2822 Synthetic Rubber; 3069 Fabricated Rubber Products Nec; 3083 Laminated Plastics Plate & Sheet; 3499 Fabricated Metal Products Nec
Company History:
As the parent corporation for three principal segments--Aerojet, GenCorp Automotive and GenCorp Polymer Products--GenCorp, Inc., headquartered in Fairlawn, Ohio, operates 28 manufacturing facilities throughout the United States, Canada, and Ireland, as well as one of the most sophisticated research centers in the world. This center, GenCorp Research, provides support for new technology development within the company's segments. GenCorp's investment in technology also extends to a world-class design center for its polymer segment in Salem, New Hampshire, and two design and engineering centers for its automotive segment in Indiana and Michigan.
A. William Reynolds heads GenCorp's management team as chairman of the 11-member board of directors and serves as chief executive officer. Since electing Reynolds in 1985, GenCorp has taken a significant shift in management approach and business strategy; businesses unrelated to core technologies have been divested, and key positions in aerospace, automotive, and related polymer products have been strengthened through reorganization and selected, carefully targeted acquisitions, joint ventures, and technology exchange agreements.
Focused efforts in GenCorp's three principal areas, in order to broaden customer bases and to expand the company's global position, and an on-going commitment to quality in all facets of the business serve as a foundation for progress in the future. GenCorp's vision, as it moved toward the 21st century, was to emerge as one of the most respected diversified companies in the world.
GenCorp was founded as the General Tire & Rubber Company in 1915 in Akron, Ohio, by William O'Neil, a former Firestone dealer. In order to create more dealerships, Firestone had gradually reduced O'Neil's service area until the dissatisfied O'Neil formed his own company, Western Tire and Rubber, in 1911 to make repair materials. In 1915 O'Neil moved from Kansas City to Akron, where his father, Michael O'Neil, owned a department store. The O'Neils established General Tire & Rubber with $200,000 in capital, mostly provided by Michael, who became company president, while William became general manager. The two hired a number of Firestone managers to help manage the new business.
General Tire initially manufactured repair materials but began producing tires in 1916, aiming its wares at the high end of the market. Its first manufactured product was a premium replacement automobile tire, "General Jumbo," for Model T Ford trucks. By 1917 the company was expanding its factory and dealership network, embarking on its first advertising campaign, and growing despite a difficult economic environment made worse by World War I.
General Tire became a medium-sized company during the 1920s, holding 1.8 percent of U.S. tire sales by 1929, when it had 14 retail stores. In 1931, with the Great Depression weakening many smaller rubber firms, General Tire bought Yale Tire and Rubber of New Haven, Connecticut, and by 1936 added India Tire and Rubber Company in Mogadore, Ohio. General Tire was now a leader in the tire industry, with 2.7 percent of U.S. tire sales in 1933. Although its sales were minuscule compared with Goodyear's 30 percent of the market, General Tire was considered an important player because of its concentration in the market for higher-priced tires. In addition, the Depression pushed General Tire to diversify. During the 1930s the firm began investing in local radio stations, and in 1942 purchased the Yankee Network, a Boston-based chain of radio stations.
During World War II General Tire, like other tire companies, switched part of its production to defense needs. The firm produced defense items in Akron, Ohio, as well as in California and West Virginia and by 1945 acquired a controlling interest in the Aerojet Engineering Corporation, an Azusa, California-based rocket manufacturer. A plant General Tire had built in Indiana to make mechanical goods was converted to the production of aviation and other military supplies. The war also boosted synthetic rubber production, which later expanded into civilian sectors.
General Tire was among a number of medium-sized tire firms that expanded immediately after the war, fueled by a boom in car sales. It began the process with the purchase of the Pennsylvania Rubber Company and 45 percent of Mansfield, a medium-sized rubber concern. When television got off the ground, the company's media division moved into it, going on the air from WNAC-TV Boston in 1948.
The start of the Korean War in 1950 disrupted supplies of natural rubber, leading to U.S. Government quotas on rubber consumption until 1952. Synthetic rubber became the primary raw material in U.S. rubber production, and General Tire opened a synthetic rubber plant in Odessa, Texas, in 1956. Tire production was changing in other ways; tubeless tires were accepted by 1960, as were synthetic fibers like nylon and rayon, which held tires together more firmly.
General Tire continued to expand its line of retail stores, growing from 72 stores in 1955 to 107 in 1957 to 164 in 1961. The firm also continued to diversify. Aerojet growth continued after World War II, and an industrial products division that manufactured plastic and metal parts for aircraft and electric appliances was started; the Aerojet General Corporation was formed in 1953. Subsequent programs like Aerobee, Titan, Polaris, and Minuteman required expansion of operations at its facilities in Sacramento, California.
In 1956 General Tire bought a majority interest in A.M. Byers, a manufacturer of steel pipe and wrought iron. General Tire moved further into the media with the purchase of television stations in New York, Los Angeles, and Memphis. In 1955 it bought RKO Radio Pictures from Howard Hughes for $25 million. General Tire sold RKO's motion picture properties to Desilu in 1958, and broadcasting operations were consolidated as RKO-General, Inc., a radio and television subsidiary headquartered in New York City. Trouble later began for RKO in 1965, when a series of license challenges were filed with the Federal Communications Commission (FCC). Hearings and license reviews would continue over the next 25 years.
In 1960 company founder William O'Neil died, and his sons assumed control of General Tire. Jerry O'Neil ran the tire business in Akron, Thomas O'Neil ran RKO in New York, and John O'Neil, General Tire's chief financial officer, lived in Washington, D.C.
A decline in the tire business, following the oil embargo of 1974 added to the firm's woes. General Tire made one-third of its tire sales directly to U.S. auto companies, and when those companies were hurt later in the decade by Japanese competitors, General Tire's profits declined. RKO had always been a minority contributor to the firm's bottom line, but when General Tire's profits fell 29 percent in 1979 to $82 million, RKO's contribution was a record 43 percent.
In 1981 General Tire was the fifth-largest U.S. tire maker, but tire making operations were so troubled that it considered selling off its other operations. A cable television operation named Cablecom General Inc. was the first to go, selling for $105.8 million. Tire production at the Akron, Ohio, plant of the General Tire & Rubber Company was closed in 1982, after 66 years of operation. In addition, Jerry O'Neil took on General Tire's rubber unions to win concessions necessary to make tires more competitive. Aerojet sold some of its industrial companies, but continued to negotiate major new defense programs, including the Peacekeeper ICBM Missile, and follow-on contracts for various tactical missile and ordnance products.
General Tire struggled to improve its tires, signing technical agreements with Germany's Continental Gummi-Werke in 1982 and Japan's Toyo Tire & Rubber Company in 1983. General Tire had 17 percent of the truck market in 1976, but only around 12 percent in 1981.
In 1982, RKO's license for its Boston television station was denied, but the challenge against its New York station was dropped. The FCC approved the relocation of the New York station to Secaucus, New Jersey, and issued a five-year license renewal. RKO also began spending more to buy the rights of popular TV reruns, including the popular series Colombo.
In early 1980 Jerry O'Neil took steps to bring in a non-family member to succeed him as chief executive officer and initiated restructuring efforts to form a holding company called GenCorp Inc. In 1985 A. William Reynolds, a former TRW Inc. executive, was named chief executive officer of GenCorp and later, in 1987, was elected chairman of GenCorp's board of directors. The restructuring plan went forward; General Tire and its industrial products, and chemicals, and plastics divisions, along with Aerojet General and RKO, became subsidiaries of the holding company.
With a bachelor's degree with honors from Harvard University, and a masters in business administration from Stanford University, Reynolds immediately introduced formal strategic planning and other professional management techniques. He also began solving GenCorp's problems, including the continuing litigation over its RKO broadcasting properties; a settlement with the government over groundwater contamination in Sacramento--an Algerian breach-of-contract suit--and the sale of GenCorp's interest in Frontier Airlines.
Reynolds announced a restructuring that involved selling the Los Angeles and New York television stations as well as the RKO radio stations. By 1989 GenCorp had sold all of its RKO broadcasting companies and exited the broadcasting business.
In 1987 GenCorp faced a hostile takeover attempt and responded by accelerating its restructuring plans. With the sale of General Tire and RKO Bottling, a beverage bottling operation, as well as a plan to repurchase shares of common stock, GenCorp successfully prevented the takeover. While addressing these divestitures, GenCorp also took measures to ensure the effectiveness of its on-going businesses. The company then made the decision to focus on high technology and high growth in aerospace, automotive (other than tires), and related polymer products.
GenCorp's DiversiTech subsidiary was reorganized into two new units, GenCorp Polymer Products and GenCorp Automotive. No longer a tire producer, GenCorp Automotive has grown to be a leading supplier of vehicle sealing systems, reinforced plastic components for vehicle bodies, and vibration control products. Two technology joint ventures with Japanese suppliers were finalized in 1990, and a significant number of new programs were launched, including passenger car and light truck components for Mazda, Toyota, Chrysler, General Motors, and Kia, a Korean company. New technology, facility revitalization, and new launch programs continued in 1991 and 1992. GenCorp formed a valuable strategic alliance and technology agreement with Henniges, a major German auto supplier. By 1993 GenCorp Automotive was supplying components to 98 percent of North American car platforms and a growing number of Japanese, Korean, and European platforms.
GenCorp Polymer Products continued to provide steady results in the early 1990s, and with the opening of a state-of-the-art production facility in Green Bay, Wisconsin, and the acquisition of Reneer Films, in Auburn, Pennsylvania, it was well positioned to maintain its high level of profitability. GenCorp Polymer Products has a major position in the design, styling, and manufacture of residential wall coverings and is the world's premier source for commercial wall coverings for new construction and refurbishment. The segment is the world's largest styrene butadiene latex producer, manufacturing coatings for publication-grade and lightweight packaging papers, carpet textile, and tire cord adhesives, and primary binders for high performance and general-purpose tapes. Its research capability provides innovative new lattices for paper towels, disposable wipes, and high performance lattices. The Penn Racquet Sports unit of GenCorp Polymer Products is the leading manufacturer of tennis balls and racquetballs in the world, with major market positions in the United States and Europe.
Four divisions are organized under Aerojet, GenCorp's aerospace and defense segment. The Aerojet Propulsion Division has the only facility in the world with the unique capability to design, develop, test, and produce both liquid and solid propellant motors. The Aerojet Electronics Systems Division is an acknowledged leader in the design, development, testing, and manufacture of airborne, space-borne, and ground-based electro-optical, microwave, and millimeter wave sensors, as well as in sophisticated warhead design and manufacture. Aerojet's Ordnance Division plays a major role in the production of air dispensed munition systems, medium caliber ammunition, advanced conventional ordnance, and heavy metal products for defense. The Aerojet ASRM Division is designing, developing and producing NASA's (National Aeronautics and Space Administration) new-generation Advanced Solid Rocket Motor for the space shuttle. GenCorp's Aerojet segment has taken steps to ensure it can compete effectively in the declining defense industry environment of the 1990s and beyond.
Principal Subsidiaries: Aerojet; GenCorp Automotive; GenCorp Polymer Products.
Further Reading:
Dworkin, Peter, "The O'Neil Brothers' $350 Million Hassle With the FCC," Fortune, April 21, 1980.
French, Michael J., The U.S. Tire Industry, Boston, MA; Twayne Publishers, 1991.
"General Tire: Pondering Spinoffs to Make the Most of Its Assets," Business Week, September 7, 1981.
"General Tire Changes More Than Its Name," Business Week, January 30, 1984.
"General Tire: Searching Again for a Driver to Map the Road to Growth," Business Week, February 13, 1984.
Schiller, Zachary, "GenCorp Isn't All in the Family Anymore," Business Week, June 24, 1985; "Is It Just Beginner's Luck at GenCorp?," Business Week, November 25, 1985.
Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.
