Marvin Lumber & Cedar Company
Address:
Highway 11, P.O. Box 100
Warroad, Minnesota 56763
U.S.A.
Telephone: (218) 386-1430
Fax: (218) 386-2925
http://www.marvin.com
Statistics:
Private Company
Founded: 1904 as Marvin Timber and Cedar Company
Employees: 4,000
Sales: $300 million (1996 est.)
SICs: 5031 Lumber, Plywood & Millwork
Company History:
Marvin Lumber & Cedar Company, known as Marvin Windows & Doors, manufactures top-of-the-line wood-frame windows for custom luxury-home building and for the remodeling segment of the construction market. The company also builds patio door units and lower-cost windows at plants outside of Minnesota. In spite of location barriers--the Warroad-based company is headquartered in the northernmost region of the contiguous 48 states and is closer to Winnipeg, Canada, than to Minneapolis/St. Paul--the Marvin family business has extended its reach throughout the U.S. and into Canada, Japan, and Mexico.
A Small-Town Business: 1900s--50s
George Marvin moved to Warroad in 1904 to manage a grain elevator and lumber yard. The Canadian owners shut down the business and moved back across the border two years later when they discovered the region did not produce enough raw grain and lumber for their operations. Marvin bought the lumber yard, established his own business, Marvin Timber and Cedar Company, and began selling goods to the settlers in the area. The company changed its name to Marvin Lumber and Cedar in 1912.
Located in a remote region about six miles from the Canadian border, Marvin's business operation was small but diverse. In addition to the lumber, Marvin established feed, hardware, and grain mill ventures. George's oldest son, William (Bill), joined the company in 1939; he was the eighth employee of the 35-year-old business. The younger Marvin, a graduate of the University of Minnesota with degrees in agronomy and agricultural economics, briefly worked for General Mills before being called home to the family business when his uncle became ill.
The seeds of the window operation were sown about that time when Harry York, the lumber yard manager, persuaded the Marvins to allow him to build barn windows during the slow winter months. When window sales proved successful, barn sash and screens were added to the product line. The woodworking capability opened the door for government sub-contracts for ammunition boxes and food containers during World War II, and the company's labor force jumped to 50 people. Anticipating the need for postwar rural jobs, Bill Marvin and his father turned their sight back to window manufacturing. The Warroad company began operating as Marvin Windows in 1951, and Bill Marvin succeed his father as head of the business in 1957.
Rising from the Ashes: 1960s--80s
In 1961, a fire destroyed the Marvin plant. The window operation was insured for only 57 percent of its total value. Loans from the Rural Electrification Administration (REA)--which provided power to the area--and the Small Business Administration (SBA) got the business back on its feet. Marvin employed 200 by 1970.
The company became airborne in 1976. Ellen Wojahn wrote in an April 1981 Corporate Report Minnesota article, "All roads do not lead to Warroad. To interest his potential customers, Marvin often has to fly them in on the company plane. But the effort is worth it, because he has found that, when attempting to sell energy-efficient wood windows and patio doors, seeing--and shivering--is believing." According to Wojahn, Marvin would often reinforce the image of the north woods by taking his guests to visit the Christian Brothers hockey stick plant as well. "You've got to build a sort of romance in a person's mind," he said.
Sales doubled from 1977 to 1979, but the housing industry was at the beginning of a dramatic downturn. Stung by an economic recession and mortgage interest rates as high as 17 percent, housing starts fell from 2.1 million units in late 1978 to 900,000 units in mid-1980. Marvin sales dropped 12 percent in 1980 to $40 million. The work week at the plant was temporarily shortened to four days while other manufacturers were laying off employees.
Marvin's "made-to-order" philosophy proved to be an asset to the company during the housing slump. The remodeling, renovation, and custom-home segments of the industry continued to generate business during the tight economic times, and since Marvin milled and stored and assembled component parts per order, the company had greater production flexibility than companies producing and stockpiling completed standard-sized windows. In addition, the company's trucking fleet, which had been established in the 1950s, allowed Marvin to ship its product quickly once the order had been made and filled. In turn, they trucked in Ponderosa pine from their own rough wood plant in Oregon, as well as, glass, screen, and hardware from other manufacturers located around the country.
The 11-acre Warroad plant operated with a peak work force of 1,150 in 1981: the population of its hometown was only 1,200. Marvin hired 16 percent of Roseau County's labor force and drew employees from a large geographic area, including the economically depressed Minnesota Iron Range. The non-union plant had instituted employee profit sharing in 1957. Nearly half the employees were women, and another small percentage were elderly--the company had no mandatory retirement age. Bill Marvin, in the Wojahn article, credited his employees for the success of the company. But faced with a limited labor market and wishing to capitalize on the housing growth in the South, Marvin built a patio door plant in Ripley, Tennessee, in 1981.
Housing starts rebounded in 1983 and remained steady into 1988. But during the same period the remodeling market jumped from $45 billion to $90 billion. Much of the U.S. housing stock had been built between the 1930s and 1950s and was ready for repair and remodeling. Hundreds of window manufacturers vied for a piece of the action. Marvin flourished.
In an April 30, 1990, Forbes article, John Harris called Marvin "the nation's fastest-growing producer of custom-made wood windows and doors." Sales for the privately held company had increased from $40 to $265 million over the last decade, and profits for 1989 were up 19 percent to an estimated $26 million, according to Harris. But Bayport, Minnesota-based Andersen Corp. held fast to first place with an estimated $1 billion in sales, and Rolscreen Co.'s Iowa-based Pella Windows held the number two spot with estimated annual sales of $350 million. Both companies were also privately held.
Marvin's impressive array of products included curved glass windows, round-top windows, and window reproductions. Marvin offered more options for glass than Andersen. Ninety distributors, located throughout the U.S., and in Japan and Canada, sold windows and doors to 3,000 lumber yards and specialty stores. Since the company built its product to order, retailers and distributors carried catalogs and display windows but no inventory.
A Rough Start to the 1990s
Housing starts began to slip again in 1989, but other problems were on the horizon. In 1990 Marvin was hit with a $2 million civil penalty, the largest ever imposed by the state of Minnesota, for improper storage and disposal of about 400 barrels of toxic chemical waste--paint, solvents, and wood preservative. The company was also charged with a criminal gross misdemeanor under a new state environmental law. Marvin's former safety director faced criminal felony prosecution for directing illegal activity and falsifying records.
The legal action against Marvin generated a heated debate among the state's policy makers, the governor, the attorney general, newspaper columnists, and others over the application of the law. While admitting they had been out of compliance, Marvin said the company was treated unfairly and shifted a planned expansion of the window operation from Minnesota to its door factory in Tennessee. Public reaction was also intense in the northwestern part of the state where the Marvin family played a large role, not only in the economy, but in the community. The Marvin family members had donated money to projects as diverse as the high school pool, a library and historical center, and a hockey arena.
According to an August 1994 Corporate Report Minnesota article, the Marvin family still controlled all the company stock. Over the years, the family had turned down numerous buyout offers and refrained from taking the growing company public. A third generation of Marvins was ready to continue the work of Bill and his brothers. In 1995, Jake Marvin, who was in line to take over the helm from his father, was succeeded by his sister Susan as president of Marvin Windows & Doors. As chief operating officer Jake continued to oversee all 13 family businesses--the largest by far was the window and door operation.
Susan Marvin, like the other family members involved with the company, worked in the plant as a youth. After earning a journalism degree and gaining marketing experience, she joined the company in 1981 and convinced the board to open a one-person advertising office in the Twin Cities. "Soon after that, a misunderstood advertising slogan began to fuel the company's 1980s growth spurt, propelling it from a one-of-the-pack regional window company to an industry leader," according to Susan E. Peterson.
"Marvin Windows Are Made to Order" was interpreted as custom-made by the industry and drew orders for odd-sized and -shaped windows; the company capitalized on the mistake and tapped into the growing remodeling business. The one-person shop grew to 30, and Marvin advanced to senior vice-president of sales and marketing prior to being named president. Marvin had also been elected chair of the Minnesota Chamber of Commerce in 1994; Marvin became more involved with the state's business and political affairs, according to a December 1994 Corporate Report Minnesota article by Lee Schafer and Eric J. Wieffering, after the company's 1990 environmental law problems.
In 1995, the company began manufacturing a lower-cost line of windows. The Integrity windows, manufactured in Fargo, North Dakota, were earmarked for the builders market. The windows were insulated with a composite material--Ultrex--manufactured by Fargo-based Tecton Products. Marvin established its partnership with Tecton in 1992. (Marvin owned 85 percent of Tecton, according to a May 1997 Corporate Report Minnesota article.)
In 1996, the company became engaged in a dispute over the direction of different partnership, Viratec Thin Films, Inc., a joint venture with Apogee Enterprises, Inc. of Bloomington, Minnesota. Viratec, a subsidiary of Marcon Coating, Inc., an architectural glass venture established by Marvin and Apogee in 1985, was developing an anti-glare coating for cathode ray tubes. Both Marvin and Apogee took legal action to dissolve the 50--50 partnership. Apogee was granted the right to buy Marvin's share in both companies for $41 million. Marvin had been purchasing 30 to 35 percent of Marcon's production, which included low-emissivity glass.
Marvin, a winner of the 1996 Governor's Award for Excellence in Pollution Prevention, was honored for its pollution control program six years after incurring huge environmental fines. The company brought on board a loss control expert from a large insurance broker as the new director of risk management. Changes such as a move to less toxic products, improved employee training, and product redesign resulted in a dramatic reduction in the generation of toxic chemicals and a savings of $100,000 per year, according to an article by Dick Youngblood.
Future Changes
By 1997, the cornerstone Warroad manufacturing facility had grown to cover more than 40 acres and employ over 3,000 people. Marvin planned to open a new plant to build its fast-growing line of wood-clad windows in Grafton, North Dakota, by the first quarter of 1989. The company faced the challenge of a changing industry, one in which huge conglomerates had begun to buy up smaller window makers and pick up market share. According to Jane Brissett, Marvin's move toward decentralized operations may have been a response to those changes. In addition Marvin, like other wood-window makers, was exploring other new products and materials to bring them into the 21st century.
Further Reading:
Beal, Dave, "Can Roseau County Keep It Up?" St. Paul Pioneer Press, March 4, 1991, p. 1.
------, "Close-Knit Family Members Set Style, Mood, Direction," St. Paul Pioneer Press, March 4, 1991.
Brissett, Jane, "Warroad's Window on the World," Corporate Report Minnesota, May 1997, pp. 46--48.
DeSilver, Drew, "Apogee Partnership Crumbles," Minneapolis/St. Paul City Business, January 12--18, 1996, pp. 1, 29.
Harris, John, "The Window Frame As Fashion Item," Forbes, April 30, 1990, pp. 125, 128, 133.
Oakes, Larry, "Marvin Says It Won't Expand in State," Star Tribune (Minneapolis), February 22, 1991, p. 1B.
Peterson, Susan E., "Apogee Gets Custody in Marvin Divorce," Star Tribune (Minneapolis), March 5, 1996, p. 1D.
------, "Full Speed Ahead," Star Tribune (Minneapolis), November 20, 1995, p. 1D.
------, "Marvin Chooses Grafton, N.D. for New Window Plant," Star Tribune (Minneapolis), November 15, 1996, p. 1D.
------, "Marvin Parent Will Receive $41 Million in Settlement of Dispute with Apogee," Star Tribune (Minneapolis), January 14, 1997, p. 3D.
Rebuffoni, Dean, "Marvin Windows Gets $2 Million Waste Fine," Star Tribune (Minneapolis), November 29, 1990, p. 1A.
Schafer, Lee, and Eric J. Wieffering, "The End of Isolationism," Corporate Report Minnesota, December 1994, p. 76.
------, "The Wealthiest Minnesotans," Corporate Report Minnesota, August 1994, p. 34.
Sundstrom, Ingrid, "Marvin Windows Plans to Build 40,000-Square-Foot Fargo Plant, Star Tribune (Minneapolis), June 15, 1991, p. 1D.
------, "Windowmaking Newcomer Settles Near 'Big 3,"' Star Tribune (Minneapolis), April 10, 1988, p. 1D.
"Susan Marvin President of Window Firm," Star Tribune (Minneapolis), September 28, 1995, p. 3D.
Wojahn, Ellen, "Looking into Marvin Windows," Corporate Report Minnesota, April 1981, pp. 51--53, 142--46.
Youngblood, Dick, "Marvin Windows Pollution Justified Penalties," Star Tribune (Minneapolis), March 6, 1991, p. 1D.
------, "Six Years After Big Fine, Marvin Wins Award for Its Work to Reduce Pollution," Star Tribune (Minneapolis), June 19, 1996, p. 2D.
Source: International Directory of Company Histories, Vol. 22. St. James Press, 1998.
