The Glidden Company
Address:
925 Euclid Avenue
Cleveland, Ohio 44115
U.S.A.
Telephone: (216) 344-8000
Fax: (216) 344-8900
Statistics:
Wholly Owned Subsidiary of ICI Americas Inc.
Incorporated: 1917 as The Glidden Company
Employees: 4,600
Sales: $900 million
SICs: 2851 Paints and Allied Products; 5198 Paints, Varnishes & Supplies
Company History:
America's third largest paint company, after Sherwin-Williams Co. and PPG Industries, Inc., Glidden Co. produces branded paints that dominate the American household consumer market. Glidden is a subsidiary of ICI Americas, Inc. and a member of the world's leading paint manufacturer, ICI Paints.
The company still bears the name of one of its founders, Francis Harrington Glidden. In 1875 Glidden, along with Levi Brackett and Thomas Bolles, founded a Cleveland varnish-making business, which they called Glidden, Brackett & Co. The business produced 1,000 gallons of varnish each week and made deliveries via horse and wagon. As partners retired over the years, the company's name went through several changes until 1894, when it became The Glidden Varnish Company. By that time, Glidden employed 18 workers in a new factory and was turning out a variety of industrial finishes for furniture, pianos, carriages, and wagons.
Although it had always concentrated on industrial finishes, in 1895 the company introduced Jap-A-Lac, a color varnish for the consumer market. Gradually gaining marketshare, Jap-A-Lac became one of the better-known varnish brands in 1903, when Glidden established a remarkable $60,000 advertising account for the product.
At the age of 85, Francis Glidden retired from the business, turning the company over to Adrian D. Joyce and his associates after a public sale. Joyce became president of The Glidden Company when it was incorporated in 1917, a position in which he would remain until 1950, when his son, Dwight P. Joyce, succeeded him. Within the first two years of his career at the helm of Glidden Adrian Joyce oversaw the acquisition of ten paint and varnish companies across the country. The companies, some of which had been established as early as the 1850s, included the Adams & Elting Co., American Paint Works, T.L. Blood & Co., Campbell Paint & Varnish Co., Forest City Paint & Varnish Co., Heath & Milligan Manufacturing Co., Heath & Milligan Manufacturing Co. of California, Nubian Paint & Varnish Co., Twin City Varnish Co., and A. Wilhelm Co.
Glidden spent the 1920s integrating vertically through the acquisition of chemical and pigment companies. In 1921, Glidden formed the Chemical & Pigment Co., a subsidiary that was supplanted with the 1924 purchase of Euston Lead Co. in Scranton, Pennsylvania. Two years later, the National Barium Co. and St. Louis Lithophone Co. were added to the roster of companies, and in 1927 Glidden formed the California Zinc Co. and Afterthought Zinc Mining Co. The Metals Refining Co. in Hammond, Indiana, rounded out Glidden's chemicals and pigments purchases for the decade.
This nine-year buildup brought Glidden into the ranks of the leading producers of lithophone, a white pigment produced through the combination of barium and zinc ore derivatives. Lithophone was widely used in the paint, rubber, and linoleum industries. The company's Chemical & Pigment operations also produced pigments for ceramics, printing ink, and automotive industries. These operations allowed Glidden to supply the paint manufacturing business as well as several other industries.
Acquisitions in the coatings field continued throughout the 1920s with the purchase of The Chemical & Pigment Co., Inc., The Diamond Paint Co., Euston Lead Co., Metals Refining Co., and the Mamolith Carbon Paint Co. Inc. Glidden spent the years before the Great Depression developing lacquers and coatings of all types for decoration and preservation of wood and metal surfaces. Although the company was an influence in the consumer market, most of its business centered on original equipment manufacturers in the automotive and industrial fields as well as contractors, dealers, and 30 retail stores.
The Glidden Food Products Co. was created in 1920. This subsidiary refined vegetable oils and produced "oleomargarine." By the onset of the Great Depression, Glidden had formed a sturdy conglomerate that was able to purchase smaller companies disadvantaged by the economic turmoil. In 1929, Glidden acquired the assets of Voco Nut Oil Products, Inc., Wisconsin Food Products Co., Troco Co. of Illinois, Colgate-Palmolive-Peet Co.'s vegetable oil refinery, and E.R. Dunham Manufacturing Co. The purchase of Durkee & Co., a leading manufacturer of salad dressings, meat sauces, pickles, spices, and condiments, for $1.8 million in mid-1929 precipitated a name change for Glidden's food subsidiary to Durkee Famous Foods, Inc. Durkee was widely known as the maker of Durkee Famous Sauce, reportedly a favorite of President Abraham Lincoln. Glidden and Durkee would enjoy a half-century of cooperation.
Late in 1929, the operations of the Portland Vegetable Oil Mills Co. were incorporated into Durkee's business, and in 1933 Van Camp Oil Co. was rescued from bankruptcy and added to Durkee's long list of operating companies. All of Durkee's assets were later acquired by Glidden in 1936, when the subsidiary became a division. In the meantime, Glidden's Chemical & Pigment business continued to grow, via the 1932 acquisition of Nelio-Resin Corp., manufacturer of a patented combination of turpentine and resin. A joint venture with Metal & Thermit Corp. of New York to form American Zirconium Corp. in 1933 further enhanced these operations. Nelio-Resin was brought into Glidden as a division in 1935, and in 1936 the Chemical & Pigment Co. was reorganized as a division. Glidden's pre-World War II chemicals acquisitions were rounded out in 1938 with the purchase of pine tar and turpentine producer Southern Pine Chemical Co.
Glidden also branched out into the soybean business, building a soybean oil extraction plant in Chicago in 1934. The operations were incorporated as Glidden's Holland Mills, Inc. subsidiary three years later. The versatile soybean business complemented both the paint and foods operations: soybean oil was used in the production of paint and linoleum as well as in margarine. Furthermore, Glidden was one of only two American companies licensed to use a German process for producing lecithin, a soybean oil byproduct used by paint and rubber as well as candy and margarine makers. Soybean flour and proteins were used in the production of plastics, paper coatings and sizings, and synthetic resins. By the mid-1940s, Glidden had developed a full line of soy-protein and water-based paints. In 1938 Glidden was able to reorganize Holland Mills as a division, but just one year later, the plant was destroyed by fire.
The company emerged from the Great Depression with $50.17 million in sales and $1.73 million in net income in 1940. During that decade, Glidden expanded the operations of its three divisions through the acquisition of the Yadkin Valley Ilmenite Co., a mining concern that supplemented the Chemicals & Pigments Division, and the remaining interest in the American Zirconium Corp. joint venture. The soybean business was eventually rebuilt through the acquisition of Standard Cereal Co.'s Indianapolis plant, and the construction of a hydrogen plant in New Jersey enhanced Durkee's vertical integration for the production of hydrogenated oils.
By the end of World War II, Glidden ranked as one of the leading manufacturers of margarine. Its spreads were sold under the Durkee, Troco, and Dinner Bell tradenames. Margarine sales made up a substantial portion of the Durkee division's total revenue. The acquisitions of the 1930s and 1940s helped triple Glidden's sales from $50.17 million in 1940 to over $170 million in 1945.
In 1948 Glidden revolutionized the consumer paint industry with the introduction of its first water-borne latex paint, Spred Satin. The invention of latex paint reduced the use of petroleum-based solvent in paints by about 90 percent, and Spred Satin would remain a leading brand for over 40 years.
After a year of limited distribution, Spred Satin was introduced nationally with ads in the September issue of Life magazine. Consumers bought 100,000 gallons of the product in 1948, and within three years that figure had skyrocketed to 3.5 million gallons. Paint sales drove Glidden's sales to $188.61 million in 1950.
The company shored up its retail distribution network in the 1950s with the purchase of several sales outlets and paint plants. In 1950, the company acquired general sales agent E. W. Colledge G.S.A., Inc., of Jacksonville, Florida. Mound City Paint & Color Co., the Zapon industrial finishes business of Atlas Powder Co., and the domestic paint business of General Paint Corp., followed in close order. The General Paint acquisition included plants at Tulsa, Portland, and 21 retail branches.
Glidden organized a new subsidiary, Glidden International C.A., in Venezuela in 1955 to license, manufacture, and distribute the company's products outside the United States and Canada. By the mid-1960s, the international group encompassed operations in over 25 countries around the world.
In 1958, Glidden sold its soybean processing and grain merchandising operations to Central Soya Co., Inc., for $3.76 million, and acquired R.C. Pauli & Sons, a bulk spice processor based in San Francisco. By the end of the decade, paint accounted for 46 percent of Glidden's sales, while the Durkee and chemicals operations contributed 40 percent and 14 percent, respectively.
The early 1960s saw expansion of Glidden's chemical division with the acquisition of three powdered metals businesses, a fiber glass manufacturer, and a chemicals company. The Durkee foods group also grew dramatically in the 1960s, with the acquisition of seven foods companies. In 1962 the company purchased specialty grocery products manufacturer Olney & Carpenter, Inc., and acquired Gretchen Grant Kitchens Inc., a frozen pastry maker, in 1964. A flurry of additions in 1965 brought Dailey Pickle Co., Allied Foods, Zippy, Inc., Chris & Pitts Bar B-Q Sauce, Inc., and B.M. Reeves Co. Polarized Meat Co. (Moosic, Pennsylvania), a frozen meats company.
In 1967, Glidden merged with SCM Corp. (formerly Smith-Corona Company) after being threatened with a takeover by Dallas' Greatamerica Corp. and General Anniline & Film of New York. SCM had broached the subject with Glidden in the past, but was forced into the role of "white knight" by Greatamerica's 40 percent tender offer.
At the time of the merger, Glidden's annual sales eclipsed SCM's by almost $100 million, at $364.2 million. And although Glidden's food division was hard to rationalize with SCM's office machine and typewriter business, the two companies hoped that Glidden's paper coatings research and its many manufacturing facilities would complement SCM's office copier business. SCM also acknowledged that the foods and coatings businesses were growing and would contribute to overall finances. Glidden was reorganized as the Glidden-Durkee division of SCM.
The $251 million merger swapped .46 shares of SCM common stock for each Glidden common share. But before the deal was completed, SCM also had to swap debt for new stock offered in the fall of 1967 in order to buy back Greatamerica's 2.1 million Glidden shares. Glidden raised SCM's annual sales to $640 million and profits to $23.6 million. But two other factors pushed the merger: Glidden enhanced SCM's technological capabilities with a comparatively small investment of time and money, and the acquisition put SCM itself out of the reach of the 1960s takeover artists.
By the late 1970s, the Glidden-Durkee operations accounted for two-thirds of SCM's $1.3 billion revenues, but the company's diverse operations had spawned a bloated bureaucracy. In 1976, SCM directed the reorganization of Glidden-Durkee along product lines. The Coatings & Resins and Foods units were headquartered in Cleveland, the Chemical-Metallurgical group was centered in Baltimore, and Organic Chemicals operations were based in Jacksonville, Florida.
Each of the four divisions had its own financial, engineering, marketing, and legal staff, and was headed by an experienced Glidden-Durkee or SCM executive who reported to former Glidden vice president of Coatings & Resins and director Paul W. Neidhardt. From 1972 to 1977, earnings for Glidden-Durkee's food, chemicals and paper products increased by at least one-third. Coatings and consumer products grew as well, but not as dramatically.
Beginning in the mid-1970s, Glidden's Coatings & Resins Division jettisoned many industrial and chemical coatings lines to concentrate on "specific high-growth-potential markets." The division left the automotive and appliance finishes markets but maintained its position in the container industry (with interior coatings for food, beer, and soft-drink containers), custom-top grain finishes for wood products, coil coatings, gel coats, and nonautomotive applications of powdered coatings.
Furthermore, Coatings & Resins was forced to pull out of Europe in the mid-1970s. Its French subsidiary was liquidated in 1975, the German affiliate was disposed of in 1976, and the Italian company was sold in 1977. Although fluctuations in currency rates and restrictions on imports adversely affected European markets, the division's Central and South American businesses enjoyed increased sales and income and even invested $14 million in a three-million-gallon per year paint plant in Sao Paulo, Brazil, in the late 1970s.
By that time, Glidden had captured ten percent of the consumer paint market despite competition from 600 rivals. The company's paints stood fourth among leading manufacturers, behind Sears, Roebuck & Co., Sherwin-Williams, and Pittsburgh Paint & Glass. The company was number three in trade sales to contractors. From 1982 to 1986, Glidden's paint shipments grew seven percent annually, or twice the U.S. industry average. The company expanded its powder coatings operations during the first half of the decade, and saw its operating income rise 40 percent, to $51.4 million in 1984, an increase of almost $20 million from 1983.
Such success drew the attention of powerful international acquirers. During the mid-1980s, Glidden became enmeshed in a series of large-scale transactions involving two of the world's largest conglomerates, Hanson Trust plc and Imperial Chemical Industries plc. Hanson acquired SCM, then sold Glidden's American and Canadian operations to rival Imperial Chemical Industries (ICI) for $580 million. The shift in ownership made ICI the world's leading paint manufacturer, and gave ICI the leader in the do-it-yourself paint market.
The addition of Glidden to ICI's American operations more than doubled that subsidiary's annual sales to $3 billion and increased ICI's corporate presence in the United States dramatically. In 1987, Glidden continued its paint innovations with the release of its Rustmaster Pro corrosion-resistant paint. This revolutionary water-soluble vinyl resin protected metal by first creating a barrier impervious to water and oxygen, then by promoting a chemical reaction at the surface of the metal inhibiting oxidation. The coating, which was made available only to industrial contractors, stood up to 10,000 hours of exposure in a salt-spray chamber at 100 degrees Fahrenheit. Glidden's ten years of research had resulted in a coating that one technician called "Saran Wrap for steel" in a June 1988 Chemical Week article.
While this advance was remarkable, some industry analysts observed that the paint's resilience would diminish the second-purchase market. Reduced paint and solvent consumption slowed the paint industry to average growth of about two percent annually. Rauch Associates predicted near-term growth to slow even further to 1.2 percent. These dismal figures urged increased advertising spending in the early 1990s.
In 1991, Glidden doubled its media budget to $12 million in the hopes of increasing its number-one share of the consumer market from 13.6 percent. Television ads by Cleveland's Meldrum & Fewsmith agency featured witty musical renditions of such popular songs as "Whole Lotta Shakin' Goin' On" and "Stormy Weather," as well as National Football League tie-ins, and won the agency an award in 1993.
Glidden hoped to spur sagging paint sales using an environmental pitch as well in the early 1990s. Spred 2000--and its professional counterpart, Lifemaster 2000--a virtually odorless paint with no petroleum-based solvents or volatile organic compounds, was the first paint of its kind to be offered in the United States. The move marked a trend in the paint industry toward more environmentally safe paints, but was not hailed as a rescue from the paint business's doldrums.
Further Reading:
Alper, Joseph, "Glidden's Antirust Secret is Out," Chemical Week, June 15, 1988, p. 10.
Cooke, Stephanie, "ICI Wants to be a Household Name in the U.S.," Business Week, September 1, 1986, p. 40.
Dunn, Don, "Color This Paint Green," Business Week, June 29, 1992, p. 130.
"Everybody Wants Glidden," Chemical Week, May 27, 1967, p. 22.
"Expand or Die," Forbes, November 15, 1967, p. 23.
Gibson, W. David, "ICI Americas: Sales up 100% in Three Years, with More Acquisitions to Come," Chemical Week, November 5, 1986, pp. 22-25.
"The Glidden Company," Cleveland, Ohio: Public Relations, ICI Paints--North America, 1993.
"Glidden-Durkee's Faber," Chemical Week, July 9, 1975, p. 40.
"Glidden's William D. Kinsell, Jr.," Chemical Week, April 20, 1977, p. 76.
Kemizis, Paul, "Wait-and-see Stance Taken on Zero-VOC Architectural Paints," Chemical Week, October 14, 1992, pp. 52-53.
"Strange Bedfellows?" Financial World, October 11, 1967, pp. 5, 22-23.
"Streamlining the Management at SCM," Business Week, February 21, 1977, pp. 96, 98.
"U.S. Paint Industry Faces Reduced Growth," Modern Paint & Coatings, May 1991, pp. 10-16.
Wical, Noel, "Exec Recalls Humble Start of Latex Revolution," Advertising Age, May 8, 1978, p. 62.
Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.
