Trico Products Corporation
Address:
817 Washington Street
Buffalo, New York 14203
U.S.A.
Telephone: (716) 852-5700
Fax: (716) 857-3459
Statistics:
Wholly Owned Subsidiary of Stant Corporation
Incorporated: 1920
Employees: 4,300
Sales: $366 million (1994)
SICs: 3714 Motor Vehicle Parts & Accessories; 3451 Screw Machine Products; 3069 Fabricated Rubber Products; 3082 Unsupported Plastics & Shapes
Company History:
Trico Products Corporation, a subsidiary of the Stant Corporation, is the world's largest manufacturer of automobile windshield-wiper systems, with 1994 sales in excess of $366 million. In the mid-1990s, seven out of every ten cars manufactured in North America were outfitted with Trico windshield wiper-systems as original equipment. Trico was also a leading brand of original-equipment windshield wiper systems in Europe, Japan, and Australia. Trico's share of the replacement market for windshield wipers was considerably less, but in 1995, the company introduced a new line of after-market wiper blades designed to be easier for consumers to install. The 1994 Stant annual report called the replacement wiper blades "possibly Trico Products' most significant product breakthrough since it commercialized the windshield wiper blade in 1917." Based in Buffalo, New York, the company also had plants in Brownsville, Texas; Matamoros, Mexico; Springvale, Australia; and Pontypool, Wales. In addition to wiper blades and wiper-blade systems, Trico manufactured hose clamps, grease guns, specialty tools and automobile flashers, and remanufactured power-steering units.
Trico was incorporated in 1920, but the origins of the company go back to 1916, when John R. Oishei, a theater manager in Buffalo, reached agreement with John W. Jepson, a retired electrical engineer, to market a hand-operated squeegee for cleaning automobile windshields. Jepson's invention, marketed as the Rain Rubber, consisted of a rubber blade attached to a handle. Carried in the automobile's tool box during good weather, the handle of the Rain Rubber fit through the opening between the upper and lower sections of the two-part windshields of the day. By pushing the handle back and forth, the driver could clear rain from the windshield.
Oishei's interest in the device apparently stemmed from an automobile accident in which he struck a man on a bicycle. The man was not seriously injured, but Oishei later described the mishap as a "harrowing experience which imprinted on my mind the definite need for maintaining vision while driving in the rain." Soon after the accident, Oishei saw a small card in a store window advertising Jepson's squeegee, which the inventor was marketing himself locally. Oishei arranged to set up a company to manufacture and market the Rain Rubber and formed a partnership with another Buffalo theater manager, Dr. Peter C. Cornell.
Before long, Oishei, who received a patent on Jepson's squeegee, was distributing the Rain Rubber nationally. However, when the United States entered World War I in 1917, automobile production came to a standstill and Oishei's company, then with 35 employees, turned its attention to making locks and hinges for ammunition boxes.
After the war, Oishei expanded wiper distribution to Europe and Australia, as well as North America, and the company took the name Tri-Continental Corporation. The name was later shortened to Trico, which was the company's telegraph and cable-code designation. By 1921, automobile makers were installing a rubber strip between the upper and lower windshields and Trico introduced the Crescent Cleaner, a manual wiper that mounted above the upper windshield. That same year, Trico also introduced the first automatic wiper system, powered by a vacuum pump, which Cadillac adopted as standard equipment a year later.
But, as Oishei would recall, "It wasn't all clear sailing in the early days, not by a long shot. In 1921, we were pressed very definitely by our creditors. It looked as if we couldn't go much farther." Oishei also realized that real success would come when other manufacturers began installing wipers as standard equipment, and in 1924, Trico hired Carl Larson to sell wipers in Detroit.
"What you have to remember," Larson recalled for the Automotive Hall of Fame, "is that cars didn't come in as complete a package as they do today. Certain things, such as bumpers, locks, chains, stop signals, were optional. And that's what windshield wipers were until Trico pushed them as original equipment." Larson went on to explain, "I installed the first hand-wiper on Henry Ford's car. I knew that if I were to sell to the company, I had to convince him first. So I kept after the people over at Ford and they finally let me put one on Mr. Ford's car. We got our order from them shortly after that."
A year later, Trico was able to pay $1 million to buy the Folberth Auto Specialty Co., a competitor in Cleveland. The companies were merged in 1928. Trico also took over Folberth's English subsidiary, which became known as Trico-Folberth in 1930 and was reorganized as Trico Limited in 1946. (Trico Limited later organized Trico Pty. Limited in Australia in 1955.)
The late 1920s and 1930s saw several new product introductions. Trico introduced a five-ply rubber blade designed to channel water away in 1928. The company began marketing the first dual-wiper system in 1929 and the first "two little squirts" windshield-washer system in 1936.
The company again turned its attention to manufacturing munitions during World War II, but returned to developing better wiper-systems soon afterwards. In 1948, Trico introduced the Rainbow wiper blade with a flexible backing strip and a triple-yoke arm, designed to follow the curve of modern windshields. In later years, Trico would introduce the first combination wiper/washer system (1949), the first air pressure motor (1956), the first vacuum-driven, rear-window wiper system (1959), the first intermittent wiper system (1963), plastic wiper blades (1980), and the first modular wiper system (1985).
In 1968 Oishei, then in his late 70s, died after 50 years at the helm of Trico. In a lengthy obituary, The Buffalo Evening News reported, "The internationally known industrialist, who harnessed a vacuum to wipe the windshields of the world, had--by his creative imagination and ability to 'think at least two years' ahead--made Trico known wherever motor vehicles are used." Oishei was succeeded as chairman and chief executive officer by his son, R. John Oshei, who changed the spelling of the family name.
Under the younger Oshei's leadership, Trico, which had concentrated on the original-equipment market since the mid-1920s, began putting more effort into aftermarket sales. Much later, President Richard L. Wolf would recall that Oshei "took the replacement parts business from practically no business to a very important part of our strategy and sales." In addition to Trico-branded products, which were marketed through discount stores, parts stores and repair shops, the company produced private-label products for NAPA, Carquest, Atlas, and Canadian Tire.
Unfortunately, it also eventually fell to Oshei to renege on a promise to Buffalo made by his father. In 1929, when an automobile maker tried to persuade Oishei to move Trico to Detroit, the Buffalo native answered, "Buffalo is where we operate and Buffalo is where we stay." But in the mid-1980s, Oshei decided that Trico had to move its manufacturing operations, not to Detroit, but to Mexico where labor costs were significantly less.
Cutting costs became increasingly important as, despite strong sales, Trico's manufacturing operations lost more than $27 million between 1980 and 1984. The company posted a profit of $781,000 in 1985 on then-record sales of $145.9 million, but the die was cast. In the company's 1985 annual report, newly named Trico President Richard Wolf and Oshei announced jointly, "The advent of economic change in the automotive industry and the emergence of worldwide competition have combined to deny us any realistic opportunity to carry on our Buffalo manufacturing operations on a profitable basis over a sustained period.... Our plan of restructuring represents a bold move to assure the future of Trico."
At the company's annual meeting in 1986, Oshei explained, "Today we have an inability to find individuals who will work for wages that would allow us to keep all our operations here. We're surely not going to stand by and watch our profits drop until we had to go bankrupt." Over the next two years, Trico closed two of its three plants in Buffalo and shifted most of its assembly work to a new facility in Matamoros, Mexico. The company also built a technology center and warehouse in Brownsville, Texas, seven miles away, to handle product development and distribution in the United States.
Close to 3,000 jobs were eventually eliminated in Buffalo where Trico employees had been paid an average of $15 an hour, including benefits. At the time, Trico paid workers in Mexico between $1.20 and $1.30 an hour, including benefits, while those in Texas received $4.50 to $6 an hour. The restructuring appeared to work and after posting an operating loss of $16 million in 1987, Trico reported net income of $5.6 million on sales of $232.7 million in 1988.
By 1991, however, Trico was again losing money, posting a $14.6 million loss on sales of $228.7 million. The company, and particularly Wolf, who presided over the plant closings, began to come under increasing criticism from the United Auto Workers, which represented Trico workers in Buffalo. In 1992, James A. Kaczmarek, then president of the UAW local in Buffalo, told The Washington Post that Wolf had "respect for the people who make the product."
Trico celebrated its 75th anniversary in 1992. The company posted modest earnings of $2.4 million and $3.3 million in 1992 and 1993, respectively, on rising sales of $265.4 million and $311.9 million. However, the company would have posted losses in both years if it hadn't liquidated almost $20 million in securities. In Trico's annual report for 1993, Wolf admitted the year "was a major disappointment for us. Expected improvements in profitability in our North American and United Kingdom manufacturing operations did not develop."
In 1994, Peter Cundill & Associates Ltd., a Vancouver-based investment firm that owned 13 percent of Trico's stock, began pressing for the company to be sold. In a filing with the Securities Exchange Commission, Cundill & Associates said that selling the company was the best way for shareholders to maximize the value of their investment. At the time, Trico had voted dividends on its stock just three times in the last 15 years, paying $1 in 1981 and 75 cents in 1986 and 1992. Moreover, the investment firm also asked the Charities Bureau in the New York attorney general's office to require the Oishei Family Charitable Foundation and other family trusts, which then owned 33 percent of Trico, to sell their shares if a buyer could be found. The Charities Bureau regulated charitable foundations to ensure they were administered properly, and Cundill & Associates maintained that the shares had depreciated "very materially" in recent years.
At least in part because of the pressure applied by Cundill & Associates, Trico put itself up for sale in the summer of 1994. In November 1994, the Stant Corporation, a Richmond, Indiana-based manufacturer of hose clamps, engine thermostats, radiator caps, car heaters, and other automotive equipment, including motors for windshield-wiper systems, offered $85 a share for 1.9 million outstanding shares of Trico stock, which was then trading for $61.50 on the NASDAQ exchange. The offer was accepted and Stant, itself a subsidiary of Bessemer Capital Partners L.P., acquired 93.5 percent of Trico's stock for $160 million in December.
Wolf retired with the acquisition. He was replaced by Christopher T. Dunstan, who became executive vice-president and general manager, reporting to Stant President and CEO David R. Paridy. In a press release, Stant explained Trico's decision to seek a buyer: "As the automobile manufacturers increasingly look to suppliers having an ability to provide complete wiper systems rather than portions thereof, (Trico) deemed it to be important to the company's position in the original equipment market to have a long-term source of motors."
In Stant's 1994 annual report, Paridy was cautiously optimistic, writing, "Our near term challenges are clear. Trico Products, our largest and most recent acquisition, has made enormous progress in revitalizing its manufacturing base and competitive position, but its profitability in recent years has not been adequate. He added, "We believe that through a carefully implemented plan, its profitability can improve substantially. It will take time and great effort, but we believe the payoff will be significant." The parent company was also expected to use Trico's international presence to market other Stant automotive products outside North America.
Principal Subsidiaries: Trico Technologies Corp.; Wiper Check, Inc.; Trico Componentes, S.A de C.V. (Mexico); Trico Limited (Wales); Trico Pty. Limited (Australia).
Further Reading:
Auerbach, Stuart, and Edward Cody, "Trico Products: A Firm's Move Means Some Shattered Lives," The Washington Post, May 17, 1992, p. A29.
Buckham, Tom, "Trico Workers to Get U.S. Aid Quickly," The Buffalo News, September 26, 1987.
Fairbanks, Phil, "Trico Products Sells Off Stock To Finance Move to Southwest," The Buffalo News, August 20, 1986, p. C7.
Hartley, Tom, "Stant Corp.'s $85-A-Share Offer Makes Trico Products a Big Gainer," Business First of Buffalo, November 14, 1994, p. 27.
Ritz, Joseph P., "Trico, Union Pursue Talks Aimed At Easing Pain of Mexico Move," The Buffalo News, December 5, 1986, p. B10.
Robinson, David, "Wolf retires as Trico Completes Merger with Stant," The Buffalo News, December 14, 1994.
Schroeder, Richard, "Stant First Sought to Buy Trico Back in January," The Buffalo News, November 20, 1994, p. B17.
Summers, Robert J., "Trico Products Remains in Red Despite Sales Gain," The Buffalo News, May 23, 1983.
------, "Trico Profits Rise, But Local Plants Just Break Even," The Buffalo News, August 16, 1984, p. B8.
Zremski, Jerry, "Employment Up at Trico Plants--But Not for Long," The Buffalo News, June 5, 1986, p. C11.
------, "Trico Begins Construction, Production in Mexico," The Buffalo News, April 2, 1986, p. C5.
Source: International Directory of Company Histories, Vol. 15. St. James Press, 1996.
