Indel, Inc. - Company Profile, Information, Business Description, History, Background Information on Indel, Inc.

10 Indel Avenue
New Jersey

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History of Indel, Inc.

Indel, Inc. is a private company based in Rancocas, New Jersey, located in the outskirts of Philadelphia. It is the parent company of more than 65 engineering and technology companies split between two business groups: the Inductotherm Group and the Diversified Technology Group. About 40 of the Indel subsidiaries are to be found in the Inductotherm Group, manufacturing and servicing induction-heating equipment--furnaces that melt metal by electric current. Some of the subsidiaries also make equipment to melt other materials. The Diversified Technology Group is composed of more than 25 companies divided among six divisions: Metal Products & Components, including metal fabrication and magnetic stampings; Electrical Components and systems engineering, which offers capacitors, high-voltage power systems, and electric sensing and safety devices; Electronics, such as graphic display systems, temperature and electronic controls, pay phone electronics, and electronic coin mechanisms and scanners; Engineered Products, including steam generators and ultrasonic welding equipment; Network Communications, including products such as fiber-optic data communication and voice & data switching systems; and Plastic Products, manufacturing injection blow molding machinery and structural foam funeral products such as caskets, graveliners, and vaults.

Postwar Origins

Indel was cofounded and headed for almost all of its history by Henry M. Rowan. He was born in 1923, the son of a doctor who would lose his wealth when the stock market crashed in 1929, an event that ushered in the decade-long Great Depression. To make matters worse, his parents divorced in that tumultuous year. His mother would singlehandedly raise Rowan and his three siblings, embodying the lessons of thrift and self-reliance she impressed upon them by returning to college to earn an advanced degree in botany and zoology. When he was just nine years of age Rowan went into business, raising chickens and selling the eggs. His mother was his only customer, and she proved a hard-nosed one, refusing to pay anything more than the best wholesale price. She was also his banker, lending Rowan the money he needed to operate his business--a role he would play with the many companies he acquired later in life.

Molded to be driven and hardworking, Rowan enrolled in a dual-degree program at Williams College in Massachusetts, and gained acceptance to the Massachusetts Institute of Technology. His studies, however, were interrupted by a stint in the Army Air Corp. He completed his training to be a bomber pilot just as the war came to a close, and then returned to MIT to complete his bachelor's of science degree in electrical engineering in 1947. He then took a position at Trenton, New Jersey-based Ajax Electrothermic Corporation, a pioneer in the development of induction-melting furnaces, relying on electromagnetic fields. Rowan was a salesman who also serviced the equipment he sold, with the latter task more to his liking. Despite his frustrations with the way Ajax was run, he learned about the foundry owners he would one day be selling to when he launched his own company. One of those owners was a man named Paul Foley, an ex-Navy commander who had started up Harcast Investment Casting Company in Glenolden, Pennsylvania, a company that made complex parts using wax patterns. Rowan impressed Foley when Rowan, paying a sales call, asked a salesman from a rival company who had just completed his pitch for a new melt unit to stay for his presentation. In that way, he said, the other rep could offer counter arguments. But Rowan's analysis of what Harcast needed and how the Ajax equipment he recommended would ideally serve the intended purpose was so convincing that there was no counter argument to be made. Rowan got the business and came to know Foley better during the installation of the melt unit and training he provided.

Rowan left Ajax in 1952 to take a job as an engineer and plant manager with Marine Manufacturing & Supply, a New Brunswick hardware and deck machinery manufacturer for ships. One day in 1953 Foley telephoned Rowan to see if he could make an induction furnace for Harcast. Rowan agreed to tackle the assignment in his spare time, using the garage of his house as a workshop and the backyard for a bonfire to heat the necessary copper. The result was a first-class furnace and an offer from Foley to go into business with him making more induction-melting furnaces for the foundry market. Rowan declined, electing to keep his steady job, but a shipbuilding boom that had driven the business of Marine Manufacturing & Supply collapsed. Foley's proposal now looked more inviting.

In 1954 Rowan and Foley launched a company called Inductotherm with a $10,000 investment. To come up with his share of the seed money, the 31-year-old Rowan sold his home in Trenton and moved his family into a rental house in Pennsylvania. Inductotherm set up operations in a vacant little office at Harcast and had one young employee, Jess Cartlidge, who was paid 75 cents an hour as a mechanic. Rowan had hired Cartlidge originally when he was just 13 to help him build the house he sold to fund Inductotherm, paying him pocket change to pull nails from board and carry cinder blocks. Cartlidge became a virtual member of the Rowan family and would one day become president of Inductotherm Japan. But at the moment such a thought would have seemed pure fantasy, given that they sat idle for three or four months before receiving their first order: a $50,000 contract from General Electric for a control panel to a vacuum furnace. Another job soon followed, a $25,000 contract from the U.S. Mint in Philadelphia for an induction-melting furnace. At the end of the first year Inductotherm realized a profit of $500.

With Inductotherm on its feet, Rowan was eager to expand the business. As orders came in the company outgrew its space and in 1955 moved to a larger facility in Delanco, New Jersey, the site of a former hosiery mill. Foley, who continued to run Harcast, could not devote enough attention to Inductotherm and soon sold his interest to Rowan for $52,500, payable in installments. Rowan then began to build a management team to help him expand Inductotherm, men who would still play key roles 30 years later: Roy T. Ruble, Jack Agnew, Thomas H. Pippitt, and Bob Sundeen. Business was so strong that in 1961 Inductotherm was able to move out of the ex-hosiery plant, buy a 90-acre farm in Rancocas, and build a new plant. Not only did the site offer ample room for future expansion, it was ideally located some 15 miles northeast of Philadelphia with direct access to the New Jersey Turnpike and later to Interstate 295, which connected the New Jersey and Pennsylvania Turnpikes. The campus eventually would grow to 250 acres.

An Industry Leader: 1960-90

During this early period, Inductotherm built a healthy business supplying furnaces used in the manufacture of jet engines. In 1963 the Consarc subsidiary was established to design and build super-pure vacuum-melt furnaces used to produce the superalloys needed in jet engines. As people became concerned about pollution in the 1960s, the company benefited because induction furnaces produced a small fraction of the emissions common in fuel-fired furnaces. Moreover, Inductotherm introduced innovations that revolutionized the technology. Small induction furnaces had been powered by motor generators or banks of transformers, but in 1968 Inductotherm introduced the world's first solid-state power supply for induction melting, making possible the building and operation of much larger furnaces.

Having established Inductotherm as an industry leader, Rowan fueled further growth in the 1960s and 1970s through scores of acquisitions. According to a 1983 company profile published in the Philadelphia Inquirer, "It bought up small companies in related fields. It expanded overseas, setting up operations in Australia, Brazil, Britain, Canada, Japan, and Mexico." The Mexico operation, despite being the best in the country, was unable to overcome the devaluation of the peso and had to be shut. Otherwise, Inductotherm enjoyed immense success during its first 25 years of operation. It was not until the recession of the early 1980s that Inductotherm did not enjoy a profitable month. The furnace business was hard hit, depressing sales and earnings, and forcing the company to cut its workforce by nearly 400 jobs to 2,600.

Although an engineer by training, Rowan proved to be a solid businessman. He permitted subsidiaries a great deal of autonomy but expected results. In many ways he acted like their banker instead of their owner. The parent company lent money to the subsidiaries, as much as 5 percent over prime, and charged for every service provided. In effect, he was treating his managers in a way similar to the way his mother treated him when he was raising chickens and selling her eggs. One of those managers, James F. Rinard, president of Vantage Products Corp., told the Inquirer, "He breathes on me hard and I get mad at him, but I don't stay mad. He can be very generous. He's almost a father image. ... His dog is the only one that doesn't jump when he talks to him."

Other than the extended interview he gave to the Inquirer, Rowan generally avoided the press and tried to keep Inductotherm out of the newspapers. That would become impossible in the 1990s when his need for a new challenge and innate generosity garnered him a great deal of publicity, whether he wanted it or not. In 1989 a local college, Glassboro State College, approached Rowan about making a donation to the school's $16.8 million library fund. Little known outside of its area, Glassboro was founded in 1923, a small state-funded school with few sources of private money, mostly known for its teaching programs. Its only claim to fame came in 1967 when President Lyndon Johnson and Soviet Premier Aleksei Kosygin met on the campus for two days of talk. Money in the school endowment fund totaled no more than $500,000. Rowan offered $1,500 for the library project, thus establishing a relationship with the school.

1990-2000: New Directions

According to Business News New Jersey, "As the 1990s began, Rowan was nearing retirement, which he dreaded and his business no longer provided the challenge it once did." He was approached by Glassboro's chief fund raiser, Phil Tumminia, who told Rowan that if he upped his contribution to the school to $10 million Glassboro would name the new library after him. However, Rowan was not interested, nor did he care to have the new business school named after him for $30 million. "Finally during a visit in the summer of 1991, Rowan asked Tumminia what the college would do with $100 million. The stunned Tumminia returned to his car and using a car phone called Herman James, the college president, who was working at home. James told him to get right back to Rowan and tell him they would name the college after him if he gave that much." It took several months to work out the details, and in the meantime MIT came calling, asking graduates to contribute to a $700 million program. Nevertheless, Rowan decided to give his money to Glassboro, where he believed $100 million could have a significant impact. As part of the agreement, the college agreed to establish an engineering school and set up a scholarship program for children of Inductotherm employees. Rowan's donation was announced to the world on July 3, 1992, and as the largest single donation to a public college ever made, and the second largest ever in the United States (private Emory University received a $105 million gift in 1979) it became national news. The donation was not without controversy, however. Some Glassboro alumni criticized the school for selling its name, and some portrayed Rowan as an egotist. Nevertheless, Glassboro changed its name to Rowan University and later opened the engineering school dear to its benefactor's heart.

Rowan may not have been as challenged in running Inductotherm as he once had been, but he did not retire. He continued to guide the family of companies he had accumulated over the years. He also indulged his love of flying (for years he had visited customers in a single-engine airplane), as the company invested in a Learjet and built a runway on the Rancocas campus. But even this luxury he made into a money-making investment, as he explained to Newark's Star-Ledger in 1996: "We call a plant superintendent, the guy we're trying to sell a furnace to, and invite him to visit our plant, and he'll say, 'Yeah, gee, maybe I'll do it.' And then you tell him, 'We'll pick you up in a Learjet at your airport at 7:30 in the morning, and take you to Alabama to see a similar unit, and then we'll take you to Pittsburgh to see another unit similar to yours. ... and then we'll fly you to our plant in New Jersey. We'll get there about noon and have lunch, meet the engineering group, and we'll get you home by dinner time.' The superintendent would tell the vice president and right on up the line executives would express interest in making the trip. 'Pretty soon you've got the whole team,' Rowan said. 'We've had about a 99 percent success rate on that type of selling. We've had some 200 such trips in the six years we've had the Lear.'"

As the U.S. economy boomed in the 1990s, Inductotherm prospered. In 1997 revenues totaled about $780 million, a 15 percent increase over the prior year. Problems with the Asian economy and declines in the stock market held back growth somewhat in the late 1990s, but Inductotherm entered the new century in strong shape. The company retained its entrepreneurial spirit, continuing to look for new opportunities. For example, in 2001 it launched Inductotherm Automation, Inc. in Canonsburg, Pennsylvania to act as an automation control systems integrator and solutions provider. Rowan also reorganized his family of subsidiaries, creating the Inductotherm Group and Diversified Technology Group in 2002. He then created Indel, Inc., to serve as the parent company and management service company of the subsidiaries. Despite his 80-plus years, he did not indicate that he ever planned to retire.

Principal Subsidiaries

Astronics Corporation; SPX Corporation; Thermadyne Holdings Corporation.


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