25 Bonnell Street
The Bonnell family of companies is steeped in tradition, a tradition of trust and integrity which accompanies each order to completion. At Bonnell, our focus is on completing orders and making on time deliveries. We strive to understand our customer's needs and use an innovative team approach to solve problems and drive change. Bonnell believes in partnering with customers so value is added to the entire supplier/customer chain ensuring success for all.
Based in Newnan, Georgia, William L. Bonnell Company, Inc., is a subsidiary of Tredegar Corporation. Bonnell is a full service company involved in three product categories: aluminum extrusion, aluminum-cast billets, and ladders. Aluminum extrusion is the company's primary business, offering customers a variety of lengths and shapes, alloys, and finishes. Markets served include automotive, building and construction, electrical, consumer durable, and sporting goods. Bonnell operates 23 extrusion presses, three casting operations, four paint lines, and three anodizing lines in seven plants located across North America. Three of these plants also possess billet casting capabilities. In addition, Bonnell also manufactures and markets a wide range of aluminum, fiberglass, and wood climbing ladders, the result of an acquisition in the late 1990s. In the United States, plants are located in Newnan, Georgia; Carthage, Tennessee; and Kentland, Indiana. In Canada, Bonnell plants are located in Ste-Thersee, Quebec; Pickering, Ontario; Richmond Hill, Ontario; and Aurora, Ontario. Because of poor economic conditions and increased competition, the Aurora plant is scheduled to be closed by 2005 and its work moved to another plant as part of a cost-cutting initiative.
The company's namesake, William L. Bonnell, was born in 1903 on a Missouri ranch, where he learned how to trick ride, a talent that would provide his first employment. Later, he would go on to study metallurgy and find employment in Columbus, Ohio, with a flooring contractor, B&T Flooring. His expertise was important because the company offered decorative metal trims, which were highly popular at the time and led to B&T deciding to produce their own shapes suitable for a number of applications. Bill Bonnell became a partner in the business and responsible for B&T's growth in metals. The company started out with six basic shapes designed by Bonnell and extruded by Alcoa. In 1939, the company bought its own extrusion press to do the work in-house. Bill Bonnell was now able to take full advantage of his talent, developing more than 500 shapes in common use today. One of his most influential designs was a preformed sink frame. His expertise in the field of aluminum extrusion was so respected that during World War II scientists building the first atomic bomb turned to Bonnell for help in developing a way to extrude radioactive uranium samples.
Bonnell went to work for Youngstown, Ohio-based Trimedge Corp. in 1945, eventually becoming vice-president and general manager. Trimedge established an operation in Newnan, Georgia, in 1952 after acquiring a press from United Extruders, and construction on a new plant in the area began a year later. Bonnell and a partner owned Trimedge of Georgia, Inc., but in 1955 Bonnell decided to strike out on his own and bought out his partner. He also acquired the Trimedge patents and trademarks. The result was William L. Bonnell Company, Inc. Over the next five years, he added other popular products and finishes, tripled production capacity, and built a national sales force. In 1960, five years ahead of schedule, he made the final payment to his partner to gain full ownership of the company, but in December 1960 Bonnell died. Bonnell's wife Mae succeeded her husband as president of the company, a position she held until the company was sold in late 1965 to Ethyl Corporation.
Ethyl had been formed in 1924 as a joint venture between General Motors and Standard Oil to manufacture tetra ethyl, a gasoline lead additive that eliminated knocking in car engines. The company held a patent on the substance, providing it with a strong position in the gasoline additive market. As a result, even after the patent expired, Ethyl was able to maintain its leading position in the market. However, when General Motors and Standard put the company up for sale in 1962, large chemical companies like DuPont and Dow Chemical were prevented from bidding on the property due to antitrust laws. This allowed a small company named Albemarle Paper Manufacturing Company to buy Ethyl, leading to a famous Wall Street Journal headline, "Jonah Swallows the Whale."
Based in Richmond, Virginia, Albemarle had started out in the 1880s making blotter and kraft paper, but with the introduction of the ballpoint pen in 1945, the need for blotting paper used with fountain pens diminished greatly. Moreover, the demand for kraft paper dropped significantly when dry cleaners during the 1950s switched over to polyethylene garment bags. Albemarle, which put together a $200 million package in an early example of a leveraged buyout, acquired Ethyl as a way to begin manufacturing polyethylene bags. The company was restructured so the Albemarle became a subsidiary of Ethyl and was then sold off to help pay down the debt taken on to finance the deal.
Building Market Entry in 1973
Ethyl began to diversify in the 1960s. It acquired VisQueen, makers of polyethylene film used in food packaging, in 1963. Then, in 1966, it took control of Bonnell, installing E.M. Harvey as the new president. He continued to grow the business while the corporate parent continued its efforts in diversification, which took on even greater significance when lead gasoline was cited as a major cause of air pollution and leaded gasoline was banned and phased out. The aluminum business was augmented in 1969 with the opening of a new extrusion plant in Carthage, Tennessee. In 1973, the parent company acquired Capital Products, an aluminum window fabricator, in a deal which transformed Bonnell into a major supplier to the building and construction industry. Capital brought with it manufacturing plants located in Mechanicsburg, Pennsylvania, and Kentland, Indiana. In 1984, Ethyl added to its aluminum group with the acquisition of Fiberlux Inc., a major manufacturer of replacement windows and patio doors.
Harvey retired in 1989, the same year that Bonnell's parent company reached a turning point. As Ethyl withdrew from the tetra ethyl business, it became involved in specialty chemicals and pharmaceuticals. Late in 1988, Ethyl announced its intention to package its plastics, aluminum, and energy assets into a new subsidiary called Tredegar Industries Inc. The subsidiary was spun off to Ethyl shareholders as a publicly trade company in July 1989. The name of the company referred to Tredegar Iron Works, famous in Richmond for its Civil War role in providing cannon and other armaments to the South. The new Tredegar was faced with difficult economic conditions as it set to the task of weeding out weak assets and building the ones offering the most long-term potential.
Bonnell was hit especially hard by a downturn in housing starts, resulting in a drop in demand for aluminum extrusion products. At this stage the company operated four aluminum extrusion facilities: an eight-press plant in Newnan and a four-press plant in Carthage, both operating under the William L. Bonnell name, and a two-press plants in Kentland and Mechanicsburg operating as Capitol Products. To adapt to changing conditions, Bonnell began to restructure its operation. The Newnan plant, which had recently upgraded its anodizing capabilities and build a painting facility, would now focus on specialty products for markets requiring extruded products with high-finish properties. Some 400 workers, out of 1,100 employed at the plant, were terminated, as some of the plant's work was transferred to other facilities. A buyer was also sought for Capitol Products, but when that effort failed, the company in February 1991 closed down the Mechanicsburg plant.
Bonnell's restructuring effort began to pay off as the economy heated up in the 1990s. The company also benefited from reduced gas rates it negotiated from Atlanta Gas Light in 1995 when it threatened to get its gas directly from the Transcontinental Gas pipeline that ran close to the Newnan plant. Aluminum required a great deal of energy, and this concession allowed the Newnan plant to be more competitive in the industry, as well as with Bonnell's own Carthage plant, which bought federally subsidized power from the Tennessee Valley Authority that cost 35 percent less than power in Georgia. Tredegar, in the meantime, invested in a number of areas, including communications, life sciences, and information technology companies. It also exited the energy business. However, its old-line aluminum and plastics businesses prospered, prompting management to invest in these areas.
In May 1997, Bonnell, through a Tredegar acquisition, added a four-press aluminum extrusions and fabrication plant in El Campo, Texas, from Reynolds Metals Company, the world's third largest aluminum company, which was shifting its focus to basic aluminum and consumer products. Less than a year later, in February 1988, Tredegar and Reynolds agreed to another sale of assets. Now Bonnell, at the cost of $29 million, added its first facilities outside of the United States and became a major player in the North American extrusion market, picking up extrusion and fabrication plants located in Ste-Theres, Quebec, and Richmond Hill, Ontario. It was from Reynolds that Bonnell became involved in the ladder business, picking up Reynolds Ladder, a leader in the Canadian market. In June 1998, Bonnell added to its Canadian assets when Tredegar acquired Exal Aluminum Inc. and its two extrusion plants in Ontario. Exal added about $92 million in sales to the $267 million generated by Bonnell in 1997.
Demand Softens in 2000
As long as the U.S. economy soared during the late 1990s, Bonnell prospered, as sales for the unit approached $500 million. The situation would change in mid-2000, however, when Bonnell started to experience a decline in demand. Tredgar's film business also began to suffer. Sales of aluminum extrusions fell by 18 percent in the first six months of 2001. In September 2001, just days before the terrorist attacks that would further hurt the economy, Bonnell announced that it was closing the aluminum extrusion plant in El Campo. Other Tredgar groups were also suffered, in particular biotechnology. The company decided to exit this field and devote resources to the film and aluminum assets, which were more likely than the tech sector to rebound with an improving economy. In 2001, Bonnell's sales decreased 21 percent from the previous year, from $479.9 million to $380.4 million. Business remained sluggish in 2002, as sales fell another 5 percent, to $360.3 million. Aside from a drop in demand, Bonnell also faced pricing pressure from domestic rivals as well as foreign competitors, in particular the Chinese.
Bonnell completed an acquisition in 2003, buying Apolo Tool and Die Manufacturing Inc., a small Ontario, Canada-based aluminum fabricator with whom Bonnell had a longstanding relationship. Apolo possessed a variety of capabilities, including bending, CNC machining, drilling, mitering, punching, riveting, sawing, and welding of aluminum extrusions and other materials. It also had in-house tool and die design and manufacturing capability to support its fabrication services. Despite this versatility, the addition of Apolo offered no solution to Bonnell's immediate problem of declining business. In 2003, sales slipped further, decreasing 2 percent to $354.6 percent.
Bonnell made a number of changes in 2004. A new president, Albert A. Butler, was hired to head the unit. Butler was recruited from Minolta-QMS, a company involved in document printing solutions. He also brought with him 20 years of experience at General Electric Company, where he held a variety of management positions. Within a matter of weeks, Bonnell began taking steps to cut costs, reduce excess capacity, and become more competitive. In April 2004, the company announced it would close the Aurora plant by January 31, 2005, and transfer its work to the other Ontario locations. The largest press would be moved to the Pickering facility, which would be enlarged and upgraded. The company was also buoyed by improved market conditions in 2004. Through the first six months of 2004, sales were up 18 percent.
Principal Competitors: Alcan Inc.; Alcoa Inc.