P.O. Box 847
Hyster Company is the dominant force in the North American lift truck industry today. Our intent is to capitalize on that position. To do so, we need to act with a sense of urgency, exercising judgement and flexibility, to take advantage of business opportunities. In pursuit of this endeavor, we owe this to our stakeholders: Employees ... To be a fair, progressive employer that provides opportunity for employment security, career advancement, and competitive, performance-related compensation and employee benefits in a satisfying, empowering work environment. Customers ... To offer products that can and will fulfil their materials handling requirements while returning the best value on their investment. Community ... To be a responsible corporate citizen that strives to provide long-term stable employment in a safe working environment that conforms to area environmental standards, while supporting community growth and services. Internal Suppliers ... To be a company that achieves its marketing plans, providing accurate forecasts of product needs with minimal changes. External Suppliers ... To be the industry leader, financially strong, creating long-term business relationships with excellent credibility, integrity, and quality expectations. Dealers ... To be the company that provides the best materials handling distribution opportunity while offering dealers complete, quality products and support. Senior Management ... To be an organization providing a cohesive, professional management team which meets or exceeds divisional objectives while containing operating costs within AOP guidelines.
The Hyster Company is one of the leading forces in the North American lift truck industry. Founded in 1929 by E. G. Swigert as an equipment supplier to Oregon's lumber industry, Hyster has been among the top three lift truck manufacturers in North America since the 1950s. A strong international presence has been an important part of Hyster's corporate plan since the 1950s, and manufacturing plants in England, Scotland, the Netherlands, Brazil, and Australia have been integral to the company's entry into the international market.
Hyster Company was founded as the Willamette Ersted Company in 1929 by Ernest G. Swigert. The company began business as a manufacturer of winches and lifting machines for the Pacific Northwest logging industry. Ernest's father, Charles Frederick Swigert, was the founder of ESCO Corp., a large steel works, and ESCO remained a major shareholder of Hyster through the 1980s. Hyster Company headquarters were located in Portland, Oregon, near the logging and timber country that the company served. The name Hyster was adopted as an evocation of the command "hoist her," shouted by the loggers when a fallen tree was secured and ready to be lifted. "Hyster," a slang corruption of the phrase, quickly became associated with the lifting machinery, and in 1934 the Willamette Ersted company adopted the term as a name for their product line. In 1944 the company name was officially changed to the Hyster Company.
One of the Hyster Company's most important early customers was the huge Caterpillar Tractor Company, which had an exclusive contract with Hyster to supply winches for its logging tractors. In 1936 Hyster opened a warehouse and distribution center in Caterpillar's hometown, Peoria, Illinois, and in 1940 the company began full-scale manufacturing there. The Peoria plant established a foothold in the Midwest that would become Hyster's center for manufacturing in the ensuing decades. In the same year, the company extended its production beyond the logging industry by beginning production of industrial lift trucks for other exterior applications. Among Hyster's important products during the 1930s and 1940s were the massive Karry Kranes, lift trucks designed for loading and unloading the huge cargo ships that were the center of the import-export trade at that time. The Karry Kranes were used in every seaport in the United States by the late 1930s and assumed a crucial role internationally during World War II when Allied forces relied on the versatile lift trucks to unload ships even at bomb-damaged ports. Almost 1,000 Karry Kranes were used during the war years, setting an important precedent for the international expansion that Hyster was to undertake in the late 1940s and 1950s.
When the war ended, Hyster was in a position to capitalize on its new export business and, in order to meet growing demand for its lift trucks both at home and abroad, the company opened a new manufacturing plant in Danville, Illinois, that was to become the heart of Hyster's manufacturing operations for the next 50 years. By 1953 Hyster's sales had reached almost $26 million. The company was ranked third in sales of lift trucks in North America behind Eaton Manufacturing's Yale division and the industry-leading Clark Equipment Company. In 1956 day-to-day operations of the growing firm were taken over by Vice-President Philip S. Hill, who had worked for the company since 1933, beginning as a machinist. Hill would go on to become president of Hyster in 1960 and CEO in 1966 upon Ernest Swigert's retirement. Under Hill's leadership, the company entered the indoor or warehousing end of the forklift business, producing smaller and more manoeuvrable trucks for indoor applications. Hyster also diversified into road construction equipment including road bed compactors and levelling equipment for a variety of industries. "We feel we are diversified because we service so many industries and professions, including the grave diggers," Hill said in a 1970 interview with Investor's Reader.
Beginning in the mid 1950s, Hyster began to make a serious push into the international market. Over the course of the following decade the company opened manufacturing plants and distribution warehouses in Scotland, Australia, the Netherlands, the Philippines, Brazil, South Africa, and Canada. By 1964 $27 million of Hyster's $63 million total annual sales were provided by the company's international operations.
From 1960 to 1970 Hyster sales more than quadrupled, rising from about $50 million to over $220 million. This growth could be accounted for in part by a rise in international sales, which made up 35 percent of Hyster's business by the early 1970s. The domestic lift truck industry also prospered during the 1960s, averaging a growth rate of about 11 percent through the decade. By 1970, lift trucks were providing over 85 percent of Hyster sales. Of this segment over 60 percent of Hyster lift trucks were sold for indoor warehouse use, an impressive accomplishment since the introduction of the line in the mid 1950s. Hyster also continued to serve the cargo ship industry that had launched the company's international business during the war years, landing a $2 million contract for "floating" lift trucks for the States Steamship Company. New manufacturing plants in Illinois and Alabama helped the company meet the rising production demanded by soaring sales.
Although Hyster's sales growth during the 1970s could not match the pace set in the 1960s, sales nonetheless more than tripled over the course of the decade, reaching $683 million by 1979. Even more significantly, a program to cut costs and improve plant efficiency resulted in increases in return on shareholder equity and higher profit margins. The growth rate in earnings per share far outstripped sales growth, rising from $2.36 in 1970 to $10.42 in 1979. As part of the company's modernization campaign, new manufacturing plants with state-of-the-art facilities were opened in Kentucky and Indiana and extensions were made to the Danville, Illinois, operations. Lift trucks now accounted for over 90 percent of Hyster sales, and the company decided to extend its competitive position in this segment by introducing a line of electric powered trucks that were particularly popular in the European market. In 1978 Hyster, at the peak of a period of growth and seeking to expand its material handling capabilities, acquired Fabtek Inc., a major manufacturer of personnel lifts based in California. By the end of the decade Hyster had outstripped its closest competitor, Eaton's Yale division, to take the number two spot in lift truck sales behind industry leader Clark Equipment.
The prosperity that fueled the lift truck industry in the 1960s and 1970s came to an abrupt halt in the early 1980s. The recession of the early 1980s hit hard for many industrial companies like Hyster, but the forklift industry received a double blow as large Japanese auto companies began to make serious inroads into the American lift truck market. Toyota, Mitsubishi, Nissan, and Komatsu, among other Japanese firms, had introduced low-cost, high-efficiency forklifts to Australia in the mid 1970s, and Hyster had seen its once-dominant 30 percent market share cut in half. Similar inroads were made in Europe during the late 1970s, but overall market growth in these areas dampened the effect of the increased competition from Japan. By the end of the 1970s, however, Japanese firms had begun to enter the low end of the U.S. market, targeting smaller customers like lumber yards and food warehouses that didn't need, or couldn't afford, the expensive options included in most domestic lift trucks. By 1982, Japanese companies had gained control of about 20 percent of the American market, and domestic materials handling companies were scrambling to prevent further erosion. The combined effect of the recession and Japanese competition caused Hyster sales to drop to $422 million, and in 1982 the company incurred its first unprofitable year, posting a $22 million net loss.
Hyster responded to these new threats by implementing an across-the-board restructuring program. Manufacturing plants in California and Belgium were closed and facilities in the Netherlands and Australia were heavily downsized. Overall, about 2,000 Hyster employees were laid off, and the remaining employees saw salaries cut back or frozen. Key to Hyster's recovery plan was the development of a low-end line of its own that would compete directly against Japanese imports. The XL Challenger line of gas-powered lift trucks was designed to meet these goals. The $18,000 to $22,000 price tag of the XL trucks was aimed at those customers who couldn't afford the $300,000 top-of-the-line Hyster models and whose needs could be met by the reduced lift capacity of the less expensive models. Introduced in 1981, by the following year the XL Challenger series had improved Hyster's market share in the low-capacity product category by six percent, and Challenger sales represented ten percent of new factory orders.
An important and somewhat controversial part of Hyster's recovery plan was the lobbying of various levels of government both to complain about unfair subsidies to Japanese companies and to demand aid for struggling Hyster plants. As outlined in a 1983 article in Forbes, in September 1982 Hyster Chairman William Kilkenny and President William Fronk addressed letters to five states and four nations in which the company built trucks, detailing Hyster's battle with foreign competition and offering to maintain precious jobs only in those areas that would offer monetary incentives for the company to stay. In a recession-plagued economy, governments felt they had no choice but to respond and retain scarce jobs at all costs. By February 1983, U.S. municipalities and states had contributed about $28 million in direct grants and subsidized loans to keep Hyster plants operating in their communities, and the United Kingdom offered a reported $20 million to save 1,500 jobs in Irvine, Scotland.
Most importantly, the new inexpensive line of Hyster lift trucks was to be exclusively produced in a new, highly automated and heavily subsidized manufacturing plant in Craigavon, Northern Ireland. Half of the $42 million construction and equipment costs at this plant were supplied by the United Kingdom, and a $50 million interest-free loan from the EEC helped defray operating costs. In addition, in 1982, Hyster built a new $8.2 million plant in Blanchardstown, Ireland, using funds provided by Ireland's Industrial Development Authority, which also contributed $16 million toward operating costs. This plant was to produce warehouse automation systems that Hyster then thought would be the direction of the future for materials handling companies. As it turned out, the automated systems were more expensive to produce and more difficult to sell than Hyster had anticipated. In June 1987, as reported in Forbes, the Blanchardstown plant was closed, much to the distress of the IDA, which would not recover its investment, and the Irish workers who, irate at the loss of their jobs, occupied the plant in a stormy protest.
Hyster's campaign to combat Japanese competition and retain market share was, by and large, a success. In 1987 the company won an anti-dumping case it filed against Japanese corporations with the International Trade Commission, resulting in the imposition of 50 percent import duties on Japanese lift trucks. Although the duties temporarily halted Japanese inroads on the American market, Japanese firms quickly set up their own U.S. assembly plants, and held onto their 50 percent market share. Almost all of the Japanese incursion on market share, however, was at the expense of Hyster's competitors, Clark Equipment, Caterpillar Inc., and Yale Materials Handling. Clark, which had dominated the American lift truck industry for years, was the big loser, as it failed to come up with a credible alternative to the Japanese products and saw its market share drop to less than 20 percent. Hyster was the only lift truck manufacturer that managed to remain profitable throughout the 1980s, retaining its 17 percent market share. Although net income never reached the 1979 high of $63 million, sales had rebounded to $776 million and profits to a respectable $22 million by the close of the decade.
In 1984 Hyster was taken private in a leveraged buy-out by longtime shareholder ESCO Corp., and in the late 1980s ESCO decided to cash in on its investment by selling the company to the highest bidder. NACCO Industries Inc., a former coal-mining company, was in the process of diversifying and had already purchased Hyster competitor Yale Materials Handling Corp. In May 1989 NACCO acquired Hyster for $620 million and an agreement to assume some $80 million of the company's debt. Hyster operations were joined with those of Yale, and the Hyster-Yale Materials Handling division of NACCO became the number one producer of lift trucks in North America. The management of the two companies was split by NACCO in a 1995 restructuring, and Hyster was then run as an independent operating unit of the NACCO Materials Handling Group.
The American lift truck industry which had struggled so bitterly through the 1980s began to rebound in the mid 1990s. A strengthening economy caused industries that had been delaying investment in new equipment to undertake new purchasing programs. As a joint company, Hyster-Yale Materials Handling posted record sales of $1.2 billion in 1994, although plant ramp-ups and heavy investments in strategic customer service and product development programs kept profits down to $15 million. As the Hyster Company entered the late 1990s, operating once again as an independent unit, the lift truck industry seemed to be regaining the vitality that had lifted Hyster sales through the almost 70 years of its corporate history.