Madison-Kipp Corporation - Company Profile, Information, Business Description, History, Background Information on Madison-Kipp Corporation

201 Waubesa Street
Madison, Wisconsin 53704

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History of Madison-Kipp Corporation

Based in Madison, Wisconsin, Madison-Kipp Corporation produces zinc and aluminum die castings for a wide variety of different end markets, including the automotive sector, agriculture, telecommunications, and electronics.

Humble Beginnings: 1898-1913

Madison-Kipp's roots stretch back to 1898, when O.G. Kipp and another man named Mason founded the Kipp Lubricator Co. in Rochelle, Illinois. Some accounts also refer to the firm as Mason & Kipp. Four years later, the company relocated to Madison, Wisconsin, where it operated from a 6,000-square-foot plant on Waubesa Street. The company's main product offering was an invention Kipp and Mason developed to provide automatic lubrication for steam cylinders found in farm tractors and power units.

Madison-Kipp's earliest years were difficult ones, but the company managed to stay afloat. It was during these trying years that a college student named Thomas E. Coleman found employment with Madison-Kipp, working there in the summers of 1912 and 1913.

Industry Pioneer: 1914-49

Upon his graduation from the University of Chicago in 1914, Coleman and his father, Thomas A. Coleman, bought Madison-Kipp, which would remain in their family for many years. In 1924, Thomas E. Coleman succeeded his father as president. A "jobbing" department was added in 1928 so that the company could design and manufacture die-casts and die-casting machines for other manufacturers, in addition to meeting its own needs. In many regards, Madison-Kipp was considered to be a die-casting industry pioneer, especially in the area of aluminum.

An important development took place in 1930, when the company introduced a high-speed air grinder for making dies. The Madison Chamber of Commerce and Foundation described the device as "the first really high speed pneumatic grinder," and explained that it "proved to be so good that the firm started to manufacture and sell it immediately to other companies."

During World War I, Madison-Kipp contributed to the military by manufacturing its oilers, which were used on engines in steamships, tanks, and tractors. Prior to the start of World War II, in March 1938, the company began querying U.S. military arsenals about a new process for manufacturing ammunition that involved the use of steel molds as opposed to boring parts out of aluminum bar stock. After Madison-Kipp invested time and resources in developing this new approach, the military eventually adopted the process of die-casting ammunition parts. The company relinquished its rights to this new process, and before long other companies were also using it to produce ammunition. However, Madison-Kipp led the pack, outpacing all of the other U.S. manufacturers combined.

In addition to benefiting American industry, Madison-Kipp's pioneering efforts were instrumental to the nation's military success. As Willard R. Smith explained in the March 28, 1943, issue of the Wisconsin State Journal: "Sharp aluminum snouts that poke their way into the wings and engines of Jap Zeros or German Messerschmifts, little dishes of TNT sent up to make things lively for the enemy 4 or 5 miles above the earth, and automatic pilots which put trench mortar bombs exactly where the sender wants them to go are among the many Madison-Kipp products for the U.S. ordnance department. ... Madison-Kipp not only is manufacturing millions of ammunition parts, it has produced the process and the machines by which all of the same type of parts are being made in England, Australia and other realms of the British empire, the process adopted by 25 other companies in the United States."

As was the case with many other U.S. manufacturing concerns during World War II, Madison-Kipp's ranks of male workers were significantly depleted due to the draft. In fact, the war effort forced the company to temporarily halt certain production lines when all of the workers involved in specific manufacturing processes were drafted. By 1943, some 365 employees had been called into military service. Madison-Kipp was hit harder than some companies of the day due to its young employee base, which at one time included 500 workers between the ages of 19 and 23.

Thus, women played a vital role in ensuring Madison-Kipp's continued prosperity, working in the factory while their husbands were overseas. These women were part of a historic peak in Madison-Kipp's employee base that occurred during the 1940s, when the company's workforce swelled to approximately 1,500 workers. During these years, Madison-Kipp also made a special effort to offer employment opportunities to individuals with hearing impairments.

Retooling for the Future: 1950-79

By 1953, Madison-Kipp's business had expanded beyond die-castings, pneumatic grinders, and mechanical lubricators to include a wide array of parts used in the manufacture of such products as tape recorders, washing machines, and space heaters. At this time, the company employed approximately 500 workers, many of who were women. Madison-Kipp continued to produce ordnance for the military, including tail fins for 81 mm trench mortar bombs used during the Korean War.

In 1964, Thomas E. Coleman passed away. Replacing him at the company's helm was his son, J. Reed Coleman--the third generation of the Coleman family to lead the enterprise. Coleman graduated from Northwestern University in 1955 with a degree in ecology. Besides the leadership change, another noteworthy development was Madison-Kipp's 1967 decision to transfer its incorporation from Wisconsin to Delaware. With offices at 229 South State Street in Dover, Delaware, the incorporation change made the company's operations, which remained in Madison, a "Wisconsin division" of a Delaware firm. An article in the January 5, 1967, issue of the Capital Times said that the move was made "to give the firm more flexibility in majority control over the issuance of stock and over capital assets."

During the 1960s, a new focus on precision miniature die-casting prompted Madison-Kipp to reorganize into two divisions. The Kippcast division concentrated on die-castings that were used as part of another company's product, while the product division was devoted to designing and marketing automatic machine tool lubrication systems as well as automated lubrication and maintenance systems for conveyor belts. The lube systems pumped precisely measured amounts of oil into the different points on a machine requiring lubrication, while another product, obtained when Madison-Kipp acquired the Opco line of products from another firm, was used in greasing conveyor wheels, lubricating chain link pins, and clean chain and carrier hooks. Both applications were marketed in the United States, as well as to customers in such foreign markets as Australia, England, France, and Japan.

Around this time, Madison-Kipp employed some 475 workers on a $4 million payroll. In addition to its own products, the company used die-casting to transform molten metals into a diverse array of products that included parking meter heads, levers and handles for voting machines, metal knobs for Zenith television sets, components for children's toys, John Deere tractor dashboards, hydraulic transmission housings, automobile trunk latches, electrical equipment, parts for gas kitchen ranges, and more.

By the early 1970s, business was booming for Madison-Kipp. In 1970 the company acquired a die-casting plant in Johnson City, Tennessee. The acquisition was inspired by the southern migration of many Madison-Kipp customers, some of whom had offered to increase their business if Madison-Kipp had a presence in the South. Things were going especially well for the company's Kippcast division. In May 1973, Kippcast President Leland Ruffner told the Wisconsin State Journal that sales of die-cast parts for use in refrigerators, cars, and the like had increased 50 percent during the previous year and were on target to rise another 30 percent during 1973. This strong uptick in demand prompted the firm to increase the size of its workforce from 300 employees in late 1971 to 500 midway through 1973. Kippcast's growth was also a factor in Madison-Kipp's decision to build a 3,500-square-foot, $150,000 addition at its Atwood Avenue plant, and to reconfigure some of its manufacturing processes to accommodate additional business.

While business was booming during the early 1970s, by mid-decade an economic recession had slowed Kippcast's growth. Consequently, Madison-Kipp was forced to move to periodic four-day work weeks and lay off a number of employees. In fact, by March 1975 the company's employee base had been reduced to 350, comparable to its 1971 levels.

While economic factors still prompted the kind of cyclical layoffs common at many manufacturing enterprises, better times had returned to Madison-Kipp by the end of the 1970s. By 1979 the company's sales ranged between $30 to $40 million, and its workforce numbered between 550 and 600 employees, making Madison-Kipp one of the largest employers in Madison, Wisconsin. In terms of size, that year Madison-Kipp was among the top 2 percent of the nation's approximately 4,000 die-casting firms.

Around this time, Madison-Kipp announced that the company would cease to accept orders from companies in the Soviet Union, or from sources that sold products to Russian factories. While Madison-Kipp's products were not considered to be of the "high-tech" kind that fell under trade restrictions imposed by the Carter administration, J. Reed Coleman told the Capital Times that the decision was a symbolic one.

Expansion and Modernization: 1980-99

Madison-Kipp began the 1980s by acquiring United Systems, Inc., a Dayton, Ohio-based manufacturer of electronic testing and measuring equipment that employed 150 workers. The purchase would increase Madison-Kipp's sales by 25 percent. Another important development took place in 1982, when Russell D. Davis was named Kippcast's president and chief operating officer.

By the early 1980s, the company had not only grown in size through acquisitions, it also had grown in sophistication. In 1981, Madison-Kipp used approximately 20 robots to increase the accuracy and efficiency of its manufacturing operations and spare humans from functions that were unsafe or uncomfortable--such as pouring ingot metal into hot furnaces. Madison-Kipp had purchased its first robot in 1976, and in the following years had gradually added more, along with employees to program and monitor them.

In the mid-1980s, Madison-Kipp continued to prosper. The company's approximately 600 workers benefited from an atmosphere where morale was high and voluntary turnover was low. In fact, by the 1980s a number of Madison-area families had served Madison-Kipp for as many as three generations. Workers participated in a wide variety of company-sponsored activities including bowling, picnics, bingo, euchre games, baseball, and golf.

In the August 1, 1986, issue of the Capital Times, J. Reed Coleman provided some insight into Madison-Kipp's culture and relationship with its workforce, which remained non-union, explaining: "This group knows that we will do the impossible for our customers. If our customer wants it, we'll do it. And our workers will pitch in and do double duty and work their fannies off to make that happen. But it's not because we're good to them or that we love them. It's because that's the culture of the company. And they're the kind of people who want to do that. I'm not kidding--this is a fabulous group of people to work with."

A number of noteworthy developments took place at Madison-Kipp in 1987. In March, the company's Kippcast division dedicated a new precision machining facility on Madison's east side. Madison-Kipp worked with the city to convert a former city bus barn to meet its needs, spending $1 million to upgrade the plant over the course of 1.5 years. In May, the company's lubrication systems division, known as KLS International, announced that it had appointed Michael E. Brose to a newly created CEO position. By this time, J. Reed Coleman was chairman of Madison-Kipp Corporation, and the company employed about 750 workers--600 at Kippcast and 150 in the products division.

In 1988, Madison-Kipp acquired Houston, Texas-based Mega Industries, which made approximately 50 percent of the high-pressure, force-feed lubricators used by the petrochemical industry in compressors, engines, and pumps. As part of the deal, Mega became a division of Madison-Kipp. In the January 20, 1988, issue of the Wisconsin State Journal, a Madison-Kipp spokesman said the acquisition would allow the company to expand into the oil and gas exploration equipment sector. At the same time, Madison-Kipp announced plans to begin manufacturing in France within one year, and that it had opened an office in Paris devoted to sales and equipment stocking.

Madison-Kipp's ending to the 1980s was bittersweet. In August, the company announced that it had agreed to sell its KLS International lubrication systems division--which had annual revenues of $10 million and employed 110 workers--to Northbrook, Illinois-based IDEX Corporation. Although Kippcast had become the company's bread and butter, KLS was the division from which Madison-Kipp originated in 1898. The sale allowed the company to concentrate on its lucrative die-casting business, and also benefited IDEX. While the sale was not an easy decision for J. Reed Coleman to make, IDEX announced that it would keep operations in Madison. Many of the company's workers were optimistic about the sale, since it represented opportunities for growth, expansion, and development.

In 1991, Madison-Kipp employed about 500 employees. The company, which then recorded about $50 million in annual sales, sold some 60 percent of the precision metal components it made to General Motors and its numerous suppliers. By this time, Madison-Kipp began to diversify the parts it made in order to offset the effects of sluggish economic cycles. Additionally, it began to concentrate on team-based incentives and continuous quality improvement initiatives to prepare workers for the future, which J. Reed Coleman said might involve the construction of smaller, high-tech factories located near key customers.

During the 1990s, a number of Madison-Kipp's residential neighbors filed complaints against the company, citing unreasonable noise levels and concerns about air pollution. In the June 2, 1997, issue of Isthmus, reporter Bob Whitby summarized some of the issues, explaining: "The ill will between Kipp and some of its neighbors comes down to charges from a small number of individuals that the die-casting plant is stinking up the air and making people sick. These detractors paint a horrific picture of chronic sore throats, chest pain, nausea, vomiting, and ear and sinus infections. They imply that Kipp is culpable in neighborhood cases of liver disease, cancer and birth defects."

Describing the company's response to the environmental and health concerns, Whitby wrote: "Kipp officials, on the other hand, shake their heads and point to emissions data showing that the plant now operates within state-mandated guidelines (That hasn't always been the case. In 1994 and 1995, the state Department of Natural Resources issued four letters of non-compliance on pollution-related matters.) The company has installed a new ventilation system designed to eliminate street-level odors by forcing air out the top of the building. It has made its chimneys higher, improved its handling and monitoring of chlorine (used to purify aluminum in one process) and switched to a synthetic lubricant on molds to cut down on odors." The debate would stretch out for several years.

By 1997, Thomas Caldwell was serving as president of Madison-Kipp, and J. Reed Coleman remained chairman. Two years later, as the company entered its second century of operation, sales had increased to $75 million and employees numbered 650. Growth was supported by Madison-Kipp's new technology center--a $500,000 facility complete with $6 million worth of advanced equipment--and a contract to make oil pans for Volkswagen Beetles and Jettas.

It also was in 1999 that Madison-Kipp formed a global investment concern called MKC WorldWide. Frank Bauchiero was named president and CEO of the new firm, which Madison-Kipp President Tom Caldwell said would play a critical role in the company's future strategies and affirm its status as an international player.

Ready for the Future: 2000 and Beyond

Madison-Kipp started the new millennium on a high note when it was among 51 Wisconsin companies nominated for the Wisconsin Manufacturer of the Year award, sponsored by regional law and accounting firms and Wisconsin Manufacturers & Commerce, a business lobbying organization. However, the company continued to grapple with complaints from area residents regarding toxic pollution. Midway through 2001, the issue appeared closer to being resolved when Madison-Kipp received a Clean Air Act permit from the Environmental Protection Agency citing that it met both state and federal government standards for air pollution.

Additionally, in 2001 the Madison Public Health Department determined--to the disagreement of Madison-Kipp's neighbors--that a proposed study of health problems among nearby residents was not necessary. In the July 9, 2001, issue of the Capital Times, David Callender wrote: "In a report to the Public Health Commission, environmental epidemiologist John Hausbeck said there were no consistent 'clusters' of health complaints from neighbors between June 1997 and December 1999 that might identify a particular problem associated with aluminum die casting processes used by the company."

By summer 2002, Madison-Kipp continued to post annual sales of approximately $75 million. One exciting growth prospect came from motorcycle manufacturer Harley-Davidson, for whom Madison-Kipp produced 100,000 inner primary components each year. Despite a number of setbacks, Madison-Kipp appeared to be positioned for growth during its second century of operation.

Principal Competitors: Gibbs Die Casting Corporation; Intermet Corporation.


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