2400 South 44th Street
Corporate Mission: Our mission is to continuously improve economic value for our shareholders.
Corporate Scope: The Manitowoc Company is a creator of market-leading engineered capital goods and support services for selected market segments, which today include Cranes and Related Products, Foodservice Equipment, and Marine. This is Manitowoc's strength.
Corporate Purpose: The centerpiece of our efforts will continue to be high-quality, customer-focused products and support services. Research, marketing, resources, manufacturing, support services, and all related elements will generally be product-oriented. The company will use this in evaluating and guiding its business units.
The Manitowoc Company, Inc. is a diversified manufacturer of cranes and related products, foodservice equipment, and ships. Its cranes operations, which contribute more than half of overall sales and which serve the heavy construction, energy, infrastructure, and other industries, lead the world in lattice-boom cranes, tower cranes, rough-terrain cranes, truck-mounted cranes, and boom trucks; Manitowoc also produces all-terrain cranes and aerial work platforms. The foodservice segment, accounting for about one-third of revenues, includes ice-making and beverage-dispensing machines, walk-in and reach-in refrigerators and freezers, and related products; industries served include the restaurant, hospitality, healthcare, convenience store, supermarket, soft-drink bottling and dispensing, and commercial ice service sectors. Manitowoc's marine operations, which generate about 16 percent of sales, are involved in building U.S. Coast Guard cutters, ferries, barges, and other vessels--both commercial and military--as well as the inspection, maintenance, and repair of vessels. More than two-thirds of Manitowoc's revenues are generated in North America, about one-quarter in Europe, about 5 percent in Asia, and the remaining 3 percent elsewhere. Manitowoc started off in the early 20th century in shipbuilding, branched out into crane manufacturing in the 1920s, and in the 1940s entered the foodservice sector through the launch of freezer manufacturing. The company's more recent history is marked by several landmark acquisitions: Sturgeon Bay Shipbuilding and Dry Dock Company in 1968 (later renamed Bay Shipbuilding Company); The Shannon Group, Inc., a large manufacturer of commercial refrigerators and freezers, in 1995; Marinette Marine Corporation in 2000; the French firm Potain S.A. (renamed Potain SAS), the world's leading producer of tower cranes, in 2001; and Grove Worldwide, a global leader in mobile telescopic cranes, in 2002.
The founders of Manitowoc Company, Charles C. West and Elias Gunnell, originally worked for Chicago Ship Building Company in Chicago, Illinois. In 1899, however, when Chicago Ship Building was purchased by American Shipbuilding based in Cleveland, Ohio, the former firm was subsumed under the latter and lost its decision-making authority and engineering autonomy. Disappointed with the results of the purchase, West and Gunnell decided to buy a shipyard of their own. West, a marine engineer and naval architect, and Gunnell, an experienced shipbuilder, designer, and mechanic, reached the conclusion that their shipyard would build steel ships rather than the wooden ships commonly built at the turn of the century. Yet after consulting their acquaintances within the shipbuilding industry, the two entrepreneurs were convinced that the best plan of action was first to purchase a yard where wooden ship repairs could be done, because this would provide them with financial stability, and then, in due time, buy and install the necessary equipment for building steel ships.
The only shipyard for sale on the shores of Lake Michigan was located in Manitowoc, Wisconsin. Owned by brothers Henry and George Burger, the Manitowoc operation had grown large and lucrative from its extensive wooden ship repair business. Having found an acquisition that ideally suited their purposes, West and Gunnell bought the Burger and Burger shipyard in 1902 for $110,000. Gunnell assumed the position of president and West became the general manager of the new Manitowoc Dry Dock Company. The first vessel launched by Manitowoc Dry Dock was the Cheguamegon, a wooden passenger steamer already under construction at the time of the purchase. By 1903, however, the company had contracted its first steel ship repair job, and by 1905 the firm had launched the passenger steamer Maywood, the first steel vessel built in the Manitowoc shipyard.
In 1904, Gunnell, West, and L. E. Geer, the secretary and treasurer of Manitowoc, had created a separate tool company to manufacture marine engines and other types of machinery necessary to outfit a ship. In 1905, Manitowoc purchased this company and incorporated it within its shipbuilding operations. In 1908, Manitowoc purchased Manitowoc Steam Boiler Works, a major manufacturer of marine boilers, pulp digesters, dryers, furnaces, ladles, vulcanizers, kilns, buoys, buckets, creosoting retorts, and tanks. These two acquisitions gave Manitowoc not only the ability to build new steel vessels but also the capability to completely equip them for operational service. With sales increasing and financial stability assured, to reflect a more modern image management decided to change the name of the firm--first to Manitowoc Shipbuilding and Dry Dock Company, in 1910, and then to simply Manitowoc Shipbuilding Company, in 1916.
During World War I the company grew dramatically. Although the war had started in 1914, the United States did not enter the hostilities in Europe until 1917. When Congress declared war on Germany in April 1917, however, the entire operations of Manitowoc were subsumed under the authority of the U.S. Shipping Board Emergency Fleet Corporation. The board immediately placed a large contract with Manitowoc for 3,500-ton freighters, and the company embarked on an extensive expansion program to fill this order. During the course of the war, Charles West was recruited by the U.S. Navy Bureau of Construction to supervise the construction of a Ford Motor Company shipbuilding plant in River Rouge, Michigan, near Ford's headquarters. For more than 18 months, West commuted from Manitowoc to Detroit and then back again to fulfill his duties to both companies. Before the war, Manitowoc turned out an average of six ships per year. By the time the war ended in 1918, the company was capable of turning out 18 ships annually and had already made 33 3,500-ton freighters used during the war effort.
Unfortunately, when World War I ended the U.S. government canceled the remaining freighter contracts with Manitowoc. This loss of wartime revenue led to a postwar depression, not only for Manitowoc but also for the entire shipbuilding industry in the Great Lakes region. With its expanded capacity for shipbuilding, and numerous employees hired for the wartime production effort, West and Gunnell searched for new business that would compensate for the disappearance of government contracts. Luckily, the two men arranged for the company's shipbuilding plant to be converted into a railroad locomotive maintenance and repair shop. This kept the company barely solvent, with funds enough to pay employee wages, but it was clear that Manitowoc would have to undergo a transformation to survive.
In 1920, West and Gunnell came to a sharp disagreement as to the direction of the company. West was convinced that Manitowoc could survive only by implementing a broadly based diversification strategy. Gunnell, on the other hand, maintained that the company should continue to emphasize its shipbuilding capacity. Unable to reach a point of mutual agreement, the company was put up for sale. Interestingly enough, West made the only offer to purchase the firm. For a total of $410,000, West and Geer bought the company and renamed it the Manitowoc Shipbuilding Corporation. An immediate policy of diversification was established, including an expansion of the boiler works and new products for the machine shop. Because marine boilers were losing their popularity, the boiler works diversified into the manufacture of paper mill equipment, dryers for coal, rock, and clay, brewery tanks, air nozzles, and heating boilers. In 1925 the machine shop reached an agreement to manufacture Moore Speedcranes under the Moore patents. By 1928, Manitowoc had taken over the manufacture and sale of all of the crane models produced by the Roy and Charles Moore Crane Company. Of course, the diversification program did not mean that shipbuilding at the company was interrupted. During the 1920s, Manitowoc constructed its first self-unloading vessel, two carferries, five tugboats, four deck barges, two dipper dredges, two dump scows, two derrick scows, a floating dry dock, and the largest suction dredge in the world.
The Great Depression and World War II
With the stock market crash of 1929, the era of the Great Depression began in the United States. Manitowoc, like many other businesses during the time, was hard hit by the downward trend in business. Sales dropped precipitously from more than $4 million in 1931 to less than $500,000 by 1933. During the middle of the decade, the company operated at a net loss for four years in a row. Many employees were laid off, and those that remained were forced to take a reduction in their salaries. The company's shipbuilding business was severely affected by the Depression, and management was forced to rely more heavily on the crane business (now producing models under the Manitowoc name). During the 1930s, Manitowoc introduced an improved version of the Speedcrane and began a maintenance service to repair and keep cranes in first-class condition. Manitowoc cranes soon garnered a reputation for high quality within the industry and were purchased to help construct the Senate Office Building, the National Gallery of Art, the National Archives, and the Jefferson Memorial, all located in Washington, D.C.
In 1940, as the start of another world war became more evident to U.S. government officials, the Navy contracted Manitowoc to build ten submarines and provided the company with funds to make the necessary plant improvements and expansion. Although West hesitated because of his previous experience with U.S. government contracts, which left the company in dire financial straits after World War I, he reluctantly decided to engage in a comprehensive plant conversion. The increased capacity soon proved itself useful. Just one week after Pearl Harbor had been attacked by the Japanese, which initiated the American involvement in World War II, the company received an order from the U.S. Navy for immediate delivery of six cranes for use in salvaging operations in the harbor. More than 58 cranes were made by the company for the Navy's Floating Dry Docks during the war, and 79 cranes and shovels were delivered to the U.S. Army.
Besides a huge order for submarine construction during the war, Manitowoc also built landing craft for use in both the Pacific and European theaters of operation. Extensive testing was conducted along the shores of Lake Michigan by company engineers, and design changes were made before actual production was begun. Manitowoc built a total of 1,465 landing craft, and received a presidential citation for the vehicle's performance during the Normandy landing in June 1944. In addition, by the end of the war the company had constructed 28 submarines for the U.S. Navy and had received the Navy "E" for excellence in production five times.
The Postwar Years
The immediate period after World War II brought the same problems that confronted the company after World War I: the necessary reorganization of the company and its manufacturing facilities to a peacetime economy. Unlike what happened the previous time, however, the U.S. Navy reimbursed Manitowoc for its wartime expenses and helped it to dismantle the Navy's portion of its shipbuilding operations. West, still in control of the company's direction, decided once again that diversification was the answer. Looking for products to manufacture that did not require significant capital investment, Manitowoc started making dry cleaning units and, in addition, freezers for Firestone and Westinghouse (production of the latter beginning in 1945). Soon the firm was making commercial frozen food cabinets used in supermarkets and restaurants and, by 1950, more than 50 percent of Manitowoc's equipment works was devoted to this business. In 1952 Manitowoc Shipbuilding Company was reorganized. To reflect its increasingly diverse operations, the company name was changed to The Manitowoc Company, Inc.; two chief units were made into subsidiaries--Manitowoc Shipbuilding, Inc. and Manitowoc Engineering Corporation (the cranes operation)--and a third, Manitowoc Equipment Works, became a division.
Manitowoc's shipbuilding operation was plagued by union strikes throughout the late 1940s but, with the end of the postwar recession in the marine industry, the firm reclaimed its role as a major shipbuilder and repair facility in the Great Lakes region. During the early 1950s, the company constructed the prototype of Nautilus, the country's first nuclear submarine. In addition, numerous commercial vessels were built during the decade, including the largest self-unloader on the Great Lakes, a coal hauler, the first diesel-powered carferry, and five crane barges. Charles West was particularly pleased to see his company survive the difficulties of the postwar period and, when he died in 1957, left behind what he considered to be a thriving firm with great potential for the future. The founder's son, John D. West, took over as president.
During the 1960s, Manitowoc continued to grow. The manufacture of dry cleaning units was expanded, as well as the production of freezers and frozen food cabinets. In 1966, the company introduced The Manitowoc Ice Dispenser, which quickly became very popular in both the hospital and lodging industries. Because shipbuilding at the time consisted mostly of smaller vessels such as dump scows and crane barges, management decided to combine its operations with another Great Lakes shipbuilding firm and relocate Manitowoc's shipbuilding operation to Sturgeon Bay, Wisconsin. In 1968, Manitowoc purchased all of the assets of the Sturgeon Bay Shipbuilding and Dry Dock Company and subsequently renamed its reorganized business the Bay Shipbuilding Corporation. This combination of both resources and facilities resulted in major contracts during the 1970s, including the first 1,000-foot ship, built to haul coal for Detroit Edison.
Growth and Transformation During the 1970s and 1980s
In addition to relocating and reorganizing its shipbuilding operation during the early 1970s--and also gaining a listing on NASDAQ through a 1971 initial public offering--the company divested its dry cleaning operation and sold off its freezer and frozen food cabinet business. The most successful and profitable product made by the company after World War II was its custom-built cranes. From the mid-1920s to 1945, management regarded the sale of its cranes as a fortuitous product of a necessary diversification program started after World War I. But after World War II, the demand for the company's cranes began to increase dramatically. In fact, during the 1950s and 1960s, Manitowoc was at the forefront of developing technological innovations to increase the quality of its cranes. The company was the first manufacturer to use T-1 high-strength steel in booms, design a controlled-torque converter for crane applications, and develop extendible crawlers. In 1967, Manitowoc engineers designed an assembly called the Ringer that doubled the lift capacity of any basic crane. By 1977, sales for Manitowoc cranes were reported at $146.5 million, whereas shipbuilding and repair revenues amounted to $73 million and ice cube maker sales totaled $14.4 million. In the late 1970s the company spent $35 million to build new manufacturing facilities for the Manitowoc Engineering and Manitowoc Equipment Works operations on a 100-acre site called SouthWorks located southwest of downtown Manitowoc.
John West remained CEO of Manitowoc through 1986 and chairman for most of the decade, but it was Ralph Helm who increasingly led the company during the 1980s, first as president and COO from 1981 through 1986 and then as president and CEO from 1986 to 1990. Helm had previously spent two decades at the Manitowoc Engineering crane subsidiary, helping increase sales there from $18 million in 1962 to more than $143 million by 1980.
During the 1980s, Manitowoc rode an economic roller coaster. The recession of the early 1980s, and the collapse of the petroleum boom, led to a dramatic plunge in Manitowoc's sales. The company's crane business fell flat, especially in the areas of large lift cranes used in the construction and offshore oil industries. The company's manufacture of ice-making machines for the foodservice, healthcare, and convenience store markets also took a nosedive, and shipbuilding at the Sturgeon Bay facility had to be abandoned altogether. By the end of the decade, conditions at Manitowoc had improved slightly. Manitowoc's crane business had benefited from the revival of offshore drilling in the Gulf of Mexico, and the company claimed that it was the only manufacturer of large lift cranes left in the United States; all of the firm's competitors had either sold their holdings to foreign interests or gone out of business. The company's ice machine business replaced the crane business as Manitowoc's most profitable operation during the middle and late 1980s, and the Sturgeon Bay facility reported that it was one of only three remaining Great Lakes shipping repair and maintenance shops for the country's largest iron-ore carriers.
Shifting to More Modern Corporate Management: Early to Mid-1990s
In 1990 Fred M. Butler was named company president and CEO. Butler was a relative outsider, having joined the company as manager of administration only in 1988. Starting as an engineer, Butler had spent more than three decades moving up the ranks of a South San Francisco-based construction firm called Guy F. Atkinson Company. His perspective as an outsider is credited with shaking up a relatively moribund company and injecting it with a more modern operating philosophy.
During the early 1990s, Butler implemented a comprehensive cost-cutting and reorganization strategy, including a revamped marketing program that significantly enhanced Manitowoc's presence across the United States and in Europe. Modernization at the firm's large crane and boom-truck facilities increased production, and the introduction of new crane designs, especially the Model 888 crane with a 220-ton lift capacity, gained immediate market acceptance. At the same time, Bay Shipbuilding cut back on its shipbuilding operations but expanded its ship repair business to include two additional locations in the Great Lakes Region (in Toledo and Cleveland, Ohio) and, by the mid-1990s, operated more than 60 percent of all dry-dock footage on the Great Lakes. On the ice machine front, as part of Butler's drive to expand in the Asia-Pacific region, Manitowoc in 1994 entered into a joint venture to build ice machines with the Hangzhou Household Electric Appliance Industrial Corporation. The venture was based in the large city of Hangzhou, located about 100 miles southwest of Shanghai, China. Meantime, in 1993, Manitowoc's stock was shifted to the New York Stock Exchange to secure the broader exposure offered by that market.
Butler's most important move, however, was to persuade the company's traditionally conservative board of directors to direct some of Manitowoc's hoard of cash toward acquisitions. The company's first major acquisition came in November 1995, when The Shannon Group, Inc., a major manufacturer of commercial refrigeration equipment--particularly walk-in refrigerators and freezers--was purchased for $126 million. The purchase of Shannon turned Manitowoc into the largest supplier of commercial ice-cube machines and walk-in refrigerators in the world. The company now derived more than half of its revenues from foodservice equipment, with cranes and related products contributing 39 percent and shipbuilding/ship repair only 7 percent.
In 1996, when company sales surpassed the half-billion-dollar mark, Bay Shipbuilding lived up to its name for the first time in years when it completed construction of Integrity, a 460-foot integrated tug/barge. This was the first new Great Lakes vessel built since 1982. In 1997 the Equipment Works subsidiary, which specialized in ice-making machines, changed its name to the more descriptive Manitowoc Ice, Inc. This subsidiary was bolstered in October of that year through the $73 million purchase of Sellersburg, Indiana-based SerVand International, Inc., the third largest maker of ice and beverage dispensers in the United States. SerVand's major customers included fast-food restaurants, convenience stores, and soft drink bottlers.
Acquisitions Center Stage: Late 1990s and Early 2000s
A key figure in these two major foodservice acquisitions was Terry D. Growcock, who had joined the company in 1994 as head of Manitowoc's ice machine subsidiary. Having previously served in management positions at a variety of manufacturing companies, Growcock was soon promoted to head of Manitowoc's foodservice group in March 1995. When Butler retired as president and CEO in July 1998, Growcock was selected to succeed him, becoming the first company president to come through the foodservice side. Under his leadership, Manitowoc nearly tripled its 1997 revenues of $545.9 million by the year 2002, when sales hit $1.41 billion. Driving this growth was a string of acquisitions that Growcock engineered.
In 1998 Manitowoc gained a manufacturing presence in Europe with the acquisition of a 50 percent interest in Fabbrica Apparecchiature per la Produzione del Ghiaccio, S.r.l. (F.A.G.), an ice-machine firm based in Milan, Italy. The company also entered into a license agreement with Blue Star, an Indian company, to manufacture Kolpak walk-in refrigerators for sale in the Middle East and Asia. During 2000 Manitowoc purchased full control of its Chinese joint venture and also paid $21.2 million for Harford Duracool, LLC, a maker of walk-in refrigerators and freezers serving the U.S. East Coast.
The cranes business expanded as well. In November 1998 U.S. Truck Crane, Inc. (USTC) was bought for $51.5 million. Based in York, Pennsylvania, USTC produced boom trucks, rough-terrain forklifts, and other materials handling equipment. After another boom truck manufacturer, Pioneer Holdings LLC, was acquired in 2000, the company's three boom truck lines (the other being Manitex) were consolidated under a new brand, Manitowoc Boom Trucks. That same year, Manitowoc introduced the most popular crane in its history, the Model 999 lattice-boom crane, which could lift 275 tons. More than 80 of the units were sold within seven months of introduction.
Manitowoc's marine group nearly tripled its revenues through the $66.7 million purchase of Marinette Marine Corporation in November 2000. Based in Marinette, Wisconsin (just across Green Bay from Bay Shipbuilding's facility in Sturgeon Bay), the purchased shipyard, which specialized more in mid-sized research and military (particularly U.S. Coast Guard and U.S. Navy) vessels, was a good fit with Manitowoc's existing shipyards, which focused on commercial vessels. Manitowoc now operated more than 60 percent of the U.S. dry docks in the Great Lakes.
The company's appetite for growth increasing, Manitowoc next completed the two largest acquisitions in company history, both of crane companies. In May 2001 the firm laid out about $307 million in cash and assumed $138.8 million in debt for Potain S.A. (later renamed Potain SAS). At the time a subsidiary of Groupe Legris Industries SA, Potain was headquartered near Lyon, France, and was a global leader in tower cranes for the building and construction industry. With annual sales of about $300 million, Potain operated eight manufacturing facilities in France, Germany, Italy, Portugal, and China, and distributed its cranes to more than 50 nations. The addition of Potain helped push Manitowoc's revenues past the $1 billion mark for the first time in 2001.
In August 2002 Manitowoc acquired Grove Worldwide for about $278 million. Grove, which had just emerged from bankruptcy, was one of the world's leading makers of mobile telescopic cranes. Its headquarters were in Shady Grove, Pennsylvania, and it had other plants in Germany and France. Grove also owned National Crane Corporation, a maker of boom trucks that competed directly with Manitowoc Boom Trucks. As a condition of approving the purchase of Grove, the U.S. Department of Justice stipulated that Manitowoc had to sell one of the two boom truck makers. The company elected to divest Manitowoc Boom Trucks, which was sold to Quantum Heavy Equipment LLC in early 2003. In another 2002 acquisition, Manitowoc purchased full control of its F.A.G. ice machine venture in Italy, which now operated as Manitowoc Foodservice Europe, S.r.l.
The two Crane purchases significantly expanded Manitowoc's presence overseas, with sales outside North America increasing from less than 6 percent in 2000 to more than 21 percent two years later. Nevertheless, this acquisition spree did not come without a price. Manitowoc posted a net loss of $20.5 million in 2002 thanks to $74 million in special charges, including costs incurred restructuring some of the crane and foodservice operations. The substantial expansion of the crane business, which now generated more than 60 percent of overall revenues, left Manitowoc dependent once again on a more cyclical business just as the global economy was struggling mightily. In mid-2003 Manitowoc warned that difficult market conditions and heightened competition were likely to translate into depressed earnings for the remainder of 2003 and into 2004 as well.
Principal Subsidiaries: CRANE GROUP: Grove Worldwide, Inc.; Manitowoc Cranes, Inc.; Manitowoc Potain Re-Manufacturing, Inc.; National Crane Corporation; Potain SAS (France). FOODSERVICE GROUP: Diversified Refrigeration, Inc.; Harford Duracool, LLC; Kyees Aluminum; Kolpak; Manitowoc Beverage Equipment, Inc.; Manitowoc Beverage Systems, Inc.; Manitowoc Foodservice Europe, S.r.l. (Italy); Manitowoc (Hangzhou) Refrigeration Co., Ltd. (China); Manitowoc Ice, Inc.; McCall Refrigeration. MARINE GROUP: Bay Shipbuilding Company; Cleveland Shiprepair Company; Marinette Marine Corporation; Toledo Shiprepair Company.
Principal Operating Units: Crane Group; Foodservice Group; Marine Group.
Principal Competitors: Terex Corporation; Hitachi, Ltd.; JLG Industries, Inc.; Sumitomo Corp.; Liebherr-International AG; Link-Belt Construction Equipment Co.; Kobelco Construction Machinery Co.; Tadano, Ltd.; Manitex Inc.; Enodis plc; IMI Cornelius Group; Lancer Corporation; Hoshizaki America Inc.; Traulsen and Company Inc.; Nor-Lake Inc.; American Panel Corporation; Bollinger Shipyards, Inc.; Atlantic Marine, Inc.; Bender Shipbuilding and Repair Co., Inc.; Fraser Shipyards, Inc.; Friede Goldman Halter Inc.; Port Weller Dry Docks.