Wah Chang - Company Profile, Information, Business Description, History, Background Information on Wah Chang

1600 N.E. Old Salem Road

Company Perspectives

"Firsts" are built on knowledge--our own and that of our customers. Wah Chang helps develop that knowledge through programs such as worldwide conference and seminars as well as on-site support and in-plant welding seminars. Programs such as these give our customers the in-depth training they need for selecting, implementing and maintaining metal products that meet their unique requirements.

History of Wah Chang

Wah Chang produces reactive and refractory metals and alloys and chemicals. Its products include corrosion-resistant metals, such as hafnium, niobium, titanium, vanadium, and zirconium that are used in commercial airliners, MRIs, rockets, satellites, orthopedic implants, and nuclear fuel. Its zirconium and hafnium industrial chemicals include such products as zirconium basic carbonate, a drying agent in antiperspirants and paints. Wah Chang also offers analytical laboratory services, photomicrographs of metals, and aerospace fabrication, and maintains an aerospace machine shop to design products for that industry. It operates metals plants in Alabama, Oregon, and Pennsylvania, and a laboratory in Illinois.

1916-1967: Bicoastal Growth as a Government Contractor

In 1916, Dr. K. C. Li founded the Wah Chang Corporation, an international tungsten ore and concentrate trading company, in New York state. Li was a mining engineer who had earned worldwide recognition as the leading authority in mining and processing tungsten ores. He came from a family that owned an antimony and tungsten mining operation in China.

According to company literature, Li chose the name Wah Chang, which means "great development," to indicate the promising future he saw for the world in metals. The first symbol of the company's name in Chinese represents a tree copiously covered with blossoms. The second character denotes two suns, or radiance greater than that which humans have known previously. Li, who envisioned his company contributing "intellectual brilliance that would lead to great progress for all people," remained actively involved in the company until his death in 1961.

During the 1920s and 1930s, Wah Chang increased the scope of its operations beyond importing and exporting raw materials to become an international engineering firm. In the 1940s, it expanded into the reduction and refining of all types of tungsten ores and also began to produce tungsten and molybdenum mill products.

Immediately prior to World War I, Wah Chang developed an ongoing relationship with the United States government. During the war, the company supplied almost 100 percent of the nation's antimony needs with metal that it obtained from the Far East. Wah Chang later helped the United States build its stockpile of tungsten, tin, and antimony and became allocating agent for all the tungsten that defense forces used during World War II.

In 1955, Wah Chang moved into the reactive metal field by producing the first high-purity titanium sponge in the United States at the government's Bureau of Mines station in Nevada. In early 1956, the Atomic Energy Commission contracted with Wah Chang to run the U. S. Bureau of Mines zirconium plant in Albany, Oregon, to develop high-purity zirconium for use in the Navy's nuclear program.

Wah Chang purchased land and built a second plant on a 45-acre site in Albany, Oregon, in 1956, and in 1957 the company began production there of zirconium, using chemical and high heat processes to separate the zircon and the silica in zircon silicate sand, and producing reactor- and commercial-grade zirconium sponge and hafnium as a side-product. Beginning in 1959, Wah Chang partnered with Boeing to develop niobium alloys for rocket engines and satellites. In the early 1960s, the Atomic Energy Commission's aircraft nuclear propulsion project fueled demand for columbium products, and Wah Chang installed additional production facilities for this material at its Albany plant.

1967-1989: Dramatic Growth Followed by Two Decades of Challenges

In 1967, Teledyne Inc. purchased the Wah Chang facilities, infusing capital and management experience into the company. During the decade that followed, Wah Chang expanded niobium production to meet needs for rocket nozzle skirt extensions, satellite orbit thrusters, MRI equipment, and particle accelerators. Commercial nuclear application of zirconium and hafnium also grew as Wah Chang supplied material for nuclear power plants. As a result, Wah Chang experienced an average growth rate of more than 20 percent per year during the early 1970s, becoming the world's largest production facility for zirconium and hafnium metals, niobium and tantalum alloys, and a leading research center for refractory metals.

The company also made advances in the area of employee safety, instituting a major safety awareness campaign beginning after 1974, a year in which one on-the-job injury occurred for every five workers. By 1976, the number of injuries at the company had dropped to 1 for every 13 workers, and by 1983, Wah Chang was experiencing one-fifth of the statewide average lost-time accident rate for manufacturing industries. By 2006, fewer than one in 20 workers experienced an on-the-job injury, a number that translated to less than half the rate of other facilities in the same industry classification.

The 1980s were a strong decade overall for Wah Chang; superalloy demand was high as aviation engine and airframe makers were making a lot of products for assembly or were stockpiling inventory. In the early 1980s, Wah Chang still occupied its original 45-acre site in Albany, Oregon, but its facilities covered an additional 65 acres and included 130 buildings and seven operating divisions. It had a virtual monopoly on the free-world production of zirconium and produced twice as much as its sole domestic competitor, Westinghouse's Western Zirconium.

However, the company's production capacity had been stagnant from about 1972, and in 1982, as the specialty metals industry overall hit a slump, French zirconium producer Cezus, walked off with about 40 percent of the world market for that metal. (By 1989, Cezus was responsible for 45 percent of world zirconium production, Western Zirconium 25 percent, and Wah Chang 30 percent.) This, plus a dive in specialty metals prices, led Wah Chang to take action. In 1982, it joined forces with Mitsui and Ishizuka Research to form Zirconium Industry, which produced zirconium sponge using a simplified process to separate the hafnium from the zirconium sand at a new plant in Japan beginning in 1983.

Another challenge facing Wah Chang beginning in 1982 arose over the disposal of the radioactive sludge produced as a by-product of the zirconium refining process at its Albany plant between 1967 and the late 1970s. This waste contained elevated levels of radium, uranium, and thorium. Wah Chang had been storing the sludge in large ponds adjacent to an old channel of the Willamette River about 400 feet from the river's main stem. The company proposed stabilizing the sludge by raising dykes around it, covering the face of the structures with riprap, and covering the sludge with plastic, clay, and rock. However, the Oregon Energy Facility Siting Council ordered it to move the sludge about a mile from its plant and three miles from Albany to the state's first radioactive waste disposal site.

Wah Chang financed a study that showed that radioactive levels in the sludge were too low to be hazardous, but the Siting Council rejected the company's request to take the study into evidence. Wah Chang, in response, appealed the Council's order to move the sludge to the State Supreme Court. However, in the end, Wah Chang removed 100,000 cubic yards of sludge and about 2,000 cubic yards of radioactive material between 1991 and 1993 at a cost of about $10 million, and in 1997, another 1,500 cubic yards of sludge. Groundwater remedies were curtailed in 1997.

Meanwhile, in 1989, a similar discovery of 16,000 tons of radioactive material containing thorium and radium at the company's former smelting and refining plant in Glen Cove, New York, again raised the specter of long-term environmental issues for the company. Former employees of the plant came forward to talk about their health problems in a 1989 New York Times article. "We used to joke about the contamination, saying, 'I'm not putting my hands in that powder, I don't know what's in it,'" one employee was quoted in the article. He continued, "'Now I wonder how big a joke it was. I hope the joke isn't on us.'"

The abandoned Glen Cove property, added to EPA's Superfund list, contained nine dilapidated buildings, more than 150 chemical and processing tanks, 200 drums of waste chemicals, and thousands of barrels, containers, and boxes containing ore residue. New York State's Department of Health responded by working with Glen Cove officials to take medical histories of former plant employees to determine whether they had been exposed to radiation or hazardous chemicals or metals. The Department's initial assessment of the site was that it posed no danger to the public because thorium is a low emitter of radiation. However, it continued to monitor the area and to take soil and air samples, as well as to study local creek and fish life.

1990-2006: Industry Slumps Lead to Redirection

The timing of the Glen Cove discovery could not have been worse for Wah Chang. In the early 1990s, as Pentagon spending ended, jet engine manufactures and other superalloy users worked hard to reduce their inventories, and from 1990 to 1995, the metals industry went into a steep decline. Observers attributed the industry's worst slump ever to three factors: the end of the Cold War, which led to a glut of low-priced titanium from the former Soviet Union onto the world market; the Gulf War, which triggered worldwide recession; and airliner deregulation, which resulted in "a very undisciplined purchasing pattern" for commercial transports, the single largest end market for titanium, according to a 1998 American Metal Market Supplement article.

Wah Chang's parent company Teledyne merged with Allegheny Technologies to become Allegheny Teledyne Inc. (ATI) in 1996. ATI responded to rising demand for specialty metals from 1995 to 1998 by acquiring Oregon Metallurgical Corporation (Oremet) of Albany, Oregon, in 1998. Oremet, an integrated titanium producer, had been founded, like Wah Chang, in 1956, and had collaborated with Wah Chang several times in the 1990s.

Soon after, due to increased competition in the titanium industry, ATI consolidated Wah Chang and Oremet. The consolidation entailed 88 layoffs at both Oremet and Wah Chang, which together became a part of ATI's specialty metals division. This division also consisted of Allegheny Ludlum, producer of stainless steel and other specialty metals; Allvac, producer of superalloys and other metals, including titanium; International Hearth Melting, producer of titanium and zirconium; Rodney Metals, manufacturer of high performance alloys; Rome Metals, a finishing facility for flat-rolled products; and Titanium Industries, distributor and processor of titanium mill products.

In 1998 and 1999, titanium shipments again dropped off as the commercial aircraft industry reduced inventory. Under the leadership of Lynn D. Davis, appointed president of Wah Chang in 2000, the company slightly altered its course. Davis knew Wah Chang well; he had joined company in 1977 after earning masters degree in metallurgical engineering and had spent time as Oremet's company's executive vice-president and general manager.

Into the 21st Century

In 2001, Wah Chang began to focus on high-value products such as precision rolled strip, nickel-based and cobalt-based alloys and superalloys, premium titanium, and high-purity niobium alloys. ATI invested $50 million on expanding Allvac and Wah Chang and also built an energy co-generation plant that year to reduce its annual energy bill. Also in 2001, Wah Chang closed its titanium sponge manufacturing plant in Albany, Oregon, leaving Titanium Metals Corporation of Denver as the only domestic titanium sponge producer. Wah Chang continued to produce titanium ingot, slab, and mill products, using the low-priced sponge available for purchase on open market.

A strike led by the United Steelworkers of America idled the Wah Chang plant in 2001 after the union that represented the company's work force rejected a new labor contract. The dispute continued for seven months, during which time ATI's Wah Chang hired temporary workers; it ended when both sides approved a new six-year labor agreement in early 2002.

After the strike, the company returned to business as usual, continuing its focus on high-value products for the medical, chemical, energy, and other industries. One of its ventures entailed adapting a zirconium-niobium alloy originally designed for use in nuclear reactor tubes to knee and hip joint implants. In another venture, Wah Chang agreed to supply the specialized alloys for the magnets and walls of the new fusion reactor, the International Thermonuclear Experimental Reactor, being built in France. With the number of zirconium applications having grown from a small number in the 1960s to thousands by 2006, the future looked brilliant for Wah Chang.

Principal Competitors

Millenium Chemicals Inc.; OM Group Inc.; Titanium Metals Corporation; Precision Castparts Corporation; RTI International Metals Inc.


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