Global Fastener News

1983 FIN – Fastener Giant RB&W Shedding a Fashionable Business

October 12
00:00 2011

RB&W Dates Back to 1845
RB&W is one of the oldest companies in the fastener business as well as the biggest. The company was established in Pemberwick, Connecticut in 1845 by Ellwood Burdsall, a clerk for a stove foundry and William E. Ward, a mechanic for a novelty company (who went on to invent a lot of equipment used in fastener making).

They rented space in the button factory of Russell, Mackay & Beach to make wood-screws on machinery invented by Ward and soon after switched to making the first stove bolts and nuts.

To obtain additional capital, Burdsall and Ward sold a one-third interest in the business to the button factory. When Russell bought the interests of both Mackay and Beach on 1951 the present day Russell, Burdsall & Ward came into being.

The company later moved its main operations and headquarters to Port Chester, N.Y. and in the early 1970’s that operation was closed and corporate headquarters moved to the present location in Mentor, Ohio.  ©1983/2011 Fastener Industry News

By Dick Callahan
FIN Editor
April 1, 1983 FIN – The management of Russell, Burdsall & Ward Corp., Mentor, Ohio, will be shedding clothes –  the line of ladies’ and children’s apparel sold through RB&W,’s chain of some 80 Mangel specialty shops throughout the southeast and parts of the Midwest.

This retailing segment, headquartered in North Bergen, N.J., has been part of RB&W since 1978 and in recent years has contributed about 13-15% of total sales, but nothing to the bottom line (it wasn’t profitable when RB&W merged with it either but it did have some hefty tax loss carry forwards).

But that’s not all that RB&W is tossing off. It has sold its big (440,000 sq ft) manufacturing operations (employing 175 workers) in Mentor, Ohio, for about $4.6 million and is moving manufacturing from there to a smaller (150,000 sq. ft.) facility in nearby Cleveland, which the company has agreed to purchase this year.

At the new location, the company will concentrate its manufacturing of automotive and automotive-type products rather than the broad line of fasteners that are now produced at Mentor.

Corporate headquarters (and probably some divisional headquarters) will also relocate to Cleveland, but will be in separate facilities from the manufacturing operations.

 

These latest developments are in addition a number of changes that have taken place at the nation’s largest fastener company in the recent past.

These changes have included:

• The closing of the Los Angeles fastener manufacturing plant.

• The closing of the Fabricated Metal Products plant in Livonia, Michigan.

• The consolidation of the Pacific Distribution Center in Los Angeles with the Central Distribution Center in Dallas.

• The consolidation of the Bosco branch in Nashville with the Memphis branch.

• The consolidation of the Rancho Cucamonga, Calif. Branch with the City of Commerce branch of RB&W Fastening Service Center.

• The consolidation of the international branch of the Fastener House into the Cleveland branch as the Export Department.

 

In addition, there have been a sizeable number of executive changes in both the company’s upper and middle management.

To understand better what is going on perhaps the best thing is to describe the company’s present structure as it looks after the changes mentioned above are factored in.

Without the Mangel Division, RB&W is now a completely metals-orientated company, with two major segments; manufacturing and distribution.

Manufacturing is made up of the Metal Forming Division (sales of $57.2 million in the 11 months ended Dec. 31, 1982) and RB&W Powered Metal Products, The Metal Forming Division has screw products plant in Mentor; Chicago and Rock Falls, ILL.; and nut products plant in Coraopolis, Pa., Kendallville, Ind., Kent, Ohio; and Toronto, Canada. Some of these plants became a part of RB&W with the acquisition of a major portion of the Industrial Fastener Division of the Lamson & Sessions Co. on April 8, 1981 for approximately $20 million. The RB&W Powered Metal Products group has its manufacturing facilities in Coldwater, Mich.

Distribution is made up of:

•Bosco Fastening Service Center, Dallas, Texas, which has branches in Little Rock, Ark.; Colorado Springs and Denver, Colorado; Wichita, Kansas; Baton Rouge, La.; Kansas City, Missouri; Omaha, Neb.; Albuquerque, NM; Oklahoma City and Tulsa, Oklahoma; Memphis, Tenn.; and Beaumont, Dallas, El Paso, Fort Worth, and Houston, Texas.

• The Fastener House, Cleveland, Ohio, which has branches in Elk Grove Village, Ill.; Fort Wayne and Indianapolis, Ind.; Livonia, Mich.; Jamestown and Rochester, N.Y.; Cincinnati, Cleveland, Columbus, Mansfield, Ontario (scene of a recent fire), and Youngstown, Ohio; Erie and Pittsburgh, Pa.; and London, England.

• RB&W Fastening Service Center (formerly Bosco Fastener House), City of Commerce, Calif., which has branches in Phoenix, Ariz.; City of Commerce, Calif.; Pocatello, Idaho; Tigard, Oregon; Orem and Salt Lake City, Utah; and Seattle, Washington.

The majority control of RB&W (50.1%) is owned by Automotive Hardware Limited of Toronto, Canada which on April 8, 1981, through its subsidiary corporation, Federal Bolt & Nut Corporation Limited and Docap Corporation Limited, acquired 200,000 shares of 5% cumulative convertible, preferred stock of RB&W used to purchase the fastener operations of Lamson & Sessions).

1982 Results

RB&W has just published the financial results for the 11 months ending December 31, 1982 (putting its fiscal year in line with the calendar year). The 1982 fiscal year ended Jan. 30, 1982—so in comparing results it’s important to be aware of the difference in the lengths of the two reporting periods.

For the 11 months ended Dec.31, 1982, net sales were $113,888,000. Net loss for the 1 months period was $5,413,000 (including an estimated loss of $3.6 million on the disposal of the Mangel Division and another $1,470,000 loss from the operations of that division). For the 12 months ended Jan. 30, 1982 there was a net loss of $1,713,000 on sales of $146,906,000. RB&W also had a net loss for the year ended Jan. 1981 ($3.3 million loss on sales of $111.2 million) but showed a profit for the year ended Feb. 2, 1980 ($1.8 million on sales of $136.8 million) and for the year ended Feb. 3, 1979 ($3.9 million on sales of $122.9 million).

Obviously it was fashions rather than fasteners that accounted for most of the red ink in RB&W’s most recent financial report. Sales for the manufacturing segment totaled $67.2 million (down from $85.5 million in the prior period) and net operating profit was $1,031,000 (down from $2.4 million in the prior period).
Sales of the Distribution Division for the 11 months were $46,664,000 (down $14.7 million from the previous 12 months sales of $61.4 million) with an operating income of $431,000 (a decrease of $2.8 million from $3.2 million in the previous 12 months). The gain on the sales of the Mentor plant of $3,976,000 is included as a non-operating item and is net of the estimated costs of relocating the manufacturing facilities and the corporate and divisional offices.
Looking on the brighter side, the company has operating tax loss carry forwards of $31.1 million available from 1983 through 1997 and an investment tax credit carry forward of $742,000.
Also available for future sources of income are real estate holdings in Los Angeles, California and Livonia, Michigan and the proceeds from the sale of excess equipment from closed down operations.
New Management Team

FIN has already reported on some of the recent management changes at RB&W but just to bring you up to date, here’s the current lineup:
The board of directors is made up of 11 persons including three representatives of Automotive Hardware Limited (Irwin Goldhart, Henry W. Lubaszka and Kenneth W. Ranney).

The offices of RB&W include; John L. Lohrman, 62, president and CEO (who has held that title since 1977); Irwin Goldhart, 71, chairman (who’s also president and chairman of Automotive Hardware); Edward J. Hamilton, 53, executive vice president and secretary (who overall operating responsibilities, especially of the Metal Forming Div.); Andrew A. Arena, vice president and general manager, Distribution Division (who was formerly president of The Fastener House); Joseph F. Lencewicz II, 36, vice president general sales manager (with overall responsibilities for field sales activities of the Metal Forming Div.); Boyd O. Murdock, 41, chief financial office (who replaced R. Peter Washington, vice president-finance in that function); David A. Spoehr, 55, senior vice president sales; and Nathan Hoffman, 46, assistant secretary.

Terry D. Capuano is vice president-markets and products; Donald H. Chadwick is director-engineering services; Dennis J. Gasper is a director-corporate systems data processing; and Timothy R. Linehan is corporate controller.

There have been some recent changes in both the distribution and manufacturing groups:

• In the distribution area, Raymond L. Doane is vice president, general manager of the RB&W Fastening Service Center (formerly Bosco Fastener House), replacing John A. Scappatura; Michael L. Justice is vice president, general manager of The Fastener House, replacing Andrew A. Arena who was president of that group before becoming a corporate vice president; and James M. Layden continues as president of Bosco Fastening Service Center.

• In the manufacturing group, Paul D. Boy, who was plant manager at Coraopolis, Pa. Is now plant manager at Kent, Ohio and John J. Mochel has succeeded him as plant manager at Coraopolis.

As a result of the changes that have taken place a number of positions have been eliminated over the past year. No longer with the company or assigned to new positions are: Daniel A. Sedlak, former general manger-nut products; Keith E. Sladek, general manager-screw products; Charles G. Smoot, plant manager-Los Angeles; and Arthur G. Kudelko, operations manager-Fabricated Metal Products.

With the restructuring of its operations and management, RB&W is certainly a very different company that it was just a few years ago. And we can probably look for even more changes as the company adjusts to what’s happening in the fastener marketplace. The company is doing what it has to in order to survive—and surviving is something it does very well.

Postscript: If you’re wondering how Lamson & Sessions Co. is doing after selling off most of its fastener business to RB&W, you might be surprised to learn that fasteners weren’t the only drag on the company’s profits. For the year ended Dec. 31 the company had sales of $130,352,000 (compared with $215,975,000 the previous year) and a net loss of $18,038,ooo (compared with a loss of $8,995.000 the previous year). Maybe they should have kept the fasteners and gotten rid of something else. ©1983/2011 Fastener Industry News.

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