Global Fastener News

1983 FIN – Microdot Gives Employees Bonuses for Buying New American Cars

May 18
00:00 2010

February 17, 1983 FIN – Microdot Inc. is doing what it can to help the domestic auto industry get back on its feet – or more accurately, wheels.

Darien, Conn.-based Microdot announced a national “Let’s Get America Moving Again” campaign to spark auto industry sales and is offering its 4,000 employees a $200 bonus if they buy a new American-made car or light truck before April 17, 1983.

The company is also running advertisements in major news publications encouraging business leaders to join them in this effort and has written letters to chief executive officers of leading U.S. corporations encouraging their participation in this campaign at their companies.
Lawrence G. Blackmon, president and chief executive officer of Microdot, in launching this effort pointed out the fact that Microdot isn’t new to such an employee bonus campaign. During the 1974-75 auto industry recession, the company was one of the first companies to offer bonuses to its employees to help revive new car sales.

Microdot is a major manufacturer of fasteners and fastener systems, oil sales and sealing devices and electronic sub systems for the automotive, aerospace and industrial markets. It also makes ingot moulds for the steel industry. Microdot has 32 plants in 11 states.
The fastener group is made up of four divisions and is based in the Detroit suburb of Troy, Mich.
©1983/2010 Fastener Industry News

Scroll Down for a summary of Microdot’s Fastener Background

Microdot History
Editor’s Note: The following is a summary of the 1994 International Director of Company Histories story of Microdot:

Microdot Inc. traces its history to the Felts Corporation – a small fastener manufacturer based in Southern California, which was established in 1950.
Felts produced a narrow line of clips, nuts and bolts, and tiny cable connectors.

New hearing aid connectors set the company apart from other manufacturers. “At the time, hearing aid cords were unable to withstand frequent bending and often broke off. This small market provided the company with an entree into the electronics industry” and more miniature electronic devices increased demand for small components.

In 1955 Felts began larger contracts supplying to auto manufacturers and electronic components to the emerging aerospace industry and the company was renamed Microdot Incorporated.
In subsequent years Microdot acquired several other companies.

In 1960, Microdot went public gaining capital for more acquisitions, including a move into instrumentation devices. “This new emphasis by Microdot on industrial control systems turned out to be highly fortunate,” the International Directory of Company Histories states. “Only months later, President Kennedy delivered his famous speech on space exploration in which he challenged the nation to put a man on the moon and return him safely to Earth, and to accomplish this historic task before the end of the decade. ”
Microdot became a subcontractor in the liquid fuel systems and other liquid controls for the race to the moon and Microdot expanded with more acquisitions.

Microdot had sales of only $2 million in 1960, with average sales per employee of $12,000. By 1966, sales climbed to $15.2 billion and sales per employee exceeded $21,000. Microdot was growing at 39% per year.
Military contracts once accounted for 90% of sales, but by 1967 commercial projects accounted for half of Microdot’s business by 1967. Microdot added new product lines, including telemetry calibration devices, pressure transducers, turbine flow meters, and solid state component connectors.

Kaynar Acquisition

“By far, however, Microdot’s most important acquisition occurred in October, when it absorbed the operations of the Kaynar Manufacturing Company, located in Fullerton, California,” according to the International Directory. “Kaynar, a privately owned company founded by Frank A. Klaus, made a line of lightweight self-locking metal fasteners for aerospace and other industrial customers. Because its sales were almost as great as Microdot’s, the acquisition represented a virtual doubling of the company’s size overnight.”

In 1968 Microdot acquired fastener suppliers Aircraft Threaded Products and Adams Supply, both suppliers of fastening devices, primarily for aerospace industries.

Rudolph Eberstadt Jr. joined Microdot with the acquisition of Vare, which he had built from steel producer Republic Industrial – which he inherited from his father in 1961 – into a major manufacturer of steel moulds.
When Eberstadt took the reins of Microdot he began to eliminate businesses, which were no longer strategic core businesses.
“Microdot began to channel further investment into electronic systems and fasteners, including a new line of products intended to meet federal standards for auto safety. Microdot was a leading manufacturer of devices that sounded an alarm in new car models when drivers and passengers failed to fasten their seat belts.”

In 1975, General Cable Corporation began an attempt to takeover Microdot with a $17 per share when Microdot was trading at under $12.
Eberstadt launched a defense including newspaper ads calling a takeover “unethical, immoral, and harmful to business, and implored other corporate leaders to voice their outrage to those who profited from it: commercial and investment banks.”
Eberstadt charged that General Cable’s chair R. P. Jensen launched the bid only to protect his annual bonus, that Morgan Stanley was lobbying for a buyout, and that brokers were hungry for commissions.
Microdot’s board advised shareholders to reject the offer.

Eberstadt searched for a friendly suitor and found Ben Heineman, president of Chicago-based Northwest Industries, the parent company of interests spun off from the Chicago & Northwestern Railroad Company.
Northwest offered $21 per share and in 1976 acquired 83% of shares.

Larry Blackmon succeeded Eberstadt as Microdot’s head of operations.
Northwest “began to suffer greatly under the stress of its widely varied business, which included Acme Boot, Lone Star Steel, and General Battery, as well as BVD underwear, a range of food products, and a chemical manufacturer. While business remained strong at Microdot, Northwest was forced to divest several of its businesses,” the International Directory explained.

In 1984, Northwest sold Microdot to senior managers led by Richard Streubel for $121 million.
“Microdot, however, virtually disappeared from public view. As a private company it was no longer obliged to issue an annual report or publish its financial statistics,” the International Directory reported.
The company sold automotive companies to focus on aerospace markets.”

“As a result of the Reagan Administration’s armament and Strategic Defense Initiative programs, this segment was growing faster than any other industrial market. In the process of this reorientation of the business, Microdot reduced the number of its manufacturing facilities from 20 to only six, including one in Britain. Microdot thus emerged with only two operating divisions, an Interconnect Systems group and Aerospace Fastening Systems group,” the directory summarized.

In the early 1990s Microdot remained in aerospace markets, where civilian, scientific, and military, with principal subsidiaries: Microdot Aerospace Ltd. (UK); Interconnect Systems Division; Aerospace Fastening Systems Group.

In its 1994 summary the International Directory of Company Histories listed Microdot as a privately-held corporation with 4,500 employees and sales of $500 million from bolts, nuts, rivets, washers and fabricated wire products.
©2010 Fastener Industry News.

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