The Kohler Company is a manufacturing company in Kohler, Wisconsin best known for its plumbing products. Kohler also manufactures furniture, cabinetry, tile, engines, and generators.
Mr. K. David Kohler serves as Independent Director of Interface, Inc. since October 2006. Since April 2009, he has served as the President and Chief Operating Officer for Kohler Co., a global leader in the manufacture of kitchen and bath products, interior furnishings, engines and power generation systems, and an owner and operator of golf and resort destinations. Previously, he served as the Executive Vice President (2007 to 2009) and Group President of the Kitchen and Bath Group (1999 to 2007) for Kohler. Mr. Kohler was formerly a chairman of the National Kitchen and Bath Association’s Board of Governors of Manufacturing. He has served as a member of the board of Kohler Co. since 1999, and has previously served on the board of a privately-held manufacturer. He is also a director of Internacional de Cerámica, S.A.B. de C.V., a public company traded on the Mexican Stock Market.
Kohler was founded in 1873 by Austrian immigrant John Michael Kohler with the purchase of the Sheboygan Union Iron and Steel Foundry. Early products included cast iron and steel farm implements, castings for furniture factories, and ornamental iron pieces including cemetery crosses and settees. A breakthrough came in 1883 when John Michael applied enamel to a cast iron horse trough to create the company's first bathtub. The company has been primarily in the plumbing business ever since, known for plumbing fixtures. In 1888, the then Kohler Water Works developed the original trademarked Bubbler. They became popular, and other companies developed similar products under the generic term "drinking fountain." The colloquial word "bubbler" is still used in several regions of the United States.
In 1934 and 1954, the Kohler Strikes took place.
The Kohler group acquired 2005 Sdmo Industries, a manufacturer of power generators, along with SOREEL (electrical engineering) and BES (maintenance of gensets) from the French Meunier Holding.
Kohler Company is one of the largest privately operated firms in the United States. Unlike others that were once public companies but were taken private through debt-ridden leveraged buyouts, Kohler has always been owned and run by a circle of family members who descended from the founder. One of Wisconsin's largest employers, Kohler is best known for its line of baths, sinks, toilets, and other bathroom fixtures. The company is also a leading producer of electric generators and small engines, owns two distinguished furniture manufacturers, and operates successful hospitality and real estate businesses in Kohler, Wisconsin, where it has its corporate headquarters and largest manufacturing facilities.
Former Wisconsin Governor Walter J. Kohler, Sr. was President of Kohler Company and his son former Wisconsin Governor Walter J. Kohler, Jr. served for many years in senior management. Today, the president of Kohler is Herbert V. Kohler, Jr. (born February 20, 1939), grandson of the founder.
In 1998, Kohler made a plan to buy back any outstanding shares not owned by the family. All family members had to exchange their common shares for share with limited rights, those that could not be sold. Since Kohler is not a publicly traded company, the number of shares floating were minimal. Kohler offered $55,400 per share, but some shareholders challenged this valuation and sued.
The IRS also challenged this valuation by prosecuting the estate of Frederick Kohler, who had recently died holding 975 shares. Kohler won the lawsuit against the IRS.
By 1932, however, residential building rates had fallen to just 11 percent of their 1928 levels, and Kohler was facing the prospect of massive employee layoffs. Because the company was not in debt and retained favorable terms for raw materials, Kohler resolved to keep the company in operation, and to stockpile whatever products could not be sold. This full employment policy had the effect of saving the local economy from ruin.
The company was revisited by labor unrest in July 1934 when a portion of the workforce struck Kohler for the right to be represented by the Federal Union. The strike was canceled later that year when the union lost an employee vote to represent all of Kohler's production and maintenance employees. In arbitration, however, the National Labor Relations Board instructed the company to recognize a smaller, independent union, the Kohler Workers' Association.
In 1940 Walter Kohler died, and a battle for control of the firm broke out between Walter's children and their father's younger brother, Herbert Kohler, who was running the company. While the children argued for strict hereditary succession, the situation was further complicated by the fact that Herbert's mother and Walter's mother were sisters. In the end, Herbert prevailed.
When the United States became involved in World War II, much of Kohler's commercial operations ground to a halt. Iron, brass, and chrome supplies were diverted for war use by the government, which asked Kohler to resume production of military wares (during World War I Kohler had made mine anchors, projectiles, and shells). The company's first military products were precision valves and fittings for use in aircraft, such as the DC-3 and B-29. Kohler also built a variety of electric generators for the armed forces.
Based on Kohler's experience in precision crafted metallurgy, the government asked the company to produce 105mm and three-inch artillery shells, as well as forgings for rockets and other shells, fuses, torpedo tubes, piston rings, shell rotating bands, and engine bearings. After the war, Kohler discontinued much of its military production, but resumed building 105mm shells during the Korean War. The company did, however, continue to manufacture precision products and generators, albeit for different markets.
Kohler's bath and kitchen fixtures are available in American hardware and home improvement stores. Kohler still makes traditional cast iron bathtubs, one of the few United States manufacturers to do so. Besides residential products, Kohler manufactures a commercial line of bathroom fixtures. The company also does artistic custom work, such as hand-painted sinks and toilets.
Kohler also makes a wide range of small industrial engines. Traditionally, the company manufactured gasoline engines, however after purchasing Lombardini company (Italy), it extended its range and now offers diesel engines up to 65HP. In 2007, Kohler created a joint venture in China called Kohler-YinXiang Ltd., based in Chongquing, China, to manufacture small gasoline engines, and intends to begin importing more of their engines, rather than building them in the USA.
Kohler engines power a range of devices from water pumps to off-road vehicles. The Global Power group manufactures generators ranging in size from 8,500 watt to 2.8 megawatts. Kohler was the first company to offer residential back-up generators to consumers, starting in 1920.
More recently, the company has been expanding in the areas of furniture, cabinetry, and tile in the consumer market, and engines and generators for industry. The Kohler Interiors division of the company comprises Baker Furniture, McGuire Furniture, Kallista and Ann Sacks Tile.
Kohler's UK subsidiary is the Cheltenham-based Kohler Mira Ltd, best known for manufacturing Mira Showers.
Kohler displays many of its products at the Kohler Design Center in the village of Kohler.
Given the occasional unreliability of utility-supplied power, many hospitals, banks, and other offices had to have their own emergency standby power, but required larger capacities than the ten megawatt models Kohler manufactured. Eager to supply this market, Kohler began development of 100 kilowatt diesel-powered systems. As the market continued to grow, Kohler introduced a 230 kilowatt model and, some years later, a massive 500 kilowatt system.
Kohler also manufactured small gasoline engines, which were first built to power the company's electric generators. During the 1950s, the small engines found an explosive market in Thailand and Vietnam, where they were used to power boats, pump water on rice paddies, and drive air compressors. Virtually all the air-cooled engines in Southeast Asia at this time were made by Kohler and sold through a distributor in Hong Kong.
In 1951 Walter Kohler, Jr., a former officer and director of the company, followed in his father's footsteps to become the governor of Wisconsin. He was reelected twice, serving until 1957. At the company, labor trouble arose again in April 1954 when the UAW-CIO local called a walkout to protest changes in union shop rules, seniority, and pay increases without regard to merit. Seeing these demands as unfair and potentially crippling to the profitable operation of the corporation, the company resisted. The strike continued until September 1960, when bargaining resumed, and a new contract was concluded two years later. The strike earned a place in the Guinness Book of World Records as the longest strike in American history.
Entering the 1960s, the company's engine division, still strong in Asia, gained momentum in the United States, where Kohler motors were used to power lawnmowers, garden tractors, construction equipment, and even snowmobiles. International Harvester, John Deere, Wheel-Horse, Jacobsen, and Bombardier (inventor of the snowmobile) incorporated Kohler engines in their products. By 1963 Kohler was one of the leading small engine suppliers in the industry.
In order to keep pace with this growing demand, Kohler established two new production facilities, in Mexico City and Toronto. The company ran into strong competition, however, from Japanese and German manufacturers who had extensive experience with two- and four-stroke engines. Kohler suffered market share loss, but won back a significant share of the market by introducing higher technology two-cycle engines in 1968. It later won a suit against market leader Briggs & Stratton, which had tried to coerce its distributors to stop handling Kohler engines.
The company experienced another leadership crisis in 1968 when Kohler's president, J.L. Kuplic, died unexpectedly. Only six days later, Herbert Kohler, Sr., chairman and CEO of the company for 28 years, also died. Herbert Kohler, Jr., heir to the company, was at the time a self-described 'hippie,' pursuing a career outside the company. He later told Supply House Times, 'By preplanning my life, my father removed my right to fail. As a result, for a portion of my life I experienced nothing but failure. That led me to become a substantial rebel.'
Company directors elected to pass over the younger Kohler, and named an interim chairman. In an unusual departure from company traditions, the directors named nonfamily members Lyman Conger and Walter Cleveland as chairman and president, respectively. When Conger retired in 1972, Herb Kohler was appointed chairman, and two years later he succeeded Cleveland as company president. In 1978, concerned about the company slipping from family control, Kohler engineered a 1-for-20 reverse stock split, which reduced the number of shareholders in the private company from more than 400 to about 250 and the number of outstanding shares from 161,105 to about 8,000. The maneuver also forced a number of nonfamily shareholders to sell out at $412.50 per share, leaving the Kohler family with 96 percent of the voting shares.
Late 20th Century: Growth Through Acquisition
Under Herb Kohler's leadership, Kohler Company more than tripled in size to an estimated $1.34 billion in annual sales by the late 1980s. After 110 years of strictly internal growth, much of the expansion came from the company's new venture into acquisitions. In 1984 the company acquired the Schaumburg, Illinois-based Sterling Faucet Company. Two years later, Kohler purchased Baker, Knapp & Tubbs, a high-end furniture manufacturer headquartered in Grand Rapids, Michigan, and Jacob Delafon, a plumbing products manufacturer headquartered in Paris. The company also established a Japanese subsidiary. In 1989 Kohler purchased the McGuire Furniture Company, a San Francisco-based manufacturer, Oakland-based Kallista, Inc., Portland-based Ann Sacks Tile and Stone, and Dupont Sanitaire-Chauffage, in Paris.
By this time, Kohler had also expanded into the leisure industry, turning the company's one-time workers' hotel, the American Club, into a successful full-scale convention and recreation resort hotel. Having poured about $50 million into the resort from 1978 through the mid-1990s, Kohler created the only resort in the Midwest to receive AAA's top five-diamond rating. The resort's centerpiece was Blackwolf Run, which offered two world championship golf courses created by a top course designer, Pete Dye. Blackwolf Run hosted the 1998 U.S. Women's Open Championship. The bathrooms in the American Club's fancy guest rooms also served as showcases for Kohler Company products. Serving a similar function was the Kohler Design Center, which opened in Sheboygan in 1985 as a 36,000-square-foot showcase of Kohler plumbing fixtures, faucets, engines, and generators; Baker and McGuire furniture; Ann Sacks tile and stone; and other company products.
Kohler continued to expand in the 1990s through acquisition, increasingly venturing overseas to do so. In 1993 the company acquired Sanijura, S.A., a French maker of bathroom cabinets. The following year, Kohler purchased Osio, a maker of enamel baths based in Italy. The company ventured further into the cabinet sector through the 1995 acquisition of Pennsylvania-based Robern, Inc., which specialized in mirrored cabinets, lighting fixtures, and accessories; and the 1996 addition of Canac Kitchens, Ltd., a maker of wood kitchen cabinets based in Ontario, Canada. Another France-based firm, Holdiam, S.A., was added in 1995, bringing to Kohler the leading French maker of acrylic baths, whirlpools, synthetic kitchen sinks, and artistic faucets. In the late 1990s the company established Kohler China Ltd., which had locations in Shanghai, Beijing, and Guangzhou province, from which it manufactured and distributed throughout the People's Republic a full line of plumbing products.
In 1993 Kohler Company sales reached a record $1.53 billion; earnings stood at $15.5 million, a figure substantially reduced by a $33 million charge resulting from a change in accounting for retiree health benefits. By 1997 earnings had increased to $88 million on sales of $2.2 billion. Concerned again about the loss of family control as well as anticipating the need to hold down estate taxes, Herb Kohler proposed another restructuring of the company's stock in early 1998. At the time, there were 7,445 shares outstanding, with 75 percent of them controlled by Herb and his sister, Ruth DeYoung Kohler. Over the years, about four percent of the stock had fallen into the hands of nonfamily members through the sale of the thinly traded stock by family members. In April 1998 Kohler shareholders approved a plan whereby all the nonfamily shareholders would be bought out at $52,700 per share. The plan also offered other family members the option of cashing in their stock or taking a mix of voting and nonvoting shares, with the added stipulation that if they chose the latter they could only sell their shares at a later date back to the company. At the end of 1997 Kohler stock had a book value of about $100,000 per share and shares had been selling in early 1998 for as high as $135,000 per share. The plan therefore angered the outside shareholders, some of whom felt the stock was worth as much as $400,000 per share, as well as dissident members of the Kohler family, who bristled both at the buyback offer and at the plan's restrictions on selling to outsiders. Under Wisconsin law, shareholders had the ability to take a disputed stock valuation to court and ask a judge to increase the per share offer. A trial was therefore set for April 2000 in Sheboygan County Circuit Court to determine the value of Kohler Company stock, with owners of 811 shares asking for redress. Meanwhile, dissident shareholders also filed suit in U.S. District Court in Milwaukee to stop the entire reorganization plan, with a trial set for late 1999. The outcome of these lawsuits seemed certain to play a key role in determining Kohler's direction well into the 21st century, both in terms of ownership control and financial health--the latter because a substantial valuation increase could prove quite costly to the company.
Principal Subsidiaries: Baker Knapp & Tubbs, Inc.; McGuire Furniture Company; Crosswinds Furniture Company; Dapha, Ltd.; Sterling Plumbing; Ann Sacks Tile & Stone, Inc.; Robern, Inc.; Canac Kitchens, Ltd. (Canada); Kallista, Inc.; Jacob Delafon, S.A. (France); Jacob Delafon, Espana, S.A. (Spain); Jacob Delafon, Maroc, S.A. (Morocco); Jacob Delafon, Italia, S.r.l. (Italy); Holdiam, S.A. (France); Sanijura, S.A. (France); KOHLER China, Ltd.; KOHLER de Mexico, S.A. de C.V.; Helvex, S.A. de C.V.; P.T. Artcraft (Indonesia); P.T. Port Rush (Indonesia); KOHLER Europe (France); Foshan Kohler, Ltd. (China); Beijing Kohler, Ltd. (China); Shanghai Kohler, Ltd. (China); KOHLER Power Systems Asia Pacific (Singapore).
Principal Competitors: American Standard Companies Inc.; Armstrong World Industries, Inc.; Bassett Furniture Industries, Incorporated; The Black & Decker Corporation; Briggs & Stratton Corporation; Chicago Faucet Company; Cooper Industries, Inc.; Crane Co.; Dal-Tile International Inc.; The Dyson-Kissner-Moran Corporation; Elkay Manufacturing Company; Falcon Building Products, Inc.; Fortune Brands, Inc.; Gerber Plumbing Fixtures Corporation; Honda Motor Co., Ltd.; Klaussner Furniture Industries Inc.; LADD Furniture, Inc.; Leggett & Platt, Incorporated; Masco Corporation; Mueller Industries, Inc.; Newell Rubbermaid Inc.; NIBCO Inc.; Premark International, Inc.; Tecumseh Products Company; TOTO Ltd.; Triangle Pacific Corp.; U.S. Industries, Inc.; Waxman Industries, Inc.; Yamaha Motor Co. Ltd.
Statistics:
Private Company
Incorporated: 1873 as Kohler & Silberzahn
Employees: 19,000
Sales: $2.4 billion (1998 est.)
NAIC: 326191 Plastics Plumbing Fixture Manufacturing; 327111 Vitreous China Plumbing Fixture and China and Earthenware Bathroom Accessories Manufacturing; 327122 Ceramic Wall and Floor Tile Manufacturing; 331511 Iron Foundries; 332913 Plumbing Fixture Fitting and Trim Manufacturing; 332998 Enameled Iron and Metal Sanitary Ware Manufacturing; 335312 Motor and Generator Manufacturing; 335313 Switchgear and Switchboard Apparatus Manufacturing; 337110 Wood Kitchen Cabinet and Countertop Manufacturing; 337121 Upholstered Household Furniture Manufacturing; 337122 Nonupholstered Household Furniture Manufacturing; 337211 Wood Office Furniture Manufacturing; 713910 Golf Courses and Country Clubs; 721110 Hotels (Except Casino Hotels) and Motels
Key Dates:
1873: Kohler & Silberzahn is established.
1883: Line of enameled plumbing fixtures makes its debut.
1887: Company is incorporated as Kohler Company.
1905: Cofounder's son, Walter Kohler, takes over company leadership.
1912: Village of Kohler is incorporated.
1920: Production of small electrical generators begins.
1940: Walter's younger brother, Herbert Kohler, takes control of company.
1954: Six-year-long strike against the company begins.
1968: Nonfamily members lead the company for the first time.
1972: Herbert Kohler, Jr., is named chairman of Kohler Company.
1984: Sterling Faucet Company of Schaumburg, Illinois, is acquired.
1985: The Kohler Design Center opens.
1986: Company enters furniture manufacturing through acquisition of Grand Rapids, Michigan-based Baker, Knapp & Tubbs.
1989: San Francisco-based McGuire Furniture is acquired.
1993: Company expands into cabinetmaking with acquisition of Sanijura, S.A. of France.
1998: Ownership reorganization plan meets with resistance from dissident shareholders.
Address:
44 Highland Drive
Kohler, Wisconsin 53044
U.S.A.
Mr. K. David Kohler serves as Independent Director of Interface, Inc. since October 2006. Since April 2009, he has served as the President and Chief Operating Officer for Kohler Co., a global leader in the manufacture of kitchen and bath products, interior furnishings, engines and power generation systems, and an owner and operator of golf and resort destinations. Previously, he served as the Executive Vice President (2007 to 2009) and Group President of the Kitchen and Bath Group (1999 to 2007) for Kohler. Mr. Kohler was formerly a chairman of the National Kitchen and Bath Association’s Board of Governors of Manufacturing. He has served as a member of the board of Kohler Co. since 1999, and has previously served on the board of a privately-held manufacturer. He is also a director of Internacional de Cerámica, S.A.B. de C.V., a public company traded on the Mexican Stock Market.
Kohler was founded in 1873 by Austrian immigrant John Michael Kohler with the purchase of the Sheboygan Union Iron and Steel Foundry. Early products included cast iron and steel farm implements, castings for furniture factories, and ornamental iron pieces including cemetery crosses and settees. A breakthrough came in 1883 when John Michael applied enamel to a cast iron horse trough to create the company's first bathtub. The company has been primarily in the plumbing business ever since, known for plumbing fixtures. In 1888, the then Kohler Water Works developed the original trademarked Bubbler. They became popular, and other companies developed similar products under the generic term "drinking fountain." The colloquial word "bubbler" is still used in several regions of the United States.
In 1934 and 1954, the Kohler Strikes took place.
The Kohler group acquired 2005 Sdmo Industries, a manufacturer of power generators, along with SOREEL (electrical engineering) and BES (maintenance of gensets) from the French Meunier Holding.
Kohler Company is one of the largest privately operated firms in the United States. Unlike others that were once public companies but were taken private through debt-ridden leveraged buyouts, Kohler has always been owned and run by a circle of family members who descended from the founder. One of Wisconsin's largest employers, Kohler is best known for its line of baths, sinks, toilets, and other bathroom fixtures. The company is also a leading producer of electric generators and small engines, owns two distinguished furniture manufacturers, and operates successful hospitality and real estate businesses in Kohler, Wisconsin, where it has its corporate headquarters and largest manufacturing facilities.
Former Wisconsin Governor Walter J. Kohler, Sr. was President of Kohler Company and his son former Wisconsin Governor Walter J. Kohler, Jr. served for many years in senior management. Today, the president of Kohler is Herbert V. Kohler, Jr. (born February 20, 1939), grandson of the founder.
In 1998, Kohler made a plan to buy back any outstanding shares not owned by the family. All family members had to exchange their common shares for share with limited rights, those that could not be sold. Since Kohler is not a publicly traded company, the number of shares floating were minimal. Kohler offered $55,400 per share, but some shareholders challenged this valuation and sued.
The IRS also challenged this valuation by prosecuting the estate of Frederick Kohler, who had recently died holding 975 shares. Kohler won the lawsuit against the IRS.
By 1932, however, residential building rates had fallen to just 11 percent of their 1928 levels, and Kohler was facing the prospect of massive employee layoffs. Because the company was not in debt and retained favorable terms for raw materials, Kohler resolved to keep the company in operation, and to stockpile whatever products could not be sold. This full employment policy had the effect of saving the local economy from ruin.
The company was revisited by labor unrest in July 1934 when a portion of the workforce struck Kohler for the right to be represented by the Federal Union. The strike was canceled later that year when the union lost an employee vote to represent all of Kohler's production and maintenance employees. In arbitration, however, the National Labor Relations Board instructed the company to recognize a smaller, independent union, the Kohler Workers' Association.
In 1940 Walter Kohler died, and a battle for control of the firm broke out between Walter's children and their father's younger brother, Herbert Kohler, who was running the company. While the children argued for strict hereditary succession, the situation was further complicated by the fact that Herbert's mother and Walter's mother were sisters. In the end, Herbert prevailed.
When the United States became involved in World War II, much of Kohler's commercial operations ground to a halt. Iron, brass, and chrome supplies were diverted for war use by the government, which asked Kohler to resume production of military wares (during World War I Kohler had made mine anchors, projectiles, and shells). The company's first military products were precision valves and fittings for use in aircraft, such as the DC-3 and B-29. Kohler also built a variety of electric generators for the armed forces.
Based on Kohler's experience in precision crafted metallurgy, the government asked the company to produce 105mm and three-inch artillery shells, as well as forgings for rockets and other shells, fuses, torpedo tubes, piston rings, shell rotating bands, and engine bearings. After the war, Kohler discontinued much of its military production, but resumed building 105mm shells during the Korean War. The company did, however, continue to manufacture precision products and generators, albeit for different markets.
Kohler's bath and kitchen fixtures are available in American hardware and home improvement stores. Kohler still makes traditional cast iron bathtubs, one of the few United States manufacturers to do so. Besides residential products, Kohler manufactures a commercial line of bathroom fixtures. The company also does artistic custom work, such as hand-painted sinks and toilets.
Kohler also makes a wide range of small industrial engines. Traditionally, the company manufactured gasoline engines, however after purchasing Lombardini company (Italy), it extended its range and now offers diesel engines up to 65HP. In 2007, Kohler created a joint venture in China called Kohler-YinXiang Ltd., based in Chongquing, China, to manufacture small gasoline engines, and intends to begin importing more of their engines, rather than building them in the USA.
Kohler engines power a range of devices from water pumps to off-road vehicles. The Global Power group manufactures generators ranging in size from 8,500 watt to 2.8 megawatts. Kohler was the first company to offer residential back-up generators to consumers, starting in 1920.
More recently, the company has been expanding in the areas of furniture, cabinetry, and tile in the consumer market, and engines and generators for industry. The Kohler Interiors division of the company comprises Baker Furniture, McGuire Furniture, Kallista and Ann Sacks Tile.
Kohler's UK subsidiary is the Cheltenham-based Kohler Mira Ltd, best known for manufacturing Mira Showers.
Kohler displays many of its products at the Kohler Design Center in the village of Kohler.
Given the occasional unreliability of utility-supplied power, many hospitals, banks, and other offices had to have their own emergency standby power, but required larger capacities than the ten megawatt models Kohler manufactured. Eager to supply this market, Kohler began development of 100 kilowatt diesel-powered systems. As the market continued to grow, Kohler introduced a 230 kilowatt model and, some years later, a massive 500 kilowatt system.
Kohler also manufactured small gasoline engines, which were first built to power the company's electric generators. During the 1950s, the small engines found an explosive market in Thailand and Vietnam, where they were used to power boats, pump water on rice paddies, and drive air compressors. Virtually all the air-cooled engines in Southeast Asia at this time were made by Kohler and sold through a distributor in Hong Kong.
In 1951 Walter Kohler, Jr., a former officer and director of the company, followed in his father's footsteps to become the governor of Wisconsin. He was reelected twice, serving until 1957. At the company, labor trouble arose again in April 1954 when the UAW-CIO local called a walkout to protest changes in union shop rules, seniority, and pay increases without regard to merit. Seeing these demands as unfair and potentially crippling to the profitable operation of the corporation, the company resisted. The strike continued until September 1960, when bargaining resumed, and a new contract was concluded two years later. The strike earned a place in the Guinness Book of World Records as the longest strike in American history.
Entering the 1960s, the company's engine division, still strong in Asia, gained momentum in the United States, where Kohler motors were used to power lawnmowers, garden tractors, construction equipment, and even snowmobiles. International Harvester, John Deere, Wheel-Horse, Jacobsen, and Bombardier (inventor of the snowmobile) incorporated Kohler engines in their products. By 1963 Kohler was one of the leading small engine suppliers in the industry.
In order to keep pace with this growing demand, Kohler established two new production facilities, in Mexico City and Toronto. The company ran into strong competition, however, from Japanese and German manufacturers who had extensive experience with two- and four-stroke engines. Kohler suffered market share loss, but won back a significant share of the market by introducing higher technology two-cycle engines in 1968. It later won a suit against market leader Briggs & Stratton, which had tried to coerce its distributors to stop handling Kohler engines.
The company experienced another leadership crisis in 1968 when Kohler's president, J.L. Kuplic, died unexpectedly. Only six days later, Herbert Kohler, Sr., chairman and CEO of the company for 28 years, also died. Herbert Kohler, Jr., heir to the company, was at the time a self-described 'hippie,' pursuing a career outside the company. He later told Supply House Times, 'By preplanning my life, my father removed my right to fail. As a result, for a portion of my life I experienced nothing but failure. That led me to become a substantial rebel.'
Company directors elected to pass over the younger Kohler, and named an interim chairman. In an unusual departure from company traditions, the directors named nonfamily members Lyman Conger and Walter Cleveland as chairman and president, respectively. When Conger retired in 1972, Herb Kohler was appointed chairman, and two years later he succeeded Cleveland as company president. In 1978, concerned about the company slipping from family control, Kohler engineered a 1-for-20 reverse stock split, which reduced the number of shareholders in the private company from more than 400 to about 250 and the number of outstanding shares from 161,105 to about 8,000. The maneuver also forced a number of nonfamily shareholders to sell out at $412.50 per share, leaving the Kohler family with 96 percent of the voting shares.
Late 20th Century: Growth Through Acquisition
Under Herb Kohler's leadership, Kohler Company more than tripled in size to an estimated $1.34 billion in annual sales by the late 1980s. After 110 years of strictly internal growth, much of the expansion came from the company's new venture into acquisitions. In 1984 the company acquired the Schaumburg, Illinois-based Sterling Faucet Company. Two years later, Kohler purchased Baker, Knapp & Tubbs, a high-end furniture manufacturer headquartered in Grand Rapids, Michigan, and Jacob Delafon, a plumbing products manufacturer headquartered in Paris. The company also established a Japanese subsidiary. In 1989 Kohler purchased the McGuire Furniture Company, a San Francisco-based manufacturer, Oakland-based Kallista, Inc., Portland-based Ann Sacks Tile and Stone, and Dupont Sanitaire-Chauffage, in Paris.
By this time, Kohler had also expanded into the leisure industry, turning the company's one-time workers' hotel, the American Club, into a successful full-scale convention and recreation resort hotel. Having poured about $50 million into the resort from 1978 through the mid-1990s, Kohler created the only resort in the Midwest to receive AAA's top five-diamond rating. The resort's centerpiece was Blackwolf Run, which offered two world championship golf courses created by a top course designer, Pete Dye. Blackwolf Run hosted the 1998 U.S. Women's Open Championship. The bathrooms in the American Club's fancy guest rooms also served as showcases for Kohler Company products. Serving a similar function was the Kohler Design Center, which opened in Sheboygan in 1985 as a 36,000-square-foot showcase of Kohler plumbing fixtures, faucets, engines, and generators; Baker and McGuire furniture; Ann Sacks tile and stone; and other company products.
Kohler continued to expand in the 1990s through acquisition, increasingly venturing overseas to do so. In 1993 the company acquired Sanijura, S.A., a French maker of bathroom cabinets. The following year, Kohler purchased Osio, a maker of enamel baths based in Italy. The company ventured further into the cabinet sector through the 1995 acquisition of Pennsylvania-based Robern, Inc., which specialized in mirrored cabinets, lighting fixtures, and accessories; and the 1996 addition of Canac Kitchens, Ltd., a maker of wood kitchen cabinets based in Ontario, Canada. Another France-based firm, Holdiam, S.A., was added in 1995, bringing to Kohler the leading French maker of acrylic baths, whirlpools, synthetic kitchen sinks, and artistic faucets. In the late 1990s the company established Kohler China Ltd., which had locations in Shanghai, Beijing, and Guangzhou province, from which it manufactured and distributed throughout the People's Republic a full line of plumbing products.
In 1993 Kohler Company sales reached a record $1.53 billion; earnings stood at $15.5 million, a figure substantially reduced by a $33 million charge resulting from a change in accounting for retiree health benefits. By 1997 earnings had increased to $88 million on sales of $2.2 billion. Concerned again about the loss of family control as well as anticipating the need to hold down estate taxes, Herb Kohler proposed another restructuring of the company's stock in early 1998. At the time, there were 7,445 shares outstanding, with 75 percent of them controlled by Herb and his sister, Ruth DeYoung Kohler. Over the years, about four percent of the stock had fallen into the hands of nonfamily members through the sale of the thinly traded stock by family members. In April 1998 Kohler shareholders approved a plan whereby all the nonfamily shareholders would be bought out at $52,700 per share. The plan also offered other family members the option of cashing in their stock or taking a mix of voting and nonvoting shares, with the added stipulation that if they chose the latter they could only sell their shares at a later date back to the company. At the end of 1997 Kohler stock had a book value of about $100,000 per share and shares had been selling in early 1998 for as high as $135,000 per share. The plan therefore angered the outside shareholders, some of whom felt the stock was worth as much as $400,000 per share, as well as dissident members of the Kohler family, who bristled both at the buyback offer and at the plan's restrictions on selling to outsiders. Under Wisconsin law, shareholders had the ability to take a disputed stock valuation to court and ask a judge to increase the per share offer. A trial was therefore set for April 2000 in Sheboygan County Circuit Court to determine the value of Kohler Company stock, with owners of 811 shares asking for redress. Meanwhile, dissident shareholders also filed suit in U.S. District Court in Milwaukee to stop the entire reorganization plan, with a trial set for late 1999. The outcome of these lawsuits seemed certain to play a key role in determining Kohler's direction well into the 21st century, both in terms of ownership control and financial health--the latter because a substantial valuation increase could prove quite costly to the company.
Principal Subsidiaries: Baker Knapp & Tubbs, Inc.; McGuire Furniture Company; Crosswinds Furniture Company; Dapha, Ltd.; Sterling Plumbing; Ann Sacks Tile & Stone, Inc.; Robern, Inc.; Canac Kitchens, Ltd. (Canada); Kallista, Inc.; Jacob Delafon, S.A. (France); Jacob Delafon, Espana, S.A. (Spain); Jacob Delafon, Maroc, S.A. (Morocco); Jacob Delafon, Italia, S.r.l. (Italy); Holdiam, S.A. (France); Sanijura, S.A. (France); KOHLER China, Ltd.; KOHLER de Mexico, S.A. de C.V.; Helvex, S.A. de C.V.; P.T. Artcraft (Indonesia); P.T. Port Rush (Indonesia); KOHLER Europe (France); Foshan Kohler, Ltd. (China); Beijing Kohler, Ltd. (China); Shanghai Kohler, Ltd. (China); KOHLER Power Systems Asia Pacific (Singapore).
Principal Competitors: American Standard Companies Inc.; Armstrong World Industries, Inc.; Bassett Furniture Industries, Incorporated; The Black & Decker Corporation; Briggs & Stratton Corporation; Chicago Faucet Company; Cooper Industries, Inc.; Crane Co.; Dal-Tile International Inc.; The Dyson-Kissner-Moran Corporation; Elkay Manufacturing Company; Falcon Building Products, Inc.; Fortune Brands, Inc.; Gerber Plumbing Fixtures Corporation; Honda Motor Co., Ltd.; Klaussner Furniture Industries Inc.; LADD Furniture, Inc.; Leggett & Platt, Incorporated; Masco Corporation; Mueller Industries, Inc.; Newell Rubbermaid Inc.; NIBCO Inc.; Premark International, Inc.; Tecumseh Products Company; TOTO Ltd.; Triangle Pacific Corp.; U.S. Industries, Inc.; Waxman Industries, Inc.; Yamaha Motor Co. Ltd.
Statistics:
Private Company
Incorporated: 1873 as Kohler & Silberzahn
Employees: 19,000
Sales: $2.4 billion (1998 est.)
NAIC: 326191 Plastics Plumbing Fixture Manufacturing; 327111 Vitreous China Plumbing Fixture and China and Earthenware Bathroom Accessories Manufacturing; 327122 Ceramic Wall and Floor Tile Manufacturing; 331511 Iron Foundries; 332913 Plumbing Fixture Fitting and Trim Manufacturing; 332998 Enameled Iron and Metal Sanitary Ware Manufacturing; 335312 Motor and Generator Manufacturing; 335313 Switchgear and Switchboard Apparatus Manufacturing; 337110 Wood Kitchen Cabinet and Countertop Manufacturing; 337121 Upholstered Household Furniture Manufacturing; 337122 Nonupholstered Household Furniture Manufacturing; 337211 Wood Office Furniture Manufacturing; 713910 Golf Courses and Country Clubs; 721110 Hotels (Except Casino Hotels) and Motels
Key Dates:
1873: Kohler & Silberzahn is established.
1883: Line of enameled plumbing fixtures makes its debut.
1887: Company is incorporated as Kohler Company.
1905: Cofounder's son, Walter Kohler, takes over company leadership.
1912: Village of Kohler is incorporated.
1920: Production of small electrical generators begins.
1940: Walter's younger brother, Herbert Kohler, takes control of company.
1954: Six-year-long strike against the company begins.
1968: Nonfamily members lead the company for the first time.
1972: Herbert Kohler, Jr., is named chairman of Kohler Company.
1984: Sterling Faucet Company of Schaumburg, Illinois, is acquired.
1985: The Kohler Design Center opens.
1986: Company enters furniture manufacturing through acquisition of Grand Rapids, Michigan-based Baker, Knapp & Tubbs.
1989: San Francisco-based McGuire Furniture is acquired.
1993: Company expands into cabinetmaking with acquisition of Sanijura, S.A. of France.
1998: Ownership reorganization plan meets with resistance from dissident shareholders.
Address:
44 Highland Drive
Kohler, Wisconsin 53044
U.S.A.
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