(May 17, 2004) — Don't get too attached to your business cards. And keep that resume in a nice, handy place.
And if anything, embrace change before it embraces you in a headlock.
After spending part of a morning scanning back issues of Plastics News and looking at old rankings of top processing companies, a hunch became a clear-cut reality. Generally speaking, many of the companies that topped our rankings lists just a decade ago have fallen off the charts.
Those in the industry talk repeatedly about how companies must keep growing to survive, how the acquisition waters became a tidal pool in the late 1990s, how consolidation is a natural law of the plastics jungle that would make Charles Darwin proud.
So I decided to conduct my own investigation, to see how things have changed since our publication's founding days.
“Time waits for no one. And it won't wait for me.” — Mick Jagger and Keith Richards.
For many companies, time has not been on their side. Consider our first injection molders ranking back in July 1990. Perched at the top of the list were three automotive-focused companies that were later sold or scattered their injection molding holdings to others: United Technologies Automotive, Worthington Custom Products Inc. and Aeroquip Corp.
Six out of that initial top 10 are gone in name, even though some of their plants might survive. I've heard that those plant managers are lighting candles nightly in memory of their fallen corporate comrades.
The same trend goes for our initial list of extruders, published in April 1991. Half of those top 10 companies also have disappeared. Polyethylene film giant Tyco International Ltd. now owns two of those original top 10: Carlisle Plastics Inc. and Armin Industries.
Listen to the pride bursting the pinstripes of those corporate executives who spoke highly of their now-extinct corporate entities. Consider this gem from then-UTA President Scott Greer in September 1997, when he told sister publication Automotive News that the problems facing the company would soon be fixed. “There are some bits and pieces that still must be moved, but we won't do it in the frenzy that occurred last year,” Greer said.
Almost two years later, in March 1999, Lear Corp. won a prolonged bidding war and bought UTA, not just the bits and pieces but the entire operation.
Companies cannot always see the writing on the wall. No one wants to admit that the end is near; it's much better to keep fighting. Take this 1995 Plastics News nugget from Thomas Parkinson, president and chief executive officer of compact-disc injection molder Shape Inc., a company that had placed seventh on the first, 1990 ranking:
“We're surviving by adding more value to the products in the markets we serve, he said. “Business is very strong, and we intend to grow Shape.”
Intentions are always well-meant, and Parkinson was buoyant after Shape emerged from Chapter 11 bankruptcy protection in 1993. But it would enter bankruptcy again in 2000, only to sell off its assets.
Hey, hindsight is always 20/20.
I don't want to be immortal through my work. I want to be immortal through not dying. — Woody Allen.
The mortal coil unfortunately is a long rope that wraps many companies. However, according to those rankings, a lot of corporate executives can take heart in this: Many of the top companies in our early rankings did not flame out and die. Instead, they were sold for a pretty penny to rivals. Let's hope those corporate executives had some stock that they cashed in before moving to Maui.
The list is long and staggering. In the automotive sector alone, four companies from the original top 10 injection molders list were sold in the mergers rush of the 1990s. In other years, the ranks of once-mighty companies that commanded a mightier sales multiple are just as powerful.
The plastics business of Worthington Industries Inc. was sold to several buyers. Aeroquip went to Eaton Corp., Becker Group Inc. to Johnson Controls Inc., Automotive Industries Inc. to Lear, O'Sullivan Corp. to Geon Co., Molmec Inc. to LDM Technologies Inc., Manchester Plastics. Inc. to Collins & Aikman Corp.
That last deal was a forerunner of things to come, when C&A snagged another injection molding giant, Textron Automotive Co. Inc., in late 2001. Textron had been a perennial No. 1 in the injection molders rankings since 1995.
In a 1997 interview with Plastics News, future Textron Chief Executive Officer Sam Licavoli said, “You either have to grow, or you're going to shrink and disappear. You really don't have a choice.”
In Textron Automotive's case, growth did not mean that they did not also disappear. Maybe an alternative axiom can be inserted here: Nothing lasts forever.
Time is nature's way of keeping everything from happening all at once. — Anonymous.
Injection molding is not the only area where everything changed with time. I surveyed the list of top 50 firms among blow molders, film and sheet manufacturers and injection molders in 1994, merely a decade ago.
Not only have the companies changed position more often than a politician running for re-election, many have been wiped off the map, figuratively speaking, nevermore to grace our rankings pages.
I did some simple tabulating. If a company had been sold and lost its name, if it had gone out of business or if it had moved away from processing since 1994, I entered it under a category called “gone.” If it was still alive and kicking today, 10 years later, it was classified under the “here” category.
A bit surprisingly, it was not so good to be a blow molder if you wanted to retain your business cards. Of the top 50 companies in 1994, 28 of them are in the “gone” category now.
Most of the drop-off in companies occurred well below the top 10. Of the 10 blow molding companies with the highest sales in 1994, six were still going, including three of the top four.
But get below that figure, and the evaporation is considerable. Near the lower levels of the top 50 companies, the change is more considerable: Seven of the companies ranked from 41-50 in the 1994 list of blow molders are no longer in that line of work.
As with all the rankings, the sales difference for the top companies between 1994 and 2003, when our last blow molders' ranking was released, is as wide as the state of Texas. In 2003, top blow molder Amcor PET Packaging recorded $1.2 billion in sales. In 1994, top blow molder Constar International Inc. had only $675 million in sales.
Only three companies in the 1994 rankings recorded over half a million in annual blow molding sales. In 2003, eight companies made that claim.
I was starting to understand where some of the smaller companies went, or at least where their business went. And I'm no brain surgeon. Life is cheap, and so are the lives of many of those smaller companies.
For injection molders, 20 of the top 50 companies in our 1994 rankings are now gone or sold. Those include the aforementioned Textron and UTA and other top 10 place holders — Automotive Industries Inc., Worthington, Becker and Donnelly Corp.
For the film and sheet makers, only 18 of the top 50 companies had fallen off the rankings list in 10 years. Maybe film and sheet is the place to be for stability's sake. Yet three of the top 10 companies in that category, namely First Brands Corp., Cryovac Inc. and Huntsman Packaging Corp., have changed names or ownership. At least those companies are still around.
Time is the moving image of eternity. — Plato.
Several stalwarts seem to grace the top 10 rankings every year since the early 1990s. Among blow molders, that includes Owens-Illinois Inc., Graham Packaging Co. LP and Plastipak Packaging Inc. In extrusion, you have Bemis Co. Inc. and Printpack Inc. And in injection molding, the most commonly seen names have been Decoma International Inc. and Nypro Inc.
In a speech at the Plastics News Executive Forum in February 2003, Nypro President Brian Jones warned of standing pat. He mentioned the falloff among companies in our rankings. And he spoke of the need to go global and continually move at your customer's pace.
“In three to five years, many companies will cease to exist or go Chapter 11 if they don't change,” Jones said.
The rankings seem to suggest that those same lessons were learned in the past. And they were learned the hard way. But will that foresight change the direction of future rankings? That's an issue for another day.
If men could foresee the future, they would still behave as they do now. — Russian proverb.
Pryweller is an Akron-based senior reporter forPlastics News.