The Wiremold Company

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The Wiremold Company

60 Woodlawn Street
West Hartford, Connecticut 06110-2326
U.S.A.
Telephone: (860) 233-6251
Fax: (860) 232-2062
Web site: http://www.wiremold.com

Wholly Owned Subsidiary of Legrand Holding SA
Founded: 1900 as The Richmondt Electric Wire Conduit Company
Employees: 900
Sales: $470 million (2005 est.)
NAIC: 335932 Noncurrent-Carrying Wiring Device Manufacturing; 335931 Current-Carrying Wiring Device Manufacturing; 335999 All Other Miscellaneous Electrical Equipment and Component Manufacturing

The Wiremold Company is one of the leading producers of wiring and cable management products for both the residential housing and commercial building markets. The tens of thousands of products the firm produces include raceway, in-floor, overhead, open space, and furniture management systems, and Wiremold also makes power and data quality products such as surge protectors. Wholly owned by the French electrical equipment maker Legrand since 2000, Wiremold came to prominence after Art Byrne was brought onboard as CEO in 1991. Byrne introduced "lean" business practices and just-in-time management techniques based on kaizen, the Japanese system of continuous improvement. Byrne's initiatives were so successful—for example, increasing sales from $100 million to more than $450 million in less than ten years—that Wiremold became a widely discussed model for a new way of conducting business.

EARLY 20TH-CENTURY ORIGINS

Prior to its acquisition by Legrand, Wiremold spent a century under the ownership and control of the Murphy family. D. Hayes Murphy was the driving force behind the company's founding. The firstborn son of an Irish immigrant, Murphy was interested in going into the manufacturing business after graduating from college in 1900. His father, Daniel E. Murphy, a very successful Milwaukee-based insurance agent for the Northwestern Mutual Life Insurance Company, had him investigate a Milwaukee manufacturer called Richmondt Electric Wire Conduit Company.

The firm was headed by C. D. Richmondt and was one of a growing number of companies attempting to meet the burgeoning demand for conduit for the still nascent electricity industry. Richmondt's firm specialized in a unique rigid conduit for household wiring, essentially zinc-coated water pipe lined on the inside with enamel to protect the wiring. D. H. Murphy was impressed by the business's potential but not by Rich-mondt's management of it, for the firm was nearly insolvent and lacked the production capacity to meet the large orders Richmondt had secured. Late in 1900 then, Daniel Murphy bought the firm from Richmondt for $10,000. Although the father was named the company's president and the son, secretary, it was D. H. Murphy who was charged with running the business.

In an attempt to fulfill Richmondt's overly ambitious orders, D. Hayes Murphy moved the company in November 1901 to Waukegan, Illinois, where he had found a larger factory. He also changed the name of the firm to The American Interior Conduit Company. Pressure from competitors, however, forced Murphy into a 1902 merger with Pittsburgh-based Safety Armorite Conduit Company, the nation's largest conduit maker. The Garland family, owners of Safety Armorite, controlled American Interior Conduit, which began operating as the Waukegan branch of Safety Armorite. In 1904, the Waukegan operations were moved to Safety Armorite's West Pittsburgh facilities to be closer to the pipe supply. That same year, American Interior Conduit began producing loom conduit, a type of flexible, nonmetallic tubing made from cotton impregnated with resin. Marketed under the Wireduct brand, the loom product was a great success for Murphy's operation.

The Garland family, meanwhile, had purchased another conduit company, the American Conduit Manufacturing Company, which they continued to run separately. Murphy, aiming to once again control his own company, viewed this firm as his vehicle for doing so, and he eventually, in 1909, angled his way into the company presidency. Aiding his ambitions was his success in securing some stock in Safety Armorite when that firm began consolidating its subsidiary companies, including American Interior Conduit, in 1906. When the Garlands and Safety Armorite ran into serious financial difficulties in 1911, Murphy persuaded the Garlands to essentially trade American Conduit Manufacturing for his Safety Armorite stock. At age 34, Murphy was the owner and president of his own company.

INTRODUCTION OF WIREMOLD RACEWAY

Based in New Kensington, Pennsylvania, American Conduit produced a variety of products, including rigid conduit and loom. By 1914 it had distributors in 33 states and two territories, was selling directly to contractors in 13 other states, and included among its customers major shipbuilders and large manufacturers such as the American Locomotive Company and the Pullman Company. That year, Murphy invested in a new factory, while he was also experimenting with various ways to reward his employees. In 1916 he introduced a successful profit-sharing plan at a time when few businesses offered such a benefit.

During this period, American households had the opportunity to purchase increasing numbers of electric products, including table lamps, portable fans, clothes irons, and carpet sweepers. Most homes, however, had a decided lack of electrical outlets into which these devices could be plugged. American Conduit came up with a solution: Wiremold raceway. Most existing forms of conduit were designed to carry electric wiring through the walls of buildings. By contrast, the Wiremold product was a lightweight, molded metal conduit designed to be installed on walls and ceilings and along baseboards, making it ideal for retrofitting homes with inadequate wiring. Ease of installation was one of its main selling points, as the wiring could easily be fed through the raceway, and various fittings, such as outlet boxes and receptacle bases, were offered as part of the Wiremold line and meshed smoothly with raceway itself. Wiremold was also much less expensive than earlier, unsuccessfully introduced metal moldings for wiring.

COMPANY PERSPECTIVES

Rapidly evolving technology and the need for flexible space have increased the amount and complexity of electrical wiring and communications cabling in typical buildings. At the same time, building owners are demanding improved aesthetics and lower life cycle costs. The Wiremold Company saw these changes coming and introduced the concept of wire and cable management.

The Kaizen philosophy allows The Wiremold Company to develop new products faster than ever before. The Quality Function Development system brings the "voice of the customer" to the heart of the process. The result is solutions that meet today's challenges—and those that the future will surely bring.

Today, The Wiremold Company offers the most extensive range of pathway solutions for a variety of commercial, institutional and residential applications.

The Wiremold 500 series (the number referred to the product's wiring capacity) was introduced in June 1916 at the annual convention of the National Electrical Contractors Association, where the attendees expressed much interest in the new product. Its full rollout was held up, however, when a competitor secured an injunction that delayed the all important approval of the product by Underwriters Laboratory. Wiremold was eventually approved, and in early 1918 a revised version of the National Electrical Code was distributed to that effect.

Unfortunately, American Conduit's rigid conduit business simultaneously encountered a host of troubles, including pipe supply difficulties in part due to World War I shortages, a $40,000 inventory discrepancy, and $30,000 worth of unfulfilled orders. Murphy was forced to hold off on further production of Wiremold while straightening out the rigid conduit mess. Once he restored the solvency of this sector of his business, he sold the rigid conduit operations to General Electric Company for $1 million. This 1919 deal enabled American Conduit to focus its resources on its Wiremold raceway and loom products. Murphy used some of the proceeds to relocate his business to Hartford, Connecticut, where he set up operations at the former Franklin Lamp Works, a five-story brick building that spanned more than a city block. A driving force behind the move was Murphy's desire to escape the pollution of industrial Pittsburgh and to settle in a location where he could indulge his passion for sailing.

After the move to Hartford, Murphy overhauled American Conduit's marketing and distribution arrangements—a successful endeavor, perhaps too successful. A huge increase in orders for loom overtaxed the new factory, leading to the shipment in the fall of 1919 of a huge batch of defective loom valued at more than $80,000. To maintain his customers' loyalty, Murphy offered to make up for this mistake by replacing the bad loom with a new delivery of twice as much loom as had been originally ordered.

KEY DATES

1900:: Daniel E. Murphy buys Milwaukee-based Richmondt Electric Wire Conduit Company; his son D. Hayes Murphy is charged with running the firm.
1901:: D. H. Murphy moves the firm to Waukegan, Illinois, and renames it The American Interior Conduit Company.
1902:: Murphy's firm merges with Pittsburgh-based Safety Armorite Conduit Company, controlled by the Garland family.
1904:: American Interior Conduit's operations are moved to West Pittsburgh.
1906:: Safety Armorite begins consolidating its subsidiary companies, including American Interior Conduit.
1909:: Murphy gains the presidency of a separate Garland family firm, American Conduit Manufacturing Company.
1911:: Murphy purchases American Conduit from the Garland family.
1916:: Company introduces the Wiremold 500 series raceway.
1919:: The firm's rigid conduit business is sold to General Electric Company; American Conduit relocates to Hartford, Connecticut.
1920:: Company is renamed The American Wiremold Company.
1926:: Company is renamed The Wiremold Company.
1929:: Wiremold moves to West Hartford, Connecticut.
1942:: Production of flexible air duct begins.
1947:: The Plugmold line debuts.
1955:: Murphy's son John is named Wiremold president.
1979:: Warren Packard becomes the first president and CEO from outside the Murphy family.
1981:: Wiremold enters the do-it-yourself consumer market with a line of plastic raceway.
1988:: Divestment of the flexible duct business is completed.
1991:: New CEO Art Byrne launches an ambitious program of quality and process improvement using the kaizen approach.
2000:: In a $770 million deal, Legrand SA of France acquires Wiremold.

It took the company several years to make up for these losses. In the meantime, Murphy staked the firm's future on Wiremold raceway. This shift in emphasis was enshrined in 1920 when Murphy renamed the company The American Wiremold Company; a further refinement came six years later when the word American was dropped from the name. Through tenacious marketing efforts, both consumers and contractors were increasingly catching on to the Wiremold product, which finally began showing a profit in 1923. New Wiremold lines were introduced, including the 700 series in 1921 and the 1000 series in 1928, both offering slight increases in wiring capacity. The company's growth during the 1920s paralleled that of the electricity industry. Wiremold benefited from the electrification of the United States as the number of electrified homes jumped during the decade from less than 25 percent to 65 percent. Wiremold ended the decade by shifting to a newly built facility at 60 Woodlawn Street in West Hartford. The 39,300-square-foot building was sited conveniently adjacent to a rail line.

PLUGGING AWAY DURING THE GREAT DEPRESSION

The crash of the stock market, which occurred shortly after Wiremold's latest relocation, ushered in the lean years of the Great Depression. Murphy vowed not to lay off any employees unless he had no other choice. He kept his promise, though the dropoff in demand led the managers to resort at times to make-work. Murphy later remarked, "When there was nothing else, we washed windows. We had the cleanest windows in town."

Murphy mitigated the effects of the Depression through such innovations as the "school-on-a-truck" program. These trucks traveled throughout the West Coast and the South during the early 1930s equipped with samples of all the company's product lines, its salesmen educating electrical contractors about Wiremold's new generation of products. New product development was not curtailed despite the difficult times, and in 1932 Wiremold 1100 raceway debuted, accommodating multiple plug receptacles. Debuting a year later was the fifth Wiremold raceway, the 200, which was designed for low-density wiring. Next, Wiremold introduced the 1500 overfloor raceway in 1936. A flat raceway designed to minimize obstruction, the 1500 carried wiring from walls across floors to installations in the center of rooms, such as desks or equipment tables. The 2100 raceway was introduced in 1937.

After the worst years of the Depression had passed, Murphy confidently expanded Wiremold's facilities. In 1935 the first half of a second unit at the West Hartford headquarters was completed, as was a new two-story office building. Two years later the second half of the second unit was completed. Following the introduction of fluorescent lighting in 1938, Wiremold created a lighting division the next year to attempt to meet some of the burgeoning demand for the popular new product. Also in 1939, the company's workforce unionized under the International Brotherhood of Electrical Workers. Wiremold had always enjoyed good relations with its workers, who had in fact never asked to join a union. However, having a unionized workforce had become necessary because Wiremold had encountered strong resistance to its products in trade union strongholds, such as New York City. The 1930s ended with another new Wiremold product, the 3000 raceway. This perimeter product was the firm's first two-piece raceway (comprised of a base and a cover) and was designed to fit in aesthetically with baseboard.

During World War II, Wiremold contributed to the war effort in many ways. In addition to providing loom for a variety of military wiring needs, the firm reconfigured some of its loom machines to produce more than 1.6 million yards of webbing, which the U.S. Army used for parachute harnesses and other strapping applications. Among the other products Wiremold produced during the war were various engine parts, Navy rocket shipping containers, shell shipping containers, and glider parts.

In 1942 the company also established an air duct division, which had the ability to produce long lengths of flexible air duct. This division originally made flexible ducts that the Army Air Corps wanted to use to preheat aircraft engines in the Arctic. Wiremold, however, stayed in the duct business after the war's end, despite its lack of synergy with the core conduit operations. This proved to be a wise move as the company quickly shifted into producing heater and defroster duct for the automobile market, becoming the dominant producer of these auto parts.

BOOMING POSTWAR YEARS

The immediate postwar years, in addition to the new air duct revenue stream, also brought a building boom that drove demand for Wiremold's core products. The Plugmold line, launched in 1947 with the 1900 model, proved quite popular for both retrofit and new construction applications. The 1900 was a perimeter product featuring built-in outlets along its length. The Plugmold 2000, introduced to the market in 1952, was a multioutlet raceway system offering a higher capacity than the 1900. In 1956 Wiremold debuted the Plugmold 2200, which had a wider raceway and was designed to take the place of wooden baseboard. These products aimed to meet the needs of the American consumer, whose appetite for electrical gadgets seemed to be ever growing.

D. H. Murphy ended his long reign as president of Wiremold in 1955, when his son John was named to succeed him. The founder remained involved in the business as chairman of the board until the mid-1960s, and he passed away in 1973. When John Murphy took over the presidency, he was already a longtime Wiremold veteran, having joined the firm in 1934. He worked closely with his brother Robert, who joined Wiremold in 1936 and was named executive vice-president in 1955.

Throughout the remainder of the 1950s and into the 1960s, Wiremold prospered thanks to the postwar housing boom and automobile craze. Sales of Plugmold products remained extremely strong, and the duct business diversified into other automobile products, such as air conditioning ducts and air intakes for carburetors. By the end of the 1950s Wiremold was the world's leading maker of automobile air-duct products. The company also continued to produce loom, a business on the decline but nonetheless still turning a profit. Ever prudent, the Murphy brothers initiated a streamlining and clean-up effort in 1959 that freed up enough additional operating space to stave off any further infrastructure expansion for a few more years. As the company continued to grow, however, the need to expand production and make it more efficient led to the construction in 1965 of a new 57,000-square-foot factory addition, Building 4, which increased the manufacturing space by approximately 40 percent. A further expansion in 1967 added more plant space as well as a new administration building.

The mid-1960s also saw Wiremold introduce its first lines of multichannel raceways: the 6000, debuting in 1964, and the 4000, in 1966. These products were designed more for commercial buildings, for cases in which two or more raceway runs would have previously been needed. The new raceways could hold two or more electrical lines, for instance, in a shop needing electrical outlets that could handle more than one type of voltage, or could carry both power and communications wiring, such as in an office equipped with a computer network. The proliferation of advanced telecommunications and computers in offices, coupled with the move toward open floor plans, led to Wiremold's introduction of Tele-Power Poles in 1969. Power and communications wiring could be fed from dropped ceiling grids through these poles down to the desks and cubicles on the office floor.

END OF FAMILY MANAGEMENT

As Wiremold grew, but remained a family company, John and Robert Murphy began to see the wisdom of bringing some outsiders onboard to build a management team for the future. In 1973 they hired Warren Packard as company treasurer. Packard, who had been a partner at the Hartford office of the accounting firm Coopers & Lybrand, was named executive vice-president and a member of the board of directors in 1977. At that same time, John Murphy was named chairman and CEO, while Robert Murphy became president and COO. In 1975, meanwhile, Wiremold celebrated its 75th anniversary and also acquired the Chan-L-Wire overhead lighting system from the Rucker Company of Oakland, California. Chan-L-Wire was a track lighting system particularly suited for large retail establishments and industrial factories.

In May 1979 Packard was named president and CEO, becoming the first person outside the Murphy family to hold these positions. John Murphy remained chairman, while his brother Robert was named vice-chairman. Over the next few years, Packard led the company through several significant changes. Later in 1979, Wiremold gained its first manufacturing operation outside the United States by acquiring the electrical division of Conduits-Amherst Ltd. of Mississauga, Ontario. The acquired unit was renamed Wiremold Canada, Inc. Also in 1979, Packard made the difficult decision to divest the longstanding loom business, as demand for loom was on a significant decline. The unit was sold to Frank D. Saylor & Sons, Inc., of Birmingham, Michigan. In 1981 Wiremold successfully entered the do-it-yourself (DIY) consumer market with a line of plastic raceway. Plastic products soon became the fastest-growing segment of Wiremold's business, in both the DIY and commercial markets. Revenues for 1981 set an all-time record, exceeding $50 million. Wiremold in 1982 also expanded into the flat conductor cable market with a new line of flat cable designed for installation of power under carpet tiles.

Two other significant events marked the Packard era. Wiremold's flexible duct division (the former air duct division) was not as strong a force as it had been in the immediate postwar era, thanks in part to the emergence of competitors and to the more unpredictable nature of the auto industry. The unit was thus earmarked for divestment in 1986, and its operations were sold by 1988. Proceeds from this divestiture were used to expand into the growing field of power and data quality products, such as surge protectors. Two companies in this field were soon acquired: Philadelphia-based Brooks Electronics Inc., in 1988, and Chicago-based Shape Electronics Inc., in 1990.

TURNAROUND UNDER ART BYRNE'S IMPLEMENTATION OF KAIZEN

Although one of the leaders in its field, Wiremold by the mid-1980s had become a victim of its own success. Weighed down by antiquated manufacturing and inventory systems, the company became incapable of moving quickly. It was taking too long to get new products to market, deliveries were lagging, customer service was declining, and overall growth was falling off. Under Packard's watch, Wiremold launched several initiatives aimed at righting the ship, including a first stab at implementing a Japanese style just-in-time production system, but these all failed for various reasons. Packard himself realized the company needed a new leader to make the sort of fundamental changes which would spark a turnaround. He thus announced in early 1991 that he planned to retire and then led the search for his replacement. Late in the year Art Byrne was hired on as the new CEO.

Byrne came onboard with several years of experience as a group executive with the Danaher Corporation, where he had successfully used the Japanese system of continuous improvement known as kaizen. At Wiremold, he first reduced the workforce, offering early retirement packages to unionized workers and implementing a modest layoff of salaried employees. He then replaced the traditional hierarchical management system with a team model. The team structure provided the framework for his implementation of both kaizen, in which small groups participate in problem-solving sessions, and just-in-time manufacturing. Within a few years the manufacturing process had shown a steady stream of improvements, and both defects and inventory were dramatically reduced. Productivity improved by 20 percent in each of the first three years after Byrne joined the company. Between 1991 and 1995, inventory levels were reduced by more than 75 percent. The time to develop new products was reduced from three years to less than six months. Sales, wages, and profits were all growing at a substantially greater pace, with revenues doubling from $100 million to $200 million between 1991 and 1995. As a result of the lean techniques that Byrne had championed, Wiremold became a model to be emulated, its turnaround story told in the books Lean Thinking (1996) and Better Thinking, Better Results (2003).

The productivity gains and inventory reductions freed up cash which Byrne invested in a string of acquisitions that bolstered and broadened Wiremold's product lines. Among the firms acquired in 1993 were Perma Power Electronics Inc., a producer of super suppressors, line conditioners, and uninterruptible power supplies, and Walker Electrical Products, maker of in-floor and overhead systems for distributing power, lighting, and communications. The 1995 purchase of Raceway Components, Inc., enhanced the Walker line with the leading brand of poke-thru systems, which provided invisible wire and cable management for open-space areas. The kaizen approach also aided new product development efforts. One of the splashier introductions came late in the 1990s when Access 5000 decorator raceway debuted. This nonmetallic multichannel raceway came in a selection of finishes, including real wood veneers, thus offering a combination of architectural trim and cable and wire management in one package. By 1999 the acquisitions and new products had helped revenues double yet again, to approximately $400 million.

ACQUISITION BY LEGRAND IN 2000

The rejuvenated Wiremold caught the attention of French electrical equipment maker Legrand SA, which acquired the still privately held company in July 2000 for $770 million in cash and assumed debt. This deal ended 100 years of control by the Murphy family. Wiremold became one of Legrand's key North American companies and began working cooperatively with a sister Legrand company, Ortronics, Inc., based in New London, Connecticut, on a line of integrated data/communications connectivity products. When Byrne retired in 2002, Mike Gambino, the CEO of another sister company, Syracuse, New York-based Pass & Seymour, was named president of Wiremold. Gambino had more than 25 years of experience in the electrical industry. Wiremold continued to crank out innovative new products, such as the Designer Series 4000 steel raceway, which hit the market in September 2005. This perimeter raceway offered the option of configuring receptacles and data jacks in a downward position, provided higher cable capacity than previous models, and was also available prewired.

PRINCIPAL SUBSIDIARIES

Wiremold Canada, Inc.; Wiremold International Sales Corporation.

PRINCIPAL COMPETITORS

Graybar Electric Company, Inc.; Cooper Industries, Ltd.; WESCO International, Inc.; Anixter International Inc.; Hubbell Incorporated; Consolidated Electrical Distributors, Inc.; Eaton Corporation.