345 South High Street
Muncie, Indiana 47305-0407
Telephone: (317) 747-6100
Fax: (317) 747-6850
Sales: $2.18 billion
Stock Exchanges: New York
SICs: 3411 Metal Cans; 3221 Glass Containers; 5099 Durable Goods, Nec; 3085 Plastic Bottles; 3081 Unsupported Plastics Film and Sheet; 3812 Search and Navigation Equipment; 3679 Electronic Components, Nec
Although the Ball Corporation is best known for its distinctive home canning jars, that business was just one segment of the diversified company in the 1990s. Glass packaging constituted only 29 percent of Ball's annual sales by that time, while metal packaging--including aluminum beverage containers, and food and aerosol cans--brought in about 60 percent of yearly revenues. The firm ranks as one of America's top beverage-can manufacturers. Ball's emphasis on quality has helped it compete well in the highly competitive can market: by 1994, the company was the third largest supplier to the combined U.S.-Canadian food can market. The remaining eleven percent of the corporation's annual income came from aerospace and communications subsidiaries. Ball has secured numerous U.S. Defense Department contracts and participates in the Space Shuttle Program of the National Aeronautics and Space Administration (NASA).
Ever since the five Ball brothers discovered that John Mason's patent on canning jars had expired in the late 1800s, the Ball Corporation has been making the preferred canning equipment in America. Five generations of Americans have preserved everything from pickle relish and apricots to cherry jam and tomatoes in the well known jars, whose design has gone virtually unchanged for over 100 years. Though Ball finally went public in 1972, 60 percent of the company's stock is still owned by the family.
The Ball Corporation began in 1880 when the Ball brothers went into the business of making tin-jacketed glass containers for kerosene lamps. From this type of operation it was an easy shift to the manufacture of canning jars and lids. Moreover, it was wise business strategy: Thomas Edison's recent invention of the incandescent light bulb had antiquated the kerosene lamp. The glass jar, on the other hand, had a great future.
Until the end of World War II, Ball was primarily a jar and bottle manufacturer with few other interests. In the late 1940s, however, a problem had to be confronted--nearly 70 percent of the company's glass production facilities were in need of modernization. Ball had either to diversify and grow in order to underwrite necessary modernization costs or liquidate the company. The family decided to diversify the company because a 1947 antitrust ruling prohibited Ball from purchasing more glass subsidiaries. Under president Edmund F. Ball, they made a number of key acquisitions outside the glass container field. Before the company ventured too far afield, Ball hired a New York management consulting team to help establish a long-range program. In the words of Edmund Ball's successor, John Fisher, 'We wanted to plan for growth, not just hope for it.'
The significant changes at Ball, those which have molded the company's future, took place in the late 1950s and early 1960s. The launching of Sputnik by the Soviets in 1958 ushered in the Space Age and created many new opportunities in the field of aerospace. Ball decided to take advantage of the situation. 'We got into the space field because it was the beginning of the biggest scientific effort in our nation's history,' said Fisher. 'We knew it could be profitable for us, and that we could get commercial 'fall-out' from it.'
The Ball management proved itself correct on both counts. A substantial portion of the company's business presently comes from the sale of computer components, pointing controls for NASA satellites, electronic data display devices, and many related items such as Sound-Guard, a preservative for phonograph records that is a derivative of a lubricant developed for spacecraft. The company also built the cameras for the Viking I and II spacecraft that were used to determine the landing site on Mars; the Space Shuttle tether system, which allows small payloads to trail up to 65 miles away from the parent ship; and the telescope on the Infrared Astronomical Satellite launched in 1983 that has helped scientists to determine more precisely the size of the Milky Way galaxy. Ball procured $180 million in defense contracts alone by 1987. Chief Executive Officer Richard Ringoen hoped the company's 'strong position in infrared and ultraviolet instrumentation [would] continue to allow it to compete favorably with larger aerospace firms like General Dynamics.'
Ironically, Ball had entered the high-tech market almost by mistake. In the 1950s, the company hired a small engineering firm in Boulder, Colorado, to develop a device that would more accurately weigh glass batch materials. The original device was never developed, but Ball was impressed enough by the technical skill of the small operation to purchase it. From this small start Ball invested heavily in research and development and made this sector a vital part of the company's overall business.
The 1960s were years of unparalleled growth in the container industry, especially in the consumer beverage area. Americans began drinking more beer and soft drinks than ever before, and innovations such as the pop-top can and the non-returnable bottle helped container companies to make large profits. While not being a large-volume can manufacturer on the order of American Can or Continental, Ball has nonetheless been extremely successful in this competitive market. Cans soon made up two-thirds of the company's packaging sales, supplanting jars and bottles as the company's primary container product.
Ball's success in this area can be traced back to 1968 when the firm made an early switch to two-piece cans. The two-piece can, which is lighter, less expensive, and faster to make, is now used to package 70 percent of all soft drinks and 94 percent of all beer. Since Ball was already in the container industry, it was able to win manufacturing contracts from such important customers as PepsiCo, Inc., The Coca-Cola Co., and Anheuser-Busch Co. In fact, Anheuser-Busch and Ball constructed a $32 million plant in New England that manufactures two-piece aluminum cans for the brewer on an exclusive basis. While Ball controlled less than one percent of the total can market in the 1980s, it had seven to eight percent of the two-piece can market.
Ball's diversification efforts during the 1950s and 1960s were bold in concept but fairly modest in scope. The man responsible for creating the widely diversified company that the Ball Corporation would become, John W. Fisher, was chosen president and chief executive officer in 1971. Fisher directed Ball into such fields as petroleum engineering equipment, photo-engraving, and plastics, and established the company as a leading manufacturer of computer components and high-tech hardware for defense and space.
Fisher, the last company president to be a member of the Ball family (his wife was the daughter of one of the five founding Ball brothers), resisted the traditionalists within his firm and pushed Ball into new markets all over the world. In 1972, Fisher acquired a Singapore-based petroleum equipment company that built and sold production gear and provided engineering expertise to oil firms in the Pacific. This purchase gave Ball subsidiary operations in Singapore, Malaysia, Indonesia, Panama, and Japan. The following year the Ball-Bartoe Aircraft Corporation was established in Boulder, Colorado. It was involved in the development of an experimental STOL (short take-off and landing) military jet in the 1980s.
The company then acquired agricultural systems and prefabricated housing. Fisher established a Ball Corporation division in Boulder devoted solely to the production and sale of 'turnkey' irrigation packages for agricultural development in arid but arable areas of Libya and other nations in the Middle East. Ball also designed a modular home that could be erected on-site in a little more than six hours. In desert nations where building materials are scarce and therefore expensive, Ball has succeeded in selling a large number of these 'kit' houses. Then, in 1974, Fisher acquired a small California computer company. This concern was expanded into Ball Computer Products Division based in Sunnyvale, California, in the heart of Silicon Valley.
Following Ball's success in the foreign petroleum engineering equipment business, Fisher established similar operations in the United States. However, stiff competition, higher technological standards, and prohibitive start-up costs thwarted this venture from the start. Fisher wasted no time in selling it in 1976 for 40 cents per share. In the mid 1970s, Ball also developed and introduced Freshware food containers. Made of plastic with tight-fitting lids, these were designed to compete with Tupperware. The product was never actually marketed and Ball had to write it off as a loss, phasing out the project in a matter of months. But these were relatively small setbacks. Fisher's management strategy was long-term and he was willing to bear the burden of brief, small-scale problems. The two large obstacles he never surmounted, however, were the company's image and the stock market's ambivalent opinion of it. Despite its interesting acquisitions, the American public still associated Ball almost exclusively with its glass jars.
Ball Corporation went public in 1972 for two reasons. The company management wanted to establish accurately the market value of the Ball family holdings, and they intended to raise equity money to finance the company's diversification efforts. But despite its impressive history, Ball's stock price did not significantly increase. Fisher's efforts to give Ball a more technological image, his trips across the United States to speak with investors, and his dedication to growth did not change the minds of many people. The executive could not understand why a profitable company would not be an attractive stock purchase. He remarked, 'We live in a world where products must be packaged, in good times or bad. This is all a bit mystifying to me.'
When Fisher retired in 1981 he was replaced by Richard Ringoen. Ringoen concentrated on two areas, technology and packaging. Many of the other sectors, while being neither divested not disregarded, had been left to operate on their own. From 1988 to 1992, Ball's annual sales increased dramatically, from $86 million to $2.177 billion, on the force of acquisitions. But net income only increased slightly, from $50.5 million to $69.1 million during the same period.
In the late 1980s, Ball began to focus on international packaging markets where growth far outpaced that of the United States. In 1986, Ball entered into a joint venture with Guangzhou M. C. Packaging in China. By 1993, that business ranked as one of that country's most successful foreign joint ventures, and Ball had established five beverage can manufacturing plants in China, one in Taiwan, and one in Hong Kong.
Ringoen served Ball for a decade, and was succeeded by Delmont A. Davis in 1991. Davis led Ball's early 1990s consolidation and rationalization. In 1992, the company acquired Kerr Group Inc.'s commercial glass assets for $68.4 million, which helped boost Ball's share of that market. Heekin Can, Inc., one of the Midwest's largest food can manufacturers, was purchased in 1993 through a tax-free exchange of stock. The integration of Heekin and Ball's existing Canadian can operations made Ball the third largest supplier to the combined U.S.-Canadian food can market. At the same time, Ball spun off its Alltrista Corporation subsidiary, which was comprised of Ball's consumer products, zinc products, metal decorating and services, industrial systems, and plastics businesses, to shareholders.
Ball's aerospace business also faced challenges in the late 1980s and early 1990s, as the end of the Cold War and the shifting governmental priorities that resulted helped reduce the federal defense budget and intensify competition for contracts. Still, in 1993, Ball was proud to have played a major role in the well-publicized repair of the Hubble Space Telescope. The Ball-built COSTAR optics system helped correct the telescope's notoriously blurry vision.
The net result of these reorganizational activities was that Ball's sales more than doubled from $1.12 billion in 1990 to $2.44 billion in 1993, while the corporation's staff was reduced by over ten percent. Ball was compelled to take a $95 million pre-tax restructuring provision, half of which was used for plant shutdowns and consolidations. Although CEO Davis rightly called Ball's $65.1 million loss for the year 'simply not acceptable,' he also expressed confidence that the company's 'unparalleled restructuring' would bring new opportunities for profitability in the last half of the decade.
Principal Subsidiaries: Ball Brothers AG (Germany); Ball-Canada Holdings Inc.; Ball Efratom Elektronik GmbH (Germany); Ball Efratom Corporation Ltd.; Ball Foreign Sales Corp.; Ball Holdings Corp.; Ball-Incon Glass Packaging Corp.; Ball Metal Container Corp.; Ball Packaging Products Canada, Inc.; Ball Systems Technology Ltd.; Ball Technology Licensing Corp.; Ball Technology Services Corp.; CCD, Inc.; Heekin Can, Inc.; Madera Glass Co.; Muncie & Western Railroad Co.; Verac, Inc.
Birmingham, Frederic Alexander, Ball Corporation: The First Century, Indianapolis: Curtis Publishing Co.
Source: International Directory of Company Histories, Vol. 10. St. James Press, 1995.