1201 Third Avenue, Suite 4900
Seattle, Washington 98101
Telephone: (206) 224-5193
Fax: (206) 224-5060
Incorporated: 1895 as Simpson Logging Company
Sales: $1 billion (1995 est.)
SICs: 2621 Paper Mills; 2421 Sawmills & Planing Mills, General
For as far into the past as anyone can determine, human beings have drawn benefit from natural resources--for shelter and safety; comfort and commerce; recreation and renewal. But people have a unique ability to change their environment--for better or for worse. No natural law ensures htat we do the right things or make the right choices. We have only our knowledge, our responsibility and our commitment. At Simpson, we've always taken our responsibility to the environment very seriously. As our knowledge has grown, we've made some changes. But our commitment to protect the resources on which we all depend has never wavered.
One of the oldest and largest privately owned companies in the Pacific Northwest, Simpson Investment Company operates as the holding company for Simpson Paper Company and Simpson Timber Company, subsidiaries involved in pulp and paper production and timber harvesting and manufacture, respectively. During the mid-1990s, Simpson Paper operated ten mills in eight states and Simpson Timber owned 770,000 acres of timberland in Washington, Oregon, and California, as well as manufacturing facilities and nurseries in Washington and California.
Origins of the Founder
Although Simpson Investment represented the corporate dynasty of the Reed family, whose legacy of leadership nearly spanned a century, the company was not founded by a member of the Reed family. Instead the diversified forest products giant was formed by Solomon Grout Simpson, a Canadian-born fortune-seeker who scored his greatest success in the logging business and lent his name to what would become one of the oldest and largest privately owned companies in his adopted home state of Washington. Born in 1843, Sol Simpson grew up in Cote St. Charles, Quebec, a burgeoning timber port town situated along the St. Lawrence River. His parents had left Yorkshire, England in the early 19th century and settled in the suburban Montreal community of Cote St. Charles. Like his parents, Sol Simpson demonstrated a peripatetic bent once he reached early adulthood, but before he embarked on a life away from Cote St. Charles he spent his teenage years working as a timber raftsman in his home town, shepherding fir and spruce logs down the Ottawa and St. Lawrence rivers.
In Sol Simpson's mind, life as a timber raftsman in Cote St. Charles paled against the riches to be found in Carson City, Nevada, where the young Canadian moved in 1865 at the age of 22. Simpson arrived in Carson City intent on unearthing caches of gold and silver from the mines nearby, but luck was not on his side and the once-hopeful fortune-seeker was forced to look elsewhere for money to survive in his adopted country. Simpson began grading roads and logging in Carson City following his failure to find a treasure trove of gold and silver, then he settled down in Carson City, eventually marrying a local woman.
Simpson spent eight years in Carson City honing his logging and road-grading skills before moving to Seattle, Washington, with his wife and young daughter in 1878. In his new town, Simpson graded railroad beds and hauled timber for the Seattle & Eastern Railroad and the Port Blakely Mill Company, earning distinction for his use of horses to pull wagons rather than oxen, the conventional beast of burden used to haul heavy loads. Using horses to transport timber proved to be quicker than using oxen, a discovery that one timber industry historian described as, "not only revolutionary, so far as the West Coast woods was concerned, but downright heretical, practically indecent." Whatever the historical significance, Simpson's innovative approach earned the respect of his customers and gave him the confidence to form his own company.
1890: The Company Is Founded
In 1890 Simpson formed his own company, naming it S.G. Simpson Company, a sole proprietorship construction firm that counted road graders and horses as its primary assets. Initially, the newly formed company was closely allied with the, its chief, if not sole customer. Five years after its formation the company was incorporated and changed its name to Simpson Logging Company. Nearly from the outset, Simpson Logging was a thriving enterprise, its business nearly entirely predicated on the orders issued forth from the Port Blakely Mill Company. Profitability was the norm shortly after Simpson Logging's incorporation, as were dividend payments. By 1898, the company was producing a half million board feet of logs per day from eight logging camps and through 80 miles of tracks used by two railroads. Shortly thereafter, company-owned housing was erected and a company-owned store was opened, as Simpson Logging took on the trappings of a full-fledged lumber enterprise quickly after its creation.
It was at this point in the young company's history that the Reed era began, although it would be several years before the first member of the family was handed the reins of control over Simpson Logging. The Reed legacy began in 1897 when Sol Simpson and Mark Edward Reed, at age 31, met for the for the first time, one a successful leader of a promising logging company and the other a failure at the same venture. Fours years before Sol Simpson and Mark Reed met, Reed and a friend had founded a logging company that fell victim to the financial panic of 1893 and was remembered, according to one long-time timber industry observer, as "one of the quickest logging failures in Puget Sound history." For someone who would go on to be eulogized as one of the most important personalities in the history of the Pacific Northwest timber industry, Mark Reed's first failure stood as an anomaly in an otherwise distinguished career, but before accolades from timber industry pundits were thrown his way, the patriarch of the Reed dynasty labored to rise through the ranks of the modestly sized Simpson Logging enterprise.
Reed was hired on as a foreman of one of Simpson Logging's camps shortly after he met Sol Simpson and four years later married one of Simpson's daughters. When Reed joined Simpson Logging, the company still relied on Port Blakley Mill Company for an overwhelming percentage of its business, but by 1902 Simpson had grown tired of the arrangement and severed the ties that connected his company from his former employer. The decision by Simpson made Simpson Logging a commercial logger exclusively, giving the company independence and enabling it to sell its logs to the highest bidder.
Early 20th Century: Reed Family Gains Control
Several years later, in 1906, when the company employed 300 people at five separate camps and cut 300,000 board feet of logs a day, Simpson died and Reed assumed the responsibilities associated with managing the timber operations, though he was not yet named president of the company. That title was bestowed on Reed in 1914 when he assumed full control over the company and began to spearhead the transformation that would turn a log supplier fettered to its 19th-century roots into a diversified, dominant forest-products corporation.
Dominant became an adjective applied to Simpson Logging long before "diversified" became descriptive of the Shelton, Washington-based operations. During the years following the conclusion of the First World War, Reed established Simpson Logging as the dominant independent logger in the Puget Sound. Shortly after orchestrating this ascension, Reed began to direct the company into other, timber-related businesses, touching off an era of diversification that would become one of the hallmarks of Mark Reed's tenure at Simpson Logging.
After a year of construction, the company opened its first sawmill, the Reed Mill, in 1925, marking its entry into the hemlock lumber manufacturing business. Capable of producing 150,000 board feet per day, the Reed Mill was joined two years later by the Reed Shingle Mill. After these additions, Mark Reed moved Simpson Logging into the business that would rank as the company's largest enterprise during the 1990s. For members of the Reed family who depended heavily on the revenue generated from this business, Mark Reed's preliminary thoughts were remarkably prescient. As Reed contemplated the first steps that would lead to the formation of Simpson Paper Company, he remarked, "I feel confident that the pulpwood industry is going to be a very important factor in the development of the Northwest in years to come." Reed went on to presage developments that would affect his company more than a half century later, sounding more and more like a 1990s timber executive by stating, "If this industry could be successfully operated on the waste material from our lumbering operations, we would bring about real conservation."
1920: The First Steps toward Diversification
While Reed was pointing out the need to diversify and vertically integrate the operations of his timber company, he was negotiating a deal that moved Simpson Logging into the pulp and paper business. With the help of other financial backers, Reed formed the, giving Simpson Logging a minority interest in the newly formed company's sole asset: a sulfite pulp mill situated next to the Reed Mill in Shelton. Although by this time Simpson Logging still operated chiefly as a commercial logger, the push towards transforming the company into a diversified forest-products company had begun. In the years ahead, diversification would pick up pace but only after the company endured the economic hardships of the 1930s.
During the Great Depression, Simpson Logging was one of only a handful of operators in the Western Washington forest products industry to keep its facilities operating continuously. Though the company withstood the pernicious affects of a devastatingly weak national economy, it did so only by striking a deal with employees to cut their wages and by adhering to Mark Reed's policy of accumulating zero debt. Reed's dictate was instrumental to Simpson Logging's survival, but the patriarch of the Reed family never saw his company emerge from the economic doldrums of the 1930s. Reed died in 1933 at the nadir of the economic downswing and in his place his son Frank Campbell Reed assumed the reins of command, becoming president and chief executive officer of Simpson Logging.
By the mid 1930s, the prospects for the company began to brighten, instilling sufficient confidence in Frank Reed and his brother William Garrard Reed to complete several acquisitions. The company acquired 50 percent interest in the, converting the railroad from a common carrier to a private carrier, and purchased timberland. But by the late 1930s economic conditions soured again and the company was forced to abandon plans for expansion. Full recovery did not occur until the United States entered World War II in 1941.
Once the country was at war, the Office of Price Administration (OPA) froze the prices of logs, plywood, and lumber, barring forest-product companies like Simpson Logging from charging whatever its customers were willing to pay. As it turned out, the intervention by the OPA occurred when the price of logs was low and the prices of plywood and lumber were high, making commercial logging far less profitable than the manufacturing side of the timber business. Quickly and artificially, the dynamics of the timber industry were changed, forcing commercial loggers to either exit the business altogether or adapt to the changes. Simpson Logging opted to change with the times and spent the war years completing two acquisitions that bolstered its involvement in the manufacturing end of the timber industry. In 1941, the company acquired the Henry McCleary Timber Company, gaining a plywood mill and a door plant, and in 1943 the Olympic Plywood Company was purchased, adding another shingle mill to Simpson Logging's operations.
As these events unfolded, Simpson Logging underwent another leadership change. In late 1942, Frank Reed died in a fire that razed his home, leaving his younger brother William as the next Reed to steward the fortunes of Simpson Logging. William (Bill) Reed's contributions to the development of the family-owned company were as important as his father's and, in essence, quite similar. Mark Reed had led the company toward diversification; his son Bill would continue the transformation of Simpson Logging into a diversified, forest-products company, creating the foundation that would support the company during the 1990s. Shortly after his promotion to the top position of the Simpson Logging, Bill Reed presided over the completion of two acquisitions that set the tone for the company's progress during the second half of the 20th century. In 1945, the company entered the redwood business with the purchase of Del Norte, California-based Requia Timber Company and the following year Simpson Logging signed the 100-year Shelton Cooperative Sustained Yield Unit (CSYU) agreement with the U.S. government. The CSYU agreement paved the way for the future of Simpson Logging by unifying 116,000 acres of company-owned land and 112,000 acres of land owned by the U.S. Forest Service. Under the terms of the agreement the combined acreage was placed under a forest management plan that provided for continuous harvesting and restocking, ensuring that the supply of timber on the land would be perpetual and creating a sustained production of 90 million board feet a year for the next century.
Post-World War II Expansion
During the second half of the 20th century, Simpson Logging expanded at a rapid pace. The company swallowed up timberlands in Washington, Oregon, and California, acquired sawmills, established subsidiary operations in Canada, and made its all-important entry into the pulp and paper business, the largest component of Simpson Investment during the 1990s. Although the company had acquired its first interest in the pulp and paper business during the mid-1920s with a minority stake in Rainer Pulp and Paper Company, the move into pulp and paper did not begin in earnest until the early 1950s. In 1951, the company acquired Lowell, Washington-based, a maker of lithographic paper, book paper, and label paper used for canned goods and fruit boxes in the western United States. The acquisition of Everett Pulp & Paper touched of a three-decade-long acquisition spree that increased Simpson Logging's role as a pulp and paper producer, enlarged its timberland holdings, and moved the company into a number of business areas not directly related to the timber business. It was Bill Reed's objective during his tenure to make Simpson Logging a more integrated forest-products operator and an industry leader in return on assets; his work during the 1950s and 1960s accomplished just that, as Simpson Logging expanded and diversified aggressively.
While the company moved resolutely forward on all fronts, several organizational changes occurred that charted the evolution of Simpson Logging from the 1950s to the 1990s. The first of these changes that facilitated Simpson Logging's transformation into Simpson Investment Company took place in 1956 when Simpson Timber Company was formed as the parent company for Simpson Logging Company, Simpson Redwood Company, which had been founded two years earlier, and the rapidly expanding Simpson Paper Company. In 1959, Simpson Paper Company merged with Vicksburg, Michigan-based Lee Paper Company, forming Simpson Lee Paper Company, and the following year Simpson Logging Company and Simpson Redwood Company were merged into Simpson Timber Company.
Structured as such, Simpson Timber entered the 1960s well on its way toward becoming a leading forest-products company on the West Coast. The company opened a paper mill in California in 1961, established a timber subsidiary in Saskatchewan, Canada, in 1965, and late in the decade bought several companies that brought the forest-products company into business areas outside the timber industry. A furniture company, a leasing company, and a machine tool manufacturer were acquired, but the only acquisition that remained a part of the company's operations into the 1990s was the 1967 purchase of Eugene, Oregon-based Gil-Wel Manufacturing. Later renamed the Simpson Extruded Plastics Company, Gil-Wel Manufacturing was a small manufacturer of extruded thermoplastic pipe used primarily for irrigation purposes.
During the 1970s, Simpson Timber acquired two paper mills in California, one in 1972 that became the company's Shasta Mill and the other in 1979 that became its San Gabriel Mill. Other developments during the decade included the establishment of another timber subsidiary in Canada, where Simpson Timber Co. (Alberta) Ltd. first began operating in 1973, and the acquisition of a plastics plant in Sunnyside, Washington, that was merged into Simpson Extruded Plastics Company. The 1970s also brought an end to another era of Reed leadership. Bill Reed stepped aside as chairman in 1971, handing the reins of command to his son, William G. "Gary" Reed, Jr., who had served as an executive for the company since the 1960s.
As Simpson Timber entered the 1980s, its acquisition program continued unabated, with Gary Reed, Jr. adding mills, timberlands, and plastics manufacturing facilities to the company's fold at a pace commensurate with the rate of expansion established during his father's tenure. Three pulp and paper mills were acquired during the first half of the decade, one in Pennsylvania in 1980, another in California in 1982, and a third in Ohio in 1983. The first half of the 1980s also were highlighted by the acquisition of four plastic plants. In 1982, the company acquired a Visalia, California plastic plant from Gifford-Hill Company, Inc. and in 1985 purchased three plastic plants belonging to Western Plastic Company, giving Simpson Extruded Plastics Company new facilities in Tacoma, Washington, and in Union City and Downey, California.
Midway through the 1980s, another company-wide reorganization altered the structure of Simpson Timber, creating the framework of the company that would carry it into the 1990s. In 1985, Simpson Extruded Plastics Company's name was changed to reflect the recent additions of the three Western Plastics Company plants, becoming PWPipe. Next, more pervasive changes were effected, giving the Reed-owned enterprise a different corporate title. Simpson Investment Company was adopted as the new name for the holding company, replacing the Simpson Timber Company name, which was used thereafter as the name for the company's timber operations. In addition to owning Simpson Timber Company, Simpson Investment Company also served as the holding company for the Simpson Paper and PWPipe companies.
During the latter half of the 1980s, Simpson Investment acquired three pulp and paper mills, two facilities to be used by its PWPipe subsidiary, and a timber company located near Arcata, California, as well as 117,000 acres of northwestern Oregon timberland from the Times Mirror Land and Timber Company. Once these acquisitions were completed, Simpson Investment officials could look back on a century of business, as the company entered the 1990s and celebrated its centennial anniversary year.
One Hundred Years in Business
By the time of its 100th birthday, the Reed-owned enterprise ranked as one of the largest producers of fine papers in the United States, while its timber business--the original part of the business founded in 1890--had thrived for decades by pursuing a strategy of acquiring inexpensive tracts of land, consistently replanting the harvested timberland, and planning for long-term cultivation. As opposed to a century earlier, Simpson Investment entered the 1990s dependent on its pulp and paper business to generate the bulk of its revenue rather than its commercial logging operations. Though this shift in the company's orientation mirrored the changing character of the forest-products industry during the 20th century, the first half of the 1990s proved to be an inopportune time for profits in the pulp and paper business. The early years of the decade were marked by declining pulp prices and a surfeit of products on the market, which crimped profits at Simpson Investment's most important subsidiary, Simpson Paper Company. As a result, the paper subsidiary was forced to consolidate, shuttering two pulp mills in California in 1993 and another in Pennsylvania in 1994, the year Simpson Paper Company's headquarters were moved from San Francisco to Seattle.
Despite the slump in profits derived from the paper industry, Simpson Investment entered the mid 1990s as a powerful, diversified forest-products company. The company ranked as the second-largest privately held company in Washington and as one of the largest forest-products companies on the West Coast. In 1995, the company narrowed its focus by selling its PWPipe subsidiary to Mitsubishi Chemical America Corp. The divestiture enabled Simpson Investment to concentrate its resources on the company's widespread paper and timber interests, operated by Simpson Paper Company and Simpson Timber Company, respectively. As Simpson Investment prepared for the late 1990s and the new century ahead, its pulp and paper business was supported by ten mills scattered across eight states. The company's timber subsidiary owned 770,000 acres of timberland in Washington, Oregon, and California and operated three sawmills, a plywood mill, and a door plant in Washington, and two sawmills, a manufacturing plant, and two nurseries in California. With these properties composing the holdings of Simpson Investment and its two subsidiaries, the family-owned company charted its course for future, intent on continuing the legacy of independence and success spawned from the efforts of Solomon Grout Simpson.
Principal Subsidiaries: Simpson Paper Company; Simpson Timber Company.
Denne, Lorianne, "Simpson Paper Takes Steps While Rival Firms Embroiled," Puget Sound Business Journal, June 4, 1990, p. 17.
"Mark E. Reed," Puget Sound Business Journal, April 29, 1991, p. 15.
Sather, Jeanne, "Simpson Investment Co. Still Keeping Low Profile," Puget Sound Business Journal, June 24, 1994, p. 42.
Spector, Robert, "It Never Came Easy for Simpson Dynasty Founder," Puget Sound Business Journal, June 24, 1991, p. 30.
------, Family Trees: Simpson's Centennial Story, Bellevue, Wash.: Documentary Book Publishers Corporation, 1990.
Tucker, Rob, "Simpson Investment to Sell Plastic-Pipe Subsidiary to Mitsubishi," Knight-Ridder/Tribune Business News, July 5, 1995, p. 7.
Source: International Directory of Company Histories, Vol. 17. St. James Press, 1997.