Brunswick Corporation

1819–1960

Brunswick Corporation, the oldest and largest manufacturer of recreation and leisure-time products in the United States, has used its commercial successes in billiard and bowling products to become a large and diversified manufacturer of marine and recreational products. Brunswick began as a family firm, merged to become the Brunswick-Balke-Collender Company in 1884, and was renamed the Brunswick Corporation in 1960. During the 1980s the company, which once described itself as the "General Motors of Sports," moved to dominate the marine and powerboat industry, while in the 1990s Brunswick expanded its recreational offerings to include bicycles, wagons, sleds, camping equipment, ice chests, and exercise equipment.

Early History

John Moses Brunswick was born in 1819 in Bremgarten, Switzerland. At 14, Brunswick immigrated to the United States. He landed in New York City and worked briefly as an errand boy for a German butcher but soon emigrated to Philadelphia, Pennsylvania, where he served a four-year apprenticeship in a carriage shop. In 1839 he moved to Harrisburg, Pennsylvania, where he worked as a journeyman carriage maker, and married Louisa Greiner. The Brunswicks moved to Cincinnati in 1840.

Brunswick found work as a journeyman carriage maker for several local firms until 1841, when a major economic downturn severely depressed the market for carriages. During the depression he worked as a steward on an Ohio River steamboat, then as a commercial trader. Though he prospered financially he became ill, and after spending several months in bed Brunswick used his accumulated commercial profits to open his own carriage shop in 1845.

Brunswick's Cincinnati, Ohio, woodworking shop began by making functional, high-quality carriages. Brunswick was willing to expand his product line and the shop soon began to produce cabinetwork, tables, and chairs. Brunswick boasted that "if it is wood, we can make it, and we can make it better than anyone else."

Brunswick's willingness to diversify was more than a manifestation of the pride that he took in his work; it was also an early attempt to diversify his product line to counteract fluctuations in the business cycle. For many years Brunswick's growth was internal, but in later years the firm acquired outside businesses to expand its product line.

Began Manufacturing Billiard Tables in the 1840s

By the mid-1840s the economy had begun to recover and with it came increased manufacturing activity. In this environment Brunswick began to prosper, and he became active in local political, religious, and social circles. Legend has it that in 1845, at a lavish dinner party, John Brunswick was led into another room where his host proudly displayed a fancy billiard table, which had been imported from England. Brunswick saw the opportunity to expand his woodworking business. Thus began Brunswick's long association and ultimate domination of the sporting-goods market.

Billiards long had suffered from a poor reputation. Indeed, sports in general had very limited mass appeal in the United States prior to the 1850s. Sporting equipment was ornate and was designed for sale to men of wealth. Brunswick's first tables were elaborate luxury items, and as such found a limited market.

In 1848 Brunswick expanded his market by sending his half-brothers, David and Emanuel Brunswick, to Chicago to establish a sales office and factory. Other sales offices were opened in New Orleans, Louisiana, and St. Louis, Missouri, while half-brothers Joseph and Hyman Brunswick worked in the firm's Cincinnati offices. In 1858 the business was reorganized as J. M. Brunswick & Brother. In 1866, the company was renamed J. M. Brunswick & Brothers when Emanuel Brunswick joined Joseph and John Brunswick as a principal in the firm.

In 1930 Brunswick sold the Brunswick Panatrope & Radio Corporation to Warner Brothers for $10 million.

1872–1922

Mergers Created Brunswick-Balke-Collender Company in 1884

By the late 1860s the U.S. billiards market was dominated by three firms: Brunswick, Julius Balke's Cincinnati-based Great Western Billiard Manufactory, and a New York-based company named Phelan & Collender, run by Michael Phelan and his son-in-law, H. M. Collender. In 1873 Brunswick merged with Balke to form the J. M. Brunswick & Balke Company. In 1884, following the death of his father-in-law in 1879, Collender merged with Brunswick & Balke, to form the Brunswick-Balke-Collender Company.

During the 1870s Brunswick's half-brothers left the firm to start rival firms and billiard parlors in Chicago and San Francisco. It is not entirely clear under what circumstances each of them left but by 1872 Brunswick's son-in-law, Moses Bensinger, and two longtime employees were vice-presidents at Brunswick.

During this period of rapid growth John Brunswick remained in Cincinnati while Bensinger, who increasingly directed the company's day-to-day operations, greatly expanded the company's Chicago facilities. In July 1886 John Brunswick died. He was succeeded by H. M. Collender, who served as president until his own death in 1890. Julius Balke, too ill and old to take over as president, stepped aside, and--after buying out another vice-president--Bensinger was named president of Brunswick-Balke-Collender.

Bensinger aggressively expanded the firm's product line. Since many billiard tables were being sold to taverns, he expanded the company's line of carved wooden back bars. Back bars covered the wall behind a bar and served a functional and decorative purpose. They were intricate and elaborate status symbols and also greatly enhanced Brunswick's reputation for fine craftsmanship. Initially the bars were custom built, but their popularity soon had the company's Dubuque, Iowa, factory operating at full capacity. Before long Brunswick bars were installed across the United States and Canada.

Bowling Pins and Balls Added in the 1880s

In the 1880s Bensinger added another product line, bowling pins and bowling balls. Taverns had begun installing lanes, interest seemed to be growing, and Bensinger was determined to be ready for this new market. He actively promoted bowling as a participatory sport and helped to standardize the game. Bensinger also was instrumental in organizing the American Bowling Congress. Although the company continued to expand its markets and product lines, bowling was to become the financial backbone of the firm.

Throughout this growth and expansion, Brunswick remained a family firm. John Brunswick's surviving son, Benedict Brunswick, and Julius Balke, Jr., were Brunswick executives, and Bensinger's son, Benjamin Bensinger, worked first as a clerk, then as a salesman, and was rapidly moving his way up in the company. In 1904, upon the death of his father, Benjamin Bensinger became the president of Brunswick-Balke-Collender, at age 36. The firm had several sales offices, and manufacturing plants in Chicago, Cincinnati, Dubuque, and New York, and in 1906 Bensinger opened a large manufacturing plant in Muskegon, Michigan. The Muskegon plant, which grew to over one million square feet in the 1940s, became the cornerstone of the firm's manufacturing, producing such products as mineralite (hard rubber) bowling balls.

Prohibition Era (1920--33) Forced Diversification

In the 1910s the temperance movement threatened not only the fixtures and bar business but also billiards and bowling. In 1912, in anticipation of Prohibition--which started in 1920--Brunswick suspended its bar-fixtures operations, which accounted for one-fourth of annual sales, and sought to replace it with automobile tires and the world's first hard-rubber toilet seats. Rubber products best utilized the firm's existing facilities. By 1921 the Muskegon plant was producing 2,000 tires a day. Then the price of rubber tripled in 1922, Brunswick sold its tire line to B.F. Goodrich, who began to manufacture tires under the Brunswick name as the Brunswick Tire Company.

1911–1976

Brunswick also began to manufacture wood piano cases and phonograph cabinets. Edison Phonograph was the principal buyer of Brunswick's cabinets. The demand for phonographs was so strong that Bensinger decided that Brunswick should manufacture its own line of phonographs. By 1916 the Muskegon plant was producing Brunswick phonographs and putting them on the market for $150--40 percent less than comparable models. In 1922 it also began producing records under its own label. Jazz greats such as Duke Ellington, Cab Calloway, and Benny Goodman and classical artists such as Irene Pavlovska and Leopold Godowsky all recorded on the Brunswick label. In 1925 Brunswick teamed up with General Electric to manufacture an all-electric phonograph called the Panatrope, which came equipped with or without a radio. In 1930 Brunswick sold the Brunswick Panatrope & Radio Corporation to Warner Brothers for $10 million.

The company had gone public in 1924, and in 1930 Benjamin Bensinger was named chairman of the board and his oldest son, Bob Bensinger, became president. Bob Bensinger had worked for the firm since 1919 and with his brother, Ted, guided Brunswick through the Great Depression. Even with the repeal of Prohibition in 1933 and the popularity of pool halls, the Great Depression was hard on Brunswick. The company marketed a line of table-top refrigerators called the Blue Flash and a successful line of soda fountains to replace its once-thriving bar and fixture business.

During World War II Brunswick found new markets and new products and once again prospered. United Service Organizations (USO) centers and military bases eagerly purchased billiard and bowling equipment. Brunswick also made wartime products, including mortar shells, flares, assault boats, fuel cells, floating mines, aircraft instrument panels, and aluminum litters.

Postwar Era Brought Pinsetters and Outboard Motors

At the end of the war Brunswick became involved in a high-stakes battle with the American Machine and Foundry Company (AMF) over the automatic pinsetter for bowling alleys. AMF produced pinsetters in the late 1940s but these proved unreliable. In 1952 AMF installed an improved version of its machine and called it a pinspotter. Brunswick, which had toyed with the idea of an automatic pinsetter as early as 1911, had to develop a working pinsetter quickly or risk losing its domination of the bowling market. Telling customers that it would be "worth waiting for," Brunswick scrambled to develop its own machine. In 1954 Brunswick formed the Pinsetter Corporation with Murray Corporation of America. By the time the pinsetters were in production in 1955, Brunswick had bought out Murray, and Brunswick aggressively sold its machine to a rapidly expanding market.

Brunswick's policy of selling pinsetters on credit, suburban expansion, and an aggressive advertising campaign all combined to make bowling centers enormously popular in the late 1950s. After the introduction of the pinsetter the company prospered as never before. Sales, which had been $33 million in 1954, jumped to $422 million in 1961. Although Brunswick's earnings did not leap correspondingly--sales were up almost 13-fold, but earnings increased just less than six times--Ted Bensinger, named CEO in 1954, received most of the credit for Brunswick gains. Brunswick acquired 18 new firms to further diversify its markets. Such companies as MacGregor Sports Products, Union Hardware, Zebco, and Owens Yacht Company made Brunswick a major force in equipment for golf, roller skating, fishing, and boating. Brunswick's most important purchase proved to be the 1961 acquisition of the Kiekhaefer Corporation, which built Mercury outboard motors.

Brunswick also sought firms outside recreational sports, and in 1959 it purchased A.S. Aloe and entered the medical-supply business. To complement the Aloe purchase Brunswick also acquired Sheridan Catheter & Instrument Corporation in 1960, Roehr Products Company in 1961, and Biological Research in 1961. Brunswick's medical-supply business became known as the Sherwood Medical Group. Brunswick also developed a popular line of school furniture in the 1950s and kept active in its defense-products division. The company, meanwhile, changed its name to Brunswick Corporation in 1960.

Further Diversification Moves Marked 1960s and 1970s

An unexpected decline in the bowling industry, which represented 60 percent of sales, in the early 1960s presented Brunswick with serious financial problems. Jack Hanigan was brought in as president in November 1963 to handle Brunswick's financial problems. Ted Bensinger became chairman and he and his brother both remained on the board of directors into the 1970s. Hanigan aggressively sought to reorganize Brunswick and to position the firm for future expansion. In 1965 he formed a technical and new-business division which developed, among other things, Brunsmet, a metal-fiber product. In 1967 Hanigan merged this division and the defense division into the technical-products division. These new divisions, along with further expansion of the company's medical lines, growth of the Kiekhaefer-Mercury products, and the recovery of bowling in the late 1960s, all helped Brunswick to reach record sales of $450 million in 1969.

The 1973--74 oil embargo caused problems at Brunswick, particularly in its profitable marine-engine division, but the company was able to further diversify its products and remained strong. The technical-products division continued to grow, producing, among other things, radomes and metal-fiber camouflage. Hanigan retired as chairman and CEO in 1976 and was replaced by K. Brooks Abernathy.

1977–2000

To promote stability Brunswick had been organized into four business groups: marine, medical, recreational, and technical. Jack Reichert, president of the Marine group, became president of Brunswick in 1977 as sales topped $1 billion for the first time. Not content, Brunswick moved into energy and transportation control systems by acquiring Vapor Corporation for $90 million in 1978, as well as actively expanding its international markets.

Marine and Recreation Products Achieved Predominance in the 1980s and 1990s

Brunswick successfully fought a hostile takeover bid by the Whittaker Corporation in 1982. Whittaker wanted Brunswick's Sherwood Medical Group medical-supply business. Whittaker was forced to withdraw its offer when American Home Products stepped in as a white knight, and Sherwood was sold to American Home Products in March 1982 for $425 million in Brunswick stock. In April 1982 Reichert took over as CEO of Brunswick. Reichert sought to decentralize Brunswick to improve efficiency and stress quality output. The firm's 11 sectors were reduced to 8, corporate staff was cut, and executive perquisites were trimmed, reducing bureaucratic costs. Reichert transferred division staff to production sites in an attempt to enhance product quality. He also moved to include hourly employees as shareholders and increased pension payments to former employees.

During the latter half of the 1980s, Brunswick made a series of significant moves aimed at not only reasserting itself in the field of recreation but also making recreation the company's main focus. In 1986 Brunswick acquired two pleasure-boat manufacturers, Bayliner Marine Corporation and Ray Industries (maker of Sea Ray boats), for $773 million. These purchases, along with the acquisitions of MonArk Boat, Marine Group, Fisher Marine, and Starcraft Power Boats in 1988, made Brunswick the world's largest manufacturer of pleasure boats and marine engines. These companies also made Brunswick vulnerable to fluctuations in marine sales.

Brunswick had enjoyed six consecutive years of record earnings from 1982 through 1988. That string of record years ended in 1989, when restructuring charges arising from a downturn in the marine market resulted in a net loss. In 1989 and 1990 Brunswick disposed of the business units that had theretofore comprised its technetics and industrial products divisions, leaving it with only its marine and recreation groups and a much smaller technical group of businesses.

Although the company returned to profitability in 1990, the economic downturn of the early 1990s severely depressed sales of pleasure boats and outboard motors, leading to net losses in 1991 and 1992 and net earnings of only $23.1 million in 1993. While weathering these rough seas, Brunswick put major acquisitions on hold and determined to concentrate solely on its marine and recreation segments. In February 1993 the company announced that it would divest its technical group. The sale to the newly formed Technical Products Group, Inc. was not culminated until April 1995, having been delayed by U.S. government investigations of its defense businesses. Also divested in 1995 was the company's Circus World Pizza operation, while 1996 saw the closure of a noncompetitive golf shaft business. Meanwhile, in April 1993 Brunswick moved into its new world headquarters building in Lake Forest, Illinois.

With Reichert planning to retire in 1995, Brunswick brought in John P. Reilly, formerly with Tenneco Inc., as president and heir apparent in the fall of 1994. He was forced out after only nine months, however, following reported conflicts among top executives. Subsequently, Reichert was succeeded in mid-1995 by Peter N. Larson, a former Johnson & Johnson executive.

In order to guard against future economic downturns--downturns that always hit the pleasure boat market particularly hard--Brunswick in the mid-1990s concentrated on expanding its recreational offerings to a wider variety of consumable goods, which tend to counterbalance such durable goods as boats. In anticipation of this expansion, Brunswick in the fall of 1995 created an Indoor Recreation Group to encompass the bowling and billiards operations, while an Outdoor Recreation Group featured the Zebco fishing equipment business. In early 1996 the company acquired Nelson/Weather-Rite, a unit of Roadmaster Industries Inc. that made camping equipment, for $120 million. Brunswick renamed this unit American Camper; it held the number-two position in the U.S. market and offered sleeping bags, tents, backpacks, and other products under the American Camper, Remington, and Weather-Rite brand names. American Camper became part of the Outdoor Recreation Group, as did Igloo Holdings Inc. after it was acquired in January 1997 for about $154 million in cash; Igloo was a market leader in ice chests, beverage coolers, and thermoelectric cooler/warmer products. Two months later, the Hoppe's line of hunting accessories was purchased from Penguin Industries, Inc.; Hoppe's, also added to Outdoor Recreation, was number one in gun cleaning and shooting accessories.

Brunswick next aimed to become a leader in the bicycle market. After spending $190 million in January 1997 to buy Roadmaster's bicycle division, which included the Flexible Flyer line of sleds and wagons, and the Roadmaster brand name, Brunswick in the spring of 1997 acquired Bell Sports Corp.'s Mongoose--a San Jose, California-based maker of higher-end mountain and BMX bikes--for $22 million. That same summer the company formed a Brunswick Bicycles division within the Outdoor Recreation Group to oversee the Roadmaster and Mongoose operations, and to launch a new brand that fall called Ride Hard aimed at the middle-tier of the market between the lower-end Roadmaster and higher-end Mongoose. The acquisition spree continued in July 1997 as Brunswick paid Mancuso & Co. $310 million for Life Fitness, maker of stationary bicycles, treadmills, stairclimbers, rowers, cross trainers, and strength training equipment for fitness centers worldwide.

After sales of $3.16 billion in 1996, Brunswick's sales for 1997 were up 15 percent during the first nine months of the year. Net earnings were down, but only because of a $98.5 million strategic charge for streamlining and consolidating various operations and for exiting from the manufacture of personal watercraft. As for the remainder of the decade, Brunswick was likely to continue to seek out acquisitions of market leaders in active recreation since it had set a goal of achieving $5 billion in sales by 2000. The company was also better positioned to weather the next economic downturn as it was increasingly less dependent on its marine operations.