The Austin Company History

Address:

6095 Parkland Boulevard
Cleveland, Ohio 44124
U.S.A.

Telephone: (440) 544-2600
Fax: (440) 544-2684

Private Company
Incorporated: 1904 as The Samuel Austin & Son Company
Employees: 2,100
Sales: $2.23 billion (1992)
NAIC: 54131 Architectural Services; 54133 Engineering Services

Company Perspectives:

The Austin Company is committed to world leadership as a premier complete-service architecture, engineering and construction firm. Through service, technology, growth and enterprise, The Austin Company will continue to set the highest standards in the industry for quality, service, professionalism and innovation.

Company History:

From roots extending back well into the 19th century, The Austin Company grew into one of the largest and most sophisticated design, engineering, and construction companies in the world. With 40 offices in ten countries on five continents, including eight regional operating units in the United States, the Cleveland-based company boasts a history of world records for building size and technological innovation. Austin's triumphs include the design, engineering, and construction of the industrial facilities that broke world records for size, including the Boeing Company's manufacturing and assembly complex in Everett, Washington. In 1992-93, Austin constructed the Asia and Pacific Trade Center in Osaka, Japan, one of the world's largest international exhibition facilities.

19th-Century Origins

The Austin story began with a young English carpenter who came to America in 1872 to find work rebuilding Chicago after that city's great fire. The carpenter, Samuel Austin, never made it to Chicago. When he arrived in the United States, he chose to work in Cleveland, building residences with a contractor and, over the course of the next six years, building a reputation for solid workmanship. He then set off to carry on his work alone, meeting with enough success to build a shop for his business in 1880.

A contract to construct a new savings bank building in 1889 marked Samuel Austin's debut into commercial work. Industry executives who banked in the new Broadway Savings Bank admired Austin's work and soon offered him work to construct their factories. In 1895 Austin won the contract to build Cleveland's first electric lamp factory; a series of contracts from the National Electric Lamp Association soon followed. Also in 1895, when the Western Mineral Wool Company decided to branch out and begin production in Chicago, it called on Samuel Austin to build their factory. The Western Mineral Wool contract represented Austin's first work outside of Cleveland. Ironically, the work was in the same location--Chicago--that he had originally intended to reach after emigrating to America 23 years earlier.

When Samuel Austin's son, Wilbert J. Austin, graduated from the Case School of Applied Sciences (now part of Case Western Reserve University) in 1904 with a degree in engineering, the father and son established The Samuel Austin & Son Company. Wilbert Austin brought to the business the innovative concept of combining full-service engineering and construction into one operation. This approach came to be known as "The Austin Method" and would distinguish the firm throughout the United States and eventually around the world.

The Austin Method transformed the traditional process of contracting by including in one contract the responsibility for the architecture, engineering, and construction of an entire project. By integrating these three services into one process, the Austin Method enabled the contractor to complete the project more quickly, thus saving the client both time and money. Armed with the prototype concept of an integrated engineering and construction contract, Samuel Austin & Son began its long history of firsts that carried the company to national and international prominence.

In 1907 Samuel Austin & Son built the first reinforced concrete structure in Cleveland for the H. Black Company. The building initially housed the region's largest women's clothing factory, the Wooltex Cloak Company, then served as offices for a series of tenants, including Tower Press, Inc., a printing company. (The Black Company building, located on Superior Avenue, was designated a Cleveland landmark in 1963.)

In 1911 Samuel Austin & Son engineered and constructed the first campus-type, industrial research facility for the National Electric Lamp Association. This facility is now known as Nela Park, General Electric's principal research complex, located in suburban East Cleveland. A contract for the design and construction of another large lamp manufacturing plant about one mile away accompanied the contract for the research complex. Since these two contracts were the two largest that Samuel Austin & Son had worked on to date, the Company moved its offices closer to the sites, specifically to Euclid and Noble Roads, where the company's headquarters remained until 1960.

Incorporation and Growing the Business in the Early 1900s

While applying their new design and construction methodology on these two projects, the Austins developed a keener awareness of the economic problems of planning new industrial plants. In 1916, then, Austin & Son introduced standard building designs for the quick delivery of prefabricated packaged industrial building concepts. Refining and standardizing the Austin Method, the company enjoyed successes in factories of all types in New England, the Midwest, and the West Coast. Samuel Austin & Son was incorporated as The Austin Company in 1916, which soon opened district offices across the country to handle scores of new contracts. The Austin Company had gained a national reputation.

With its stature established, Austin strove over the succeeding decades to become one of the nation's leading architectural, engineering, and construction organizations. To that end, Austin branched into design and construction services for a variety of different industries, researched and developed cutting-edge engineering and construction concepts, and continually innovated new kinds of building concepts.

One of the earliest and longest-running lines of business that Austin diversified into was the defense industry. Many of the plants that had been designed and built earlier by Austin were producing arms for the Allies during World War I. When the United States entered the war in 1917, an enormous demand emerged virtually overnight for additional war materiel. Manufacturers immediately turned to Austin for new facilities.

The Austin Company's involvement in these and other industries remained constant across the decades, continuing on beyond the lives of its founders. By the end of 1940, both Samuel Austin and Wilbert J. Austin had died. Under the leadership of the new president, George A. Bryant, however, Austin continued its work in war plants as well as other, non-defense, industries. During World War II, according to The Austin Story, Austin designed and constructed crucial facilities for the war, including "mammoth aircraft production plants, military airports, air force training stations and naval facilities" for the U.S. government and "a variety of industrial defense plants" for private industry. Austin also constructed chemical-processing plants for the defense industry during the war. Austin's work for the government in its war efforts resumed in the early 1990s.

As innovators in the design and construction of automated distribution centers for use by the retail-merchandising and manufacturing industries, Austin in 1990 developed the U.S. Army's Eastern Distribution Center in New Cumberland, Pennsylvania. That 1.6-million-square-foot facility was designed to deliver supplies to military installations in the United States, Europe, and the Middle East. It fulfilled crucial logistical functions during the Persian Gulf War in 1991.

Austin's contribution to U.S. defense efforts was largely the result of its success, based on technological developments, in a host of civilian industries. The fields of industry in which Austin achieved leadership in facilities design and construction were few, but important. The company expanded into a limited number of industries, such as aviation, broadcasting, food processing, newspaper publishing, and pharmaceutical manufacturing. At the same time, Austin developed expertise in operations centers, research and development centers, automated distribution centers, computer-controlled manufacturing and processing plants, and "intelligent" office buildings.

Austin's work in aviation stemmed from government contracts garnered during World War I, when Austin built aviation support facilities at many of the nation's airports. Following the war, Austin continued its work in aviation. In the late 1920s, Austin designed and constructed hangars, maintenance facilities, and administration and terminal buildings, including those for the Cleveland Municipal Airport (now Cleveland Hopkins International Airport). Under the direction of Wilbert Austin, who had succeeded his father as company president in 1925 when Samuel Austin became chairman, the company perfected the original canopy door for wide-span hangars. Austin's new hangar design became the prototype for many succeeding hangar-door designs.

Moreover, an enduring business relationship with the Boeing Company, begun in the mid-1920s, led to a world record in building size in the early 1990s. Austin began constructing facilities for the Boeing Company in 1924; during 1966-67, Austin designed and constructed a 2.2-million-square-foot facility to assemble the 747 jumbo jet. In 1991 Austin was awarded a contract from Boeing to expand that Everett, Washington, manufacturing plant for the production of the new 777 aircraft; with the addition of 1.7 million square-feet in mid-1993, the plant became the largest-volume industrial structure in the world.

This building was not Austin's first record-breaker, however. In 1927 the company erected what was then the world's largest building, a manufacturing plant for the Oakland Motor Car Company in Pontiac, Michigan. Austin continued its work in the automotive industry since that time. In 1930 a historically significant international contract called for a $60 million integrated automobile manufacturing complex and workers' city located in the former Soviet town of Gorki (now known as Nizhny Novgorod, Russia). The project incorporated infrastructure to accommodate 50,000 people.

In addition to the automobile industry, Austin distinguished itself in design and construction for the communications industry. The company designed Hollywood's first sound stages and film studios in the 1920s, NBC's famous Radio City of the West in Hollywood in 1938, and 50 of the first 75 local television stations that went on the air across the country after World War II.

Postwar Era

Austin's experience in newspaper publishing dated back to 1921, when it created the Warren Tribune's newspaper production plant. The Austin Story recounts that in 1959, the newspaper publishing trade journal, Editor & Publisher credited one of Austin's creations as "probably the most efficiently laid out plant ever constructed for a major newspaper in the United States." Austin's client list included more than 100 of the country's leading dailies, including The Austin Company's hometown newspaper, the Cleveland Plain Dealer.

Austin's expertise in engineering cutting-edge buildings manifested itself also in operations centers and research and development centers. While Austin designed computer operating centers for public utilities and airlines, its most significant computer facilities have been sophisticated computer data processing centers for institutions of finance. Notable earlier experience in this area accrued to Austin as a result of its design and construction of the largest computer center in Ohio during the mid-1960s, a six-story facility completed in 1964 for Cleveland Trust, subsequently absorbed into Society Corporation. More recently, Austin designed and constructed a 180,000-square-foot computer center in Cleveland in 1991 for Society Corporation, parent of Society National Bank. This center processed all of the bank's collections of data.

Advanced research centers represent a similarly complex area of building design. Austin has gained experience in such facilities through its work for clients in the industries of food, petroleum, and pharmaceuticals, among several others. In 1992 Austin completed one of the world's largest pharmaceutical research centers for the Upjohn Company, located in Kalamazoo, Michigan.

The design and construction of these complex structures, as well as the company's reputation in serving such a broad range of industries, were a direct result of Austin's long-standing practice of researching and innovating new building technologies. During the late 1920s and 1930s, construction of vast automotive and farming implements factories demanded immense tonnages of riveted steel. Austin saw an opportunity to improve the assembly of steel-framed plants, and launched experiments into steel fabrication using electric-arc welding.

In 1928 The Austin Company designed and constructed at its own expense the Upper Carnegie Building using arc welding technology developed by the Lincoln Electric Company. The Upper Carnegie was the world's first commercial building with an all-welded steel structural framework. Across the street from the Upper Carnegie, Austin constructed the prestigious Carnegie Medical Building, using similar technology, in 1931.

Austin's research achievements are diverse and numerous. 1929, for instance, marked the beginning of research that led to the design of the world's first "controlled-conditions" building, for the Simmonds Saw and Steel Company at Fitchburg, Massachusetts. This factory, from which windows were entirely eliminated, made possible the control of all internal environmental conditions--temperature, humidity, light, and sound. In the late 1930s, Austin pioneered the installation of fluorescent lighting in industrial buildings and championed the efficiency of single-story factories. When business slowed during the 1930s, Austin intensified its research and diversified its business. It established a division in 1933 devoted to the design and construction of insulated steel structures. The division eventually produced packaged, pre-fabricated, porcelain-enamel service stations for major oil corporations across the nation.

Beginning in 1980, Austin also gained considerable experience in building computer-controlled logistics facilities such as automated distribution centers. By the early 1990s, Austin had assumed a position as a leader in the design and construction of such facilities; its clientele included both the U.S. Army and the U.S. Postal Service.

Austin engineered one of the most sophisticated "intelligent" buildings in the world, the Information Systems Building for the Salt River Project public utility in Phoenix, Arizona. In an "intelligent" building, every operation and function is completely computerized, automated, and electronically controlled. Austin has built similar facilities in other locations such as Los Angeles and Madrid, Spain, as well.

Extreme Challenges in the 1980s-90s

While The Austin Company ownership remained stable throughout most of its lifetime, in the 1980s its corporate identity began to shift. In 1984 the National Gypsum Company, a gypsum wallboard manufacturer, acquired Austin. National Gypsum underwent a leveraged buyout in 1988, after fending off take-over bids from The Wickes Cos. of Santa Monica, Drexel Burnham Lambert Inc., and Ivan F. Boesky. National Gypsum thus became a centerpiece of the largest insider trading lawsuits ever filed by the Securities and Exchange Commission against brokers and investment bankers.

National Gypsum filed for voluntary bankruptcy in 1990. Austin was not included in the bankruptcy filing, however. In March 1993 a bankruptcy court judge confirmed National Gypsum's reorganization plan, thus preparing NGC to emerge from bankruptcy. As part of the reorganization plan, a trust was established to pay the claims of thousands of plaintiffs who had sued National Gypsum and other former asbestos manufacturers for injuries allegedly derived from asbestos. The trust became the legal owner of The Austin Company's stock, as well as insurance policies intended to compensate the asbestos claimants. Austin operated independently as a private company under the trust.

The Austin Company currently has two specialized divisions, Austin Consulting and Austin Process, as well as a general contracting subsidiary, Ragnar Benson Inc. Austin Consulting provides services to clients in the area of manufacturing and logistics operations. Austin Process offers engineering and construction services for the process industries, particularly in the fields of agrichemicals, chemicals, fermentation, food processing, petrochemicals, and pharmaceuticals. Ragnar Benson, Inc., a subsidiary of Austin, provides general contracting and construction management services for clients. RBI projects include commercial buildings, facilities for public power utilities, corporate headquarters, and manufacturing plants.

Internationally, Austin maintains permanent offices in Japan, Australia, Belgium, Canada, Mexico, the Netherlands, Spain, and the United Kingdom. Associated companies operate in Argentina, Brazil, and Italy. Internationally, Austin has won six major contracts in Japan since 1990. Most recently, an Austin-Japanese consortium won the bid to construct a wing of the Asia and Pacific Trade Center at Osaka, which, after completion, will house one of the world's largest international trading facilities. Austin has maintained an office in Tokyo since 1972, and since then has gradually built credibility among major Japanese corporations and the Japanese government. Austin hopes to continue expanding its international operations while maintaining its stature in the U.S. marketplace.

Several factors intervened in this course of action. Due to a drop in construction projects, especially in Europe, Austin went through a period of downsizing. Sales dropped from $2 billion in 1990 to $365 million in 1994. In 1992 and 1993, the company reportedly posted losses. All of Austin's international subsidiaries except its U.K. company were sold off or closed down in the early 1990s, and the company refocused its efforts on the U.S. market. In 1995, the asbestos settlement trust decided to get rid of the ailing construction company by selling it back to the reorganized National Gypsum Company for $125 million--$70 million for the actual purchase of Austin and a $55 million tax-deductible donation to the trust. Austin suffered another setback in 1996 when the U.S. Department of Justice sued the company for overcharging for federal construction work. According to Jeffery Raday, vice-president of sales and marketing, the intricacies of accounting practices and federal regulations concerned in the matter led to the suit. "There was nothing intentional here," he told Mark Rollenhagen of the Cleveland Plain Dealer, "but because these are complex regulations and subject to a lot of interpretation, we just decided it was best to settle it." Austin agreed to pay the federal government $4 million to resolve claims of alleged padding in costs relating to employee pension funds.

Into a New Century

The dispute coincided with National Gypsum's efforts to sell off the construction company. Deals with the defense-contractor giant Raytheon, which maintained its own design, engineering, and construction business, and another unnamed buyer fell through, however, and National Gypsum decided to offer the company to its employees. In September 1997 J. William Meslop, president and CEO of Austin, and 21 other members of senior management purchased the company for an undisclosed sum, which was said to be the same price the second buyer would have paid had the earlier deal gone through. Under its new ownership, Austin upgraded its technology. During the slump years of the early 1990s, Meslop told Dan Harkins of Ohio Business, adding "the investment in new plants and equipment was at the lowest level in 40 years." M. Glenn Hobratschk, Austin's executive vice-president and chief financial officer, remarked to Thomas W. Gerdel of the Cleveland Plain Dealer, "we've invested heavily in technology, and that allows us to do resource sharing much more efficiently than we did previously. We've been able to maintain or increase our volume in recent years with a much smaller head count." Such innovations as web cameras on construction sites that provide photo updates on construction progress at 15-minute intervals have cut time and staff needed to keep projects on track. "We used to take job photos and do reviews on a monthly basis," Philip J. Todd, vice-president of Austin's Cleveland district told Gerdel. "Now it's an update on the Internet," he noted. The company's health bounced back sufficiently to allow them to construct a new headquarters in Mayfield Heights, Ohio, to replace their long-time Cleveland Heights office. Austin's award-winning large projects of the early 2000s included an aircraft paint hangar in Oklahoma City for the U.S. Air Force, an Emergency Operations Center at Los Alamos National Laboratories in New Mexico, the Boeing Rocket Center in Decatur, Alabama, and broadcast centers for WGCL-TV and WSB-TV, both in Atlanta, Georgia. As of 2005, the company reported 300 employees and a 2003 sales volume of $640 million.

Principal Subsidiaries: Ragnar Benson Inc.; The Austin Co. of U.K. Ltd.

Principal Competitors: The Haskell Company; Hensel Phelps Construction Co.; Washington Group International Inc.

The Austin Company History

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