Carlisle Companies Incorporated History

Company History:

Carlisle Companies Incorporated is a diversified corporation that manufactures rubber and plastics products in three areas: construction materials, transportation products, and general industry, including food service plastics. Carlisle Companies is a highly decentralized company with most functional decisions for each division made by the division management. The headquarters, which was moved from Cincinnati, Ohio, to Syracuse, New York, in 1989 comprised only about 21 of Carlisle's over 4,000 employees.

The present day Carlisle Companies Inc. was incorporated in 1986 as a holding company for the original company, Carlisle Corporation, founded in 1917 as a manufacturer of inner tubes. Later it became a major manufacturer of bicycle tires, brake linings, and rubber roofing. In the 1970s the company also diversified into the manufacture of electronics components.

For years, Carlisle had tried to compete with the big rubber companies for the automobile tire market, but in 1980, a new strategy began to pay off for the company. Carlisle simply decided not to compete with the big tire companies for the automobile original equipment market. Instead, the company sold half its products to the replacement market and also concentrated on specialty products such as snowblower, tractor, motorcycle, and dirt-bike tires. Carlisle chairperson George Dixon told Forbes that the company's new resolution was "not to get trampled by the elephants." So while the economic recession hurt such big tiremakers as Firestone and B. F. Goodrich, Carlisle's net earnings were $26 million, representing a 38 percent improvement over the year before, and its stocks were soaring.

During this time, Carlisle was also very successful in the rubber roof market, which accounted for most of the company's earnings and brought in 43 percent of its profits for 1980. The rubber roofing market was strong, having become a popular and effective alternative to the traditional felt and asphalt coverings of flat roofs, and Carlisle led the market with 40 percent of its sales. Furthermore, Carlisle's best-selling Sure-Seal and other construction materials helped make up for any losses in other divisions of the company. Although growth in the rubber roof industry was attracting competition from larger rubber companies, Carlisle was confident in its ability to compete with "the elephants" in this market, because of its years of experience in production of the single-ply rubber sheeting. Its president, Malcolm Myers told Forbes, "When it comes to single-ply roofing, we're the giants." He also commented that it would probably take some time before the other companies could even begin to produce a product as good as Carlisle's. To further secure its lead, Carlisle opened a new plant in Greenville, Illinois, to manufacture single-ply rubber roof sheeting. The Greenville plant, as well as a plant in Carlisle, Pennsylvania, were equipped with special machines to automate the manufacture of the huge rubber sheets, measuring 40 feet by 100 feet or larger.

Another market in which Carlisle held a unique niche was in providing contractors with complete roofing systems, including the rubber sheeting, all pipe seals, flashing, metal fasteners, edging, and adhesives. Contractors installing Carlisle roofs were required to learn proper installation from Carlisle representatives, who then inspected installations before guarantees could be issued.

Other areas in which Carlisle dabbled included the manufacture of specialty wire and cable for data communications, magnetic computer tapes, and magnetically coated plastics for floppy disks.

Carlisle's strength in its market niches earned it a place among the Fortune 500 companies in 1985 with sales of $527 million. The following year, a holding corporation, Carlisle Companies Inc., was incorporated to oversee operations at Carlisle and the other companies that were being added to the group, such as Data Electronics, purchased in 1986 for $33.4 million in cash and Hardcast, Inc., acquired the following year. In 1988, Carlisle bought Ivan software, a developer of utility software, while selling its International Wire Products Company. Shortly thereafter, Carlisle decided to sell its interest in Graham Japan Limited, a joint venture in Japan that sold computer tapes made by Carlisle.

Carlisle's corporate headquarters, which had been based in Cincinnati since 1971, were moved to Syracuse, New York, in 1989. President and chief executive officer Stephen Munn maintained that its new location would provide more convenient access to the country's major financial institutions. Munn, a former executive of Carrier Corporation, an air conditioning manufacturer based in Syracuse, welcomed E. Douglas Kenna, former president of Carrier, as Carlisle's new chairperson.

In 1990, Carlisle became one of only 170 U.S. companies to form joint ventures with the Soviet Union. Carlisle's subsidiary, SynTec Systems, had a 49 percent share, and the Soviet Union retained a 51 percent share of the Moscow-based Krovtex, which sold and installed rubber roofs in the Soviet Union. The roofing materials were manufactured in the United States by Carlisle SynTec Systems, the largest company in the corporation's construction materials division. The Soviet Union was a complicated place to conduct business and became even more complicated when the country broke apart into separate republics in 1992. Krovtex continued to operate as a joint venture following the breakup, despite chaotic conditions, and the company foresaw strong long-term potential in Russia and other Eastern European markets.

As part of its plan to grow 15 to 20 percent yearly, in 1990 Carlisle purchased Brookpark Plastics Inc. of Lake City, Pennsylvania, and Off-Highway Braking Systems, a division of B.F. Goodrich Aerospace based in Bloomington, Indiana. Brookpark, a compression molder of diversified plastics products, became part of Continental Carlisle, Inc., while Off-Highway, a maker of braking systems for off-highway vehicles, with manufacturing facilities in The Netherlands and Brazil, became part of Carlisle's Motion Control Industries Inc. With the addition of the former Goodrich division, Carlisle was for the first time capable of manufacturing a complete brake system, as it already manufactured brake linings, pads, and other brake system components.

In September, 1991, Carlisle purchased SiLite Corporation, a maker of reusable mugs, cups, and dishes for restaurants and cafeterias, with manufacturing facilities in California, Illinois, and Wisconsin. Carlisle already had plastic foodware production facilities in Oklahoma and Pennsylvania, and SiLite, with sales of $37 million in 1990, was a welcome addition.

Due to the effects of recession on the automobile and truck industries, Carlisle's profits fell substantially in 1991, as sales of its plastic parts for interior and exterior trim, as well as brake components for the heavy trucking industry declined. The company also suffered losses in the one-half inch computer tape market.

Consequently, the company began a restructuring strategy designed to consolidate or sell parts of its slumping data communications and electronics businesses. Carlisle had entered the electronics industry in the 1970s, seeing a need to diversify into these potentially profitable and growing new product lines since its current product lines and markets had already reached maturity. By the 1990s, however, the electronics competition was stiff, the market and prices were slumping, and Carlisle was losing money.

Carlisle Memory Products group, which manufactured and marketed cartridges for backing up main memory tapes of small and mid-sized computer systems, was sold to Verbatim Corporation in 1992. The company also sold the rest of its magnetic tape business. Having divested itself of its unprofitable, peripheral divisions, Carlisle began to strengthen its core businesses, acquiring ECI Building Components Inc., a manufacturer of components for metal roofing and siding. ECI had sales of $32 million in 1991, and its acquisition strengthened Carlisle's marketing position, particularly in the Southwest and West, as metal became an accepted roofing material for many nonresidential buildings.

Carlisle also consolidated some plants. Carlisle Tire and Rubber, which mainly manufactured tires for use on lawn and garden equipment, relocated its Indianapolis wheel plant to Aiken, South Carolina. Two Continental/SiLite factories were closed and their operations were moved to other plants.

Internationally, Carlisle acquired a brake shoe factory in Canada in order to increase its share of the heavy-duty after market. Because shipping of these heavy assemblies was very expensive, the market for these brake shoes was regional. Carlisle continued to expand its foreign sales with more than 40 percent of its off-highway braking systems for heavy machinery and other vehicles being sold outside the United States. Furthermore, the company entered a joint venture with Rutgerswerke, a large German manufacturer, in Mexico, producing brake pads and truck brake linings for the small but growing Mexican truck market.

During this time, the company's Tensolite division began moving away from the commodity wire market and into the aerospace and electronics markets. Its line of precision-coated wires and cables was selected for use in Boeing's 737s and 757, representing the first time Boeing, the leading airframe maker, used a single wiring system in its planes.

In 1993, Goodyear sold its roofing products business to Carlisle Companies Inc., strengthening Carlisle's position as the number one supplier of nonresidential roofs. Carlisle also became the leading supplier of pneumatic tires and specialty wheels to makers of riding mowers, garden tillers, and other lawn care equipment such as utility carts. With plans to expand its market for wheels and tires to include the golfing industry, the company also began manufacturing and marketing Softpave, shock-absorbing, bonded rubber crumb tiles for use on golf practice ranges and walkways. A related product, Playguard tiles, provided a soft, shock-reducing surface for use on playgrounds. These products were manufactured from recycled scrap from Carlisle's tire-making plants, as well as from used tires and rubber bought from other suppliers who first removed the steel belts. The use of recycled material helped reduce the company's costs and was good for the environment.

Despite its success with roofing materials and other rubber products, however, Carlisle's food service market represented the largest segment of its business in the early 1990s. Carlisle's Continental/SiLite International division manufactured more than 6,000 different plastic products and was a leader in the market for plastic permanentware, having captured a large share of the market in cafeterias of schools, colleges, and correctional institutions. The division dominated the growing market for display food containers in deli departments and salad bars of supermarkets, which were upgrading their counters. Although fast-food restaurants had represented a growing market for Carlisle in the 1980s, that market stabilized in the 1990s while mid-priced family-type restaurants became a growing market for the company's kitchen products as well as dinnerware, beverage dispensers, and salad bar containers. Also a manufacturer of acrylic gift and table accessories sold in major department stores, Continental/SiLite expanded its lines, adding high quality pewter items.

Carlisle intended to continue its focus on its core industries as it approached the twenty-first century, emphasizing its strategy in its mission statement: "to serve customers worldwide by building on our strengths in rubber, plastics, friction and precision coating products, and other technologies in which we can develop a competitive advantage.

Principal Subsidiaries: Geauga; Carlisle Syntec Systems; Carlisle Tire and Rubber; Motion Control Industries; Tensolite; Continental/Silite International; Netstor; Braemar; DSI; Vistatech.

Further Reading:

• Annual Reports, Syracuse, New York: Carlisle Companies Incorporated.
• "Carlisle Makes It the Hard Way," Fortune, April 29, 1985, pp. 320-7.
• Flax, Steven, "Where the Rubber Meets the Roof," Forbes, April 13, 1981, pp. 58-61.

Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.

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