S.C. Johnson & Son, Inc. History

Company Perspectives:

In 1976, we formally stated our guiding philosophy in "This We Believe.' In it, we express our beliefs in relation to the people to whom we are responsible and whose trust we must continue to earn. Employees: We believe our fundamental strength lies in our people. Consumers: We believe in earning the enduring goodwill of the people who use and sell our products and services. General Public: We believe in being a responsible leader in the free market economy. Neighbors and Hosts: We believe in contributing to the well-being of the countries and communities where we conduct business. World Community: We believe in improving international understanding.

Company History:

S.C. Johnson & Son, Inc. is one of the largest family-owned and family-managed companies in the United States and a leading manufacturer of home, personal care, and insect-control products. Long known colloquially as S.C. Johnson Wax (or simply Johnson Wax), its well-known products include Raid insecticides, Off! insect repellents, Glade air fresheners, Pledge furniture polish, Windex glass and surface cleaners, Ziploc storage bags, and Edge shaving gel. Johnson was founded in 1886 as a parquet flooring company and became one of the first U.S. corporations to expand worldwide, entering Great Britain in 1914. It sells its products in more than 100 countries. Still in family hands after more than a century, Johnson's strength is its ability to develop and market new products.

Parquet Flooring Business Led to Johnson Wax

In 1882 Samuel Curtis Johnson began selling parquet flooring made by the Racine Hardware Company in Racine, Wisconsin. Four years later, Johnson purchased the flooring business from the hardware company. The new organization had four employees and showed a first-year profit of less than $300.

Johnson's parquet customers often asked him about caring for their new floors. At that time shellac had been used for that purpose, but it tended to build up and peel off. Johnson created a product called Johnson's Prepared Wax to sell along with his flooring. The concept was borrowed from the European use of wax to care for old wooden floors. It was very successful, and Johnson began selling it even to people who had not bought his flooring. It was nationally advertised by 1888.

Samuel's son, Herbert F. Johnson, Sr., joined the firm in 1892, beginning a more than century-long tradition of family involvement in the business. By the following year the company was already experimenting with products such as wood dye, crack filler, and car wax. When the car wax proved to be popular, Johnson made a radiator cleaner. He was forced to buy back 900 Model T Ford radiators that were dissolved by the insufficiently tested product. This setback provided a valuable experience. Johnson Wax has given priority to top-rate research teams and chemists ever since.

As simple maple and oak flooring replaced the intricate parquet floors in the late 1800s, the company's diversification paid off. In 1898 sales of the floor wax and other woodcare products exceeded Johnson's flooring sales. Floor wax became Johnson's major product.

The company changed its formal name to S.C. Johnson & Son in 1906, when Herbert F. Johnson, Sr., became a partner. While continuing to add to their product line--Floor Renewer, Under-Lac, and Flat Color Finish--the company expanded overseas in 1914, when the British Johnson company was established. The company opened in Australia in 1917. Johnson discontinued the manufacture of parquet flooring, and the last shipment of it was made in 1917. Johnson concentrated on wax products and preservation products for cars, such as Hastee Patch and Self-Vulcanizer. S.C. Johnson died in 1919, and his son succeeded him as president. The three keys to Johnson Wax's continued success had been already established: international operations, chemical technology, and the use of advertising.

During this time, the company's innovations as an employer were also notable: it was one of the first U.S. companies to give paid vacations, a policy begun in 1900. With its 200 employees in 1917, S.C. Johnson Wax began one of the first profit-sharing programs in the country; the program in 1990 was the fifth oldest. It started offering group life insurance for employees also in 1917. In 1920 the Canadian Johnson company was formed. Throughout this decade, product offerings expanded, including enamel paints, carbon remover, weighted brushes for painters, and Kleen Floor and Restorer. Herbert F. Johnson, Jr., became president after his father's death in 1928. At that time, the company had 500 employees.

Wright-Designed HQ Unveiled in 1939

The French Johnson company opened in 1931, the same year in which sales began of one of Johnson Wax's longest-selling products, Glo-Coat Floor Finish. The product involved a colloid technology developed at Johnson Wax that freed it of the need for resins that caused yellowing. Glo-Coat became one of the most successful floor-care products of all time. In 1932 S.C. Johnson & Son was incorporated. The company's pension plan was initiated two years later, and product innovations continued. The most notable event of the decade, however, was the 1939 unveiling of the company's new office building, designed by Frank Lloyd Wright. An accomplishment in any era, it was particularly stirring at the close of the Great Depression, which Johnson weathered without laying off any employees. The Racine building continues to be headquarters for the company. In the late 20th century the company was still giving five percent of its pretax profits to charity, a tradition begun with the founder, who gave ten percent of his annual income to civic improvements.

By 1942 the company was concentrating its output on products for the war effort, while many employees were called upon to serve. Its contribution during World War II was marked by army and navy production awards. A Research & Development Tower was opened in 1950. The Lighthouse Resort for employees and retirees was unveiled in northern Wisconsin the following year.

The West German Johnson company was established in 1953. Samuel C. Johnson, great-grandson of the founder, joined the company in 1954. He headed the new-products department that was created the following year. Not long after, he produced his first new product within that division, an aerosol insecticide. His father, Herbert F. Johnson, Jr., sent him back to the lab, claiming the insecticide was no different from others on the market. In 1956 Johnson came forward with Raid House & Garden Bug Killer; water-based, it was the first product that could be used on plants and in the home without killing the plants. Raid would become one of Johnson Wax's most profitable lines. Along with this breakthrough came Glade Air Fresheners, introduced the same year; they featured advanced technology in aerosol manufacturing. Insecticide products continued with Off!, an insect repellent first sold in 1957. Another very successful product, Pledge, came out in 1958. Herbert F. Johnson, Jr., became company chairman in 1958, and the presidency was assumed by the first nonfamily member, H. M. Packard.

In 1959 S.C. Johnson Wax established a presence in Italy, and this marked the start of a decade of international expansion: Chile, Switzerland, Sweden, and South Africa in 1961; Belgium, Japan, and the Netherlands in 1962; Norway, Austria, Spain, and Ghana in 1964; and Denmark, east Africa, Greece, Hong Kong, Singapore, and Thailand by 1968. Establishing an international base allowed Johnson Wax to manufacture its products from local materials for local markets; exporting the products would not have been profitable. In 1966 Packard became chairman and S.C. Johnson was named president.

Entered Personal Care Products in 1970

Johnson Wax entered the personal care product market in 1970, with the introduction of Edge, a shaving gel, which also went on to become a company mainstay. Penetrating eight more countries by 1972, the company recognized the need to slow its innovations in order to deal with its own growth. Johnson Diversified, Inc. (JDI), a wholly owned subsidiary, was formed in 1970. JDI began acquiring highly diversified companies, many of them recreational equipment manufacturers. In the early 1970s, 15 companies--ranging from Eureka Tent & Awning Company to Under Sea Industries--were acquired. William K. Eastham was elected president of S.C. Johnson & Son in 1972. Three years later the company eliminated chlorofluorocarbons, which had been linked to ozone layer damage, from its aerosol products worldwide; the move came three years before the U.S. government mandated their removal.

Gas prices and related mid-1970s economic circumstances made the company's diversification into recreational equipment costly. Five of the weaker companies were sold. During this time, there was a notable slowdown in the introduction of new products while Johnson Wax adjusted to its size and variety. JDI changed its name to Johnson Wax Associates (JWA) in 1977. After H.F. Johnson, Jr., died in 1978, S.C. Johnson took a sabbatical from his post as chairman and CEO in order to settle his father's estate; Eastham served as CEO in the interim. The company entered Egypt, Taiwan, and the Dominican Republic in 1979, but the decade was closing with lost momentum. Johnson Wax had introduced Agree conditioner and shampoo in 1977 and 1978. During that time, sales increased (to $1 billion by 1978) while profits declined. All consumer packaged goods saw sluggish profits during this time, and Johnson Wax had acquisitions and overseas expansions sapping profits in addition. While foreign markets accounted for 60 percent of the company's sales for a period during the late 1970s, the recession-affected U.S. dollar undercut this portion of earnings, and the company was faced with a call to change in the early 1980s.

Restructured in the 1980s

Raymond F. Farley became president in 1980, the same year S.C. Johnson resumed the CEO seat and began instituting needed reforms. In 1982 Johnson imposed a one-year wage freeze. It was the first time in 20 years that a wage freeze had been instituted without governmental exigency. He reduced the company's U.S. workforce by three percent with early retirement programs, then increased the research and marketing staffs. The company was restructured into four enterprise units: personal care, insecticides, home care, and commercial products. Units were organized to speed up the time between product idea and introduction, and new products were pouring forth by the mid-1980s. The advertising budget was nearly 70 percent higher in 1984 than in 1979, the research-and-development budget increased by 40 percent, and product price increases were reduced. Building on its consumer pest control products, S.C. Johnson & Son entered the market for commercial pest control in 1986 with the purchase of Bugs Burger Bug Killers.

One week before the October 1987 stock market plunge, JWA went public. Johnson called this move "going public to stay private," since the offering created liquid assets needed for potential estate taxes, thus protecting the company's assets and its private status. At the time the family owned 90 percent of Johnson Wax, with employees holding the other ten percent. JWA was selling $250 million annually in the late 1980s, mostly fishing and other recreational gear, as well as ink-stamping equipment. JWA was the nation's largest producer of electric fishing-boat motors and a major seller of reels and lures. Sales at S.C. Johnson & Son, meantime, passed the $2 billion mark in 1987.

In late 1988, Farley became the second nonfamily member in Johnson's history to become chief executive. S.C. Johnson remained chairman. All four of his children were then involved with the company, with his eldest son, S. Curtis Johnson III, heading a venture-capital unit he induced his father to bankroll in 1983.

Tremendous Growth in the 1990s

In January 1990 Farley retired and was succeeded by Richard M. Carpenter, president and CEO. The 1990s were marked by a number of acquisitions and divestments, along with continued new product introductions and overseas expansion. In 1990 the company joined with a Ukrainian household production association to form S.C. Johnson Kiev Corporation, initially 80 percent owned by S.C. Johnson & Son but wholly owned by 1994. Although it got off to a rocky start, this venture reached profitability in 1995--after the collapse of the Soviet Union and the emergence of Ukraine as a sovereign nation. S.C. Johnson & Son found success making and marketing such products as Brillo dish detergent, Pronto furniture polish, and Duck toilet cleaner. Also in 1990 came the introduction of yet another successful new product, Glade Plug Ins, long-lasting fragrance dispensers which are plugged into electrical outlets; the product quickly gained the top position in the continuous-action air freshener category.

In late 1992 Carpenter retired and William D. George, Jr., who had headed the worldwide consumer products division, was appointed president and CEO. In January 1993 S.C. Johnson & Son acquired Drackett Co. from Bristol-Myers Squibb Co. for $1.15 billion, a sum ten times larger than any previous company acquisition. Brands acquired therein included three that were either number one or two in their segment--Windex glass cleaners, Drano drain openers, and Vanish toilet bowl cleaner. Other brands gained included O-Cedar brooms and mops and Mr. Muscle hard-surface cleaners. The purchase bolstered the company's presence in household cleaners, which had already received a boost in 1992 from the debut of Toilet Duck and Bathroom Duck spray cleaners. It also, however, brought S.C. Johnson & Son into more direct competition with household cleaning giants Procter & Gamble Company and Clorox Company. Johnson Wax subsequently beefed up its global advertising budget, which by 1994 stood at about $500 million, or 14 percent of the company's $3.6 billion in revenues.

For antitrust reasons, S.C. Johnson & Son had to divest three Drackett brands within sectors in which the company was already very strong: Endust cleaning sprays, Behold furniture polish, and Renuzit air fresheners. A further divestment came in 1993 after the company decided to sell the bulk of its shampoo and lotion lines. In August of that year the Agree and Halsa brands were sold to Dep Corporation for $45 million. Less than a year later Dep sued S.C. Johnson & Son, charging it with changing its marketing of the two brands before the deal was closed, withholding sales information, and making false representations to Dep prior to the acquisition; and seeking recision of the deal plus $75 million in damages. Johnson Wax was the object of another lawsuit filed in 1997 that claimed that the company discriminated against blacks in its hiring and promotion policies. By 1997 William D. Perez, former head of the worldwide consumer products division, had become president and CEO of S.C. Johnson & Son.

In January 1998 Johnson Wax completed its second major acquisition of the decade when it purchased the DowBrands unit from Dow Chemical Co. for $1.13 billion. Added to the S.C. Johnson product portfolio were Ziploc plastic bags, Saran Wrap plastic wrap, and Fantastik cleaners. As with the Drackett acquisition, S.C. Johnson had to divest several acquired brands to gain antitrust muster, including Spray 'N Wash laundry-stain remover (Johnson already sold the Shout brand in this product category) and Glass Plus glass cleaner. The company also sold off the Yes laundry detergent and Vivid color-safe bleach lines. The acquisition of DowBrands brought an immediate 20 percent increase to company revenues, which grew from $4 billion in 1998 to more than $5 billion in 1999. Meantime, in February 1999, S.C. Johnson made a further withdrawal from the personal care sector through the sale of its dermatological skincare business--which was primarily made up of the Aveeno brand&mdashø Johnson & Johnson for an undisclosed amount. S.C. Johnson had thus largely reduced its personal care line to the shaving sector, where the Edge for men and Skintimate for women brands were sector leaders.

By the late 1990s S.C. Johnson & Son was a broadly based consumer products giant, and this position was echoed in the company's decision in late 1998 to alter its logo and ads to say "S.C. Johnson--A Family Company" rather than "S.C. Johnson Wax"--wax products being only a small part of the business. With its new image, S.C. Johnson entered the 21st century as an aggressively expanding firm, strongly committed to research and development and willing to pursue blockbuster acquisitions. It also remained firmly controlled by the Johnson family. S.C. Johnson remained chairman, while two sons held high posts: S. Curtis (Curt) Johnson, chairman of commercial markets, and H. Fisk Johnson, president of consumer products. A daughter, Helen Johnson-Leipold, had resigned her post as vice-president of personal and home care products in order to assume the chairmanship of the publicly held spinoff company Johnson Worldwide Associates, Inc.

Principal Subsidiaries: Johnson Venture Capital, Inc.; Prism Integrated Sanitation Management, Inc.; Whitmire Micro-Gen Research Laboratories Inc.; Ceras Johnson de Portugal, Lda.; Ceras Johnson Ltda. (Brazil); Johnson Company, Ltd. (Japan); S.C. Johnson (U.K.); La Johnson Francaise S.A. (France); Johnson Nederland B.V. (Netherlands); P.T. S.C. Johnson & Son (Indonesia) Ltd.; Johnson Wax (Egypt); Johnson Wax AG (Switzerland); Johnson Wax Consumer Products (Belgium); Johnson Wax GmbH (Germany); Johnson Wax Industrial Products (INNOCHEM) (Belgium); Johnson Wax Nigeria Limited; Johnson Wax Research and Development (U.K.); Johnson Wax S.p.A. (Italy); N.V. Johnson Wax Belgium S.A.; Johnson's Wax (East Africa) Ltd. (Kenya); Johnson's Wax Española, S.A. (Spain); Johnson's Wax Ltd. (Ghana); Johnsonwax del Ecuador S.A.; Korea Johnson Co., Ltd.; Quimica S.C. Johnson & Son Chilena S.A.C.I. (Chile); S.C. Johnson (Norway); S.C. Johnson & Son Colombiana S.A. (Colombia); S.C. Johnson & Son de Argentina S.A.I.C.; S.C. Johnson & Son (Hellas) E.P.E. (Greece); S.C. Johnson & Son, Inc. (Philippines); S.C. Johnson & Son, Limited (Canada); S.C. Johnson & Son, Ltd. (Thailand); S.C. Johnson & Son of South Africa (Pty.) Ltd.; S.C. Johnson & Son Pte. Limited (Singapore); S.C. Johnson & Son Pty. Ltd. (Australia); S.C. Johnson & Son, S.A. de C.V. (Mexico); S.C. Johnson & Son Taiwan Ltd.; S.C. Johnson & Son de Venezuela, C.A.; S.C. Johnson Company Limited (Cyprus); S.C. Johnson de Centroamerica S.A. (Costa Rica); S.C. Johnson Kiev Corp. (Ukraine); S.C. Johnson, Ltd. (Hong Kong); S.C. Johnson New Zealand Ltd.; Svenska Johnson's Vax AB (Sweden).

Further Reading:

• "Agree and Halsa Continue to Cause Problems for Dep Corporation," Cosmetics International, February 25, 1996, pp. 13+.
• Benady, Alex, "Johnson Spend Is Biggest Ever," Marketing, November 4, 1993, p. 16.
• Carrington, Tim, "Ukraine's Women Love These Two Firms," Wall Street Journal, February 6, 1992, p. A10.
• "Dep Files Suit Against Johnson, Company Rumoured to Be Maybelline Target," Cosmetics International, March 25, 1994, pp. 1+.
• Deveny, Kathleen, "As More Americans Declare War on Dirt, Cleaning-Product Firms Make Tidy Sums," Wall Street Journal, April 6, 1993, p. B1.
• Dries, Mike, "S.C. Johnson to Build Warehouse, Distribution Center," Business Journal- Milwaukee, December 5, 1997, pp. 1+.
• Ellis, James, "Sam Johnson Is 'Going Public to Stay Private,"' Business Week, December 5, 1988.
• Fitzgerald, Kate, "How Johnson Will Gain with Drackett," Advertising Age, November 2, 1992, p. 13.
• Gibson, Richard, "Bristol-Myers to Sell Drackett to S.C. Johnson: Wisconsin Firm Boosts Line of Household Products with $1.15 Billion Pact," Wall Street Journal, October 28, 1992, p. A3.
• Henkoff, Ronald, "When to Take on the Giants," Fortune, May 30, 1994, pp. 111+.
• Johnson, Samuel C., The Essence of a Family Enterprise: Doing Business the Johnson Way, Indianapolis: Curtis Publishing, 1988, 179 p.
  Johnson Wax Magazine, December 1986.
• Kaminski, Matthew, "Waiting Game Paying Off in Ukraine," Financial Times, July 25, 1995, p. 19.
• McMenamin, Brigid, "Eroding Patent Rights," Forbes, October 24, 1994, p. 92.
• Moss, Michael, "No One's Fall Guy, Johnson Wax Expert Barely Ever Slips," Wall Street Journal, August 7, 1996, p. A1.
• Neff, Jack, "New Products Boosting Johnson, Categories," Advertising Age, September 15, 1997, p. 76.
• Pierce, Lisa McTigue, "Line Plugs New Product into Top Spot," Packaging (Boston), March 1991, pp. 40+.
• Schellhardt, Timothy D., "Race-Bias Suit at S.C. Johnson Raises Some Worker-Team Issues," Wall Street Journal, February 13, 1997, p. B7.
• ------, "This Office Building Is a Work of Art, Unless It's Raining," Wall Street Journal, February 18, 1997, p. A1.
• Warren, Susan, "S.C. Johnson Seals Deal to Buy Ziploc and Other Brands from Dow Chemical," Wall Street Journal, October 29, 1997, p. A4.

Source: International Directory of Company Histories, Vol. 28. St. James Press, 1999.

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