MENU
SECTIONS
OTHER
CLASSIFIEDS
CONTACT US / FAQ
Advertisement
A gasoline station made of O-I glass blocks glows from within in 1937. The firm no longer produces the blocks.
5
MORE

Homegrown global force

file

Homegrown global force

“ ... The most significant advance in glass production in over 2,000 years,” the American Society of Mechanical Engineers wrote two decades ago about the invention in Toledo of a machine for mass-producing glass bottles.

This week, that advance and the Toledo company it spawned turn 100 years old.

The anniversary Sept. 3 will be observed in characteristic low-key fashion at the headquarters of Owens-Illinois Inc. on Toledo's downtown riverfront.

Advertisement

It was mentioned in the firm's glossy annual report to shareholders. A display has been set up in the headquarters lobby, and a public-television documentary on the company's origins is planned.

But executives, busy planning for a present and future in which glass containers are a niche product favored as the package of choice by a dwindling number of industries, decided to forgo a bigger observance.

Yet even today, O-I remains an international force. One of every two beer, wine, and other bottles produced anywhere in the world is made by Toledo's second largest corporation, an affiliate, or a licensee.

O-I played a major role in the growth of America's industrial might after the turn of the last century. Before going private after its acquisition by Kohlberg Kravis Roberts & Co in 1987, it was one of 30 companies that made up the Dow Jones index of 30 leading industrial companies.

Advertisement

“Owens-Illinois, through its own efforts and its predecessor companies dating back to Libbey Glass, was the basis for the entire glass industry in the city of Toledo,” said Jack Paquette, a former O-I public relations executives who has written three books on the firm's role in the glass industry.

In Toledo, auto plants - those that built cars and those that supplied parts to factories in Detroit - provided more jobs and greased the way for the elevation to the middle class of immigrant workers, their children, and grandchildren.

But O-I shaped the civic identity. It was for many years Toledo's biggest corporation and a large part of the reason the city laid claim to the moniker “glass capital of the world.”

It helped add a white overlay to the city's blue collar.

It brought acclaim to the city through innovative products and niche items such as specially inscribed glass bottles carried by Adm. Richard Byrd on his famous Antarctic expedition in 1928.

Mostly, however, it brought to Toledo a lot of bright and industrious people who increased their personal wealth and that of their new-found city.

Locally-based Plastic Technologies Inc., a packaging consultant to soft drink manufacturers that is responsible for plastic recycling advances, is among dozens of companies founded by former O-I executives.

President Tom Brady is a local boy, but he could have gone anywhere after earning a PhD in plastics from the University of Michigan in 1971.

Today, O-I employs 1,200 in greater Toledo, including headquarters offices and a research facility in Perrysburg Township. Other holdings in the region include factories in Bowling Green, Findlay, and Fremont employing 460.

People had been making glass since ancient times, and it became the first industry in America when John Smith established a factory in 1608 in Jamestown colony.

But O-I's story begins after the Civil War, amid the drive to find a way to mass-produce bottles needed to hold an ever widening array of consumer products.

At the end of the 19th century, most glass was produced in small shops by groups of glass blowers working with apprentices as young as 10.

Michael J. Owens, a skilled glass-blower, was a product of the apprentice system.

Later, while working in Toledo's Libbey Glass plant, operated by Edward Drummond Libbey, the West Virginia native saw the potential of full-scale mechanization.

He wasn't the only one. Inventors in the United States, Great Britain, France, and Germany were working on bottle-making machines. The earliest patent was issued to a German in 1859.

But early machines were semi-automatic and relied extensively on human power. Then, in 1903, Mr. Owens came up with the fully automatic “bicycle pump” - so named because it looked and performed something like that device.

Owens Bottle Machine Co. was incorporated Sept. 3 of that year - although production began two days earlier - by Mr. Owens and a group of investors that included Mr. Libbey, his main financial backer. Two years later, commercial sales began with the production of the “A,” a machine capable of making about 10 pint bottles a minute.

It was the first in a family of bottle-making machines from Owens. In 1983, the American Society of Mechanical Engineers designated the circa-1912 “AR” - capable of producing bottles in different sizes from a prescription bottle to a gallon jug - an “international historic engineering landmark.”

The glass-blowing profession, which paid well but took a heavy toll on its practitioners' health, was doomed. A single Owens machine could produce six times as many bottles as a shop of a dozen glass-blowers and apprentices. By 1923, 94 percent of bottles were made by machines.

Especially pleased was the National Child Labor Committee of New York, which in 1913 praised the Toledo technology's role in reducing child labor.

Sales of the Owens machines were slow at first because prospective buyers balked at what they considered excessive royalty payments. Even so, 194 machines were sold by 1918.

The Toledo company faced its first competition in 1918 when rival machinery was introduced by a recently minted graduate of the Massachusetts Institute of Technology.

But as early as 1908 the company shifted its strategy from merely building machinery to producing bottles. That led to a name change in 1919 to the Owens Bottle Co. By 1920, Owens was the nation's largest bottle manufacturer.

O-I's main founders died within two years of each other. Mr. Owens, who was born New Year's Day, died at age 64 after collapsing during a company board meeting two days after Christmas in 1923.

Mr. Libbey, whose fortune helped finance the internationally acclaimed Toledo Museum of Art, died in 1925.

Four years later, the firm made an acquisition that would prove momentous. The addition of the Illinois Glass Co. of Alton, Ill., in 1929, would provide the firm with not only a new name but also young blood.

The leader of the new pack was William Levis, who at age 40 in 1930 became president of the newly christened Owens-Illinois Glass and today is viewed as integral to the firm's success as its founders.

He brought in men such as Harold Boeschenstein, who would go on to lead an O-I spin-off that would grow into another Toledo Fortune 500 company called Owens-Corning Fiberglas Corp.

It is no small testament to William Levis' leadership that, in 1930, the first full year of the Great Depression when many companies went bankrupt, O-I made $2.7 million. Foreseeing the end of Prohibition, he geared up early to produce beer and whiskey bottles and captured a huge market share when alcohol production resumed in 1933.

Mr. Levis invested heavily in glass fiberization technology research, which led to the creation of Owens-Corning (not to mention a revolution in production of such products as pleasure boats and skis).

Under Mr. Levis, O-I bought Toledo's Libbey Glass, a manufacturer of drinking glasses.

He recognized something that was equally important, according to reports at the time. Glass bottles need not be just vessels for holding ginger ale, face cream, mouthwash, and other popular products of the day, he believed. They could also be sales tools if labels were streamlined and the product were allowed to show through the containers.

Wall Street was impressed. Asked by one publication to identify which stock would be the biggest gainer of 1936, three of five analysts replied O-I.

Mr. Levis was promoted to chairman in 1941 and stayed at the firm until his retirement in 1950. He wasn't the last family member to lead the company. His cousin J. Preston Levis was chairman from 1950 to 1968, although he retired from active management three years earlier.

O-I grew into an industrial behemoth. It was the largest glass bottle manufacturer in the world. And in the 1950s, it was 75th largest corporation in America.

Worldwide employment reached nearly 80,000, including 4,300 in Toledo. At one point, O-I employed 1,500 scientists and researchers in Toledo. It operated a succession of research and development centers locally, first downtown, later on Westwood Avenue near the University of Toledo, and finally in Perrysburg Township at a facility named for the Levis family.

In the mid-1960s, O-I had factories in the United States, Canada, Brazil, Colombia, Venezuela, West Germany, Belgium, and Italy. Additionally, the firm shipped products from domestic plants to 80 countries.

The company expanded beyond core glass-container manufacturing to plastic bottles as well as areas including nursing homes and financial services. Over the years, its scientists gave the world hundreds of new products.

They include everything from plastic beer bottles that are helping reduce injuries at football stadiums to caps for potentially dangerous prescription drugs that are more difficult for children to open.

The firm's entrance into plastic-bottle manufacturing was spurred, in part, by Clorox Co., a major customer, in the late 1950s. Inundated with demands from grocers for an alternative to breakable glass jugs in which bleach was then packaged, Clorox told O-I to come up with an alternative or lose the business.

When fast-food giant McDonald's Corp. began to sell burgers and breakfast in foam containers in the mid-1970s, the packaging was designed and manufactured by O-I. (The restaurant company drastically cut its use of the containers in 1990 under pressure from environmentalists.)

Acquisitions also helped O-I grow. Believing the company could save money by producing the cardboard boxes in which its bottles were shipped, O-I in 1956 bought the National Container Corp., which was one of the nation's largest box manufacturers. With the purchase, the Toledo company acquired 1.3 million acres of forest, an area the size of Rhode Island.

The firm and its then chief executive, Edwin Dodd, took a major role in downtown Toledo revitalization in the 1970s.

O-I's 32-story headquarters at One SeaGate, which was opened in 1981, was the linchpin of that effort.

But the firm has had its share of problems. One is legal liability from its involvement in the 1940s and '50s with the production of insulation containing cancer-causing asbestos. Another was the kidnapping of a top executive by Venezuelan guerrillas in the 1970s.

And just as the company was moving into its new headquarters, consensus was emerging within O-I that the company had grown too fat and that profits needed to be improved.

Between 1980 and 1984, 40 factories were shuttered and 20,000 of the 78,000 employees lost their jobs.

Executives also began to worry about the possibility of a hostile takeover.

With its stock price trading at a then-low $21 a share in 1982, investor Carl Icahn quietly bought up 5 percent of the firm's shares.

Worried he might try to leverage his holdings into control of the company, executives agreed to re-purchase the shares for $5.2 million more than Mr. Icahn paid for them.

But the big bomb for Toledo and company employees fell five years later when KKR, a New York investment firm that had gobbled up many other U.S. companies including Nabisco, struck a deal to acquire O-I in a leveraged buy-out.

After that, O-I ceased to be a public company. Its shares disappeared from the New York Stock Exchange for the first time since early in the century.

KKR later spun off the company's nursing homes as a separate firm called Health Care & Retirement Corp, now known as Manor Care Inc. Also given its independence was O-I's tableware unit, which became Libbey Inc.

Other assets were sold as well. O-I re-emerged as a public company on the New York Stock Exchange in 1991. KKR remains a major stockholder.

More recently, the firm sold its mutual fund family, Harbor Capital Advisors Inc, in 2001 to raise cash to reduce debt and provide money for asbestos settlement payments.

Today, O-I has nearly 32,000 employees worldwide and $5.6 billion in annual sales.

First Published August 31, 2003, 5:25 p.m.

RELATED
SHOW COMMENTS  
Join the Conversation
We value your comments and civil discourse. Click here to review our Commenting Guidelines.
Must Read
Partners
Advertisement
A gasoline station made of O-I glass blocks glows from within in 1937. The firm no longer produces the blocks.  (file)
In a frame from a film from about 1910, left, Michael J. Owens examines a bottle from his `A' automated machine that changed the course of glass manufacturing. By 1948, even part of the company's testing methods had become mechanized.  (HO)
A technician in Toledo subjects containers to the impact of a heavy pendulum in 1948.  (file)
Pickle jars get a once-over before being shipped out of a Huntington, W.Va., factory in 1942.  (handout)
In Toledo in 1970, O-I poured a telescope mirror blank of Cer-Vit, a glass-ceramic material developed by the firm.  (Ho)
file
Advertisement
LATEST local
Advertisement
Pittsburgh skyline silhouette
TOP
Email a Story