Johns Manville

Early years

The present-day Johns Manville company traces its origins to two early manufacturers of construction materials. Just prior to the American Civil War, in 1858, at the age of 21, Henry Ward Johns^[a] founded the H.W. Johns Manufacturing Company^[b] in New York City.^[7][8][9] He obtained a number of patents during his business career.^[c]

In the midst of the Second Industrial Revolution, on March 16, 1886, the Manville Covering Company was incorporated with a capital stock of $200,000 in Wisconsin^[11] by Charles Brayton Manville,^[d] who also won several patents^[e] and whose grandson was the much-married socialite Tommy Manville.

In 1891, the H. W. Johns Manufacturing Co. consolidated with its four largest competitors.^[f] Business was continued as H. W. Johns Manufacturing Co.,^[g] the name of the pioneer in the business and owner of the largest asbestos plant in the world employing 125 workers in Brooklyn.^[20] The company had been running perennial advertisements in dozens of newspapers for more than 30 years,^[h] creating a brand. Keasbey & Mattison with their plant near Philadelphia were a major competitor at the time.

At the turn of the century, virtually all asbestos used in the United States was imported from Canada. Under the Dingley Act of 1897, raw asbestos was free to import, while there was a 25% duty on imported manufactured asbestos products and the quantity so imported was relatively small.^[28][29]

In 1901, the H.W. Johns Manufacturing Company and the Manville Covering Company of Milwaukee merged to form the H.W. Johns-Manville Company with a capital of $2,500,000 in appraised assets and $500,000 of new cash raised.^[i] In 1920 the company renamed itself to Johns-Manville Incorporated.^[32] In 1926, the firm was reincorporated as Johns-Manville Corporation.^[j] On the occasion, JP Morgan & Co invested close to $7,500,000 into what had theretofore essentially been a family-owned "gold mine" (New York Times).^[33] A few months later JP Morgan & Co. increased their stake substantially.^[34] In both cases though this was not new financing for the company, but the purchase of stock from other individuals. A June 1931 article in Fortune Magazine explored in detail the relationship between individuals in leading positions at the time. Estelle Manville married Folke Bernadotte, who was the nephew of the King of Sweden, albeit without the right of ascension to the throne.^[35]

From 1902 to 1920 the company had paid a total of $3,067,969.07 of dividends on its 7% preferred and its common stock and paid out $9,067,815.25 in dividends from 1921-1926. The stock buyback of $2,500,000 face amount of preferred stock for cash concluded in 1923 was also a form of (self-selecting) cash dividend.^[32]

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On the New York Curb Exchange Manville common stock more than doubled during 1927 from a low of 55+1⁄2 in January to a high of 126+1⁄2 in November.^[37] There had been some trading of the old company's stock on the Curb Market as well.^[k] The stock was listed on the NYSE in February 1928.^[40] In February '29 market capitalization briefly exceeded $180 million.

In 1929 J-M obtained a license from the Eternit Pietra Artificiale, S.A. of Genoa, Italy to manufacture and sell seamless asbestos-cement pipe ("Transite Pipe") in the U.S. and in Canada. Two sets of machinery were built in Italy and were shipped for installation at Waukegan.^[43] On June 26, 1929 the Johns-Manville International Corporation was incorporated in Delaware.^[44] In the early 1930s, the United States was still the biggest consumer and importer of asbestos, Canada was still by far the biggest producer.^[45] Johns-Manville in 1930 was the largest asbestos company in the United States, employed 10,000 people, made more than 1,000 individual products in 12 factories supplied from two mines (Asbestos, Quebec and Chrysotile, Arizona) and had a substantial interest in a plant in Donk, Antwerp (Belgium).^[46]

Theodore F. Merseles, president since July 1, 1927 and former president of Montgomery Ward, died unexpectedly on March 6, 1929.^[47][48] On March 15, 1929, Lewis H. Brown was elected president of the company.^[49] After serving for 17 years he became Chairman of the Board on September 18, 1946 and was succeeded as president by R. W. Lea.^[50]

Johns-Manville tilted a bit towards banking. In 1931 the company went into the business of providing credit to their own customers, large distributors and home-owners alike, who could spread out their payment over periods ranging from 6 months to 2 years without having to involve third party banks.^[51] In October 1934 the Johns-Manville Credit Corporation was formed with a capital of $1 million. Under the National Housing Act of 1934 the company was to make home loans on favourable terms in cooperation with the government to improve the quality of housing in the United States.^[52]

During the depression, no dividend was paid on common stock (last paid Oct 15, 1931; first paid July 15, 1935^[53]). In 1933 the April 1 and July 1 quarterly dividend on cumulative preferred stock was not paid until December.^[54] In 1937 100,000 shares of stock were sold (at $100 per share^[55][m]) to finance $6,920,000 of ongoing plant expansions and to inject $1.2 million additional cash into the Johns-Manville Credit Corporation. This was the first new financing since incorporation, bringing the outstanding stock to 850,000 common shares.^[57]

During World War 2, Johns Manville managed operations of the Kansas Army Ammunition Plant in Parsons.^[58] In 1943 J-M factories continued to operate at a high level, management however attributed a growing percentage of the demand to ordinary (civilian) business that had been deferred due to the war. The company was accruing a deferred expenditure account, in anticipation of heavy spending required for renewals and expansion after the war.^[59] In each of the years 1940, 1941 and 1944, $3,000,000 was spent to redeem at 120 the 75,000 shares of preferred stock issued in 1926.^[60][n]

In July 1945 $17,000,000 were raised with the sale of a new issue of 3.5% convertible preferred stock.^[o] In each of 1947 and 1950 about half of the stock was called for redemption with the goal of having it converted to common stock.^[p] A $50 million expansion program was set in motion during 1946^[70] and expected to yield first results in 1947. Part of this program were several new facilities: a research center near Manville (NJ), a plant in Natchez, Mississippi for insulating board, one at Tilton, New Hampshire for asbestos insulation, one at Port Union near Toronto for asbestos-cement pipe and rock wool insulation and one at Marrero, Louisiana for asbestos-cement pipe.^[71]

On March 31, 1947 J-M bought the Goetze Gasket & Packing Co of New Brunswick, New Jersey (est. 1887), owner of a 40,000sqft factory in that town.^[72] Effective May 12, 1947 the common stock was split 3-for-1. Each of the following quantities were tripled: 1,500,000 authorized common stock, 950,461 outstanding shares (to 2,851,383), 74,634 reserved for conversion of the preferred.^[73] On July 15, 1947 the company arranged a line of credit with the Metropolitan and the Mutual life insurance companies for a maximum of $25,000,000 in 20-year notes. It paid 0.5% on amounts not borrowed for the right to borrow until Dec 31, 1950 at any time at the rate of 2.7% (apparently some form of interest rate swap). In 1947 $5,000,000 were borrowed under this arrangement.^[74]

In 1949, the Canadian branch of the company was involved in the Asbestos Strike at its mines in Asbestos, Quebec.

In the early 1950s the company framed itself as vital for national defense, as was common for companies that could be considered on the fringes of the military-industrial complex. The company would pursue projects for "the development of substitutes for critical materials, jet aircraft blanket insulations, filters for radioactive dusts, improved fireproof clothing and other projects which will play a vital role in military and civilian defense".^[75]

Effective March 12, 1956 the common stock was split 2-for-1.^[76][77] One share of par $100 common stock worth $100 in 1901 would have been split 8x in 1923, 3x in 1926, 3x in 1947 and 2x in 1956 into 144 shares with a 1956 market value of ca. $50 per share.

In 1956 a $40,000,000 expansion plan mainly for an increase in production of Transite Pipe (asbestos-cement pipe) was carried out. Existing plants at Marrero, Waukegan, Manville and Watson, California were equipped with new facilities. A large plant at Stockton was underway and the plant at Denison was announced on August 22, 1956. The Denison plant was the company's 7th Transite Pipe plant (one additional plant was at Toronto).^[78] It was the first continuous asbestos-cement pipe mill and was almost completely automated. It was one of 8 new J-M factories opened in 1958, the company's centennial anniversary^[q] and Denison was one of 26 towns in the United States and Canada where J-M mines or factories were located.^[80]

In December 1958, Johns-Manville bought Libbey-Owens-Ford Glass Fibers, Inc. for about $55 million in stock,^[r] based in Toledo, Ohio and second largest by revenue in the glass fiber business. The properties obtained included a research center at Waterville, Ohio and plants in Parkersburg, West Virginia, Houston, Corona, California, Waterville and Defiance, Ohio (3 plants). The new company became the 10th Manville operating division and was headquartered in Toledo. The 7 new plants resulted in a new total of 33, including the plant in Belgium.^[83] At that time, Dominick Labino was working for Glass Fibers; Barnard and Labino both joined Johns-Manville. Glass Fibers had several plants in Waterville and Defiance, which are still in operation under Johns Manville,

In 1982, for the first time in 42 years, Manville omitted a regular dividend.^[84][85]

Beginning just after World War II, sculptor Beverly Bender spent thirty-two years working in the art department of Johns-Manville, creating animal sculpture in her free time.^[86]

Asbestos litigation and bankruptcy

Starting as early as 1929, Johns-Manville employees began claiming disability from lung diseases.^[87] The claims settled out of court, with a secrecy order.^[88] In 1943, Saranac Laboratory in New York confirmed the link between asbestos and cancer, but Johns-Manville suppressed the report.^[88] From approximately 1930 to 1950, attorney Vandiver Brown handled involvement in such lawsuits. Files and testimony alleged that "[Johns-Manville] maintained a policy into the 1970s of not telling its employes that their physical examinations showed signs of asbestosis".^[89]

In 1943, Johns-Manville suppressed a report confirming the link between asbestos and cancer. During the 1960s, 1970s and 1980s, the company faced thousands of individual and class action lawsuits based on asbestos-related injuries such as asbestosis, lung cancer and malignant mesothelioma. Many new settlements included offering $600 for asbestosis, while the FAIR Act called for $12,000 for this condition level.^{[citation needed]}

As a result, the company voluntarily filed for chapter 11 bankruptcy protection in 1982. At that time, it was the largest company in United States history to have done so. The filing shocked financial analysts, but a few, such as Gary J. Aguirre, had predicted the filing and had forced the company to post a bond to guarantee payment to their clients.^[90][91]

The bankruptcy was resolved by the formation of the Manville Trust to pay asbestos tort claimants in an orderly fashion by giving the trust the majority of the equity in the company. The bankruptcy took over five years to process and resulted in protracted litigation. The Manville Trust is still in operation today.^[92][93]

Post-bankruptcy

The company emerged from Chapter 11 in 1988^[94] as the Manville Corporation.^{[citation needed]} In 1997, the company changed its name back to Johns Manville (but without the hyphen), and this is the name under which it does business today. In 2001, Johns Manville became a wholly owned subsidiary of Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B).

Then chairman and CEO Jerry Henry retired in 2004. At that point, Steve Hochhauser became chairman, president and CEO. Todd Raba succeeded him in the summer of 2007; he came from MidAmerican Energy Holdings, another Berkshire Hathaway company. In November 2012, Mary Rhinehart was named president and CEO,^[95] and she added the title of chairman in 2014. In September 2020, Bob Wamboldt became CEO and president, while Rhinehart remained as chairman.

In 2012, Johns Manville appointed a new CEO, Mary Rhinehart.^[96] She was the CFO for Johns Manville and had been with the company for over 33 years. In 2020, Bob Wamboldt became the president and CEO, while Rhinehart remained as chairman.

Manville, New Jersey

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The town of Manville, New Jersey, is named for the company. It had the largest asbestos refinery and manufacturing plant operated by Johns Manville from 1913-1986 in the borough, which earned the town the grim nickname of "The Asbestos City". In the early years of the town, as a result of processing of asbestos done at the Johns Manville Plant, there were reports from the residents of the town of Manville of asbestos snow, a result of asbestos dust being carried by the wind and blanketing the whole town. Manville was set up as a company town for the Johns Manville Corporation and as a result the town reflected the image of Johns Manville and contributed to the lawsuit litigation against the Johns Manville Corporation which is still ongoing to this day.^[97]