100 Years of Ulbrich: Expansion, Stalemate, and The Death of Fred Ulbrich Sr.

To mark our historic 100th anniversary, we continue our series of sharing stories from the past. In this sixth post, we enter the 1970s, where the company sees substantial expansion, as well as the passing of our founder, Fred Ulbrich Sr. in 1975.

CATCH UP ON PREVIOUS ARTICLES:

• Our Founder’s Story
• Fred Sr.’s Dream
• 1929 & The Great Depression
• Another Great War & The Foundation Years
• The Biggest Little Mill

Ulbrich was ready to tackle greater challenges in the next decade — the 1970s. Fred Sr. and Ada opted to live full-time in Florida but spent their summers in Guilford, Connecticut. This required an organizational change at Ulbrich. A board meeting was called by the Chairman of the Board, Fred Ulbrich Sr. to elect the new executive leadership for the company. Fred Ulbrich Jr. was elected President in this meeting.

In his first act as president, Fred Jr. called on his father’s longtime bank, Connecticut Bank and Trust, to borrow funds for a new Sendzimir Mill installation. The mill had been on order for one and a half years — the length of time needed to construct the mill. Fred Jr. went to the bank expecting to walk out with a check. In his hand was a letter of commitment dated two years earlier, negotiated by Fred Sr. who had served on the bank’s Board of Directors. The letter promised a loan when the mill was completely built. Instead, for reasons of their own, the bank chose not to fund Ulbrich's 5-Z Sendzimir Mill.

Fred Jr. exclaimed, “What a way to start my presidency!" The shocking news forced Ulbrich to find a new bank. An exhaustive inquiry at 42 banks ended with Colonial Bank and Trust (which became the Bank of Boston) in Waterbury. Fred Jr. knew the bank President as a fellow member of the Young Presidents Organization (YPO). Although the steel business was flourishing and each department at Ulbrich was headed by a competent person, it became apparent that each officer had a different level of engagement. More importantly, there were different interests among those involved.

In 1970, Fred Sr. gave controlling interest in Ulbrich Steel to his three sons, Fred Jr., Dick and Dan; but he kept the real estate portion of the business, Ulbrich Realty Corporation. While giving away his shares of Ulbrich Steel, Fred Sr. amended the company by-laws to require 76% approval for every capital investment and major business consideration. Because the three sons each possessed a 33% share, unanimity was necessary to make meaningful decisions. Unable to agree on much, the gifted stock created temporary disarray.

Ulbrich was no longer one company working in harmony. In fact, it was split into three separate organizations — one in production, one in sales and one in finance. The situation presented great difficulty for Fred Jr. to manage three departments that focused on three different objectives. The company had grossed over $10 million, orders were coming in, customers were being serviced and each department was functioning; yet the corporate objective could not be agreed upon.

Fred Jr. and Dick wanted the corporate objective to be constrained, steady growth.

In this scenario profits would be used to secure small loans for capital investments while incurring a minimum amount of debt owed to steel mill suppliers and banks. Each non-steel related venture would need to be profitable on its own. Dan and Bill Gardner wanted the corporate objective to be maximum growth and maximum debt. They thought profits should secure larger loans to fund non-steel related ventures and backed by the full faith and credit of Ulbrich. The two parties had huge differences in philosophies.

Despite some discord, the business sustained growth amid a recession in 1971. Ulbrich Wire Inc. was prospering as its own entity. Ulbrich of Illinois was fully operational and the Service Center proved to be a sound investment. The new executive team bought another Chicago-based company: Tubex. Many personal ventures were initiated within Ulbrich Realty Inc. The company was consuming vast amounts of cash and credit to finance inventory, equipment, wages, accounts receivable and travel expenses. According to Fred Jr., “A rule of thumb for any private company is to never run out of cash and credit at the same time.”

Ulbrich made at least one too many financial commitments. Ownership was well aware of a potential collapse due to cash-intensive investments. Luckily, each of the steel divisions were either profitable or going according to plan. It was full speed ahead for the sake of speed. High inflation swept the nation, goods became more expensive.

Due to rising inflation President Richard Nixon imposed wage and price controls for steel companies with sales over $50 million. All material purchased from large steel companies was retroactively priced by six months. If companies charged more than a 3.5% rate of increase for metal shipped during the last six months, then the mills would have to refund the money to customers. Consequently, Ulbrich received a check for a portion of the material purchased over the last six months. The combined amount from various steel mills was in excess of $300,000. This was more than Ulbrich's annual net profit.

Ulbrich could charge its own prices subject to competition and without heavy government regulation. Instead, the Nixon Administration had given Ulbrich a major boost. Company management started to feel a false sense of accomplishment, because no matter which direction it went, the company seemed to make money. This illusory mindset caused Fred Jr., Dick, Dan, and Bill Gardner to turn their talents to other fields, believing they had the Midas touch.

A few years prior Ulbrich purchased another Illinois-based company: Tubex Corporation. This firm manufactured ornamental welded tubing used in swimming pool railings, automobile luggage racks, food processing, hospital equipment and plenty of other uses. Tubex sales were about $3 million and had 30 employees. It had always been a marginal company, not making or losing more than $100,000 each year. It was, in effect, a breakeven company.

When Fred Sr. purchased Defco Park and renamed it to Wharton Brook Industrial Park, included in the acquisition was the Valley Water Company. Valley furnished water to nearly 700 people working in the park. The property also had a spur railroad feeding the New Haven to Hartford line which serviced seven companies and these companies formed the Wharton Brook Rail Association. Fred Jr. was in charge of the water and rail entities.

Thankfully, departments at the Strip Mill were running autonomously. The real workhorses and craftspeople were on the shop floor and in the offices chipping away one order at a time. Competent and devoted staff continued to provide a quality service to customers. As far as customers were concerned, Ulbrich was the same vendor, though its officers were tied up in other projects.

In 1975, another recession occurred and it was steep and harsh. Ulbrich's sales dropped by 33.5% ($26.5 million in 1974 to $17.6 million in 1975). This recession clobbered management. Financial obligations from various non-steel Ulbrich ventures finally landed the company in a tough situation. Ulbrich Steel was unable to pay its major vendors, especially Crucible Steel, to whom the company was past due by ten months.

Colonial Bank and Trust met with Fred Jr. to specify that Ulbrich and its companies had to resolve its problems or face liquidation. It was that serious — Ulbrich was going belly up. In fact, Crucible Steel Company gave Ulbrich 24 hours to either pay up or to be liquidated — the company would be forced into Chapter 11 bankruptcy. Crucible had been a good supplier and a friend of Ulbrich. If it had been another company, it would have forced a bankruptcy months prior. Suppliers had a right to do so.

Budgetary problems intensified the stalemate among upper management.

The four decision-makers were split with Fred Jr. and Dick on one side and Dan and Bill Gardner on the other. The by-laws of the company were clear. To Fred Jr. and Dick, the answers were clear as well. They called for an end to funding company ventures either losing money or not going according to plan. This meant taking large personal losses so that Ulbrich Steel could stay afloat.

Ulbrich was able to retain the confidence of the bank and returned to its core business: re-rolling steel. Sales doubled due to advanced manufacturers on the forefront of technology. Ulbrich’s cutting edge customers were using more exotic alloys for new industries. Computers, medical devices, black box recorders used in airplanes and nuclear power applications came into existence. When the company reached its 50th anniversary, Ulbrich supplied 70 different alloys and employed more than 200.

THE PASSING OF THE FOUNDER FRED C. ULBRICH SR. 1901-1975

Like his father, Frederick Christian Ulbrich Sr. died as the beloved patriarch of the family. He departed a proud, but humble and happy man. Fred Sr. had a purpose in life — to do the best in all he did. He accomplished this goal. His was a full and productive life. He was a loving husband and father. He cherished and practiced his Catholic faith while serving the Knights of Columbus as a Grand Knight for Wallingford’s Pinta Council No. 5. He loved and tended to his community. He was fond of all types of people, but especially his co-workers and their families.

Fred Sr. lived long enough to witness eight of his coworkers from the 1930s and 1940s retire from Ulbrich, including one of his closest friends, Vic Calabrese. He believed that the success of a company could be solely measured by the happiness of its retirees. The year before Fred Sr. passed, retirees, co-workers and friends celebrated Fred Sr.’s birthday at the Strip Mill with a cake that read, “Happy Birthday Fred Sr. From the Ulbrich Gang.” That same year Ulbrich Steel celebrated its 50^th anniversary. The milestone was highlighted by a Congressional Commendation for Ulbrich’s role in landing men on the Moon.

It was a fitting farewell for an inspiring man and leader. In the latter stage of his life, Fred Sr. and his wife Ada enjoyed long road trips from Connecticut to Florida in their red Rolls Royce. They were adventurous travelers inseparable.

A few days after Saturday, April 26th, 1975—the day Fred Ulbrich Sr. passed away—the local family-owned newspaper printed the following:

Fred Ulbrich Of Wallingford, Conn.

When Fred Ulbrich was first making and his way in business in his home town of Wallingford back in the Depression Days people called him the “Little Flower.” The name was in recognition of his physical likeness to Mayor Fiorello LaGuardia, then mayor of New York. Both men were short and stocky. Moreover, both men were honest, energetic, devoted to good causes, and honored and respected by their fellow citizens.

Like Mayor LaGuardia, Frederick Ulbrich Sr. had abounding energy and was active in politics. He served as warden of the borough during the years that Wallingford had both a town and a borough form of government. Most of his life was devoted to his business and to his charities. The business was successful, thanks to his energy and enterprise, and his charities public and private were legion. As a dealer in scrap metal, Ulbrich began to specialize in special steels. He studied metallurgy at night, and eventually developed a business which included dealing in rare alloys whose special properties were required for exploration of interstellar space.

Fred Ulbrich’s business interests were nationwide. He had plants in the Midwest, but his heart was always close to the people of Wallingford among whom he grew up. He earned the respect and affection of his fellow citizens. His death Saturday at age 73 is a loss to the community. On behalf of the people of Wallingford, whom he knew and loved and served so well in so many capacities, The Record extends sympathy to his family.”

- The Morning Record, Meriden, Connecticut, Wednesday, April 30, 1975

Want to learn more about Ulbrich’s century of excellence?

Visit our Centennial website for a company timeline, treasured memories, and more!