100 Years of Ulbrich: Challenging Milestones and the 75th Anniversary

To mark our historic 100th anniversary, our tenth installment of our history series tells the story of how Ulbrich pursued growth through facing both successes and challenges, reached major milestones, and celebrated the 75th anniversary in 1999.

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
• Expansion, Stalemate, and The Death of Fred Ulbrich Sr.
• The Difficult Years
• In Need of Change
• The Ulbrich Revolution Goes Abroad

Ulbrich was finally an international company after two decades of persistence. By 2010, half of all orders at Ulbrich Specialty Strip Mill would be exports. Before that became a reality, many obstacles had to be conquered as a company. In the 1990’s, there existed a limited number of customers and potential customers seeking small quantities of stainless steels and special metals. The only way for Ulbrich to gain more sales was to take orders away from competitors.

To win business from competitors in 1993, Ulbrich bought a company called Aerodyne Alloys of East Hartford, Connecticut. Aerodyne Alloys supplied temperature resistant alloys, titanium bar and sheet metal products to jet engine manufacturers — mainly Pratt & Whitney, General Electric and their subcontractors. Aerodyne products were also used in aerospace, oil & gas, petrochemical plants, power applications, trash to energy plants and even mechanical parts for the human body. Aerodyne had Steel Service Centers in Connecticut and Indiana (to meet the requirements of General Electric of Cincinnati, Ohio).

The total sales of Aerodyne Alloys was $6.5 million when Ulbrich acquired 51% of the company on June 3, 1993. Its president was a man named Edward Williams who owned 49% of the company. Over a span of three exciting years, the company was renamed Aerodyne Ulbrich Alloys and the division fostered sales to $27,000,000. This acquisition resulted in, for the first time, a non-family minority owner of stock in an Ulbrich company. Integrating the product line into Ulbrich’s sales and marketing also proved to be a challenge, but bigger problems loomed.

Aerodyne held debt that their bank wanted Ulbrich to take over. Ulbrich was unwilling to assume the debt unless it had full operational control of the company from Ed Williams. When lending hit about $15 million, the bank refused any further loan. This meant that Aerodyne’s future sales would be capped. Meanwhile, the division’s competitors were large, well-run companies. For Aerodyne to be a factor in the bar, sheet and plate sector, Ulbrich, as majority owners, required revenues to be around $55 million. With too much debt, this objective was now impossible to attain, putting the company’s stability and viability at risk.

The situation had to be resolved. Either Ed Williams had to buy out Ulbrich’s 51%, or Ulbrich had to buy out Ed Williams 49%. Ulbrich performed a buyout in an amicable agreement. Titanium accounted for one third of Aerodyne’s sales, more than half of its profits and nearly half of committed inventory. Then, suddenly, overwhelming demand for titanium caused prices to soar. Ulbrich supplied 10 million pounds of titanium in 1996 and 1997 to golf equipment manufacturers alone.

During this two year period, deliveries of titanium by Aerodyne Ulbrich Alloys increased substantially. The division experienced unrelenting demand for titanium from their most critical customer: Boeing Aircraft Corporation. The titanium boom finally busted in 1998 and the year brought a sharp drop in titanium prices. Boeing reached a stabilized production level, and they ordered less volume from Aerodyne. Golf equipment usage fell to about 3 million pounds. Similarly, the price of pure nickel dropped — reaching historic lows in 1998. Since Aerodyne Ulbrich’s high temperature products contained nickel, its inventory lost 20% in their value. With nearly $18 million worth of nickel alloys, the company incurred a $3 million loss and Aerodyne Ulbrich became unprofitable. Management held on to hope that the precious metals market would stabilize and profitability would return. Prices eventually recovered and sales at Aerodyne Ulbrich surpassed $42 million in 1999 — well on its way to the minimum goal of $55 million.

Back in 1995, Ulbrich purchased another company called Metals & Cutting Specialists, Inc. Located in Rancho Cucamonga, California, the business was founded by Albert Tuscano, an entrepreneur. Metals & Cutting specialized in small quantities (less then 200 pounds). The orders were not only stainless steel, but also carbon, aluminum, copper and plastic in many grades and variations. With sales of $1.4 million, the budding operation seemed to have promise. Ulbrich planned to transform Metals & Cutting into a national brand specializing in small orders.

However Ulbrich became trapped in the old cliché of a larger company taking over a smaller company and ruining it. Fred Jr. wanted to superimpose Ulbrich’s concepts onto this smaller business, and to change its culture. Metals & Cutting refused to adopt to what became known as “The Ulbrich Way" of doing things. Sales increased, but so did expenses. Ulbrich as a corporation blew many millions on this West Coast deal and management lost some self-confidence — especially when Metals & Cutting ceased to exist on October 15, 1999.

The third Ulbrich acquisition was the aforementioned Diversified Stainless in Canada. The new division was comprised of two separate locations; one in Toronto, and one in Montreal. The operations specialized in stainless sheet and stainless plate. Both of these products were newer to Ulbrich, and the type of customers utilizing them were unknown to Ulbrich. The customers made food processors, cars, trucks, trailers, holding tanks, slaughterhouse and brewery equipment, and much more.

Diversified Ulbrich of Canada was originally started by Frank Szabo, whose leadership had brought it to an enviable position in Canada. He continued to ably lead the company after Ulbrich’s purchase but retired in 2005. Many capable managers and personnel have followed since and Diversified Ulbrich of Canada has remained a successful acquisition. In addition to increasing the supplier base in Europe, Diversified also grew Ulbrich’s customer base for steel and wire products made by divisions in the United States.

Though blunders were made, acquisitions brought about new advantages, specialty products, increased sales, better suppliers, and more sales. Soon enough the business was supplying old customers with additional products, interfacing with different company cultures, learning from others and growing its global knowledge and reach. An advantage was that Ulbrich knew how to hire additional managerial and hourly talent from many years of experience. These positions were at the heart of the company and pumped the proverbial lifeblood of Ulbrich, and they hold the power to continuously rejuvenate Ulbrich for the better.

In addition to decisions and judgements made by Fred Jr. and Dick, Ulbrich used a consultant. A man named Marvin Adler helped to buy and sell Ulbrich divisions. Adler oversaw every acquisition, which involved at least twenty candidates that were seriously investigated. The amount of time and effort in qualifying potential acquisitions was enormous — but it was worth it. The initiative to acquire companies kept Ulbrich dynamic and nimble.

To use baseball terminology, Ulbrich was batting for a good average. The company had one strikeout with the purchase of Metals & Cutting, a two-run home run with Diversified of Canada, a double with Ulbrinox, and as for Ulbrich Aerodyne Alloys, the call on the field was still being argued. Ulbrich has been, and is still on the acquisition trail. Out of the 1990s has come a company policy to only purchase companies that exceed $5 million in sales. The next major acquisition would be a grand slam.

By reaching its ambitious $200 million goal by 1997's end, three years ahead of schedule, Ulbrich celebrated a significant milestone. At this juncture the company was employing 575 co-workers across fourteen divisions in four countries. It positioned itself as a midsize player in an industry of behemoths with some boasting thousands of employees and billions in revenue. This unique position allowed Ulbrich to maintain a balanced scale of operations.

Ulbrich, as a mid-size firm, had carved a niche for itself as an innovative manufacturer. Fred Jr. often credited the team with this reputation his company had earned; from skilled workers to professional staff, he lauded their expertise and dedication. He viewed Ulbrich’s employees as masters of their craft, essential to the company's fabric, and as individuals with whom he shared a strong, trusted bond. They worked with the agility of a mid-size company while embracing ownership in their respective divisions. Fred Jr.’s reflections on this culture highlight the dynamic that contributed to Ulbrich's success. Fred Jr. once wrote of this dynamic stating:

“We have to think in two ways: one - as a mid-size company, and two - as a smaller divisionalized company in which we must take care of each individual order and customer. We must start to think of other divisions and their needs and attempt to integrate our needs with theirs. We must understand our corporate strategic statement both on a divisional level and as one unified company.

Throughout the metals marketplace unceasing changes in technology caused many buyouts. Steel companies were bought, sold and dismembered. Domestic and international steel suppliers faced significant exposure to the largest corporations. New alliances were being made, and old partnerships were being severed. Demand steadily escalated for stainless steel, high temperature alloys and titanium. Plenty of competitors were consolidated, and many old facilities were shuttered. Ulbrich had fresh-faced competitors, opportunities and difficulties.

As the first quarter of 1998 began, business was going well. It appeared to be quite a profitable year. Ongoing efforts to increase sales at Ulbrich of U.K., Ulbrinox in Mexico, and Metals & Cutting in California seemed to be paying off. Ulbrich had anticipated that these three divisions would be fruitful after several years of difficulty to attain enough sales. Meanwhile at Aerodyne Ulbrich Alloys, aircraft industry customers were clamoring for more material. Boeing had a huge backlog of orders, and Ulbrich expected sustained volumes at least until 2002.

Much of the material was titanium in plate and bar form. The end usage application was in fuselage and engines for the aircraft industry, especially Boeing. Aerodyne Ulbrich sourced most of the titanium was from a mill based in Russia. Fred Jr. and other purchasing representatives made several trips to the Ural Mountains carrying with them hopes of procuring material from the only titanium mill in Russia. In short, they were successful. The state-run Russian entity supplied millions of dollars worth of titanium bar and plate to Aerodyne Ulbrich. It appeared to be a solid year for the aircraft sector — one that Ulbrich took for granted. Like so many times before, the pendulum of good fortune swung back around when second quarter forecasts were shattered. A surplus of inventory sat on the shelves for far too long, especially at Aerodyne Ulbrich Alloys and Metals and Cutting. The overabundance of inventory resulted from unsuccessful sales calls as well as an expected announcement from Boeing.

In reaction to the Asian Financial Crisis of 1997, Boeing put a slowdown on building airplanes. This particular financial crisis caused deferred shipments of planes to various international airlines. Boeing Aircraft Company cut production just as its titanium coffers were filled. This meant that the major titanium mills in the United States, all of whom had significantly increased their capacities, as well as distributors who supplied Boeing and their subcontractors, now had plenty of titanium in stock. There was terrific competition for the reduced number of titanium orders available. Aerodyne Ulbrich Alloys found itself competing not only with distributor competitors, but also with titanium melting mills. Needless to say, Aerodyne Ulbrich was not successful in obtaining most of these orders. Simultaneously, Aerodyne’s heavy competition resulted in a large reduction in prices. Suddenly and surprisingly Aerodyne’s inventory was worth $3.6 million less than a few months before. Some of this reduction in value was caused by historically low nickel prices. Aerodyne Ulbrich had a huge nickel and nickel-based inventories in bar and sheet form. The material was now worth substantially less than a few months ago.

Ulbrich’s takeover of Aerodyne was another trite case of a corporation unintentionally spoiling the balance sheet of a smaller operation. The division engaged in sloppy business practices pertaining to inventory, or other aspects of its business. Retribution was swift and profits were punished accordingly. At the end of the year more than half of Ulbrich's profits made by the other profitable divisions were wiped out by titanium and nickel-based alloy inventory losses at Aerodyne Ulbrich Alloys, Metals and Cutting, and Ulbrich of California.

If any of the Ulbrich family were to write a song entitled "West of the Rocky Mountains" it would not be a good one, because most of the aircraft industry that Ulbrich supplied were on the West Coast of the United States. In addition, Ulbrinox in Mexico had to absorb losses because of the devaluation of the Mexican peso. The unpredictably of rapid expansion had finally caught up with Ulbrich and its investments.

A general slowdown in business and reduction of stainless pricing by the European producers thwarted the revival of Ulbrich of U.K. Sales in Great Britain were increasing and the number of customers increased. Great progress was being made at the Service Center, although a breakeven pace was not attained as a result of pricing reductions. Shipments of metal in 1998 were actually more than 1997 in pounds, but the number of dollars for those same orders was significantly lower due to price fluctuations. The year of 1998 had been a veritable roller coaster. Ulbrich reached new heights in shipments and profits, and then a free-fall downward was sudden, swift and unsettling. Contingency plans were made for the following year in the event that these problems could not be resolved. Fred Jr. and Dick believed that they would be, but then again, they believed in the beginning of 1998 that everything would be fine. Some folks at Ulbrich described 1998 as a disappointing year business-wise, and looked forward to 1999 — the 75th anniversary of Ulbrich.

An important year for Ulbrich was 1999. Ulbrich took the entire year to celebrate its 75th anniversary. It was a time for retrospection and introspection. As a legitimate international company, there was plenty to celebrate. Ulbrich’s financial position was stronger than it had ever been, its products were the best it had ever produced and its people were more talented than ever. The company celebrated its 75th year by hosting festivities at every division. The year-long observance provided morale boost to the family and the co-workers. Owners and executives traveled to each Ulbrich facility to lead employee and customer appreciation lunches, dinners, golf outings and sporting events. The anniversary was a symbolic nod to its people, customers, culture and history. The 75th anniversary was much larger in scope than the previous milestones.

For the 25th anniversary (1949), a small party was held at Christmastime in Ulbrich’s original building. Fred Sr. powered down all if the machines so no accidents occurred. Tables and chairs were brought to the factory floor; food and drink was available to co-workers, suppliers, friends, family, neighbors and politicians. The celebration started in the afternoon and lasted until the evening. Much of the food was made by the wives of employees, and since most employees were of Eastern Europe, especially Poland, the spread featured plenty of kielbasa and pierogis. Fred Jr. once recalled his task of chauffeuring a few impaired guests.

The 50th anniversary (1974) was more sophisticated. The company purchased gifts for every employee, staged customer appreciation dinners and held a special family picnic and a Fourth of July fireworks display. There was not one specific event for the 50th Anniversary but many. The most memorable family moment happened at a sales conference at a hotel in Key Biscayne, Florida. A plan was hatched to surprise Fred Sr. and his wife Ada. Fred Jr. drove his unsuspecting parents from their home in Ft. Lauderdale to Key Biscayne.

An American flag that flew over the White House in Washington D.C. was presented to Fred Sr. from from Senator Low; and a certificate of appreciation from the Governor of the State of Connecticut was presented to him by Dick Ulbrich; and customer and supplier awards and accolades for starting Ulbrich. Numerous cards and telegrams from his friends, relatives and co-workers were read and presented. In the months before his passing, Fred Sr. often lauded that special evening in Key Biscayne and how much it meant to him and Ada. The 75th Anniversary was bittersweet for some. Five divisions were hemorrhaging money - two of which were heavily involved in the aircraft industry. It was decided that if there was no light at the end of the tunnel then by the end of the first quarter of 1999, a contingency plan for these five companies would be implemented. Regrettably, the turnaround did not occur within the first three months. Metals & Cutting was consolidated into a new division called Ulbrich of California in Fresno, California.

Aerodyne Ulbrich had five divisions in the United States. In order to break even, a minimum of $5 million in sales was essential for each of the location. It became crystal clear that Service Centers in Alpharetta, Georgia, that serviced the Southern portion of the United States, and the Service Center in Houston, Texas, which serviced the oil and gas industry, could not reach profitability based on anticipated sales. Both were closed and their inventories were shipped to Aerodyne’s operation in Indianapolis, Indiana.

Meanwhile, Ulbrich of California continued to absorb losses. The division leaned on profitable items only and a dozen major customers responsible for the losses were no longer serviced. Drawing a hard line with Service Center customers became a repeated theme. Ulbrich of California remained in tact, and there was never a thought of closing it. Throughout its lifespan, the division has serviced high profile customers on the West Coast.

Ulbrich created an international trading company: Ultraco. It was an acronym standing for Ulbrich Trading Company, The entity was to fulfill a function of servicing requirements that involved trading raw material and specialty alloys outside of the United States. However, a temporary collapse of the titanium industry gravely damaged Ultraco. Fred Sr. decided to keep the company as a paper company only, and ceased soliciting business. Ultraco was short-lived and eventually was folded into Ulbrich’s International operations.

The company reduced its number of divisions from eighteen to fourteen within a short period of time in 1999. Uncertainty at the Service Centers caused the consolidation. Sales volumes were willfully and drastically reduced at Ulbrich of California. Downsizing during the 75th Anniversary had to be done, but nobody celebrated the closures. The year was indeed bittersweet.

Then in early March of 1999, Fred Jr. took a routine stress test and failed it. This was not part of Ulbrich’s contingency plan. Two weeks later he had another successful bypass operation. While recovering, he designed a new organizational structure on a blank piece of paper. The rough draft would eventually evolve into the company’s first succession plan. A new organizational structure was put in place. The contingency plan came at an opportune time.

After all, Ulbrich had profitability problems at five divisions. When times are tough the first place to look for deficiencies was at the top of the organization. As part of the plan, Fred Jr., who was Chairman, President and Chief Executive Officer planned to relinquish all three titles. He was 68 years old and additional sharing of responsibilities by others was appropriate, especially since the company had become much larger. Dick would become Chairman and Chief Executive Officer, and Fred Jr. would become Chairman Emeritus in charge of setting up an Advisory Board to guide Ulbrich’s strategic initiatives and succession planning.

Operational issues were now the duties of Chris Ulbrich as the new President of Ulbrich. The company created a new position called Chief Operating Officer (COO) that would be a critical part of the management structure. The idea of a Chief Operating Officer came from a Fortune Magazine article. It indicated eight of the ten most admired and efficient large companies in the United States had a Chief Operating Officer solely responsible for the result of operations. In Ulbrich’s organization, the role was spread out between Fred Jr., Dick, Chris and Jay Cei as Chief Financial Officer (great-nephew of Ada Cei Ulbrich) and those who reported to them.

Jay Cei thrived in the areas he served in throughout his career at Ulbrich. In fact, he continued to play a key role in the company for over 40 years. His background and financial skills were of great benefit to Ulbrich from his start as an accountant and continued until he retired in March of 2023.

Each of the General Managers and salespeople reported through the organization to Chris Ulbrich. To accomplish this, Frank Best was promoted to Group President, Distribution Division NAFTA; and Vic Artaiz was promoted to Director of International Business. They also reported to Chris. All the staff individuals previously reporting to Fred Jr. and Dick, began to report to Chris as COO. On paper, the organization was ideal for a mid-sized operation.

The new structure also had to work in practice. As time would tell, Ulbrich was becoming more efficient and streamlined under a limited amount of executive officers. With more organizational agility, the company was able to cope with the challenges caused by increased sales and increased personnel. While all of this was going on during the 75th Anniversary year, Chris Ulbrich had an idea to augment marketing efforts and to boost the local stature of the company. Ulbrich applied to be a candidate for The Nozko Family Business Award.

The awards were given to family-owned companies based in Connecticut, and the competition was named for Henry W. Nozko, Sr. of ACMAT Corporation - the main sponsor of the awards. More than a thousand firms applied for the second annual Nozko Awards. Businesses vying for the recognition were strong candidates. Administrators from the University of Connecticut Family Business Program were slated to select the winners. Applicants were rated on the following criteria:

1. Success measured by growth in revenue, employees and profits; 2. A positive family linkage; 3. Ownership and management of the company by at least two generations; 4. Contributions to the community and industry through leadership; service and financial support; and 5. Whether the family had developed innovative or creative business practices to enhance the company’s longevity.

The Nozko Award winners were announced at a dinner at the Radisson Hotel in Cromwell, Connecticut. There were three first place winners: a large company award, a midsize company award and a small business award. The University of Connecticut judges sent an extensive list of questions for the award application. It was a long and tedious process to synthesize 75 years of accomplishments into the requested format, so Ulbrich formed an Application Committee. They were tasked with extensive investigations before answering each detailed question.

Victor D’Amato of the Finance Department compiled statistics to show the company's financial growth, Spider Bulyk wrote an essay about the company’s development and Tom O’Leary provided research regarding Ulbrich’s community outreach. The Packing Department at Ulbrich Specialty Strip Mill, led by John Rumi, sent the judges a sample product shipment with a letter attached saying: “This is how we have successfully presented our products to our customers for 75 years. We thought it would be fitting for you to enjoy the same quality.” The sample from packing prompted a phone call from one of the judges. He expressed his utmost satisfaction. Perhaps the packaging made Ulbrich stand out compared to the rest of the competition - because the First Place award in the large business category went to Ulbrich Steel. The family business was most fortunate and extremely pleased to win the Nozko Award. It was a compelling testimony to what the family, the business and its people had accomplished thus far.

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

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