Document Xzg9DaVgojR7XO3nOeNmozk7y

INTERVIEW WITH ROBERT TS CHANNEN (RETIRED) SHERWIN- WILLIAMS COMPANY CLEVELAND, OHIO DECEMBER 14, 1990 Interview Conducted By KATHLEEN MCDERMOTT THE WINTHROP GROUP, INC. & PATRICIA ELDREDGE SHERWIN-WILLIAMS COMPANY BK/lst Draft/1-6-91 JG?Edxted/5-14-91 N10814 WG: I'm here at Sherwin Williams interviewing Bob Tschannen and today is December 14th,1990. Bob, would you start out by telling us how you first came to work at Sherwin-Williams and all of the jobs you've had since the beginning. t v r& ****'?**<& -fr ^ ^ BT: Weld:, I came dewn-here `originally and--tadked to a gentleman by the name of Art Holton who was the technical director at that time. I wanted a job in operations but I wanted to have two years in technical before I went into operations, but he said at that time, "We don't do those things." So I said, "Well, then I don't want to talk to you." ftfe sent me over to see Mr. Mills who was the -- in those days they didn't have as many vice presidents -- s &l Mr. Mills, I think, was the Director of Operations or Manufacturing. -SE|r X talked to him briefly and .gasrhe sent me down to the Cleveland factory to see Mr. George Mies who was the plant manager at that time. Mr. hired me and sS? I went to work at the Cleveland factory. WG: We're talking what year? BT: June, 1950. Another Person: What did you do? BT: WHSfe 1 was a graduate chemical engineer and the first job I had was working on the time study standards, not using chemical engineering at all. sb after about a year and a half doing that 0007-SWP-0060342 they sent me down to be the foreman of the filling department. I knew where it was but I didn't know what they did. So they immediately made me the boss. WG: What they do? BT: They put the paint into the cans. The caulking into the tubes and all kinds of things. After running the filling department for about two to three years tStesa I was circulated throughout the whole factory, running all the operations. Jfoal i did go into technical for six months, a crash course, Ss- to learn a smattering about all the products that we manufactured. Then I came back unofficially as .pf^assistant superintendent and fches- in 1961 I became the plant manager. WG: Of the Chicago plant? BT: No, the Cleveland plant. I was moved up to headquarters as the general manager of manufacturing. six months I lived in Detroit or I lived on an airplane between here and Detroit trying to get those operations straightened out. Then 4*fter six months I stayed here and started managing all the other facilities around the country so my title kept changing. Right now I couldn't tell you what they all were. l-^cruess I became a Vice President in 1975. I was Vice President of Operations. And^ddten in 1979, jafcsseefipee, Mr. Breen came and then we came up with the 2 0007-SWP-0060343 title of Vice President of Administrative Services and Facilities. SS29S? I retired in 1987. WG: 1975, VP of Operations for all the plants? BT: Yes. Another Person (Pat?): That was the Acme Plant in Detroit? Pat: Were there great problems /c f-r^^cc v- / BT: There were huge quality problems, huge labor problems, huge productivity problems, huge management problems. i changed plant managers three times throughout the^five years. It ~&msr became obvious that there was no way we could make it an efficient plant. Pat: So when did you close it? BT: Probably about *78. And^we-opened"Richmond' in ~T9T6~^gauser$t was^j3as4calrlry-i{raki^g--autemot-ive pa the Richmond Plant in 1976. 7t was then that we . Ve opened Detroit and finally closed and sold the plant. 3 0007-SWP-0060344 WG: What brought on all the problems in the Acme plant all at once? BT: didn't come on all at once. I think people knew they were there but they didn* t^hare anybody to spend the amount of time "i+t-a&e. g^e that was necessary aft -theZ-Company fee--pfeavtr-thom- WG: What is the factory operations like in making paint? How is paint made in the factory? What are the operations that are involved so that we can get a sense of what the complexity is? BT: _jn its simplest form paint is a mixture of pigments, inerts, and t-teen vehicles such as latex, or a manufactured alkyd resins or oils ^/^^solvents. through various mixing and grinding means, they can take all those ingredients, put them together and come up with a quality product that will give you the Out-' smoother glass or ~tho_<rmaothesfe surface^ on-thg^-atrtemubile^ LfOt a* * )&**+**5^t 4e> Haage^*tAgive--gj35 a good appearance. Whatever appearance you're looking for, whether you want a flat finish, a high gloss or just a satin finish. Thafc=: $Sa.si.c*c4 It' s a mixing, grinding operation. And of course you do have to shade to a thousand colors. Whatever color tfggfc they wast.~^-; / , Pat: How did the Cleveland factory work? I only saw it when it was being torn down. 4 0007-SWP-0060345 BT: :L " i Vigf^r, t^he Cleveland factory was a very^nef f icient factory. Pat: Right, but how did it work? BT: Back to when? Pat: When you were the superintendent. BT: If you go all the way back they used to make the barrels. But we're not going to go into that. --tt-too^-waiF::gh'~^^ opgrat-jon. h a s a good work force.you could do just as well as some of the new factories that we had at that time. But the raw materials would come in on the ground floor, they would be stored there, they would be brought to the fifth Mi n i_il ijiim Til. where the materials Were mixed. WG: Were they mixed on an assembly line or something? BT: No. They^s. mixed in large vessels. They would be mixed in 200 gallon mixers, 400 gallon mixers, 50 gallon mixers, depending on whether you're making a 25 gallon batch or a 10,000 gallon batch. The materials would be mixed, then, from the mixers they would be dropped by gravity into a roller mill which would take the paste and grind it up. If you've ever seen [colander) mills where they're taking rubber for making tires, they just keep blending it from one roll to another. In this case, you'd be putting the 5 0007-S WP-0060346 mixture through two tight rolls which would be actually breaking up the agglomerates and making <2gwal fine and dispersi$l^' Pat: Would this be a paste at this point? BT: Yes, a paste. Pat: What you mixed upstairs would not have been the vehicle? BT: gg. Part of it. You would be mixing 30 to 40 percent of the final paint. If it didn't go into a roller mill you could add all those ingredients into a ball mill, /4^ball mill has small 5/aV^one inch steel balls in it and t7h~a/^t' if c '/ from 12 to 72 hours before you'd get the dispersion which you needed*, for- oswanple. If you didn't put it into a balliJBg mill you could put it into a pebble mill. Now a pebble mill is the same as a ball-^g mill except that it's got a stone lining and the steel balls are not steel balls but they're small pebbles. They're picked up off the beaches somewhere in Spain and it's a very hard stone aagQr that they use for grinding clear varnishes because there's no discoloration which you^SPget from steel. If you didn't put it into a ball mill or a pebble mill or a roller mill, you could put it into a [Morehouse] mill which is just very high speed stones that you'd drop the paint into and it jrtsfc blends it and squeezes it out through the stones. ibUbii-It. At the time when I started there they also had what they called 0OO7-SWP-OO6O347 stone mills which goes back a hundred years. Those are very slow grinding mills, much the same as you would grind flour. But those went out shortly after I Andthem-of- -course jthe fu. ^ improvement in the particle size pf the various pigments f ^various inerts over the years.,was--sueh-^that--today .ua_ dont. or miH&. We .oas? make pea&afeiy 80% of the paint ttea^fehasy-iimke today, agfcxgf" cQuroe/a good share of it is latex^ "tjg^^atee-Titahet in what call a high speed dispersion -^"that technique was developed about 1958~b@ 1960. WG: Was that considered a real innovation in technology for paint? BT: Yes. I did quite a bit of work on that myself when I was in the lab and when I came back into the factory I didn't tell people what I was doing because a lot of people would have been critical // . and said that you can't do it. It worked. v^c,: - (f Thas r^wsts^wfeere" i " ct ^ happened. developed a high speed dispersion &Vc.-'> i, the paint industry?per se^ put a lot more pressure on^ the pigment manufacturers to do a much better job of gdv-"> a more finely dispersed pigments and inerts which could be broken up very easy compared to what s o b o of the othi^-wag-. We say we do grinding, but the paint industry really doe^ not do any particle reduction. What yoa-Hfe trying to do is break the agglomerates down ti- c b^gausjB,_when you -start getting -into real--particle size- of carbon biaeks- or' -titanium--er--some of the**--othferfr \We don't begin to approach Jbteat. If we could approach that we could use one-tenth 7 6< 'S'C. nn _ 0007-SWP-0060348 rA V ,, the pigment that we use. WG: Is that something that R&D people work on? BT: forces of the particles to each other is lot of work to pull them apart. he cohesive reat that it takes a WG: Do those pebble and steel ball things run on gravity? Is that the idea? BT: Oh no. It's ^^t a cylinder'and they're j<-aet f'--u1mbling.7^ In V the case of the roller mills you've got one roll against another t+*v+t, "S~ 'lUst&y > .--r 7 rollj raga4rtot-1 another roll ^ they''re just feeding against each other under great pressure. In the case of the jfMorehouse^' mills, which--aren-H:--around--anymore, they still 'use^fehe for grinding mustard^ tha%^S^here,J:hey^tirigijRatod-. Sfeen t^eey started , -^c'i cxdi/.iT-i- g using the f <5.<nbmg'rujie for latex paint/' 11'c^nrothing=but 8 or 9 inch stones nesting just like two stones for grinding flour. -techniquoc and brouqhte-it^jdown-to^where--wo .could use ^ . Instead of running `SS' at 20 or 50 revolutions per minufe we were running them c at 1800 stre=0 revolutions per minute. The important thing i^ to find a stone that didn't fly apart. Sa^fclrroggh Whatever means you use to disperse your pigments and get it incorporated in the vehicle, hhayi affce!i-ithat you thin the materials down with 8 0007-SWP-0060349 ^ / --^ f J < /-< additional vehicle^or-* solvents to get it to the consistency 4hg yo^-^mrrt^^^Eb. Then you would start to shade the product to the final color and tfrejas^n.-warild^ adjust .the viscosity or the thinness Mi-sffi, y n> U >T of the painty rf-ggs^^tl. ;fiid brush it,andMo whatever testing /Ia^uJh2^ ,, hen it would go to the filling department. Pat: We started on the fifth floor, now we're on the forth floor? BT: No, we're probably on the third floor now.bcoouacnSte"fifth IS /hert, )ke --xr^ floor re hmc, grinding equipment, io heico an4 the thinning tanks are on the third floor. And the filling department is below all the filling tanks. WG: What kind of processes are set up to measure whether the material is thinned correctly or ground correctly or whatever it is? How is all that regulated? BT: We33L, (through various testing methods. Good paint men could f,1v*~^*TBTl ?P&ggjgg^ rub the painty between two knives and could ~i' tell you how good it Like a cake, if you're rubbing 4?t and it's still got lumps in it. Same way with paint. But they also had gauges where they would / C - f pour the finished product on it, draw it down, and they could see exactly what level of dispersion they had. 3qid~-|hey had strict requirements for this, depending on whether you were making house paint, wgrrhi <zt- Ms&iJL, wa 11 paint or whethar .^wng-wege making Jam- enamel to 9 0007-SWP-0060350 finish off a good piece of furniture or something. WG: Is there one kind of paint that would be more dispersed than others? BT: Oh yes. WG: Which one? Tell us. I wasn't sure which. BT: -W^l-j^Iouse paint would be dispersed the least of all. you want a flat wall paint you don't generally get into a dispersion. -That would be somewhat better than a house paint. |f you wanted to paint ^cabinet or if you wanted to paint an automobile that has to be extremely fine. WG: And hence the need for the highest dispersion. BT: <rba*H-e \h(ien I said sometimes you could make runs of finishes in a ball mill for 72 hours. A lot of those would be automotive y><s finishes because not only do^want the dispersion but you also want the color developj^^^' T WG: And how is color development aided by... BT: You continue to work on it. Sometimes you might have the dispersion you want but you don't have the color developmentase^yu 10 0007-SWP-0060351 / may have to 43m ..it another 24 or 48 hours. C'iW&eou.iL 'if*** Pat: The smaller the particles are the more color is. ^4 BT: TheScolor is developed. You can grind blacks and after 24 hours it comes out brown. To the normal eye it's black but relatively speaking it's brown. You run it for 48 hours and now it's less brown and it's getting black as you run it. You run it for 72 hours and it's really a jet black. After 24 hours you Lr, ' say, "That's not a black, that's a brown// ffe^ft's a case of where fU. ^ you're trying to get that "jetness." That's true of a lot of colors. Pat: Which colors would they be? Which color would most require the grinding to bring out the color? BT: Blacks probably require the most. Phthalo cyanide blues were very difficult to grind. Sometimes it's not so much a question of the development of the color but it's also the ability to grind that particular pigment. Some of the original pigments were jaa tejeyaibsliee and^even phthalo cyanide blues were very difficult yo v WG: When=ytt=sayy=JM>errib3re-,-'' ^mean hard to break apart? BT: Very difficult to break apart. Terribief-s^^s^ad-word. 11 0007-S WP-0060352 WG: When pigment comes to you does it come in chunks? BT: No, no, no. It comes in a powder. WG: But the particles themselves... BT: They'd be similar to your face powder. If you take your face powder and try to dissolve it and mix it up with water you^get a jy^sfcie lumpy sfrafef. ^^<5, WG: So what you're trying to do is even out that consistency? BT: S everything throughout the whole l-fefcng 35? the same consistency^ when im passes all the quality control meets^te~ specifications .set by either our lab or by the customer^ tfemaa it's turned over to the filling department. We then fill it into whatever container is specified. It might be a tank cars^ it might be a tank s&L wagon*, it might be drums, it might be five gallon pails. Back in the early '50s, early '60s we were still filling quarter pints, half pints and pints. At that time there was a lot of demand for t-.frgfe- but--youJ-d--go in- and--you-1 d buy--a quarter--pip*--, which isn't vp.ry mnnh -pn'nf-, Vm- Jin EuropejA quarter ei -a pint stilly pretty good beeauco that1 e^all you-, need to--point _o--M.iryele. And it. It--jtrst::::dQpshdssBijan --tffta-t- thowwsiT*'; 'Vfrre. Now, I don't think we fill any quarter pints. Very few half pints. We fill some pints. |the filling job is 12 0007-SWP-0060353 a lot easier today than it was then. Pat: Bob, what sort of products /'would Qtoday} have a half pint or even a pint? Nothing that you see in Sherwin-Williams store. BT: and I think we are still filling automotive colors in pints /'A'" prepackaged automotive colors^quarts are. very prevalent,,Hgg I sti^. think we''pufc'quite a few in pints. '3? may^bfirdwrohgrfeut . Because, to finish an automobile that had a damaged fender, you don't need a gallon. Quite often all you need is two spray cans. You ^oould--jaake^45 apray^cans--out. other companies are still filling quarter pints and half pints of specialty products. WG: Why? BT: ' wetl, Jx' s a very high profit item. Some peojafee will quarter pint or a half pint of a special product. I think maybe- Ace Hardware might carry^some special colors in hfeaae. ~ t;very expensive proposition from7an inventory -e iC' standpoint. You can never guess what the demand is going to be^ostt thaee-. /tf/l`AASo~r `Z***^. There's just no way ,4 4% one of the read-heavy v-. products in quarter pints and half pints. If you refinish a .table you could III1 get it all sanded qpsam^nrglnowaftr- and put on a coat of^furniture finish^^agjgaiLL^.. /- 13 0007-SWP-0060354 Pat: It was a varnish stain. So you could put on both the stain and the varnish at the same time. BT: It looked suitor. <7 \**r I don't think we make that anymore. WG: Now at the various points in the process you'd have somebody, presumably a union person or some kind of production person, who was doing the work and then what, an engineer or some sort of testing person who was around at each point in the factory? BT: ^]ge3., the technicians. They would be m the laboratory. WG: Who was checking the specs at each point? BT: The^person who was doing the work. Whether it be union or non-union employee, it would be part of his7job to see to it that ~h=met the necessary quality controls.uu"t WG: Now has the work that you've described in the factory changed much over the years? Like, for instance, how it was in the late '50s until the present. )i>s. BT: JWsjfclr, we're certainly much more automated. WG: Can you tell us about that? 14 0007-SWP-0060355 BT: When I first started with the Cleveland factory, for example, a 2,000 gallon tank was preberfriy the biggest tank they had^cmsis^J-d en I became plant manager we put in 8,000? gallon _ tanks, Again, people said you can't do this but we^d4da=* a4^'#'iET<mnmyt rwt navy.// TInn^^tKhheo early days they said you couldn't make latex paints in more than 300 or 400 gallon tanks. Today we make them in 10,000 gallon tanks. We shaded everything strictly by eye at that time. Today 3 that probably 90% gf the shading ussr is done by a person who puts the various ccjeer^al^naants into the tanks, computer > the.. in-gtramerHsatiron w4-M with the assistance of the color eye, /4r*i-t.w 'YltjU*, tellg you what to put in A WG: When did the computer technology come in for pigment? BT: You mean for shading? WG: Yes. Excuse me, for shading. BT: That evolved. We had a man that was most instrumental in Sherwin-Williams by the name of Sam Huey. He saw a real opportunity and he was in charge of our quality control team back then. He continued to persist and then the company saw the merit in it and set him up in a special department to do nothing but handle bfer shading /wruiaaiy instrumentation. WG: What year are we talking generally here? 15 0007-SWP-0060356 BT: I'd say Sam probably started on that project probably about 1955^ tb^ugfe*=t9-6K>. c^^S5Sh jt was very crude at that time, but 'e~~r uSa<. A-v-etj. tbeE8sa6 some instrumentation Aat--that --time tha3^fac=*-asva4d?able. There was such a variation in the pigments.and everything else that fxxxxxxr 'xrit became a difficult -piese--jof-.equipment-- to use. . the * -> (^4x_pigments got better, as the factories got better controlling the bases today then the s^ /'ll c-2:Hr-U l M.& probably 90% shaded i&se with ir to the point where T&-*> instrumentation. That's throughout the pa.int i.ndustry, ^feht was a very large change. &lo^/a~r -tfdL cy.d-=ftot blindly accept the resvilt of tfcs&te- instrument. // And/t z u -c ^x You e<'H& -UsC-Jstill turited-aresnd-arnd- compared the colors^se^fe^. in case somedne misread what the computer said or put the wrong materials in t^^h^^^^at--thatd^4>/hat^4.t- was^fehen j/ou just don't blindly go down the road and say, "Well, that's what the computer said. Ship it!" It's wrong. ----r * C--y piey still have to visually lonh-.~at ..this. The instrument can' t compare to the human eye. see variations that an instrument can^->!^rt The human eye can Pat: I'm going to quote you on that. Some of these computers that read the little chips -ad supposedly come up with the &aroe color. BT: Sam Huey came up with the idea freezing all of our paint chips because all color chips change. YsS" pwfe- them in UHf-iU. /; *< they'll change. H.ang a dress in a closet and des^sh^siseiisar/ u changed, j&gp'phe same way with color chips# so^tehen Sam Huey and his group came up with the fact that if you freeze the color chips 16 0007-SWP-0060357 the color will not change. Pat: Had nobody in the industry done that before? BT: No, I don't think so. Pat: Is that so? BT: I don't know if Sam Huey's still alive or not? / H/M Pat: Yes he is, I interviewed him. interviewed him. At least two years ago I BT: Another person that might have a little more detail on that is Chuck Sherman^, at thco-store-. Chuck Sherman up in Chicago. He was ^fehat^group f carly-fflg?: Pat: [Bev Danko] was in that group later. BT: Later, right, but not that early. You could authenticate that a little more. WG: So we've got size of the tanks, shading, what are some of the other things that you think have changed since the early days? BT: Well-, I didn't go back to making the resins for varnishes^jasd17 0007-SWP-0060358 That has also changed pretty drastically. Of--course Vmen I came with the company they were already making [alkyds] in large ? it < Ci 6*3*0 kettles^but at the time they were st-iH making resins in; 150 gallon /pots over open fires.- Over charcoal fires. They would be set up in oven stalls^ if you will, with open-doers so they <%(ould push the resin materials over the coke fires and then they would keep stirring it by hand and come back and check it 10 minutes later and f stir it by hand, and if the f^e^s getting too ht^ they'd pull it offhand push it on and pull it off --A& /2&g&&ic. '7 ' WG: How long did it take for something to cook up? BT: 12 to 24 hours. It was a three shift operation. They told me they use^ to have a fire every day. Theytsjyast have a big heavy blanket when the fire would cssme they ^ just cover the whole CO-zLi.--/ kettle. Pull it off the fire and 1 <6--0 C'<- 'f ket ad=ssePt yu'. gpt too excited about it. l WG: BT: The material itself would catch fire? -i-C-- /-t y -s- K Oh sure^because you've got smtoent fumes and-sheff coming off. ''m It got to be pretty/common. WG: So now what do they do? BT: Wej^tf I don't know anyone that's large in the business that 18 0007-SWP-0060359 iB5giEaimsc4Wi!ii uses that method anymore. Those are all shut down. use all closed kettles. -They will maJje resin batches , now up to 10,000 gallons : **wo2. --ithe market nas / ffp everything Ji. s^-gust^tandar^s^rmctpae/- \ -if 'f~K <-t`Z.<.tZ-C-^r <*:/^szcl^rtzL exp>aannddeedd_^aia3j^sep>. We uu-soi- cb make 40, 50 Becausemillion gallons of paint. I don't "know what they make today. 125 million? j|3g I remember putting a production^together for 1968. I think in those days manufacturing did the forecasting and sales tried to sell it. I remember 68 million gallons in '68. THat was our motto that year: "68 in '68." WG: Did you reach it? BT: Didn't quite make it. I think we hit 67. But I don't know what it is today. That was a lot of paint in those days. A lot of paint. Pat: Well, we don't make our own resins today that's another change. BT: make a-H our own resins. WG: We do? I thought we bought all our resins. BT: We don't make latex resins, Pat: What other kind of resins do we make? 19 0007-SWP-0060360 BT: we make all the [alkyd] resins. Pat: AT what factories? BT: 3217 make them in Chicago, we-make^thom in Dallas, we=^aafee in Richmond,- Kentucky. We used to have a resin plant in every plant but we jagg gradually shut^them 333: down. -3-HSEfcjpecause of the economy of scale. WG: Can we talk a little bit about that and how the operating structure has changed? Because we've heard that things used to be that almost every plant made lots of different things and that's changed quite a bit. BT: When Sherwin-Williams started buying companies -- when they bought Acme, Acme was able to make everything that they wanted or they needed. Then when we bought Lowe Brothers in Dayton they made / ~t~f' jg^verything ^they needed. And then we bought W.W. Lawrence in >tew tCn -/ii. ^ ^ ^T^dersey . bought^hat plajit-.OJi-PittsbiirgSXyCan-M:1 think-of--the - -.now. "Pat: W.Wv-Lawrence. Lucas was-4n [Gibbsborough]. BT: That-wa the. same -as--in -Gibbsborough too, -right? And of course l^e had a plant in Oakland and a plant in L.A. The plant in Dallas was always Sherwin-Williams. But- each one of ^hose plants 20 0007-SWP-0060361 seemed-wise t^ ^o-^abead=^nd-feey to pjjoduct / -Fi^/L'ci;* -ic hfc*'* ?-*'rhen I -eame -uptown in '65 a^d*- we started to take a look at <V -`- 2 everybody making lO-Qb^geiiens of a product^ or &Q gall-ons--or--50/3-- gal#&&s We started looking at economy of scale. And that's when we started to specialize. The same way with automotive. Package colors, just a huge amount of colors^ AH3 we were making them in Detroit and Chicago and Los Angeles and Dallas. We had large quality problems because they were very demanding, products and the / raw materials were rather unique to them. iStS-When we started to look at the cost of carrying raw materials, the cost of , _____ manufacturing, the quality problems and everything we -had - we- decided it was time for us to specialize. And-u-f"coursejjby the early '70s we were able to computerize our inventory / management. rS3-l$e were able to put together some cost models which V'S i'll would tell -you which was the^Gheapest~*#ay==of--doin<f^/uhc#:&r/. ig 'fiii That's when we started to say, "Okay, with this plant we'll do-^tehis.. /^and with this plant WS4=^3lr-==de^*feat." Instead of having five plants making a product we'll have one plant do it in much larger quantities. Of. coursetime shipping costs were much lower than they are now. I think that the pendulum has actually swung the other way. Because shipping costs-' are so much higher now .that-^sE would--sa-y==that probably--jj^o f_ -iQ^ears--ago-^fehey started--saying-; "i?EL^ it' s ?cheaper for us to start producing this in^another "factory, ^than t6 jus^ try -to. produce dt in -one." "Sa lt's a constantly moving situation. 21 0007-S WP-0060362 WG: And where are we now? Are we more towards strategically locating certain factories dedicated to one thing? BT: I's say we?re still very specialized. Pat? About when did you say the change would have come from diversified factories to dedicated? BT: Probably would have started right around 1968 to '70. WG: And was that in concert with any other major changes going on } in the company or was it just something within the operations group? BT: WSiir, ^n -atemt 1968 or 1969 we put together a 5 or 10 year strategic plan for operations which would tried to anticipate what our demands were going to be. We took a look at the facilities that we had, many of th^,2?S to years old. Many of them, such as the Cleveland factory, very inefficient, because you can't handle a drum 19 times before you get it to the customer. But that's the way it was. You can't take materials up onvelevators It just became a herculean task to try to make those plants efficient. ~SS-;4t that time we put together a plan to build a new factory in Atlanta. Of course we built a new automotive plant in Richmond. Pat: Garland was before that? 22 0007-SWP-0060363 __ ^------ii--ni -jn,|CHa4Wa;i^|t) ____________ _ BT: Garland was opened, the~new`,,p,lant wass=opgfFgd in '59. && $.hen it jufPE became obvious we had to shut down the Dayton factory, the Detroit factory, the Los Angeles factory, the .^fGibbsljorougli.} -rTyiuzAzS'.. , factory, the 14ttie^=cEre3rt plant xn Pittsburgh, the W.W. Lawrence Pat: This was after your strategic plan in '68? BT: Yes. built the new emulsion plant in Chicago, (CCu-^- s . unfortunately that's where we jput it. Those jware--the--three -free standing---ne3fc=-plantg. Now. we made millions of dollars of modifications to the gfei^gr existing plant^fcedoyr I would say that the manufacturing and operations people today are still taking a look at the situation of do we produce everything in every factory. It's -gHHS a very logical thing. You must do that or else you're not going to survive because of costs. WG: It strikes me that you were thinking strategically somewhat earlier than the rest of the company. BT: I won't answer that question. I'd like to think so. / WG: I don't mean to put you on the spot at all but we have been getting a sense of in our interviews is that strategic planning as such didn't really come in until later on, until maybe almost a decade later with Breen. But that's why I'm interested about 23 0007-SWP-0060364 certain strategic planning that was going on earlier in the company. BT: t's what we did in operations. I 'yt&c.***- `~S in the operations end, not the end of the business. WG: And so the strategic plan would have covered operations all kinds of paint, including the automotive division? BT: 'Sg&jrCs. Pat: It would be nice to see a copy of that. WG: Is there anyway we could get some documents related to that? BT: I don't know. I've thrown most of them out. At that time it was not a formalized type of document that you know today. Many things were done on the back of an envelope. I'd say that the plan I'm talking about right now, we had it on three sheets of paper. It was approved by Spencer and Baldwin and Prescott and I guess the board. Basically, that's where we were headed. WG: And just to recap that, the idea was to begin to think about creating economies of scale by consolidating different kinds of operations, in particular, plants. 24 0007-SWP-0060365 BT: '^Skay-, but it's also anticipating the future growth and the fact that there' s no way that we could continue with those facilities" and be efficient 25s^^E,^=sf3ro--oW'. The old is great but eventually you've got to eliminate it. // Pat: Just to recap too. So we closed Lawrence, and Lowe in Dayton and Lucas in [Gibbsborough] and L.A. What was made in L.A., everything? BT: L.A. was our west coast automotive facility and they made package colors. I'd say that probably 30% of their capacity was automotive. gh t, Bat-they did quite well. .BHfclJhey made latex, they--<al s<- made house eZZt-X paints^ They made tbe--whol--=rriTTe~*^rds raaade i t.jh>aajnef aga ^2{' very^--very-4rnerffjjrxent. 2? - Pat: And then from that came the building of [Morrow] and the Chicago emulsion from that same plan. -/ BT: And the Richmond plant. And -their;--ef--eou-rse, Kre made modifications to^Newark, to ---make huge mod^j^tafeaons to Oakland ^tneho^teit? ') [Garland] as the -years went. we had to on. That . .. was mostly in the filling and finishing end--of ity.-ef--course, --at [Gaa^a-nd^,. Pat: How about [Dombre] /unclear/. When did you play with that. 25 0007-SWP-0060366 A long time ago, right? !J ' Jr \ (,1// BT: A long time ago. Basically we got that during the [Rook]. \ Pat: You got tkht from Hemingway and company. BT: Right. I really don'V^know anything about that. Pat: Okay, so then it didn't come under^-yQur...with insecticides and such. BT: That's right. WG: What's the difference the way Sherwin-Williams makes paint and the way its competitors make paint? BT: Not much. -Not uraesh. WG: The processes are basically the same? sSH <e J -c <<. ic`i4 t-i( < <: C BT: Right. The basic equipment is pcethy-msch-the^same. / WG: So what differentiates our paint from theirs? BT: That would have to be the formulations and -assn the quality control. That-'-s rthe"-basic difference. 26 0007.SWP-0060367 WG: Within the different lines of paint within Sherwin-Williams, what differentiates the paint? Again, the formulas? BTThe formulas. WG: So different amounts of time putting it through those processes you described to us? End of Side 1, Tape 1 Beginning of Side 2, Tape 1 BT: ...which would mean that you'd have much better coverage. WG: Coverage. What do you mean by that? BT: ( .^2 / _ 7 ----- ( < cz-- i'fc-ti-i ''t *'< AX It means that you would have, let's say, a riiuch wider paint, er--if-^you--were::7go ing fco .paint--a-^material--ObVer^--a--whoie=pra4*fced__ sur^-ce-you-eould cover it wiLlt-^orua coat-. Some materials you could not cover with one coat. Some people don't mind spending $22.00 for a gallon of paint. ,^me people only want to spent $10.00. I always remember a story of a woman that told me, "Gee, Bob, I just bought some paint. They had a two-for-one,, sale. What so you think?" And I said, " Wi3@P, |.f I was you I would buy Sherwin- Williams." She said, "What about this two-for-one sale?" I said, "If you're happy with it and that's what you want to spend, it's up to you. But I would but Sherwin-Williams paint. And I'd always 27 0007-SWP-0060368 the best paint I could buy, because the labor is the real cost." r^i^hree months later she saw me and she said, "Bob, I should haye taken your advice." I said, "Why?" She said, "Well, I went to wash those walls and all the paint washed off." This is the thing that people, for some reason or another just don't fully understand. Two or three or five dollars more for a can of paint ___ ____ _ _ that has got so^mach quality in lt> ^-6<u WG: Now you described to us that in the late '60s, early '70s a vbmsoh of plants were built or dedicated and I suppose the old ones closed down. What xs present, ~*=/\ say about when you retired, jdjate of the plants and equipment in the company? Are there new ones in the works or did you know that, or are they somewhat older and in need of being updated? What's the present status of the different plants? BT: I'd say the present status is that they are very up to date and very efficient. We still have some old plants. I would guess that, long range, they will eventually be closed. Our Newark plant is still 80 to 100 years old. Our Oakland plant is still 80 to 100 years old. Pat: What's being made at Oakland now? BT: All Latex. And that's all that's being made at Newark. 28 0007-SWP-0060369 That's probably the reason that they are still open. TK^fegfcb-, is much simpler and easier to make and manufacture. The number of raw materials are considerably ifeewer^ than it would be for a full line of oil paints. And I say^tfeaefejaecausq^pi 1 paints may have 250 or 300 raw materials. A full line of latex paint may only have 60 materials. ^en in an old facility you can make latex paint very efficiently. ---rT the key to j C-- cost te@s4%- is in the filling and finishing. ThcrtYs wherebyou probably two <sSs three employees in the filling and finishing area for one in manufacturing. There's a lot of material handling. You've got to handle all the cans, yoa-^W -<jbt tt^iandie cartons, yoif'vc^get a tremendous amount of equipment to wash up. do have the capabilities of automatic filling machines. I mean that's improved greatly. Aufeomaticr^fi-Hririg^^ ^ you've got automatic packaging equipment now. Cartons are automatically sealed > eve^gefe^-rt^tO'point-ifeiaBge- fihe^pnuls ion plant in jCbi-caqo, the five gallon pails are automatically or mechanically put on to pallets. $ien you get the proper scale and you can make the investment, you^pome up with ^ very efficient operation^'.- That's probably one of the main reasons, other than qualityy, thhaatt//iitg specialized. are- -this. > Arv---f^eonrse, pjg'^hr;~he~e . a.zt..plant 5 is- already . Y.y .Y<v v ` Ul /~ /* -****'*<7 written off^you don't have huge depreciation costs ,460^6?/. You go out to build a new paint plant for 25 or 35 or ,45 million - '- - .. , - ,,, . i- < dollars, you've got to pay for that plant. These old facilities //' are already paid for. So it's just a question of how long can you ' {' i^f-T continue to produce economically at that facility and produce a 29 0007-SWP-0060370 quality product ^ that--you--want /anulear/'. .-XQU.rrhave- -to--make ~the_^ Of course when we acquired Dutch Boy we acquired some different facilities Pat: Baltimore and what else? from Desoto. I'm not familiar with those so I won't even speak .- A about them. I've been in^thefo andsT1-' v ^j i t^eem3Sem but I won't speak about them. I guess in the paint factories, that's about it. Pat: What happened at [Hubbard]? Was that a can factory? BT: That's a can factory. Still is. We ha n factories there, * 'llr1" k/ [EmeryvilleJ, XElgn]. We_so-l-d [Elgen^T--we=sol-d -[-Hubba-rd-] , we sold the-SJggSss can business. WG: The sale was based on the idea that it was simply not good investment any longer? BT: I think basically that's what it was. WG: Where there other consideration? / BT: Talk to'.fcC iclear/ ] 30 0007-SWP-0060371 WG: Okay, just checking. I want to ask you a question getting at some of the big picture issues. We've been looking at, and you've been teaching us about making paint ancl paint operations but I get this sense that for many, many years, almost a hundred years, it seems like paint was a sort of, not a sleepy business, but there wasn't much turmoil in it. And it seems like in the last 20, 25 years the whole industry has really been shook up. I wondered if that was you sense of it and , if so, what were some of the things that were impacting on the paint business? BT: I guess just competition, over capacity and price wars. WG: Can you talk about each of those things? BT: Marketing people could probably talk about them better than I can. WG: Is there a way that this affected operations? BT: We could never make it cheap enough. To that extent operations had to become even more efficient. There were times when our raw materials cost was as high as yhat they were selling it for. WG: Now, when was that? 31 0007-SWP-0060372 BT: Many times. WG: Can you remember when it first happened? BT: pgg, I think that's something that happened periodically. `AnZT t was particularly true when we would do big -bug-jness. Traffic zone paint, for example. By the time we manufactured the resin and bought the chrome pigments and bought the inerts or titaniums or what have you, the raw material cost was higher than the competitor was selling it for. "SRP^sbmebody had to be buying better^ <S>r else someone was using products that did not meet the specifications. All kinds of ways that could have happened. Pat: Did this mean that at any point that the quality, we're talking house paints now, of the products went down because of the crunch on manufacturing? BT: No. Not because of manufacturing. You've got to realize that, from 62 to 70% of the cost of the productsis the raw & materials and the container. Pat: I meant because of the raw material. Bepause with the crunch that manufacturing is between the raw material cost and what they were asked, to make the paint, as you said they couldn't make it cheap enough. Like in the '70s or something. 32 0007-SWP-0060373 &T: Well, a penny saved was a lot of money. If you're making 60, 70 million gallons of product, a penny is a lot of money. If you could save a nickel, that's about 35 million dollars down to the bottom line. And that's the thing that we fought constantly^-was pennies. That's why the pressure was on the formulators to try to find a way to keep the same quality but was there another material that -put into that product ^was a penny a pound cheaper or a nickel a pound cheaper. That's another reason why we went to larger batches because the way our accounting system works, when you manufacture small batches, it was very expensive^,fofepa.4nfc. -Sut^s soon as you started 1,000, 2,000, 5,000 pound batches .manufacturing were _ _ _ ____ jSsCsometimes we'd make a 300 gallon batch and bSgs^wsjd^Sill -idfoll-with six months' inventory*. Sometimes you'd have to eat it because it never sold. That's the other problem. WG: It never sold because A ,/ Pat: What about the perennial problem I kept hearing about not having a schedule so we ended up in July without white house paint or something like that? The whole scheduling during the winter. BT: --Ws?1 ^hat was a case of where you could not produce enough to meet the demand. We always said that you could make a batch every 33 0007-SWP-0060374 12 to 24 hours. It was never a problem but every factory only had 20 tanks for white paint and if you have a hundred white paints to make and you only have 20 tanks to put theu in then you can only get around to it once a week. So it wasn't a question of not being able to make it, the question was trying to satisfy a hundred demands and only having so many tanks to put it ins<* That was always the problem. Plus the fact that the high volume, because of inventory management, the stores could not begin to guess how fast it was going to move. The painter would come in and say, "I want 300 gallons of this," and he*d wipe him out. The next five difficult period. Pat: When was that? BT thatguess that was early '70s. manager placed his order with the assistance of the computer printout. He would place his order on Tuesday and he would receive /O . > it every Tuesday morning, - letasrrshy. Instead of one shipment a month, now he got four or five shipments a month. When we were on the monthly system he would have an emergency order every day. And 34 then he would get an order and he would find out that he didn't get this particular product, and so then he^would reorder it and then reorder lt^anci he-wanted 36--iT:Qns~ but---cmit&-Joften he-^i^ht=havg^> yj6 n-f-ct*. < * 250 gallons on orderJ!or 50 thihkijfef that^ay_Jtiaioi^^L^e--trr-oT?n'--Qrg^T^Td->. 14-^rX^S dLy^ti&r : * AGd-thejnJdiaLjaappens-^-s^\i^--taJL_a_Jj3Qk.-ah-thi-s--end^=sa.y, "0h the <^>tnan/is tremendous, make , 000 gallons." Then all of a sudden we'd /?\yyu*t&.J-! XX-3.-y0%f~ * _ start shipping and hed-eu>y j-^Hfull, w u Quu-* L VdiiL-it-now^V So phen we went to the weekly shipment which I think improved the inventory turns in the stores and it gave the factories *z more realistic /Jt'-'tlc -C. ^ c^rO-^aJ^ demand figures. Beoause^the yotho^ way we strictly operated on^wfeet- c*~ we sold last year and what people think was going to happen this J year. Wer say, "Well, let's increase it 5%, 10%," or what m??., -you-r --`y WG: What had changed? Something obviously had changed to make the old system obsolete. Was it because paint was going on sale or people were buying more paint so that you couldn't simply say, "Whatever we did last year, let's just increase it 5%." I mean, the world had changed to affect operations in the factory and I'm just trying to get a sense of what that was. BT: -WeEfe, I think one thing that changed is7 that we went from 300 stores to a thousand stores to 2,000 stores. That was a huge change. When you start putting 3,000 gallons of paint into a thousand stores thatone thing, when you start putting it into 2,000 stores obviously the question is, ''Can-we--get-2SB0--gailons2J' i35 ' 0007-SWP-0060376 BPWMiWBiWTOfciiaMittrfiMM!iiaunm.attW.^ujBm^ -TtHHaagh better inventory management. We spent a great deal of time and money on inventory systems and they're still using the same, probably modified, systems. The branch manager: has more say today, j j> In these^ays he didn't have any say at all-^-e*^#.*#**^ WG: He was just shipped paint. y*Ce- 4^-i- ' BT: He was shipped that paint an^e^feWxtSfcAfc. He had the ability to return it if he thought he had too much. Thoy^xdn^lF^KFve a who!e^--!<>te^^f^rsarfe^_so. They are treated today more as an entrepreneur, as if it's their own business. They're held accountable for their return on their assets^in^pay. at that time. 7tfe.it They weren't WG: We've heard in other interviews about the distribution changes. For instance, at a certain point Sherwin-Williams paint, I guess its the Kem family, correct me if I'm wrong on this, Pat, but it began to be sold in places like K-Mart and Uncle Bills', the discounters and Sherwin-Williams paint began to go on sale. People could buy it on sale and I'm wondering how did that whole change affect your side of the business? BT: We shipped more paint to Uncle Bills' than we did to our stores. WG: So was more paint being consumed? 36 0007-SWP-0060377 BT: Absolutely. Like I Said when I came uptown in '65 I think the company was making maybe 50 million gallons-and . ,,0 1 `lc?. saxd--an^L6 8 ,^^wasL_ taikifig_j 4S I WG: But this paint was being sold at a discounted price than from what the paint had normally been sold at. Did that put pressure on your operations side of things? BT: Oh^sure. Every time they's run a $3.99 sale they'd run out of paint but they would never order enough ahead of time. WG: But did it put pressure on you from a point of view, "How can I make this paint and still make a profit on it?" BT: No. WG: Why? BT: Because we shipped them the paint and they priced it the way they wanted to. Our goal in operations, we didn't worry about what they sold the paint^oJiafe^afe was to produce that product with the quality that they wanted, when they wanted it, at the lowest possible cost. WG: Has that changed now? Is there more attention given to the ultimate price that the stores sell it at or not? 37 0007-S WP-0060378 BT: / ' t , jbhe manufacturing departments could lower their costs a pennhy^gallon or two '/t C1-tt-i- zZ / thatts^-ar^hage `amount. o cents a gallon or three cents a gallon -- L Vz 'iLkLi'-x^c^ .7? If it lowered theipt distribute*o: n costs, -if C<L-dht*i^ i-tsfeeasEced-thei* transportation costs, -each-f=these--el-ements=-hav-e-- VT"5 '`/fly. -- *<- gcd^..to-be-aAl-ad4ed~nip~and^we -l-eoked- at-each--and-every--Jomneo--en-ff--ffechheasep--J I eiementsv It used to be that if a branch manager ordered a special truck, we'd spend $300 to deliver it to him, and he didn't make $300 on that paint. But he insisted he had to have it and he didn't pay the transportation bill. That was paid by transportation Going back to in Cleveland That's different today. . putting more .., v/~ /*/ responsibility ' eut--=fehere. Manufacturing, regardless of what the sales department sold it for, thfij(Urwoutd.-^sid do everything they could to reduce their costs. They would reduce their transportation costs, working with the Sales department to try to see what we could do to improve on that. When we w*sH-Q^m a eeife month .doliietapy, that- was^p?etty--cute- because we shipped everybody a -fcgueklaad of paint. They didn't know what to do with it. They didn't have any place for it. When we went to shipping to them every week, instead of shipping them 4,000 gallons of paint^we shipped them 1500 gallons of paint or 1200 or whatever it was. They could unload it easier, they could put it away easier. -They coul-d--have some .-.free--time. When we ' * * shipped them a full truckload of paint they had to go out hire three guys to help them unload the truck, meanwhile there's nobody out front. They were very happy to see this once a week delivery. What's that outfit out there in California? The one-like the Uncle 38 0007-SWP-0060379 ''V .<-:S Bills-L5=-^They biit-a j?1 anir^in~Texas ,__Not doing to_o_wg-l5=3;ateiyu___ -tyZ*/s-**<.*v^j Stajadard^-Brands-. W&ssn--I went out there and les^asd -What their ^-- > *<^zei operations wage in the early '70s* .hey had a shedthe back of their store ahd the truck driver had the key to the lock on that door. At four O'clock every morning he would drop offW, 60, or _ Vr* Ls-fa&Z.iJC. u,--bz 100 gallons of paint, or 200 gallons^ At`eight o'clock in morning jialu^^they opened the doors for a customer the first thing they did was they unloaded that shed and put everything away so they didn't have any inventory in the back room. Everything was on the shelf. ?S8 js^ien the.first customer walked/**he had every product in its place rc every-merm=na. Now that's every day. M^^hey only had 32 stores. That's the ultimate, I guess. But imagine going from a 4 week schedule to 1 week schedule down to a one day schedule. WG: It's like Just-In-Time. The Just-In-Time theory. BT: Yes, you hoped you got it just in time. WGj We'd like to get a picture of the company during the different decades and wondered if there was any sense in you mind that the different leaders of the company had a particular philosophy. For instance, you were around during the Baldwin era. Was there something that might have differentiated his approach from say, Spencer? And then, of course, the Breen era we've got a better fix on. We're pretty sketchy about those two decades intervening and I wondered if you had any insights on how they affected your 39 0007-SWP-Q060380 part of the business or the business generally? BT: $HS:, I'd have to say that the Baldwin organization was not very dynamic. Under Steudel rules maybe less than that. I guess all they ever wanted to do was make paint. I remember we talked about it a lot of times that when Steudel came in had they turned around and had a real sharp technical person leading the company in the area of chemistry we could have eaai'ly'iigvc been a Dupont in the United States. "IBut When I joined the company those decisions Were long gone. And when a lot of other people joined the company that decision was formalized. Because we were in the chemical business, in the pigment manufacturing and a number of other things. So we just slowly got rid of those particular businesses. Rightfully, because we never had the economy of scale where we could truly compete. When you start looking where we are and where we've been and where we think we wants^to go those parts of the business, dnot fit. Trying to be totally objective ,/melear/-. Xfcf^really never had any, so called, strategic plans ifTryonswiU.. We started some of it but it was never carried out, never enforced, like it was finally when Mr. Breen came on board. WG: Well you had the one in operations that, you mentioned. BT: y / <- ` `c I guess^-maybe I prcbabl-y put the first "Management by Objectives" program into the company. That was pmofeafeiy around '73 or '74. Every plant had safety objectives, costs, quality and 40 0007-S WP-0060381 service. A number of plant managers didn11 make-them- because they didn't meet those objectives. 'So--Impress I always felt that we were beating ourselves up but I'm not sure other people were beating each other up. .<t,, f--c< > c.v. -< < I--guess/they-wefe-V T'1me'6r^lreyTwere,--but. , c- .not--m-the--same^jray. i And then, of course, when Jack came m there " '. ' " ' , A. ' ' /as no question about objectives. /$e just formalized the ) ~ " 1 ~~~ " whole procedure^/ Plans would be put together, they'd be put on the-^ ^shelf. I don't think top management ever looked at them. / Pat: You 'were a^^siafeefic plan <&f/l968. You knew about it but you were never held to that. BT: I held myself to it. course. Xj Zaj x Q-c CI'd /unclear/ ESF6- top management knew about/; of ave--a board of operations meeting every other week. 'AHd^s^^cputsse Chicago was treated as a _y->, i/` 'J?/ >c t company all o^ibo-own^ccfie^ phe general manager was considered part of the board of operations. would come in from Chicago every two weeks. ji^e'd sit there and review with the marketing people, the purchasing people, everybody in the company at the corporate level. We would review what we'd done, what we haven't done, talk about what our problems were. Colin Baldwin once in a while would join us and then when Spencer became the CEO he was in those meeting every other week. That was probably--about--a- 10 .person dgocaaslon. With all the key operating people, the technical people, the manufacturing people, financial head of the company. marketing, the , 41 0007-S WP-0060382 Pat; Hu would always be there. BT: J<\ yes_, ^ . WG: We got the sense from one of our interviewees that Spencer came on like a ball of fire. That people felt like he was really trying to change things. Was that your sense of it too? BT: -^gS- y4s. I think the thing that was lacking was the follow through. ^gdj|f it wasn't done then somebody/had to ^sf. I think that's one of the major changes. Nobody likes to let anyone go and every one waits too long. I waited too long^-but my feeling was I wanted to be as fair as I could be and if they want to criticize me for waiting too long, so be it. At least I didn't pull the trigger too quickly. My feeling was, I had to work with the qsaa- person to make sure that person had every chance he could have. -Beeause "Jf you can't help them then it's easy to fire somebody. I think that's ^yisraraty one thing that Mr. Breen does. He's probably one of the best trainers I've ever seen. People don't realize how much he's teaching them, just through his methodology of questioning. I don't think we had as much as that through--~any--of-the other rff" -the- CEO's. It was very formal. Shirt and yies and ^always have coats. Never went to a meeting without a coat on. Made sure your hair was combed, teeth brushed. You think I'm kidding? Pat: No, I don't. 42 0007-S WP-0060383 BTt There's one gentleman Cu who brushed 7 every time bbtgertHPforr re he went to a meeting. You know him very well so I won't mention his name. C-Ls He's gone buttery interesting man. So I'd take my coat off and it 4 didn't bother me. ;But /jobody kicked me out so I guess it was acceptable. But it was a totally different style of management. Walt /vm&&aPr/ was a very capable guy, very intelligent. But somewhere along the line he lost it. WG: Was it that he was out of touch? BT: I don't know, put--in-^there. ] I- don ' t want- to-.shy~anything'~t^hat you would WG: thatls Tfi/he. I mean we) wou^dffrt? put..ahy^3iipjg--i^T^^iiit^you di&n' 4^want us tL-prffc in print; didn t- BT: f~tc~ `r'' If you want to know anymore about ;i^ just read the-, }4*<2-*.j - /-<c cl ^-i. ccJJYY': TYZuctrf'TT ^>*K. ~~ jSf&4t*c+~j WG: Xet "toe -jyst ask.,,you thiso4re4r. f. When you look back--ovex_your_.. BT: IJJ>_ad__a...lQt_._pf: respect for Walt. WG: I wak just asking to see/what you thought about that period. t/ // / / / --_ It's okay. (. ; put in.~ We're/not going/to put anything you don'^t want us to /L 43 0007-SWP-0060384 WG: When you look over your time with the company what are the things that really stood out for you; some great successes you hador things that made you feel great about working for the company? The times you were really on a roll for one reason or another. BT: day I don't necessarily get real highs. I jUStr work day in and out, `~ I thank/ basically when the facilities, met the goals that we all set, that the managers themselves set. ... . . Put Those things were accomplished and- we^ never We couldn't afford to^, Wg=trfways hnd pi nnt.y- nf hrrrFTTi` `piViTn1 iiTTIn mi fill i up wintrr. I think when we built the new facility in Atlanta, when we started the new facility in Richmond, Kentucky^ that^ad^o^bc--o~real high.~=for^=me. The company never spent 25 million dollars for a paint plant before. Pat: Which one was that? BT: Richmond. Tlfestty^dne of the low spots was when I had to put LC. the emulsion plant in Chicago. I 'hacKone placefj-then--I-wa&=g^ing back....-1 had--it back to where I wanted- it-ihen it wont back, it--where I--wanfeed it and i;t~ went-lack.^ I f-i^e^y lost out but that's the way it goes. I^wish that decision had been different today, but it isn't. .^Tlhe emulsion plant is still a good plant. It's probably in the best location it could be in except for the 44 0007-SWP-0060385 labor force. And the fact that 4sfeey made an investment in the facility that, long range, isn't going to serve the company that much, jit's done. That's where management makes a decision. they override you. You still go along, it's up to management. M .-it /my philosophy, 'alwaysAbeen/-7 -L-'^ra qjefe^to make the boss look facilities in operations -t?ee always a great thing. When we started the trucking company I think that was a first for SherwinWilliams. WG: When was that? BT: JS^H~^hat's when we started thf^/weekly service to branches. Pat: Is that when we started [CTF]? BT: Yes, that's right. /ic' <. That was under Barney Stevens at that time. We fought for hirsrir. <~T. Pat: In the early '70s you're talking about? BT: I believe so, Pat. And ~tha-t continued to grow. We just couldn't rely on the trucking companies to do those things. that-was-somethmg that continued: tO^grsw. It's still there today. 45 0007-SWP-0060386 Pat: Once upon a time, Mr. Sherwin's philosophy was to control everything so you would never be beholding to any suppliers or anybody else. Then we had the linseed oil mill and all those other things, and we made our own pigments and we made everything went into the paint ^as-welX=as^^e-^urtolear/. Specifically, when did we sell the linseed oil mill and secondly, when did that sort of break down? When did we sort of start relying on suppliers? BT: I can't tell you when we shut the linseed oil mill down but it had to be somewhere around '75. Somewhere early '70s. X could find that date out for you if you really wanted to know. Bob [Blank] who worked there could tell you. He still lives up* feKeye ________ /xi?**. in^Hn^lear/^srn ~fact^vi~jbstr-^fealJeed-Ao- hinu_ The plant manager, he died not totflong ago, six months ago. />/ But-^then Jtfe got out of the pigment manufacturing in Chicago. Pat: And that was...? environmenta1 problem. unaloar/ -goeril-ly small batch manufacturer. I think it may have been environmental reasons as much as -anything' /ixnclear~words^buainess. The can business, of course we got out of that after Mr. Breen came in. We sold off __ * . moxe^-of the business^in-^-sacchar ine, chemical business as you Well know. /une^aT^^^formadtion~en-^that. We never did produce latex. v, - - That's something that's, a running story for as long as I've been 46 0007-SWP-0060387 around. There again it1 s a case of where we could buy the material cheaper than we could buy the raw materials to make it. So why make it? T-he--onty place--where--it-probably_is that_-we--jast didn^-t Jiaiee any of our own special in-house latex products which would have givers, pertegpa~^itiaybe- some better characteristics or edge on the competition. Pat: Who did we buy it from? tT?he""c BT: Of-coxnrge-'you -know, the old Kem-Tone was made out.of c,a,sein. Asd^thsn^4tter the end of World War II -theri they bought' from Goodyear. Thry -bought--thf ^tyrnnm-ftmtarr The quaiity~'^= tefefL~, - co-rt-*- 4jna ial going-into-Super--Keia==Tone-was- we-had- a tough time-trying tOL^ge_hextLr,to-ch latex technology made mimtvftgous changesand- iJ__/TiiiUlaar- wuuls/ latex was a very poor . H" i% ilZCU-OLg^i, ` L- polymer*/ That was tough to change but we finally got Don [Coor]- / T"<327?'! yL_# c ~~Zc{e4 and Dr. Van Stone and some of those-olky^ guys to start to use some of the other latexes.-.. Rohm & Haas is probably one of the biggest suppliers. -So-that-J^s been a huge change in the latex /uSSStar/* Pat: You've got to explain something to/.me. Bob. It's been explained to me before but I don't understand it. "Watermiscible." The first Kem-Tone was watermiscible but it wasn't latex. BT: It was casein. 47 0007-SWP-0060388 Pat: Casein. Which means it was... I mean I think of casein as being egg tempera. . BT: That's about all it was. It's filled hot and then closed up so that it wouldn't putrefy. Pat: Was it, in fact, an animal protein? BT: I think it wasX You'd have to talk to one of the technical guys.because twe made our own casein, eBsd=-tteey-dioporse-her"ftatr'--S*nr ourcrT^^^u-bhat=rca^^lRsirs'. -Tadj^tff" oomobody All I know is that material could putrefy very quickly. I mean, you open a can of it and it^wao', juS--t, - ... l_,-mear--it just--smei-ied something -awful. But we sold millions and millions of gallons of e it. And in those days, before the war, that was real innovation. Pat: What I wondered was, if you knew what the difference between Kem-Tone, which revolutionized everything and regular... BT: It was basically the styrene /u-nc 1 enr/sdye-^nk polymer. Which was *man-madeT5e3Sft,^hey took styrene and polymerized it. They came up with a very long molecule. jL, a* :-x, i -u^c Cc' 2 c^-\ U-*L. / ,-r <k Ul J, Pat: But you're talking about Super Kem-Tone now, BT: Right. 48 0007-SWP-0060389 pat: Okay. What made Kem-Tone, the first Kem-Tone different from a regular casein. Because there have been caseins around for...you know. Why was it so revolutionary? BT: I don't know. BecauseIfyhen I came in *50 casein paint was on its way out. Super Kem-Tone was in there so 1 never got mte the casein onerLwav^pr^the^other. They were still making some of it at that time as a cheap product, compared to Super Kem-ToneB3t therr, obvieusiy <hsr wr.nt. by the hna.r-^, Ther-hhly^reason^-we erurt- (te-c^Zn^ startj^=jfe^o-4Uie^y^j^k -was ^ sc aus e Jjuring the war -we- couldn't get natural rubber and so Goodyear and al3*gfcfre other companies had to find a way to make tires* art&sss=fehen^hey started working, on -these.various polymers. That's when the latex polymer technology really took off. WG: Would you just say that slowly, by--interviewee^polymer^__ Styrene7--^-butadiene-}. (spelled ~T y err /' _ 7'-. v// BT: Now there'a .guat*Qe many co-polymers^it^WgtlTd"blow^yeur -mind. How^s^yourcoffee?- WGl PatJL- I'll go get you some----I will go get you some. WG: Would you like to take a break or do you want, to keep going? 49 0007-SWP-0060390 BT^ No, 11 m^finei^-T talk my wife/i'd meet her at 11 o'clock bet /. /s' / X-'-said for surd 11:30. Okay> well we'11 ..finish up fast. BT: Keep goings Forget the coffee. Sit down. _-We^ll just-^-keep going here because I didnnt^ealize^t^s^O^ifter 11. WG: Okay7~~l^t'f 5^firrish^Sp-. From your perspective, what challenges are facing the company? End of Side 2, Tape 1 Beginning of Side 1, Tape 3 BT: I think from a facilities standpoint my feeling would be that they're still going to have to eliminate a number of the old facilities. They will have to be replaced, mainly because the transportation costs are so outlandish you cannot ship water all over the country and make any money. I'd say probably 60% of our product is latex. It may be that they still may have to look at what we looked at back in '78, '75, and-years beyond'that -was~tKat ,jK3ssJbirly--Btany^latex plants where they produce a very limited volume -hut at very, very high efficiency. We put that facility together a number of years ago but I guess I wasn't smart enough to sell it. We never did do it. The economics now might be to the point where something like that may be the thing that may be done at a very low 50 0007-SWP-0060391 cost. c c< Whetfe^*i==we--ean afford to spend 25 million dollars for another latex plant produce 20 million gallons and ship it all over the country again. '.Again, that's--where- ^he economics, would dictate what tfeefc Over the years we've gone from decentralized to centralized and back to decentralized and I see nothing wrong with that. The economics dictate that. I guess I would think that somewhere along the line there's got to be some innovation in packaging. Pat: In what direction? BT: I don't think we can continue to ship containers, if you will, in four gallons or six quarts and twelve quarts and that sort of thing with all of the environmental problems that we have. And lie looked at this* ^ txS trying to come up with some other kind of containerization. Pat: The purpose would be...? BT: Which would allow you to ship the products from warehouses to stores without the products being damaged but without stores having / to rid of all that rubbish at that level. Pat: Wow. What sort of things would that be. 51 0007-SWP-0060392 BT: Shrink wrap. We tried that about 14 years ago. Pat-. Shrink wrap cans? BT: Yes^a*^. Pickup a six pack, right, and all you've got is a little plastic cover on top. They don't put those in big cartons or--anything. I think it's an area which people are going to have to constantly look at. The biggest problem the earth has got is a*JL 'iAri<c<- fc cts < overpopulation, thu^iTOdasanrEi^Ll^rt>bTeTri. My hope is that I want -to-live to be 100 because I want to see What God's plan is when the earth has got 10 billion people instead of just 5j^P^ro^ear^stSEds/ --Those are sort of-^ome==&-^the-ddiings. ... WG: Bob, if you were writing the history, looking back over your time with the company, what would you pick out as the key events, turning points or important milestones in the company history during your period? BT: Well there's no question about the improvement in the polymers Si - J //L * ____ that were made available to the ^pabUe^ iji^her^pad^fe-^^duetry. .GfcaEtfittsiy-^She" improvement in the pigment manufacturing. The ability for it to be incorporated/Ninto paints. We've gone from a mixing, grinding intensive area down to where you basically good mixing type operation. But it also makes it that much easier for every person to get into the paint business in their garage. We still have over a thousand companies. In 1950, 52 0007-SWP-0060393 1960 we had 1800 companies to compete with. And^tfea%, I think, -something~that, as a big corporation, sfct will .continue to contend with. Taint is very profitable. That's why it's so easy for everyone to get into the business. And it's much easier today. You can get all your formulas and everything from your suppliers. That's not saying that the quality is going to be as good as what the major companies have but 90% of the customers out there, if it works, they're happy with it. That will continue to be a headache. A big challenge. Marketing. There's no question about the marketing aspect of it, because, as you said, "What is the difference in all these products?" A good share of it is marketing. What's the difference between perfumes, what's the difference between powders, why cigarette sell more than another? It's the way they take it to market. The perceived image, the perceived quality. Why do people buy Japanese cars? Are they really that much better? I won't buy a foreign car. Obvious reasons. But people perceive them to be of better quality. And I think that we have got to continue to impress on people that our quality is as good or better than anybody else's. There was no question about Super Kem-Tone. The product that ''/uhe^ectr-words/ ~fz> "'P'O , r y'b ", r! ,We~^ve.-xjuL~get--thafe=feagki- We've still got problems, I think, in stores, getting people in and out of there. I was in a store not too long ago and I was patient but I saw two other people * there, there was five people in line, and -the people just put the product down and walked out. I don't know the answer to that. ' There are times when you'll have five people in the store and 53 0007-S WP-0060394 . P. * ^' / you've got.-^Aanej-oerr/. The employees were working like crazy but they only had one place to ring it up and ring it out. One - , computer operated machine, --Sd everybody had to wait for that. I was in a drugstore the other day, my wife and I went over to [Be^chwood] ^bat^She was waiting in line to buy something and they had two clerks baek-tnare -andrSTomehow the-Visa card got messed up, the machine got messed up*, the^^waoL-G peoplo--i-n line*"^hen we had three clerks backethare, then there was 4 clerks back=febere and thee=*eea?e 6 people waiting in line^aasd-rfagisEtiy two people just put the products^jand walked out of the store. I guess^hose things will happen but we've heard about this quite often^ I don't know what the answer is* CAj' WG: I know you've got to go, I just want to ask about pictures. Do you have any pictures of yourself say in various plants or company outings. BT: Yes, but I don't give those out. WG: You don't? Okay. Well I just wanted to make sure because we are collecting. BT: I have some at home. / Pat: We have to think about illustrations for the book and if we're going to talk about manufacturing or talk about different 54 0007-SWP-0060395 plants or something 11 ve got formalized portraits that doesn't make a very interesting book. BT: -Wp$I, st of the*e are probably. posed pictures. I mean, &T&2 u j -zZ-*2-a these are plant managers at a plant managers' meeting^, I__guoes in __. . Atlanta. That was the first time we^all the paint peopleand=eftlri 4dse* chemical -people and aH the container people^,) We've got a picture of all the managers. Pat: What do you mean, the first time? you'd all ever gotten together? It was the first time WG: We would like a picture of that. Pat: When was that? BT: Gee, I don't know. I just told you I think it's somewhere in the early '70s. Pat: It was an Atlanta meeting and it was the first time? BT: That was the first time that we'd all been together. the meeting. I ran Pat: Manufacturing, and technical, and____ 55 0007-SWF-0060396 BT: No, I didn't day technical. Pat: Oh, you didn't say technical. What did you say? BT: It was manufacturing, chemical, containers, it was Spray on, it was all the operations, including international. And I think I have a picture of-that. I can look through the pictures and get them down here sometime. I think Pat's searching^and^aetfencF=a.l 1 the informai/fSir- we' ve-~had ^arounrd--for-r:years, ` tf'ying^te^^nclearr ^wogde/ /ubZ- Crz> Pat: That picture would be very/..`iwhat did you talk about at this meeting? It was when you were VP of operation? BT: Yes. I have^-no idea wlmfc-th&^agendas^as. isaaeafi, I know it was very broad because we brought all the top from all the various disciplines. Walt [Maynard] came down and talked to usA1- He^^s^^i-f^^~Dob^-(;Bend|;^^^an] onpbenef%fcs. It was a much broader ba^ed meeting than just talking about manufacturing paint. That was the firstAthe company ever d^d=irt. Spencer and I put together. ./ Pat: Why do you suppose it was never done before? BT: I don't know. Well', I think they sort of kept the various operations and, for that matter, some of the various divisions, 56 A007-SVVP-0060397 isolated* But there was just so many common topics that pertained to all operations, it wasn't just paint factories, it wasn't just chemicals, it wasn't just containers, it was very broad based. I think that was one of the things Spencer brought^ ^much more open type of organization where we actually communicated with each others.'71'It wasn't a question of everybody operating in a vacuum. And of course, as you well know, I'd say one of the highlights also was the fact that Spencer divisionalized the company. That was very, very significant. WG: How did that impact the company? jr BT: WeSSfc, jit was the right decision, but I--guess^-lifee- everything c. ^ else, the timing was wrong. The business cycle was turning down. But I don't think we got the maximum result out of it because, I'd haKe?sfeo=say, it was, peshsqsEu, more, on paper than it. was in fact. -2^2(2- >4-^ ^ When Breen came in there was no question about decentralizing and the divisions having^fehetr responsibility^uneiear/. I they didn't pick it up, they didn't get the results, they had a new division manager. I think that was one of the major /unclear/. I mean, I used to forecast for the company /unclear/ operations should /unclear words/. Pat: When? When you were Vice President, when you were manager, when? 57 0007-SWP-0060398 BT: 1967. X-remember--eoIin^aidwin-saying, ''WelTr-how-_oan~you dQ this?--Y^oi_r-ot-inmarket ing And - Iid^ay---''Well-,--if~marketing won't doit-I-ean'ir-run--15~}>lants--and_not-have--a_pIan.--that's- it. " /unclear-words7^"Thank~yau^_Bob^-i!--Never-raised his~vo ice-on WJg. <- Kiftx/L spoke varT^astT--but-lva-was-okay^ Good bunch of.people as--far as ethxcai-people. They were topnotch. If they wepeH, I wouldn't be here. A different story. WG: Well; we don't"-want-to make'your wife^uncomtortable?*--it's jg^fefaag=i=a%e. Thank you very much. _ BT: Well . olce^.... End of Tape 58 0007-SWP-0060399