[This part of the story is written by Paul Cook]
Our first crisis occurred in September when the “tube” of our GE EBG burned out. Halperin got the job of getting a new tube fast so that our manufacturing could continue. The new tube didn’t work nor the one after that nor the one after that. Over the next three months we couldn’t manufacture anything and our customers became very anxious. We had to lay off about a third of our people, reduced all salaries and wages, and tried to assure our customers that everything would be all right.
It was the day before Christmas that we finally received a satisfactory tube from GE. We quickly got running again,-worked through Christmas and New Years and supplied our customers at just about the time their patience was running out. We quickly became profitable again and grew rapidly. All employees who survived this crisis and stayed with or returned to the company received shares of stock in the company. Those shares became very valuable within a few years.
We developed five products in our first year, three of which became successful. It was the start of a remarkable company. We then grew at the rate of 25% per year for 20 years- mostly from products that we invented ourselves, based upon our new pioneering technology.
We quickly spread to countries all around the world, with well over half our sales and manufacturing outside the US.
All from that very humble beginning.
Raychem was sold in 1999 to Tyco for $3 Billion on annual sales of $1.8 Billion.
I’ve been learning in the last few weeks what’s happened to our business since Tyco has owned it. In spite of cuts made in funds for research and development and sales and marketing, the business has continued to grow. The growth has averaged almost 10% per year in revenues. You’ll be amazed at the size and dominance of the various parts of the business. For example:
Aerospace and Defense is an almost $500M dollar per year business. Industrial and Commercial is about $250M. Telecom has grown to $800M per year while Energy is also at $800M per year. Polyswitch has grown to a business of $300M per year and Elographics- now EloTouch- is $400M per year. The division previously called Chemelex has grown to $550M per year. In terms of the individual product lines, Tyco is the largest manufacturer in the world of heat shrinkable tubing, of heat shrinkable molded parts, of irradiated wire and cable, and of special devices (no one else even makes any) – products started well over 40 years ago.
The innovations of the past have really paid off resulting in a business today of over 3.5 Billion dollars per year. I guess we did some really good innovating.